Travelers 2003 Annual Report Download - page 120
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118
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. INSURANCE CLAIMS RESERVES, Continued
The table below is a reconciliation of beginning and ending property casualty reserve balances for claims and
claim adjustment expenses.
(at and for the year ended December 31, in millions) 2003 2002 2001
Claims and claim ad
j
ustment ex
p
ense reserves
at be
g
innin
g
of
y
ea
r
$ 33,628.4 $ 30,616.5 $ 28,312.0
Less reinsurance recoverables on un
p
aid losses 10,360.3 10,419.2 8,878.1
N
et balance at be
g
innin
g
of
y
ea
r
23
,
268.1 20
,
197.3 19
,
433.9
Provision for claims and claim ad
j
ustment ex
p
enses
for claims arisin
g
in the current
y
ea
r
8,554.1 7,872.1 7,600.6
Estimated claims and claim ad
j
ustment ex
p
enses for
claims arisin
g
in
p
rior
y
ears 390.0 3,031.0
(
41.0
)
Ac
q
uisitions - - 622.7
Total increases 8
,
944.1 10
,
903.1 8
,
182.3
Claims and claim adjustment expense payments
for claims arisin
g
in:
Current
y
ea
r
2,987.3 2,814.3 3,044.9
Prior
y
ears 5,170.0 5,018.0 4,374.0
Total
p
a
y
ments 8
,
157.3 7
,
832.3 7
,
418.9
N
et balance at end of
y
ea
r
24
,
054.9 23
,
268.1 20
,
197.3
Plus reinsurance recoverables on un
p
aid losses 10,419.3 10,360.3 10,419.2
Claims and claim ad
j
ustment ex
p
ense reserves
at end of
y
ea
r
$ 34,474.2 $ 33,628.4 $ 30,616.5
The increase in the claims and claim adjustment expense reserves in 2003 from 2002 was primarily due to net
prior year reserve strengthening, principally in Commercial Lines, and growth in business volume in both
Commercial Lines and Personal Lines. Partially offsetting the above were net payments of $607.0 million in
2003 for asbestos and environmental claims.
The increase in the claims and claim adjustment expense reserves in 2002 from 2001 was primarily due to the
strengthening of Travelers asbestos reserves, principally in connection with Travelers asbestos reserve study
completed in fourth quarter 2002. Partially offsetting the above were net payments of $521.7 million in 2002
for asbestos and environmental claims.