Travelers 2012 Annual Report Download - page 50

Casualty insurance .......... Insurance which is primarily concerned with the losses caused by
injuries to third persons, i.e., not the insured, and the legal liability
imposed on the insured resulting therefrom. It includes, but is not
limited to, employers’ liability, workers’ compensation, public
liability, automobile liability, personal liability and aviation liability
insurance. It excludes certain types of losses that by law or custom
are considered as being exclusively within the scope of other types
of insurance, such as fire or marine.
Catastrophe ............... A severe loss, resulting from a variety of events, including, among
others, hurricanes, tornadoes and other windstorms, earthquakes,
hail, wildfires, severe winter weather, floods, tsunamis and volcanic
eruptions. Catastrophes can also result from a terrorist attack
(including those involving nuclear, biological, chemical or
radiological events), explosions, infrastructure failures or as a
consequence of political instability. Each catastrophe has unique
characteristics and catastrophes are not predictable as to timing or
amount. Their effects are included in net and operating income and
claims and claim adjustment expense reserves upon occurrence. A
catastrophe may result in the payment of reinsurance reinstatement
premiums and assessments from various pools.
Catastrophe loss ............ Loss and directly identified loss adjustment expenses from
catastrophes, and related reinsurance reinstatement premiums.
Catastrophe reinsurance ...... A form of excess-of-loss reinsurance which, subject to a specified
limit, indemnifies the ceding company for the amount of loss in
excess of a specified retention with respect to an accumulation of
losses resulting from a catastrophic event. The actual reinsurance
document is called a ‘‘catastrophe cover.’’ These reinsurance
contracts are typically designed to cover property insurance losses
but can be written to cover casualty insurance losses such as from
workers’ compensation policies.
Cede; ceding company ....... When an insurer reinsures its liability with another insurer or a
‘‘cession,’’ it ‘‘cedes’’ business and is referred to as the ‘‘ceding
company.’’
Ceded reinsurance .......... Insurance risks transferred to another company as reinsurance. See
‘‘Reinsurance.’’
Claim .................... Request by an insured for indemnification by an insurance company
for loss incurred from an insured peril.
Claim adjustment expenses .... See ‘‘Loss adjustment expenses (LAE).’’
Claims and claim adjustment
expenses ................ See ‘‘Loss’’ and ‘‘Loss adjustment expenses (LAE).’’
Claims and claim adjustment
expense reserves .......... See ‘‘Loss reserves.’’
Cohort ................... A group of items or individuals that share a particular statistical or
demographic characteristic. For example, all claims for a given
product in a given market for a given accident year would represent
a cohort of claims.
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