Travelers 2006 Annual Report Download - page 50

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Casualty insurance ............. Insurance which is primarily concerned with the losses caused by
injuries to third persons, i.e., not the insured, and the legal liability
imposed on the insured resulting therefrom. It includes, but is not
limited to, employers’ liability, workers’ compensation, public
liability, automobile liability, personal liability and aviation liability
insurance. It excludes certain types of losses t hat by law or custom
are considered as being exclusively within the scope of other types of
insurance, such as fire or marine.
Catastrophe................... A severe loss, resulting from natural andmanmade events, including
risks such as fire, earthquake, windstorm, explosion, terrorism and
other similar events. Each catastrophe has unique characteristics.
Catastrophes are notpredictableasto timing or amount in advance,
and therefore their effects arenot included in earnings or claims and
claim adjustment expense reserves prior to occurrence. A
catastrophe may also result in the payment of reinstatement
premiums and assessments from various pools.
Catastrophe loss............... Loss and directly identifiedloss adjustment expenses from
catastrophes.
Catastrophe reinsurance........A form 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 toas the “ceding
company.”
Ceded reinsurance ............. Insurance risks transferred to another company as reinsurance. See
“Reinsurance.”
Claim........................ Request by an insuredfor indemnification byan insurancecompany
for loss incurred from an insured peril.
Claim adjustment expenses. .....See “Loss adjustment expenses (LAE).”
Claims and claim adjustment
expenses.................... See “Loss” and “Loss adjustment expenses.”
Claims and claim adjustment
expense reserves ............. See “Loss reserves.”
Cohort ....................... A group of items or individuals that share a particular statisticalor
demographic characteristic. For example, all claims for a given
productin agiven market for a given accident year would represent a
cohort ofclaims