Travelers 2010 Annual Report Download - page 207

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) 2010 2009 2008
Written premiums
Direct ................................................. $22,634 $22,545 $23,074
Assumed ............................................... 668 740 763
Ceded ................................................. (1,667) (1,949) (2,154)
Total net written premiums ................................ $21,635 $21,336 $21,683
Earned premiums
Direct ................................................. $22,533 $22,658 $23,131
Assumed ............................................... 664 762 771
Ceded ................................................. (1,765) (2,002) (2,323)
Total net earned premiums ................................ $21,432 $21,418 $21,579
Percentage of assumed earned premiums to net earned premiums ..... 3.1% 3.6% 3.6%
Ceded claims and claim adjustment expenses incurred .............. $ 404 $ 582 $ 1,464
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) 2010 2009
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment
expenses ..................................................... $ 6,934 $ 8,138
Allowance for uncollectible reinsurance ................................ (363) (523)
Net reinsurance recoverables ........................................ 6,571 7,615
Structured settlements ............................................. 3,380 3,456
Mandatory pools and associations .................................... 1,568 1,745
Total reinsurance recoverables ....................................... $11,519 $12,816
Terrorism Risk Insurance Program
The Terrorism Risk Insurance Program (the Program) is a Federal program administered by the
Department of the Treasury that provides 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 has been authorized through 2014.
In order for a loss to be covered under the Program (subject losses), the loss must meet certain
aggregate industry loss minimums and must be the result of an event that is certified as an act of
terrorism by the U.S. Secretary of the Treasury, in concurrence with the Secretary of State and the
Attorney General of the United States. The annual aggregate industry loss minimum is $100 million
195