Travelers 2004 Annual Report Download - page 50

Catastrophe loss .................... Loss and directly identified loss adjustment expenses from
catastrophes.
Catastrophe reinsurance ............. Aform of excess of loss reinsurance which, subject to a specified
limit, indemnifies the ceding company for the amount of loss in
excess of a specified retention with respect to an accumulation of
losses resulting from a catastrophic event. The actual reinsurance
document is called a “catastrophe cover.” These reinsurance contracts
are typically designed to cover property insurance losses but can be
written to cover casualty insurance losses such as from workers’
compensation policies.
Cede; ceding company .............. When an insurer reinsures its liability with another insurer or a
“cession,” it “cedes” business and is referred to as the “ceding
company.”
Ceded reinsurance .................. Insurance risks transferred to another company as reinsurance. See
“Reinsurance.”
Claim ............................ Request by an insured for indemnification by an insurance company
for loss incurred from an insured peril.
Claim adjustment expenses ........... See“Loss adjustment expenses.”
Claims and claim adjustment
expenses ....................... See“Loss” and “Loss adjustment expenses.”
Claims and claim adjustment expense
reserves ........................ See“Loss reserves.”
Combined ratio .................... ThesumoftheLoss and LAE ratio, the underwriting expense ratio
and, where applicable, the ratio of dividends to policyholders to net
premiums earned. A combined ratio under 100% generally indicates
an underwriting profit. A combined ratio over 100% generally
indicates an underwriting loss.
Commercial lines ................... Thevarious kinds of property and casualty insurance that are written
for businesses.
Commercial multi-peril policies ....... Refers to policies which cover both property and third-party liability
exposures.
Commutation agreement ............. Anagreement between a reinsurer and a ceding company whereby the
reinsurer pays an agreed upon amount in exchange for a complete
discharge of all obligations, including future obligations, between the
parties for reinsurance losses incurred.
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