The Hartford 2015 Annual Report Download - page 60

60
Impact of Re-estimates
The establishment of property and casualty insurance product reserves is an estimation process, using a variety of methods, assumptions
and data elements. Ultimate losses may vary materially from the current estimates. Many factors can contribute to these variations and
the need to change the previous estimate of required reserve levels. Subsequent changes can generally be thought of as being the result
of the emergence of additional facts that were not known or anticipated at the time of the prior reserve estimate and/or changes in
interpretations of information and trends.
The table below shows the range of annual reserve re-estimates experienced by The Hartford over the past ten years. The amount of
prior accident year development (as shown in the reserve rollforward) for a given calendar year is expressed as a percent of the
beginning calendar year reserves, net of reinsurance. The percentage relationships presented are significantly influenced by the facts and
circumstances of each particular year and by the fact that only the last ten years are included in the range. Accordingly, these percentages
are not intended to be a prediction of the range of possible future variability. See “Impact of key assumptions on reserve volatility”
within this section for further discussion of the potential for variability in recorded loss reserves.
Commercial
Lines Personal Lines
Property &
Casualty Other
Operations Total Property &
Casualty [1]
Annual range of prior accident year unfavorable
(favorable) development for the ten years ended
December 31, 2015 (3.1)% - 1.0% (6.9)% - (0.2)% 1.9% - 9.3% (1.2)% - 2.0%
[1] Excluding the reserve increases for asbestos and environmental reserves, over the past ten years reserve re-estimates for total property and
casualty insurance ranged from (2.5)% to 0.3%.
The potential variability of the Company’s property and casualty insurance product reserves would normally be expected to vary by
segment and the types of loss exposures insured by those segments. Illustrative factors influencing the potential reserve variability for
each of the segments are discussed above.
A table depicting the historical development of the liabilities for unpaid losses and loss adjustment expenses, net of reinsurance, follows:
Loss Development Table
Loss And Loss Adjustment Expense Liability Development — Net of Reinsurance
Years Ended December 31,
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Liabilities for unpaid losses
and loss adjustment expenses,
net of reinsurance $16,863 $17,604 $18,231 $18,347 $18,210 $17,948 $18,517 $18,689 $18,676 $18,765 $18,943
Cumulative paid losses and
loss expenses
One year later 3,702 3,727 3,703 3,771 3,882 4,037 4,216 4,274 4,072 4,066
Two years later 6,122 5,980 5,980 6,273 6,401 6,664 6,897 7,019 6,801 —
Three years later 7,755 7,544 7,752 8,074 8,241 8,503 8,875 9,015 — —
Four years later 8,889 8,833 9,048 9,411 9,538 9,928 10,329 — — —
Five years later 9,903 9,778 10,061 10,395 10,649 11,015 — — — —
Six years later 10,674 10,564 10,845 11,303 11,534 — — — — —
Seven years later 11,334 11,216 11,612 12,072 — — — — — —
Eight years later 11,895 11,883 12,270 — — — — — — —
Nine years later 12,493 12,487 — — — — — — — —
Ten years later 13,044 — — — — — — — — —
Liabilities re-estimated
One year later 17,159 17,652 18,005 18,161 18,014 18,315 18,513 18,881 18,904 19,015
Two years later 17,347 17,475 17,858 18,004 18,136 18,275 18,686 19,207 19,170 —
Three years later 17,318 17,441 17,700 18,139 18,093 18,299 19,013 19,515 — —
Four years later 17,497 17,439 17,866 18,120 18,056 18,629 19,375 — — —
Five years later 17,613 17,676 17,848 18,092 18,408 18,980 — — — —
Six years later 17,895 17,673 17,857 18,437 18,742 — — — — —
Seven years later 17,899 17,749 18,215 18,764 — — — — — —
Eight years later 18,045 18,097 18,499 — — — — — — —
Nine years later 18,390 18,372 — — — — — — — —
Ten years later 18,640 — — — — — — — — —
Deficiency (redundancy), net
of reinsurance $ 1,777 $ 768 $ 268 $ 417 $ 532 $ 1,032 $ 858 $ 826 $ 494 $ 250