Travelers 2015 Annual Report Download - page 39

Catastrophe reinsurance ...... A form of excess-of-loss reinsurance which, subject to a specified
limit, indemnifies the ceding company for the amount of loss in
excess of a specified retention with respect to an accumulation of
losses and related reinsurance reinstatement premiums resulting
from a catastrophic event. The actual reinsurance document is
called a ‘‘catastrophe cover.’’ These reinsurance contracts are
typically designed to cover property insurance losses but can be
written to cover casualty insurance losses such as from workers’
compensation policies.
Cede; ceding company ....... When an insurer reinsures its liability with another insurer or a
‘‘cession,’’ it ‘‘cedes’’ business and is referred to as the ‘‘ceding
company.’’
Ceded reinsurance .......... Insurance risks transferred to another company as reinsurance. See
‘‘Reinsurance.’’
Claim .................... Request by an insured for indemnification by an insurance company
for loss incurred from an insured peril.
Claim adjustment expenses .... See ‘‘Loss adjustment expenses (LAE).’’
Claims and claim adjustment
expenses ................ See ‘‘Loss’’ and ‘‘Loss adjustment expenses (LAE).’’
Claims and claim adjustment
expense reserves .......... See ‘‘Loss reserves.’’
Cohort ................... A group of items or individuals that share a particular statistical or
demographic characteristic. For example, all claims for a given
product in a given market for a given accident year would represent
a cohort of claims.
Combined ratio ............ For Statutory Accounting Practices (SAP), the combined ratio is the
sum of the SAP loss and LAE ratio and the SAP underwriting
expense ratio as defined in the statutory financial statements
required by insurance regulators. The combined ratio as used in this
report is the equivalent of, and is calculated in the same manner as,
the SAP combined ratio except that the SAP underwriting expense
ratio is based on net written premium and the underwriting expense
ratio as used in this report is based on net earned premiums.
The combined ratio is an indicator of the Company’s underwriting
discipline, efficiency in acquiring and servicing its business and
overall underwriting profitability. A combined ratio under 100%
generally indicates an underwriting profit. A combined ratio over
100% generally indicates an underwriting loss.
Other companies’ method of computing a similarly titled measure
may not be comparable to the Company’s method of computing this
ratio.
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