The Hartford 2015 Annual Report Download - page 59

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The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that
may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company currently expects to perform its
regular comprehensive review of Property & Casualty Other Operations reinsurance recoverables annually. During the second quarters
of 2015, 2014 and 2013, the Company completed its annual evaluations of the collectability of the reinsurance recoverables and the
adequacy of the allowance for uncollectible reinsurance associated with older, long-term casualty liabilities reported in the Property &
Casualty Other Operations. In conducting this evaluation, the Company used its most recent detailed evaluations of ceded liabilities
reported in the segment. The Company analyzed the overall credit quality of the Company’s reinsurers, recent trends in arbitration and
litigation outcomes in disputes between cedants and reinsurers and recent developments in commutation activity between reinsurers and
cedants. The evaluation in the second quarters of 2015, 2014, and 2013 resulted in no material adjustments to the allowance for
uncollectible reinsurance. As of December 31, 2015, 2014, and 2013, the allowance for uncollectible reinsurance for Property &
Casualty Other Operations totaled $220, $225, and $202. Due to the inherent uncertainties as to collection and the length of time before
reinsurance recoverables become due, particularly for older, long-term casualty liabilities, it is possible that future adjustments to the
Company’s reinsurance recoverables, net of the allowance, could be required.
A summary of asbestos and environmental reserves in Ongoing Operations and Other Operations is presented in the following table.
Summary of A&E Reserves
As of December 31, 2015
Asbestos [1] Environmental [2] Total A&E
Gross
Direct $ 1,681 $ 222 $ 1,903
Assumed Reinsurance 234 14 248
London Market 307 51 358
Total 2,222 287 2,509
Ceded (496)(31) (527)
Net $ 1,726 $ 256 $ 1,982
[1] The one year gross paid amount for total asbestos claims is $231, resulting in a one year gross survival ratio of 9.6. The three year average gross
paid amount for total asbestos claims is $263, resulting in a three year gross survival ratio of 8.5.
[2] The one year gross paid amount for total environmental claims is $68, resulting in a one year gross survival ratio of 4.2. The three year average
gross paid amount for total environmental claims is $64, resulting in a three year gross survival ratio of 4.5.