Travelers 2013 Annual Report Download - page 51

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.
Combined ratio (SAP and
GAAP)................. For SAP, it is the sum of the SAP loss and LAE ratio and the SAP
underwriting expense ratio as defined in the statutory financial
statements required by insurance regulators. The GAAP combined
ratio is the equivalent of, and is calculated in the same manner as,
the SAP combined ratio except that the SAP underwriting expense
ratio is based on net written premium and the GAAP underwriting
expense ratio is based on net earned premiums.
The GAAP combined ratio as used in this Annual Report on
Form 10-K is an indicator of the Company’s underwriting discipline,
efficiency in acquiring and servicing its business and overall
underwriting profitability. A combined ratio under 100% generally
indicates an underwriting profit. A combined ratio over 100%
generally indicates an underwriting loss.
Commercial multi-peril policies . Refers to policies which cover both property and third-party liability
exposures.
Commutation agreement ...... An agreement between a reinsurer and a ceding company whereby
the reinsurer pays an agreed-upon amount in exchange for a
complete discharge of all obligations, including future obligations,
between the parties for reinsurance losses incurred.
Debt-to-total capital ratio ..... The ratio of debt to total capitalization.
Debt-to-total capital ratio
excluding net unrealized gain
(loss) on investments ....... The ratio of debt to total capitalization excluding the after-tax
impact of net unrealized investment gains and losses.
Deductible ................ The amount of loss that an insured retains.
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