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Reinsurance
 12 Months Ended
Dec. 31, 2014
Reinsurance Disclosures [Abstract]  
Reinsurance
Reinsurance
Reinsurance mitigates the risk of highly uncertain exposures and reduces the maximum net loss that can arise from large risks or risks concentrated in areas of exposure. Management’s decisions about the appropriate level of risk retention are affected by various factors, including changes in our underwriting practices, capacity to retain risks and reinsurance market conditions.

Primary components of our property and casualty reinsurance program include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and catastrophe bonds.
 
Our consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business:
(Dollars in millions)
 
Years ended December 31,
 
 
2014
 
2013
 
2012
Direct earned premiums
 
$
4,209

 
$
3,903

 
$
3,520

Assumed earned premiums
 
12

 
11

 
9

Ceded earned premiums
 
(176
)
 
(201
)
 
(185
)
Earned premiums
 
$
4,045

 
$
3,713

 
$
3,344

 
 
 
 
 
 
 

 
Our consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business:
(Dollars in millions)
 
Years ended December 31,
 
 
2014
 
2013
 
2012
Direct incurred loss and loss expenses
 
$
2,661

 
$
2,323

 
$
2,235

Assumed incurred loss and loss expenses
 
6

 
11

 
6

Ceded incurred loss and loss expenses
 
(40
)
 
(33
)
 
(104
)
Incurred loss and loss expenses
 
$
2,627

 
$
2,301

 
$
2,137

 
 
 
 
 
 
 

 
Our ceded incurred results generally vary with our catastrophe experience.

Our life insurance company purchases reinsurance for protection of a portion of the risk that is written. Primary components of our life reinsurance program include individual mortality coverage, aggregate catastrophe and accidental death coverage in excess of certain deductibles.
 
Our consolidated statements of income include earned life insurance premiums on ceded business:
(Dollars in millions)
 
Years ended December 31,
 
 
2014
 
2013
 
2012
Direct earned premiums
 
$
259

 
$
248

 
$
235

Ceded earned premiums
 
(61
)
 
(59
)
 
(57
)
Earned premiums
 
$
198

 
$
189

 
$
178

 
 
 
 
 
 
 

 
Our consolidated statements of income include life insurance contract holders’ benefits incurred on ceded business:
(Dollars in millions)
 
Years ended December 31,
 
 
2014
 
2013
 
2012
Direct contract holders' benefits incurred
 
$
299

 
$
266

 
$
232

Ceded contract holders' benefits incurred
 
(70
)
 
(62
)
 
(47
)
Contract holders' benefits incurred
 
$
229

 
$
204

 
$
185

 
 
 
 
 
 
 

 
The ceded benefits incurred can vary depending on the type of life insurance policy held and the year the policy was issued.