Travelers 2003 Annual Report Download - page 31

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29
Product Lines
Travelers writes most types of property and casualty insurance covering personal risks. Personal Lines had
approximately 5.8 million policies in force at December 31, 2003. The primary coverages in Personal Lines are
personal automobile and homeowners insurance sold to individuals.
Personal Automobile provides coverage for liability to others for both bodily injury and property damage and for
physical damage to an insured’s own vehicle from collision and various other perils. In addition, many states require
policies to provide first-party personal injury protection, frequently referred to as no-fault coverage.
Homeowners and Other provides protection against losses to dwellings and contents from a wide variety of perils, as
well as coverage for liability arising from ownership or occupancy. Travelers writes homeowners insurance for
dwellings, condominiums and rental property contents. Travelers also writes coverage for personal watercraft,
personal articles such as jewelry, and umbrella liability protection.
Principal Markets and Methods of Distribution
Travelers Personal Lines products are distributed primarily through approximately 7,200 independent agencies located
throughout the United States, supported by personnel in twelve marketing regions, three single state companies and six
business service centers. In selecting new independent agencies to distribute Travelers products, Travelers considers
each agency’s profitability, financial stability, staff experience and strategic fit with Travelers operating and marketing
plans. Once an agency is appointed, Travelers carefully monitors its performance. While Travelers principal markets
for Personal Lines insurance are in states along the East Coast, in the South and Texas, Personal Lines is expanding its
geographical presence across the United States.
Travelers uses a consistent operating model with agents outside of the single state companies. The model provides
technological alternatives to agents to maximize their ease of doing business. Personal Lines agents quote and issue
96% of Travelers Personal Lines policies directly from their agencies by leveraging either their own agency
management system or using Travelers proprietary quote and issuance systems which allows agents to rate, quote and
issue policies on line. All of these quote and issue platforms interface with Travelers underwriting and rating systems,
which edit transactions for compliance with Travelers underwriting and pricing programs. Business processed by
agents on these platforms is subjected to consultative review by Travelers in-house underwriters. In the past year,
Travelers continued to increase use of Internet-based proprietary systems, and agents have transitioned approximately
94% of Travelers new business to these platforms. Travelers also provides an industry-leading download capability
that refreshes the individual agency system databases of approximately 3,700 agents each day with updated policy
information.
Travelers continues to develop functionality to provide its agents with a comprehensive array of online service
capabilities packaged together in an easy-to-use agency service portal, including customer service, marketing and
claim functionality. Agencies can also choose to shift the on-going core service responsibility for Travelers customers
to one of Travelers four Customer Care Centers, where Travelers functions as an extension of an agency’s servicing
operation by providing a comprehensive array of direct customer service needs, including response to billing and
coverage inquiries, and policy changes. Approximately 1,000 agents take advantage of this service alternative.
Personal Lines operates single state companies in Massachusetts, New Jersey and Florida with products marketed
primarily through independent agents. These states represented 21% of Personal Lines direct written premiums in
2003. The companies were established to manage complex markets in Massachusetts and New Jersey and property
catastrophe exposure in Florida. Each company has dedicated resources in underwriting, claim, finance, legal and
service functions. The establishment of these separate companies limits capital at risk in these markets.