Travelers 2015 Annual Report Download - page 210

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. INSURANCE CLAIM RESERVES (Continued)
year reserve development impacting the Company’s results of operations and $50 million of accretion
of discount.
Business and International Insurance. Net favorable prior year reserve development in 2014
totaled $322 million, primarily driven by (i) better than expected loss experience in the general liability
product line (excluding increases to asbestos and environmental reserves discussed below), primarily
related to excess coverages for accident years 2008 through 2012, reflecting a more favorable legal
environment than the Company previously expected, (ii) a $162 million benefit resulting from better
than expected loss experience related to, and the commutation of reinsurance treaties associated with, a
workers’ compensation reinsurance pool for accident years 1996 and prior, (iii) better than expected
loss experience in the property product line for accident years 2010 through 2013, including catastrophe
losses from Storm Sandy for accident year 2012 and (iv) better than expected loss experience in the
commercial auto product line for accident years 2011 and 2012. These factors contributing to net
favorable prior year reserve development in 2014 were partially offset by (i) $250 million and
$87 million increases to asbestos and environmental reserves, respectively, which are discussed in
further detail in the ‘‘Asbestos and Environmental Reserves’’ section below, (ii) an increase in
unallocated loss adjustment expense reserves of $77 million for interest awarded as part of damages
pursuant to a court decision in the third quarter of 2014 related to a legal matter, which is discussed in
more detail in the ‘‘Settlement of Asbestos Direct Action Litigation’’ section of note 16 and (iii) higher
than expected loss experience for liability coverages in the commercial multi-peril product line for
accident years 2010 through 2013.
Bond & Specialty Insurance. Net favorable prior year reserve development in 2014 totaled
$450 million, primarily driven by better than expected loss experience in the contract surety product
line for accident years 2012 and prior.
Personal Insurance. Net favorable prior year reserve development in 2014 totaled $169 million,
primarily driven by better than expected loss experience in the Homeowners and Other product line for
non-catastrophe weather-related losses for accident year 2013 and catastrophe losses for accident years
2011 through 2013.
2013.
In 2013, estimated claims and claim adjustment expenses incurred included $944 million of net
favorable development for claims arising in prior years, including $840 million of net favorable prior
year reserve development impacting the Company’s results of operations and $48 million of accretion
of discount.
Business and International Insurance. Net favorable prior year reserve development in 2013
totaled $399 million, primarily driven by better than expected loss experience in (i) the general liability
product line for excess coverages for accident years 2012 and prior (excluding increases to asbestos and
environmental reserves discussed below), reflecting a more favorable legal environment than the
Company previously expected, (ii) the property product line related to both catastrophe and
non-catastrophe losses for accident years 2010 through 2012, (iii) the workers’ compensation line of
business (which was largely offset by a $42 million charge that was precipitated by legislation in New
York enacted during the first quarter of 2013 related to the New York Fund for Reopened Cases for
workers’ compensation) and (iv) the surety line of business in Canada and the marine line of business
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