Travelers 2015 Annual Report Download - page 104

The following table displays activity for environmental losses and loss expenses and reserves:
(at and for the year ended December 31, in millions) 2015 2014 2013
Beginning reserves:
Gross ......................................... $353 $355 $352
Ceded ........................................ (7) (11) (5)
Net .......................................... 346 344 347
Incurred losses and loss expenses:
Gross ......................................... 81 94 72
Ceded ........................................ (9) (7) (7)
Net .......................................... 72 87 65
Paid loss and loss expenses:
Gross ......................................... 56 95 87
Ceded ........................................ (1) (11) (3)
Net .......................................... 55 84 84
Acquired reserves, foreign exchange and other:(1)
Gross ......................................... (3) (1) 18
Ceded ........................................ 1—(2)
Net .......................................... (2) (1) 16
Ending reserves:
Gross ......................................... 375 353 355
Ceded ........................................ (14) (7) (11)
Net .......................................... $361 $346 $344
(1) Amounts in 2013 represent acquired reserves of Dominion at November 1, 2013.
UNCERTAINTY REGARDING ADEQUACY OF ASBESTOS AND ENVIRONMENTAL RESERVES
As a result of the processes and procedures discussed above, management believes that the
reserves carried for asbestos and environmental claims are appropriately established based upon known
facts, current law and management’s judgment. However, the uncertainties surrounding the final
resolution of these claims continue, and it is difficult to determine the ultimate exposure for asbestos
and environmental claims and related litigation. As a result, these reserves are subject to revision as
new information becomes available and as claims develop. The continuing uncertainties include,
without limitation, the risks and lack of predictability inherent in complex litigation, any impact from
the bankruptcy protection sought by various asbestos producers and other asbestos defendants, a
further increase or decrease in the cost to resolve, and/or the number of, asbestos and environmental
claims beyond that which is anticipated, the emergence of a greater number of asbestos claims than
anticipated as a result of extended life expectancies resulting from medical advances and lifestyle
improvements, the role of any umbrella or excess policies the Company has issued, the resolution or
adjudication of disputes pertaining to the amount of available coverage for asbestos and environmental
claims in a manner inconsistent with the Company’s previous assessment of these claims, the number
and outcome of direct actions against the Company, future developments pertaining to the Company’s
ability to recover reinsurance for asbestos and environmental claims and the unavailability of other
insurance sources potentially available to policyholders, whether through exhaustion of policy limits or
through the insolvency of other participating insurers. In addition, uncertainties arise from the
insolvency or bankruptcy of policyholders and other defendants. It is also not possible to predict
changes in the legal, regulatory and legislative environment and their impact on the future development
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