Travelers 2015 Annual Report Download - page 101

dismissed. The agreement in principle with PPG is still subject to several conditions. Given the
resolution of the objections to the Amended Plan the Company believes that the conditions will be
satisfied and accordingly, the Company’s obligations under this agreement in principle are included in
the Policyholders with Settlement Agreements category at December 31, 2015. At December 31, 2014
those obligations were included in the Home Office and Field Office category described below.
The Home Office and Field Office category relates to all other policyholders and also includes
IBNR reserves and reserves for the costs of defending asbestos-related coverage litigation. IBNR
reserves in the Home Office and Field Office category include amounts for new claims from and
adverse development on existing Home Office and Field Office policyholders, as well as reserves for
claims from policyholders reporting asbestos claims for the first time and for policyholders for which
there is, or may be, litigation. Policyholders are identified for the annual home office review based
upon, among other factors: a combination of past payments and current case reserves in excess of a
specified threshold (currently $100,000), perceived level of exposure, number of reported claims,
products/completed operations and potential ‘‘non-product’’ exposures, size of policyholder and
geographic distribution of products or services sold by the policyholder. The Assumed Reinsurance and
Other category primarily consists of reinsurance of excess coverage, including various pool
participations.
The following table displays activity for asbestos losses and loss expenses and reserves:
(at and for the year ended December 31, in millions) 2015 2014 2013
Beginning reserves:
Gross ..................................... $2,520 $2,606 $2,689
Ceded .................................... (163) (256) (311)
Net ...................................... 2,357 2,350 2,378
Incurred losses and loss expenses:
Gross ..................................... 313 258 190
Ceded .................................... (89) (8) —
Net ...................................... 224 250 190
Paid loss and loss expenses:
Gross ..................................... 843 343 273
Ceded .................................... (73) (101) (55)
Net ...................................... 770 242 218
Foreign exchange and other:
Gross ..................................... (1) (1) —
Ceded .................................... ———
Net ...................................... (1) (1) —
Ending reserves:
Gross ..................................... 1,989 2,520 2,606
Ceded .................................... (179) (163) (256)
Net ...................................... $1,810 $2,357 $2,350
See ‘‘—Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves.’’
ENVIRONMENTAL CLAIMS AND LITIGATION
The Company has received and continues to receive claims from policyholders who allege that they
are liable for injury or damage arising out of their alleged disposition of toxic substances. Mostly, these
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