The Hartford 2014 Annual Report Download - page 55

Assumed reinsurance exposures are less predictable than direct insurance exposures because the Company does not generally receive notice of a reinsurance
claim until the underlying direct insurance claim is mature. This causes a delay in the receipt of information at the reinsurer level and adds to the uncertainty
of estimating related reserves.
London Market exposures are the most uncertain of the three categories of claims. As a participant in the London Market (comprised of both Lloyd’s of
London and London Market companies), certain subsidiaries of the Company wrote business on a subscription basis, with those subsidiaries’ involvement
being limited to a relatively small percentage of a total contract placement. Claims are reported, via a broker, to the “lead” underwriter and, once agreed to,
are presented to the following markets for concurrence. This reporting and claim agreement process makes estimating liabilities for this business the most
uncertain of the three categories of claims.
The following table sets forth, for the years ended December 31, 2014, 2013 and 2012, paid and incurred loss activity by the three categories of claims for
asbestos and environmental.

 








Gross
Direct $ 201 $ 206 $ 55 $ 23
Assumed Reinsurance 72 70 12 —
London Market 17 28 6 7
Total 290 304 73 30
Ceded (74) (92) (14) —
        

Gross
Direct $ 159 $ 72 $ 23 $ 6
Assumed Reinsurance 68 50 4 6
London Market 16 8 6 —
Total 243 130 33 12
Ceded (51) — (1) —
        

Gross
Direct $ 153 $ 55 $ 31 $ 9
Assumed Reinsurance 51 14 7 —
London Market 17 5 5 3
Total 221 74 43 12
Ceded (57) (26) (3) (2)
        
[1] Excludes asbestos and environmental paid and incurred loss and LAE reported in Ongoing Operations. Total gross losses and LAE incurred in Ongoing Operations for the
years ended December 31, 2014, 2013 and 2012 includes $19, $15 and $13, respectively, related to asbestos and environmental claims. Total gross losses and LAE paid in
Ongoing Operations for the years ended December 31, 2014, 2013 and 2012 includes $21, $14 and $15, respectively, related to asbestos and environmental claims.
In the fourth quarters of 2014, 2013 and 2012, the Company completed evaluations of certain of its non-asbestos and non-environmental reserves in Property
& Casualty Other Operations, including its assumed reinsurance liabilities. In 2014, the Company's prior year development was impacted by unfavorable
frequency of international workers' compensation claims. The Company's prior year development on these reserves was immaterial in 2013 and 2012.
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