The Hartford 2015 Annual Report Download - page 173

Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Reinsurance (continued)
F-42
Insurance Revenues
The effect of reinsurance on property and casualty premiums written and earned is as follows:
For the years ended December 31,
Premiums Written 2015 2014 2013
Direct $ 10,861 $ 10,571 $ 10,564
Assumed 297 275 247
Ceded (580)(602) (882)
Net $ 10,578 $ 10,244 $ 9,929
Premiums Earned
Direct $ 10,704 $ 10,531 $ 10,494
Assumed 298 264 241
Ceded (586)(699) (871)
Net $ 10,416 $ 10,096 $ 9,864
The reduction in ceded premium for the years ended December 31, 2015 and 2014 were driven by the Company's decision to exit unprofitable
programs, including captive programs where the Company ceded direct premiums to insured captive insurance companies. Ceded losses,
which reduce losses and loss adjustment expenses incurred, were $336, $502, and $459 for the years ended December 31, 2015, 2014, and
2013, respectively.
The effect of reinsurance on life insurance earned premiums and fee income is as follows:
For the years ended December 31,
2015 2014 2013
Gross earned premiums, fees and other considerations $ 5,767 $ 6,029 $ 6,435
Reinsurance assumed 209 193 138
Reinsurance ceded (1,707)(1,720) (1,780)
Net earned premiums, fees and other considerations $ 4,269 $ 4,502 $ 4,793
The Company reinsures certain of its risks to other reinsurers under yearly renewable term, coinsurance, and modified coinsurance
arrangements, and variations thereto. Yearly renewable term and coinsurance arrangements result in passing all or a portion of the risk to
the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses
and is liable for a corresponding proportionate amount of all benefit payments. Modified coinsurance is similar to coinsurance except
that the cash and investments that support the liabilities for contract benefits are not transferred to the assuming company, and
settlements are made on a net basis between the companies.
The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using
assumptions consistent with those used to account for the underlying policies. Insurance recoveries on ceded reinsurance agreements,
which reduce death and other benefits, were $1,111, $863, and $913 for the years ended December 31, 2015, 2014, and 2013,
respectively.
In addition, the Company has reinsured a portion of the risk associated with variable annuities and the associated GMDB and GMWB
riders.