The Company cedes insurance to affiliated and unaffiliated insurers to enable the Company to manage capital and risk exposure. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company's procedures include careful initial selection of its reinsurers, structuring agreements to provide collateral funds where necessary, and regularly monitoring the financial condition and ratings of its reinsurers. The Company has ceded reinsurance in connection with the sales of its Retirement Plans and Individual Life businesses in 2013 to MassMutual and Prudential, respectively.

Reinsurance Recoverables

Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Reinsurance recoverables include an estimate of the amount of gross losses and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for business ceded to the reinsurance contracts. The Company calculates its ceded reinsurance projection based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded under reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

The Company's reinsurance recoverables are summarized as follows:



	As of
	December 31, 2015			December 31, 2014
Property and Casualty Insurance Products:
Paid loss and loss adjustment expenses	$	119		$	133
Unpaid loss and loss adjustment expenses	2,662			2,868
Gross reinsurance recoverables	2,781			3,001
Allowance for uncollectible reinsurance	(266		)	(271		)
Net reinsurance recoverables	$	2,515		$	2,730
Life Insurance Products:
Future policy benefits and unpaid loss and loss adjustment expenses and other policyholder funds and benefits payable
Sold businesses (MassMutual and Prudential)	$	19,369		$	18,997
Other reinsurers	1,305			1,193
Net reinsurance recoverables [1]	$	20,674		$	20,190
Reinsurance recoverables, net	$	23,189		$	22,920


[1]	No allowance for uncollectible reinsurance is required as of December 31, 2015 and December 31, 2014.

As of December 31, 2015, the Company has reinsurance recoverables from MassMutual and Prudential of $8.6 billion and $10.8 billion, respectively. As of December 31, 2014, the Company had reinsurance recoverables from MassMutual and Prudential of $8.6 billion and $10.4 billion, respectively. The Company's obligations to its direct policyholders that have been reinsured to MassMutual and Prudential are secured by invested assets held in trust. Net of invested assets held in trust, as of December 31, 2015, the Company has no reinsurance-related concentrations of credit risk greater than 10% of the Company’s consolidated stockholders’ equity.

The allowance for uncollectible reinsurance reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between reinsurers and cedants and the overall credit quality of the Company’s reinsurers. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance or charge off reinsurer balances that are determined to be uncollectible. Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group-wide offsets.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

Insurance Revenues

The effect of reinsurance on property and casualty premiums written and earned is as follows:



	For the years ended December 31,
Premiums Written	2015			2014			2013
Direct	$	10,861		$	10,571		$	10,564
Assumed	297			275			247
Ceded	(580		)	(602		)	(882		)
Net	$	10,578		$	10,244		$	9,929
Premiums Earned
Direct	$	10,704		$	10,531		$	10,494
Assumed	298			264			241
Ceded	(586		)	(699		)	(871		)
Net	$	10,416		$	10,096		$	9,864

The reduction in ceded premium for the years ended December 31, 2015 and 2014 were driven by the Company's decision to exit unprofitable programs, including captive programs where the Company ceded direct premiums to insured captive insurance companies. Ceded losses, which reduce losses and loss adjustment expenses incurred, were $336, $502, and $459 for the years ended December 31, 2015, 2014, and 2013, respectively.

The effect of reinsurance on life insurance earned premiums and fee income is as follows:



	For the years ended December 31,
	2015			2014			2013
Gross earned premiums, fees and other considerations	$	5,767		$	6,029		$	6,435
Reinsurance assumed	209			193			138
Reinsurance ceded	(1,707		)	(1,720		)	(1,780		)
Net earned premiums, fees and other considerations	$	4,269		$	4,502		$	4,793

The Company reinsures certain of its risks to other reinsurers under yearly renewable term, coinsurance, and modified coinsurance arrangements, and variations thereto. Yearly renewable term and coinsurance arrangements result in passing all or a portion of the risk to the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments. Modified coinsurance is similar to coinsurance except that the cash and investments that support the liabilities for contract benefits are not transferred to the assuming company, and settlements are made on a net basis between the companies.

The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. Insurance recoveries on ceded reinsurance agreements, which reduce death and other benefits, were $1,111, $863, and $913 for the years ended December 31, 2015, 2014, and 2013, respectively.

In addition, the Company has reinsured a portion of the risk associated with variable annuities and the associated GMDB and GMWB riders.