Travelers 2015 Annual Report Download - page 205

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. REINSURANCE (Continued)
covered by state guaranty associations. In the event that the life insurance company fails to make the
required annuity payments, the Company would be required to make such payments.
The following is a summary of reinsurance financial data reflected in the consolidated statement of
income:
(for the year ended December 31, in millions) 2015 2014 2013
Written premiums
Direct ................................................ $24,939 $24,844 $23,952
Assumed .............................................. 843 788 705
Ceded ................................................ (1,661) (1,728) (1,890)
Total net written premiums ............................... $24,121 $23,904 $22,767
Earned premiums
Direct ................................................ $24,740 $24,810 $23,891
Assumed .............................................. 814 743 717
Ceded ................................................ (1,680) (1,840) (1,971)
Total net earned premiums ............................... $23,874 $23,713 $22,637
Percentage of assumed earned premiums to net earned premiums .... 3.4% 3.1% 3.2%
Ceded claims and claim adjustment expenses incurred ............ $ 1,034 $ 953 $ 1,019
Ceded premiums include the premiums paid for coverage provided by the Company’s catastrophe
bonds.
Reinsurance recoverables include amounts recoverable on both paid and unpaid claims and were
as follows:
(at December 31, in millions) 2015 2014
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment
expenses ....................................................... $3,848 $4,270
Allowance for uncollectible reinsurance .................................. (157) (203)
Net reinsurance recoverables ......................................... 3,691 4,067
Mandatory pools and associations ...................................... 2,015 1,909
Structured settlements .............................................. 3,204 3,284
Total reinsurance recoverables ........................................ $8,910 $9,260
Terrorism Risk Insurance Program
The Terrorism Risk Insurance Program is a Federal program administered by the Department of
the Treasury authorized through December 31, 2020 that provides for a system of shared public and
private compensation for certain insured losses resulting from certified acts of terrorism.
In order for a loss to be covered under the program (subject losses), the loss must meet certain
aggregate industry loss minimums and must be the result of an event that is certified as an act of
terrorism by the U.S. Secretary of the Treasury, in consultation with the Secretary of Homeland
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