Travelers 2010 Annual Report Download - page 37

(at December 31, in
millions) 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) 2010(a)(b)
Reserves for claims and
claim adjustment
expense originally
estimated .........$19,435 $20,197 $23,268 $24,055 $41,446 $42,895 $42,844 $43,098 $41,312 $40,941 $40,255
Cumulative amounts paid
as of
One year later ...... 4,374 5,018 5,170 4,651 8,871 8,632 7,417 8,146 7,519 7,748
Two years later ..... 7,517 8,745 8,319 8,686 14,666 13,837 13,181 12,798 12,454
Three years later .... 10,218 11,149 11,312 11,541 18,733 18,466 16,545 16,264
Four years later ..... 12,000 13,402 13,548 13,708 22,514 21,025 19,113
Five years later ..... 13,603 15,115 15,229 15,574 24,572 22,992
Six years later ...... 14,958 16,473 16,836 16,624 26,189
Seven years later .... 16,063 17,877 17,738 17,558
Eight years later .... 17,283 18,662 18,563
Nine years later ..... 17,945 19,416
Ten years later ...... 18,571
Reserves re-estimated as of
One year later ...... 19,394 23,228 23,658 24,222 41,706 42,466 42,172 41,373 39,863 39,524
Two years later ..... 22,233 24,083 24,592 25,272 42,565 42,311 40,837 39,925 38,640
Three years later .... 22,778 25,062 25,553 26,042 42,940 41,692 39,739 38,842
Four years later ..... 23,871 25,953 26,288 26,501 43,148 40,855 38,734
Five years later ..... 24,872 26,670 26,731 26,803 42,655 40,026
Six years later ...... 25,521 27,179 27,055 26,619 42,068
Seven years later .... 26,039 27,556 27,022 26,342
Eight years later .... 26,364 27,580 26,815
Nine years later ..... 26,380 27,496
Ten years later ...... 26,397
Cumulative deficiency
(redundancy) (a)(b) . . . 6,962 7,299 3,547 2,287 622 (2,869) (4,110) (4,256) (2,672) (1,417)
Gross liability—end of
year ............$28,312 $30,617 $33,628 $34,474 $58,984 $61,007 $59,202 $57,619 $54,646 $53,054 $51,062
Reinsurance recoverables . 8,877 10,420 10,360 10,419 17,538 18,112 16,358 14,521 13,334 12,113 10,807
Net liability—end of year . $19,435 $20,197 $23,268 $24,055 $41,446 $42,895 $42,844 $43,098 $41,312 $40,941 $40,255
Gross re-estimated
liability—latest .....$37,357 $40,001 $38,606 $37,270 $59,656 $57,824 $54,123 $52,606 $51,144 $51,116
Re-estimated reinsurance
recoverables—latest . . . 10,960 12,505 11,791 10,928 17,588 17,798 15,389 13,764 12,504 11,592
Net re-estimated
liability—latest .....$26,397 $27,496 $26,815 $26,342 $42,068 $40,026 $38,734 $38,842 $38,640 $39,524
Gross cumulative
deficiency (redundancy) . $ 9,045 $ 9,384 $ 4,978 $ 2,796 $ 672 $ (3,183) $ (5,079) $ (5,013) $ (3,502) $(1,938)
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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Gross ............$5,953 $ 5,680 $ 2,020 $ 1,995 $ 1,547 $ 713 $ 516 $ 517 $ 447 $ 262
Net .............$4,493 $ 4,311 $ 1,366 $ 1,342 $ 1,382 $ 551 $ 395 $ 395 $ 325 $ 140
Environmental 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Gross ............$ 940$ 887$ 733$ 674 $ 522 $ 505 $ 397 $ 215 $ 130 $ 45
Net .............$ 893$ 851$ 701$ 642 $ 525 $ 495 $ 375 $ 190 $ 105 $ 35
(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.) 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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