Reinsurance

3 Months Ended

Mar. 31, 2012

Reinsurance

NOTE 8 – Reinsurance

Reinsurance mitigates the risk of highly uncertain exposures and limits the maximum net loss that can arise from large risks or risks concentrated in areas of exposure. Primary components of our property and casualty reinsurance program include a property risk treaty, casualty per occurrence treaty and property catastrophe treaty.

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

(In millions)	Three months ended March 31,
	2012			2011
Direct earned premiums	$	839		$	780
Assumed earned premiums		3			5
Ceded earned premiums		(44	)		(40	)
Net earned premiums	$	798		$	745

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

(In millions)	Three months ended March 31,
	2012				2011
Direct incurred loss and loss expenses	$	536		$	527
Assumed incurred loss and loss expenses		5			15
Ceded incurred loss and loss expenses		(2	)		(12	)
Net incurred loss and loss expenses	$	539		$	530

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 comprehensive income include earned life insurance premiums on ceded business:

(In millions)	Three months ended March 31,
	2012			2011
Direct earned premiums	$	54		$	50
Assumed earned premiums		-			-
Ceded earned premiums		(13	)		(13	)
Net earned premiums	$	41		$	37

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

(In millions)	Three months ended March 31,
	2012			2011
Direct contract holders' benefits incurred	$	53		$	53
Assumed contract holders' benefits incurred		-			-
Ceded contract holders' benefits incurred		(10	)		(8	)
Net incurred loss and loss expenses	$	43		$	45