Travelers 2002 Annual Report Download - page 24

This discussion contains certain forward-looking statements within
the meaning of the Private Litigation Reform Act of 1995. Forward-
looking statements are statements other than historical information or
statements of current condition. Words such as “expects,” “antici-
pates,” “intends,” “plans,”“believes,” “seeks” or “estimates,” or variations
of such words, and similar expressions are intended to identify for-
ward-looking statements. Examples of these forward-looking state-
ments include statements concerning:
• market and other conditions and their effect on future premiums,
revenues, earnings, cash flow and investment income;
• price increases, improved loss experience, and expense
savings resulting from the restructuring and other actions and ini-
tiatives announced in recent years;
• statements concerning the anticipated approval of the Western
MacArthur asbestos litigation settlement; and
• statements concerning our expectations of savings in our Health
Care segment as we settle claims in a runoff environment.
In light of the risks and uncertainties inherent in future projections,
many of which are beyond our control, actual results could differ mate-
rially from those in forward-looking statements. These statements
should not be regarded as a representation that anticipated events will
occur or that expected objectives will be achieved. Risks and uncer-
tainties include, but are not limited to, the following:
• changes in the demand for, pricing of, or supply of our products;
• our ability to effectively implement price increases;
• general economic conditions, including changes in interest rates
and the performance of financial markets;
• additional statement of operations charges if our loss reserves
are insufficient;
• our exposure to natural or man-made catastrophic events, which
are unpredictable, with a frequency or severity exceeding our
estimates, resulting in material losses;
• the possibility that claims cost trends that we anticipate in our
Health Care and other businesses may not develop as we expect;
• the impact of the September 11, 2001 terrorist attack and the
ensuing global war on terrorism on the insurance and reinsur-
ance industry in general, the implementation of the Terrorism
Risk Insurance Act and potential further intervention in the insur-
ance and reinsurance markets to make available insurance cov-
erage for acts of terrorism;
• risks relating to our potential exposure to losses arising from acts
of terrorism and our ability to obtain reinsurance covering such
exposures;
• risks relating to our continuing ability to obtain reinsurance cov-
ering catastrophe, surety and other exposures at appropriate
prices and/or in sufficient amounts;
• risks relating to the collectibility of reinsurance and adequacy of
reinsurance to protect us against losses;
• risks and uncertainties relating to international political develop-
ments, including the possibility of warfare, and their potential
effect on economic conditions;
• changes in domestic and foreign laws, tax laws and changes in
the regulation of our businesses which affect our profitability and
our growth;
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• the possibility of downgrades in our ratings significantly adversely
affecting us, including, but not limited to, reducing the number of
insurance policies we write, generally, or causing clients who
require an insurer with a certain rating level to use higher-rated
insurers or causing us to borrow at higher interest rates;
• the risk that our investment portfolio suffers reduced returns or
investment losses which could reduce our profitability;
• the effect of financial market and interest rate conditions on pen-
sion plan assumptions and contribution levels;
• the impact of assessments and other surcharges for guaranty
funds and second-injury funds and other mandatory pooling
arrangements;
• risks related to the business underwritten on our policy forms on
behalf of Platinum Underwriters Holdings, Ltd. (“Platinum”) and
fully reinsured to Platinum pursuant to the quota share reinsur-
ance agreements entered into in connection with the transfer of
our ongoing reinsurance operations to Platinum in 2002;
• loss of significant customers;
• risks relating to the decision of the bankruptcy court with respect
to the approval of the settlement of the Western MacArthur matter;
• changes in our estimate of insurance industry losses resulting
from the September 11, 2001 terrorist attack (including the
impact if that attack were deemed two insurable events rather
than one);
• adverse developments in non-Western MacArthur related
asbestos litigation (including claims that certain asbestos-related
insurance policies are not subject to aggregate limits);
• adverse developments in environmental litigation involving policy
coverage and liability issues;
• the effects of emerging claim and coverage issues on our busi-
ness, such as developments relating to issues such as mold con-
ditions, construction defects and changes in interpretation of the
named insured provision with respect to the uninsured/underin-
sured motorist coverage in commercial automobile policies;
• the growing trend of plaintiffs targeting property-liability insurers,
including us, in purported class action litigation relating to claim-
handling and other practices;
• the inability of our subsidiaries to pay dividends to us in suffi-
cient amounts to enable us to meet our obligations and pay
future dividends;
• the cyclicality of the property-liability insurance industry causing
fluctuations in our results;
• risks relating to our asset management business, including the
risk of material reductions to assets under management if we
experience poor investment performance;
• our dependence on the business provided to us by agents and
brokers;
• our implementation of new strategies, including our intention to
withdraw from certain lines of business, as a result of the strate-
gic review completed in late 2001;
• and various other matters.
Forward-Looking Statement Disclosure and Certain Risks