Travelers 2014 Annual Report Download - page 86

Table of Contents
development in each segment are discussed in more detail in note 7 of notes to the Company's consolidated financial statements.
Significant Catastrophe Losses
The Company defines a "catastrophe" as an event that:
•
is designated a catastrophe by internationally recognized organizations that track and report on insured losses resulting from
catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada; and
•
the Company's estimates of its ultimate losses before reinsurance and taxes exceed a pre - established dollar threshold.
The Company's threshold for disclosing catastrophes is determined at the reportable segment level. If a threshold for one segment or a
combination thereof is pierced and the other segments have losses from the same event, losses from the event are identified as catastrophe losses
in the segment results and for the consolidated results of the Company. The threshold for 2014 ranged from approximately $17 million to $30 million
of losses before reinsurance and taxes.
The following table presents for significant catastrophes the amount of losses recorded in each of the years ended December 31, 2014, 2013
and 2012, and the amount of related net unfavorable (favorable) prior year reserve development recognized in subsequent years as well as the
estimate of ultimate losses at December 31, 2014, 2013 and 2012. For purposes of the table, a significant catastrophe is an event for which the
Company estimates its ultimate losses will be $100 million or more after reinsurance and before taxes.
Amortization of Deferred Acquisition Costs
Amortization of deferred acquisition costs in 2014 was $3.88 billion, $61 million or 2% higher than in 2013, primarily reflecting the impact of the
acquisition of Dominion, partially offset by declines in the Personal Insurance segment. Amortization of deferred acquisition costs in 2013 was
$3.82 billion, $89 million or 2% lower than in 2012. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions
that follow.
85
Losses Incurred /
Unfavorable (Favorable)
Prior Year Reserve
Development for the Year
Ended December 31,
Estimated Ultimate
Losses at December 31,
(in millions, pretax and net of reinsurance)
2014
2013
2012
2014
2013
2012
2012
PCS Serial Number:
67 —Severe wind and hail storms
$
—
$
( 2
)
$
140
$
138
$
138
$
140
74 —Severe wind and hail storms
1
(20
)
171
152
151
171
76 —Severe wind and hail storms
(5
)
(10
)
148
133
138
148
83 —Severe wind storms
(1
)
2
136
137
138
136
90 —Storm Sandy
(62
)
(52
)
1,024
910
972
1,024
2013
PCS Serial Number:
93 —Severe wind and hail storms
5
114
n/a
119
114
n/a
15 —Severe wind and hail storms
16
128
n/a
144
128
n/a
2014
PCS Serial Number:
32 —Winter storm
144
n/a
n/a
144
n/a
n/a
43 —Severe wind and hail storms
180
n/a
n/a
180
n/a
n/a
n/a: not applicable.