Travelers 2009 Annual Report Download - page 38

(at December 31, in millions) 1999 2000 2001(a) 2002(a) 2003(a) 2004(a)(b)(c) 2005(a)(b)(c) 2006(a)(b)(c) 2007(a)(b)(c) 2008(a)(b)(c) 2009(a)(b)(c)
Reserves for claims and
claim adjustment
expense originally
estimated . . . . . . . . . $19,983 $19,435 $20,197 $23,268 $24,055 $41,446 $42,895 $42,844 $43,098 $41,312 $40,941
Cumulative amounts paid
as of
One year later . . . . . . 4,082 4,374 5,018 5,170 4,651 8,871 8,632 7,417 8,146 7,519
Two years later . . . . . . 6,957 7,517 8,745 8,319 8,686 14,666 13,837 13,181 12,798
Three years later . . . . . 9,324 10,218 11,149 11,312 11,541 18,733 18,466 16,545
Four years later . . . . . 11,493 12,000 13,402 13,548 13,708 22,514 21,025
Five years later . . . . . . 12,911 13,603 15,115 15,229 15,574 24,572
Six years later . . . . . . 14,172 14,958 16,473 16,836 16,624
Seven years later . . . . . 15,301 16,063 17,877 17,738
Eight years later . . . . . 16,206 17,283 18,662
Nine years later . . . . . 17,194 17,945
Ten years later . . . . . . 17,799
Reserves re-estimated as of
One year later . . . . . . 19,736 19,394 23,228 23,658 24,222 41,706 42,466 42,172 41,373 39,863
Two years later . . . . . . 19,600 22,233 24,083 24,592 25,272 42,565 42,311 40,837 39,925
Three years later . . . . . 22,302 22,778 25,062 25,553 26,042 42,940 41,692 39,739
Four years later . . . . . 22,612 23,871 25,953 26,288 26,501 43,148 40,855
Five years later . . . . . . 23,591 24,872 26,670 26,731 26,803 42,655
Six years later . . . . . . 24,559 25,521 27,179 27,055 26,619
Seven years later . . . . . 25,114 26,039 27,556 27,022
Eight years later . . . . . 25,664 26,364 27,580
Nine years later . . . . . 25,917 26,380
Ten years later . . . . . . 26,013
Cumulative deficiency
(redundancy)(a)(b) . . . . 6,030 6,945 7,383 3,754 2,564 1,209 (2,040) (3,105) (3,173) (1,449)
Gross liability—end of
year . . . . . . . . . . . . $28,854 $28,312 $30,617 $33,628 $34,474 $58,984 $61,007 $59,202 $57,619 $54,646 $53,054
Reinsurance recoverables . 8,871 8,877 10,420 10,360 10,419 17,538 18,112 16,358 14,521 13,334 12,113
Net liability—end of year . $19,983 $19,435 $20,197 $23,268 $24,055 $41,446 $42,895 $42,844 $43,098 $41,312 $40,941
Gross re-estimated
liability—latest . . . . . . $36,106 $37,297 $40,061 $38,843 $37,592 $60,347 $58,906 $55,478 $54,140 $52,888
Re-estimated reinsurance
recoverables—latest . . . 10,093 10,917 12,481 11,821 10,973 17,692 18,051 15,739 14,215 13,025
Net re-estimated liability—
latest . . . . . . . . . . . . $26,013 $26,380 $27,580 $27,022 $26,619 $42,655 $40,855 $39,739 $39,925 $39,863
Gross cumulative
deficiency (redundancy) . $ 7,252 $ 8,985 $ 9,444 $ 5,215 $ 3,118 $ 1,363 $ (2,101) $(3,724) $ (3,479) $(1,758)
Included in the cumulative deficiency (redundancy) by year is the following impact of unfavorable
prior year reserve development related to asbestos and environmental claims and claim adjustment
expenses, in millions:
Asbestos 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Gross . . . . . . . . . . . . . $ 5,968 $ 5,781 $ 5,503 $ 1,843 $ 1,818 $ 1,285 $ 451 $ 254 $ 255 $ 185
Net..............$4,450$4,400$4,216$1,271$1,247 $1,242 $ 411 $ 255 $ 255 $ 185
Environmental 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Gross . . . . . . . . . . . . . $ 986 $ 911 $ 856 $ 702 $ 643 $ 477 $ 460 $ 352 $ 170 $ 85
Net..............$ 934$ 870$ 827$ 677$ 618 $ 490 $ 460 $ 340 $ 155 $ 70
(a) Includes reserves of the subsidiaries of Jupiter Holdings, Inc. and its subsidiaries and Commercial Guaranty Lloyds Insurance Company,
which were acquired from Citigroup on October 1, 2001. Also includes reserves of Commercial Guaranty Casualty Insurance Company, which
was contributed to TPC by Citigroup on October 3, 2001. At December 31, 2001, these gross reserves were $867 million, and net reserves
were $633 million.
(b) For years prior to 2004, excludes SPC reserves, which were acquired on April 1, 2004. Accordingly, the reserve development (net reserves for
claims and claim adjustment expense re-estimated as of subsequent years less net reserves recorded at the end of the year, as originally
estimated) for years prior to 2004 relates only to losses recorded by TPC and does not include reserve development recorded by SPC. For
2004 and subsequent years, includes SPC reserves and subsequent development recorded by SPC. At December 31, 2004, SPC gross reserves
were $23,274 million, and net reserves were $15,959 million.
(c) In December 2008, the Company completed the sale of Unionamerica Holdings Limited (Unionamerica), which comprised its United
Kingdom (U.K.)-based runoff insurance and reinsurance businesses. (Unionamerica was acquired in 2004 as part of the merger of SPC and
TPC.) Immediately before the sale, the claims and claim adjustment expense reserves of Unionamerica totaled $790 million. As a result of
the sale, those obligations ceased being the responsibility of the Company and its affiliates. The sale is reflected in the table as a reduction in
December 31, 2008 net reserves of $790 million and as a $790 million increase in paid losses for each of the years 2004 through 2007 to
reflect the transfer (payment) of the reserves to the buyer, resulting in no impact to incurred losses.
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