The Hartford 2010 Annual Report Download - page 41

41
Reserve Roll-forwards and Development
Based on the results of the quarterly reserve review process, the Company determines the appropriate reserve adjustments, if any, to
record. Recorded reserve estimates are changed after consideration of numerous factors, including but not limited to, the magnitude of
the difference between the actuarial indication and the recorded reserves, improvement or deterioration of actuarial indications in the
period, the maturity of the accident year, trends observed over the recent past and the level of volatility within a particular line of
business. In general, adjustments are made more quickly to more mature accident years and less volatile lines of business. Such
adjustments of reserves are referred to as “reserve development”. Reserve development that increases previous estimates of ultimate
cost is called “reserve strengthening”. Reserve development that decreases previous estimates of ultimate cost is called “reserve
releases”. Reserve development can influence the comparability of year over year underwriting results and is set forth in the paragraphs
and tables that follow.
A roll-forward follows of property and casualty insurance product liabilities for unpaid losses and loss adjustment expenses for the year
ended December 31, 2010:
For the year ended December 31, 2010
Property &
Casualty
Commercial
Consumer
Markets
Corporate and
Other
Total
Property and
Casualty
Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross $15,051 $2,109 $ 4,491 $ 21,651
Reinsurance and other recoverables 2,570 11 860 3,441
Beginning liabilities for unpaid losses and loss adjustment expenses, net 12,481 2,098 3,631 18,210
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes 3,579 2,737 — 6,316
Current accident year catastrophes 152 300 — 452
Prior accident years (361) (86) 251 (196)
Total provision for unpaid losses and loss adjustment expenses 3,370 2,951 251 6,572
Payments (3,485) (2,889) (460) (6,834)
Ending liabilities for unpaid losses and loss adjustment expenses, net 12,366 2,160 3,422 17,948
Reinsurance and other recoverables 2,361 17 699 3,077
Ending liabilities for unpaid losses and loss adjustment expenses, gross $14,727 $2,177 $ 4,121 $ 21,025
Earned premiums $5,744 $3,947
Loss and loss expense paid ratio [1] 60.7 73.2
Loss and loss expense incurred ratio 58.7 74.8
Prior accident years development (pts) [2] (6.3) (2.2)
[1] The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums.
[2] “Prior accident years development (pts)” represents the ratio of prior accident years development to earned premiums.