Travelers 2009 Annual Report Download - page 215

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. REINSURANCE (Continued)
The following is a summary of reinsurance financial data reflected in the consolidated statement of
income:
(for the year ended December 31, in millions) 2009 2008 2007
Written premiums
Direct................................................. $22,931 $23,469 $23,824
Assumed............................................... 354 368 374
Ceded................................................. (1,949) (2,154) (2,580)
Total net written premiums ................................ $21,336 $21,683 $21,618
Earned premiums
Direct................................................. $23,062 $23,516 $24,000
Assumed............................................... 358 386 180
Ceded................................................. (2,002) (2,323) (2,710)
Total net earned premiums ................................ $21,418 $21,579 $21,470
Percentage of assumed earned premiums to net earned premiums ..... 1.7% 1.8% 0.8%
Ceded claims and claim adjustment expenses incurred .............. $ 582 $ 1,464 $ 1,212
Ceded premiums included the premiums paid to Longpoint Re Ltd. and Longpoint Re Ltd. II for
coverage under the Company’s catastrophe bond programs.
Reinsurance recoverables include amounts recoverable on both paid and unpaid claims and were
as follows:
(at December 31, in millions) 2009 2008
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment
expenses..................................................... $ 8,138 $ 9,376
Allowance for uncollectible reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (523) (618)
Net reinsurance recoverables ........................................ 7,615 8,758
Structured settlements............................................. 3,456 3,517
Mandatory pools and associations .................................... 1,745 1,957
Total reinsurance recoverables ....................................... $12,816 $14,232
Terrorism Risk Insurance Acts
On November 26, 2002, the Terrorism Risk Insurance Act of 2002 was enacted into Federal law
and established the Terrorism Risk Insurance Program (the Program), a Federal program in the
Department of the Treasury, that provided for a system of shared public and private compensation for
certain insured losses resulting from acts of terrorism or war committed by or on behalf of a foreign
interest. The Program was scheduled to terminate on December 31, 2005. In December 2005, the
Terrorism Risk Insurance Extension Act of 2005 (the Terrorism Extension Act) was enacted into
Federal law, reauthorizing the Program through December 31, 2007, while reducing the Federal role
under the Program. In December 2007, the Terrorism Risk Insurance Program Reauthorization Act of
2007 was enacted into Federal law, extending coverage to include domestic acts of terrorism and
203