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Reinsurance
 9 Months Ended
Sep. 30, 2017
Reinsurance Disclosures [Abstract]  
Reinsurance
Reinsurance
Primary components of our property casualty reinsurance assumed include involuntary and voluntary assumed risks as well as contracts from our reinsurance assumed operations, known as Cincinnati Re. 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.

The table below includes our net written consolidated property casualty insurance premiums on assumed and ceded business:
(Dollars in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Direct written premiums
 
$
1,221

 
$
1,189

 
$
3,712

 
$
3,561

Assumed written premiums
 
26

 
23

 
101

 
86

Ceded written premiums
 
(39
)
 
(37
)
 
(103
)
 
(131
)
Net written premiums
 
$
1,208

 
$
1,175

 
$
3,710

 
$
3,516

 
 
 
 
 
 
 
 
 


Our condensed consolidated statements of income include earned consolidated property casualty insurance premiums on assumed and ceded business: 
(Dollars in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Direct earned premiums
 
$
1,195

 
$
1,153

 
$
3,547

 
$
3,409

Assumed earned premiums
 
39

 
22

 
99

 
53

Ceded earned premiums
 
(43
)
 
(42
)
 
(123
)
 
(119
)
Earned premiums
 
$
1,191

 
$
1,133

 
$
3,523

 
$
3,343

 
 
 
 
 
 
 
 
 

 
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 September 30,
 
Nine months ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Direct incurred loss and loss expenses
 
$
760

 
$
691

 
$
2,318

 
$
2,131

Assumed incurred loss and loss expenses
 
62

 
9

 
97

 
30

Ceded incurred loss and loss expenses
 
(7
)
 
(10
)
 
(18
)
 
(51
)
Incurred loss and loss expenses
 
$
815

 
$
690

 
$
2,397

 
$
2,110

 
 
 
 
 
 
 
 
 

 
Our life insurance company purchases reinsurance for protection of a portion of the risks that are written. Primary components of our life reinsurance program include individual mortality coverage, 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 September 30,
 
Nine months ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Direct earned premiums
 
$
72

 
$
74

 
$
223

 
$
220

Ceded earned premiums
 
(16
)
 
(16
)
 
(50
)
 
(45
)
Earned premiums
 
$
56

 
$
58

 
$
173

 
$
175

 
 
 
 
 
 
 
 
 

 
Our condensed consolidated statements of income include life insurance contract holders' benefits incurred on ceded business: 
(Dollars in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Direct contract holders' benefits incurred
 
$
73

 
$
72

 
$
236

 
$
228

Ceded contract holders' benefits incurred
 
(14
)
 
(9
)
 
(52
)
 
(40
)
Contract holders' benefits incurred
 
$
59

 
$
63

 
$
184

 
$
188

 
 
 
 
 
 
 
 
 


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