Travelers 2013 Annual Report Download - page 144

inappropriate and ineffective to use the formulas to rate or to rank these companies. At December 31,
2013, all of the Company’s insurance subsidiaries had adjusted capital in excess of amounts requiring
any company or regulatory action.
Off-Balance Sheet Arrangements
The Company has entered into certain contingent obligations for guarantees related to the sale of
business entities, certain investments, third-party loans related to certain investments, certain insurance
policy obligations of former insurance subsidiaries and various other indemnifications. See note 16 of
notes to the Company’s consolidated financial statements. The Company does not expect these
arrangements will have a material effect on the Company’s financial position, changes in financial
position, revenues and expenses, results of operations, liquidity, capital expenditures or capital
resources.
CRITICAL ACCOUNTING ESTIMATES
The Company considers its most significant accounting estimates to be those applied to claims and
claim adjustment expense reserves and related reinsurance recoverables, investment valuation and
impairments, and goodwill and other intangible assets impairments.
Claims and Claim Adjustment Expense Reserves
Gross claims and claim adjustment expense reserves by product line were as follows:
2013 2012
(at December 31, in millions) Case IBNR Total Case IBNR Total
General liability .................... $ 5,355 $ 8,604 $13,959 $ 5,525 $ 9,109 $14,634
Commercial property ................ 778 542 1,320 992 638 1,630
Commercial multi-peril .............. 1,879 1,707 3,586 2,018 1,723 3,741
Commercial automobile .............. 2,305 1,219 3,524 2,343 1,241 3,584
Workers’ compensation .............. 9,918 7,856 17,774 9,684 7,589 17,273
Fidelity and surety .................. 426 818 1,244 479 934 1,413
Personal automobile ................ 1,793 785 2,578 1,980 722 2,702
Homeowners and personal—other ...... 635 551 1,186 1,335 809 2,144
International and other .............. 3,585 2,109 5,694 2,216 1,551 3,767
Property-casualty ................. 26,674 24,191 50,865 26,572 24,316 50,888
Accident and health ................. 30—3034—34
Claims and claim adjustment expense
reserves ...................... $26,704 $24,191 $50,895 $26,606 $24,316 $50,922
Gross claims and claim adjustment expense reserves at December 31, 2013 decreased by
$27 million from December 31, 2012, primarily reflecting the impact of net favorable prior year reserve
development, payments related to catastrophes and payments related to operations in runoff, including
asbestos and environmental claims, partially offset by the impact of the acquisition of Dominion.
Dominion’s reserves at December 31, 2013 were included in the ‘‘International and other’’ category in
the foregoing table.
Asbestos and environmental reserves are included in the General liability, Commercial multi-peril
and International and other lines in the foregoing summary table. Asbestos and environmental reserves
are discussed separately; see ‘‘Asbestos Claims and Litigation’’, ‘‘Environmental Claims and Litigation’’
and ‘‘Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves.’’
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