Travelers 2012 Annual Report Download - page 212

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) 2012 2011 2010
Written premiums
Direct ................................................ $23,614 $23,220 $22,634
Assumed .............................................. 695 667 668
Ceded ................................................ (1,862) (1,700) (1,667)
Total net written premiums ............................... $22,447 $22,187 $21,635
Earned premiums
Direct ................................................ $23,509 $23,146 $22,533
Assumed .............................................. 691 641 664
Ceded ................................................ (1,843) (1,697) (1,765)
Total net earned premiums ............................... $22,357 $22,090 $21,432
Percentage of assumed earned premiums to net earned premiums .... 3.1% 2.9% 3.1%
Ceded claims and claim adjustment expenses incurred ............ $ 1,357 $ 737 $ 404
Ceded premiums included the premiums paid to Longpoint Re Ltd., Longpoint Re II Ltd. and
Long Point Re III Ltd. 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) 2012 2011
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment
expenses ..................................................... $ 5,256 $ 6,255
Allowance for uncollectible reinsurance ................................ (258) (345)
Net reinsurance recoverables ........................................ 4,998 5,910
Mandatory pools and associations .................................... 2,549 2,020
Structured settlements ............................................. 3,165 3,225
Total reinsurance recoverables ....................................... $10,712 $11,155
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
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