Travelers 2003 Annual Report Download - page 117

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115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. INTANGIBLE ASSETS, Continued
Travelers had customer-related intangible assets with a gross carrying amount of $555.1 million and $470.6
million as of December 31, 2003 and 2002, respectively, and with accumulated amortization of $133.1 million
and $90.8 million as of December 31, 2003 and 2002, respectively, which are included in other assets in the
consolidated balance sheet. Amortization expense was $42.2 million, $35.4 million and $34.5 million for the
years ended December 31, 2003, 2002 and 2001, respectively. Intangible assets amortization expense is
estimated to be $50.6 million, $48.1 million, $47.0 million, $47.0 million and $41.6 million in 2004, 2005, 2006,
2007 and 2008, respectively.
6. REINSURANCE
Travelers participates in reinsurance in order to limit losses, minimize exposure to large risks, provide additional
capacity for future growth and to effect business-sharing arrangements. In addition, Travelers assumes 100% of
the workers’ compensation premiums written by the Accident Department of its former affiliate, The Travelers
Insurance Company (TIC). Travelers is also a member of and participates as a servicing carrier for several pools
and associations.
Reinsurance is placed on both a quota-share and excess of loss basis. Ceded reinsurance arrangements do not
discharge Travelers as the primary insurer, except for cases involving a novation.
Certain of the assumed reinsurance contracts that Travelers has entered into with non-affiliated companies on an
excess of loss basis do not transfer insurance risk. These contracts are accounted for using deposit accounting
and are included in other liabilities in the consolidated balance sheet and totaled $325.2 million and $274.4
million at December 31, 2003 and 2002, respectively.