Travelers 2014 Annual Report Download - page 160

Table of Contents
The FASB and the International Accounting Standards Board (IASB) are in the final phases of their long
- term convergence program with the
intent of developing global standards for several significant areas of accounting, including the accounting for insurance contracts and financial
instruments. In February 2014, the FASB decided to discontinue the full insurance project and instead make targeted changes to U.S. GAAP for
insurance contracts. For property and casualty insurance contracts, the FASB decided to limit the targeted improvements to enhanced disclosures
and is targeting the first quarter of 2015 to finalize the new disclosure requirements. The IASB is expected to complete its project in 2016 which may
require valuation and accounting that is significantly different than under the U.S. GAAP model for short
- duration contracts.
In 2014, the IASB issued a final financial instruments standard with an effective date of January 1, 2018, which provides guidance that is
significantly different than current U.S. GAAP, e.g., under the new IFRS standard changes in the fair value of investments in equity securities
would be reported in earnings whereas current U.S. GAAP reports such changes in other comprehensive income, a component of shareholders'
equity. The FASB is in the final stages of completing an update to its current financial instruments guidance. The FASB has tentatively decided on
different models for impairments, and classification and measurement of financial instruments than the IASB. The tentative FASB decisions would
result in minor changes in the accounting of financial instruments for the Company's consolidated financial statements.
It appears likely that the Boards will have different insurance and financial instrument standards that could result in the Company having to
apply accounting standards for its consolidated financial statements that are different from the accounting standard used for local reporting in
foreign jurisdictions.
The Company is not able to predict whether it will choose to, or be required to, adopt IFRS or how the adoption of IFRS may impact the
Company's financial statements in the future.
FORWARD - LOOKING STATEMENTS
This report contains, and management may make, certain "forward
- looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical facts, may be forward
- looking statements. Words such as "may," "will,"
"should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates" and similar expressions are used to identify
these forward
- looking statements. Specifically, statements about the Company's outlook, share repurchase plans, expected margin improvement,
potential returns, future pension plan contributions and the potential impact of investment markets and other economic conditions on the
Company's investment portfolio and underwriting results, among others, are forward looking, and the Company may also make forward
- looking
statements about, among other things:
•
its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating
income, investment income and performance, loss costs, return on equity, and expected current returns and combined ratios);
•
the sufficiency of the Company's asbestos and other reserves;
•
the impact of emerging claims issues as well as other insurance and non - insurance litigation;
•
the cost and availability of reinsurance coverage;
•
catastrophe losses;
•
the impact of investment, economic and underwriting market conditions; and
•
strategic initiatives, including initiatives, such as in Personal Insurance, to improve profitability and competitiveness.
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