Reinsurance

Primary components of our property casualty operations assumed reinsurance include involuntary and voluntary assumed as well as contracts from our reinsurance assumed operations, known as Cincinnati Re^SM. Primary components of our ceded reinsurance include a property per risk treaty, property excess treaty, casualty per occurrence treaty, casualty excess treaty, property catastrophe treaty and catastrophe bonds and retrocessions on our reinsurance assumed operations. 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.

Our condensed consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Direct earned premiums	$	1,137		$	1,093		$	2,256		$	2,169
Assumed earned premiums	16			3			31			5
Ceded earned premiums	(39		)	(37		)	(77		)	(74		)
Earned premiums	$	1,114		$	1,059		$	2,210		$	2,100

Our condensed consolidated statements of income include incurred consolidated property casualty insurance loss and loss expenses on assumed and ceded business:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Direct incurred loss and loss expenses	$	792		$	675		$	1,440		$	1,366
Assumed incurred loss and loss expenses	11			1			21			0
Ceded incurred loss and loss expenses	(44		)	(22		)	(41		)	(23		)
Incurred loss and loss expenses	$	759		$	654		$	1,420		$	1,343

Our change in ceded incurred compared to prior years resulted from an increase in current accident year losses.

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 and aggregate catastrophe and accidental death coverage in excess of certain deductibles.

Our condensed consolidated statements of income include earned life insurance premiums on ceded business:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Direct earned premiums	$	75		$	68		$	146		$	133
Ceded earned premiums	(16		)	(16		)	(29		)	(28		)
Earned premiums	$	59		$	52		$	117		$	105

Our condensed consolidated statements of income include life insurance contract holders' benefits incurred on ceded business:



(Dollars in millions)	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Direct contract holders' benefits incurred	$	80		$	72		$	156		$	144
Ceded contract holders' benefits incurred	(18		)	(14		)	(31		)	(26		)
Contract holders' benefits incurred	$	62		$	58		$	125		$	118

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