Travelers 2003 Annual Report Download - page 54

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52
Assumed reinsurance exposure primarily consists of reinsurance of excess coverage, including various pool
participations.
In addition to incurred but not reported, or IBNR, amounts contained in the reserves for specific policyholders or
groups of policyholders described above, Travelers has established an unallocated IBNR reserve for further adverse
development related to existing policyholders, new claims from policyholders reporting claims for the first time,
policyholders for which there is, or may be, litigation and direct actions against Travelers. During 2003, $117.0
million and $31.2 million of reserves were recategorized from unallocated IBNR to policyholders with settlement
agreements and other policyholders subject to home office review, respectively, due to additional settlements and
further development consistent with Travelers expectations. This follows the analysis conducted during Travelers
annual ground up review of asbestos policyholders that was completed during the fourth quarter of 2003.
The following table displays activity for asbestos losses and loss expenses and reserves:
(at and for the year ended December 31, in millions) 2003 2002 2001
Be
g
innin
g
reserves:
Direc
t
$ 4,287.1 $ 1,046.0 $ 1,005.4
Ceded
(
882.8
)
(
225.6
)
(
199.0
)
Ne
t
3
,
404.3 820.4 806.4
Incurred losses and loss ex
p
enses:
Direct
(
1
)
-3,660.2 282.7
Ceded -
(
715.2
)
(
93.9
)
Accretion of discount:
Direc
t
24.6 - -
Ceded
(
0.4
)
- -
Losses
p
aid:
Direct 529.8 419.1 242.1
Ceded
(
78.0
)
(
58.0
)
(
67.3
)
Endin
g
reserves:
Direc
t
3,781.9 4,287.1 1,046.0
Ceded
(
805.2
)
(
882.8
)
(
225.6
)
Net $ 2,976.7 $ 3,404.3 $ 820.4
(1) Includes $800.0 million related to asbestos incurrals subject to the Citigroup indemnification agreement in
2002.
See “-Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves.”