Travelers 2013 Annual Report Download - page 219

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. INSURANCE CLAIM RESERVES
Claims and claim adjustment expense reserves were as follows:
(at December 31, in millions) 2013 2012
Property-casualty ................................................. $50,865 $50,888
Accident and health .............................................. 30 34
Total ........................................................ $50,895 $50,922
The following table presents a reconciliation of beginning and ending property casualty reserve
balances for claims and claim adjustment expenses:
(at and for the year ended December 31, in millions) 2013 2012 2011
Claims and claim adjustment expense reserves at beginning of year ..... $50,888 $51,353 $51,537
Less reinsurance recoverables on unpaid losses ................... 10,254 10,434 11,282
Net reserves at beginning of year .......................... 40,634 40,919 40,255
Estimated claims and claim adjustment expenses for claims arising in the
current year ........................................... 14,060 15,559 16,937
Estimated decrease in claims and claim adjustment expenses for claims
arising in prior years ..................................... (944) (1,074) (842)
Total increases ........................................ 13,116 14,485 16,095
Claims and claim adjustment expense payments for claims arising in:
Current year ........................................... 5,485 6,507 7,751
Prior years ............................................ 8,477 8,326 7,653
Total payments ....................................... 13,962 14,833 15,404
Acquisition(1) ........................................... 1,792 ——
Unrealized foreign exchange (gain) loss ......................... 563 (27)
Net reserves at end of year .............................. 41,585 40,634 40,919
Plus reinsurance recoverables on unpaid losses .................... 9,280 10,254 10,434
Claims and claim adjustment expense reserves at end of year ......... $50,865 $50,888 $51,353
(1) Dominion’s net claims and claim adjustment expense reserves at November 1, 2013 were
$1,792 million. Dominion’s gross reserves on that date were $2,144 million. Dominion’s reinsurance
recoverables on unpaid losses on that date were $352 million.
Gross claims and claim adjustment expense reserves at December 31, 2013 decreased by
$23 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, largely offset by the impact of the acquisition of Dominion. Gross
claims and claim adjustment expense reserves at December 31, 2012 decreased by $465 million from
December 31, 2011, primarily reflecting the impact of net favorable prior year reserve development as
well as payments related to operations in runoff, including asbestos and environmental claims.
209