Travelers 2014 Annual Report Download - page 41

Table of Contents
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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.
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 and related reinsurance reinstatement premiums 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."