Travelers 2008 Annual Report Download - page 214

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. INSURANCE CLAIM RESERVES
Claims and claim adjustment expense reserves were as follows:
(at December 31, in millions) 2008 2007
Property-casualty ................................................. $54,646 $57,619
Accident and health .............................................. 77 81
Total ........................................................ $54,723 $57,700
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) 2008 2007 2006
Claims and claim adjustment expense reserves at beginning of year ..... $57,619 $59,202 $61,007
Less reinsurance recoverables on unpaid losses ................... 14,521 16,358 18,112
Net reserves at beginning of year .......................... 43,098 42,844 42,895
Estimated claims and claim adjustment expenses for claims arising in the
current year ........................................... 14,504 12,848 12,533
Estimated decrease in claims and claim adjustment expenses for claims
arising in prior years ..................................... (1,725) (672) (429)
Acquisitions(1) ........................................... —— 538
Total increases ........................................ 12,779 12,176 12,642
Claims and claim adjustment expense payments for claims arising in:
Current year ........................................... 5,761 4,528 4,279
Prior years ............................................ 7,356 7,417 8,632
Total payments ....................................... 13,117 11,945 12,911
Sale of subsidiary(2) ....................................... (790) ——
Unrealized foreign exchange (gain) loss ......................... (658) 23 218
Net reserves at end of year .............................. 41,312 43,098 42,844
Plus reinsurance recoverables on unpaid losses .................... 13,334 14,521 16,358
Claims and claim adjustment expense reserves at end of year ......... $54,646 $57,619 $59,202
(1) In February 2006, the 2003 and prior years of account of Lloyd’s Syndicates 5000 and 779 closed
through reinsurance to close (RITC) into the 2004 year of account. See ‘‘Reinsurance to Close’’
section of note 1.
(2) In December 2008, the Company sold its United Kingdom based subsidiary, Unionamerica
Holdings, Ltd., which was in runoff.
Gross claims and claim adjustment expense reserves at December 31, 2008 decreased by
$2.97 billion from the same date in 2007, primarily reflecting favorable prior year reserve development
during 2008, payments related to operations in runoff (including asbestos and environmental payments)
and the sale of Unionamerica, partially offset by catastrophe losses incurred.
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