Travelers 2015 Annual Report Download - page 208

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. INSURANCE CLAIM RESERVES
Claims and claim adjustment expense reserves were as follows:
(at December 31, in millions) 2015 2014
Property-casualty ................................................. $48,272 $49,824
Accident and health .............................................. 23 26
Total ........................................................ $48,295 $49,850
The following table presents a reconciliation of beginning and ending property casualty reserve
balances for claims and claim adjustment expenses:
(at and for the year ended December 31, in millions) 2015 2014 2013
Claims and claim adjustment expense reserves at beginning of year ..... $49,824 $50,865 $50,888
Less reinsurance recoverables on unpaid losses ................... 8,788 9,280 10,254
Net reserves at beginning of year .......................... 41,036 41,585 40,634
Estimated claims and claim adjustment expenses for claims arising in the
current year ........................................... 14,412 14,621 14,060
Estimated decrease in claims and claim adjustment expenses for claims
arising in prior years ..................................... (897) (957) (944)
Total increases ........................................ 13,515 13,664 13,116
Claims and claim adjustment expense payments for claims arising in:
Current year ........................................... 5,666 5,828 5,485
Prior years ............................................ 8,669 8,099 8,477
Total payments ....................................... 14,335 13,927 13,962
Acquisitions(1) ........................................... 2— 1,792
Unrealized foreign exchange (gain) loss ......................... (395) (286) 5
Net reserves at end of year .............................. 39,823 41,036 41,585
Plus reinsurance recoverables on unpaid losses .................... 8,449 8,788 9,280
Claims and claim adjustment expense reserves at end of year ......... $48,272 $49,824 $50,865
(1) Amount in 2015 represents acquired net claims and claim adjustment expense reserves of Travelers
Participa¸c˜ oes em Seguros Brasil S.A. at October 1, 2015. Amount in 2013 represents acquired net
claims and claim adjustment expense reserves of Dominion at November 1, 2013. Dominion’s gross
reserves on that date were $2,144 million. Dominion’s reinsurance recoverables on unpaid losses
on that date were $352 million.
Gross claims and claim adjustment expense reserves at December 31, 2015 decreased by
$1.55 billion from December 31, 2014, primarily reflecting the impact of (i) payments related to
operations in runoff, including a $579 million payment related to the settlement of the Asbestos Direct
Action Litigation as described in more detail in note 16, (ii) net favorable prior year reserve
development and (iii) changes in foreign currency exchange rates. Gross claims and claim adjustment
expense reserves at December 31, 2014 decreased by $1.04 billion from December 31, 2013, primarily
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