Travelers 2004 Annual Report Download - page 144

THE ST. PAUL TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Automobile policies provide 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 policies are available for dwellings, condominiums, mobile homes and rental property
contents. Protection against losses to dwellings and contents from a wide variety of perils is included in these
policies, as well as coverage for liability arising from ownership or occupancy.
Net written premiums by product line were as follows:
(for the year ended December 31, in millions) 2004 2003 2002
Automobile ........................................................... $3,433 $3,054 $2,843
Homeowners and other .................................................. 2,496 2,027 1,732
Total Personal ..................................................... $5,929 $5,081 $4,575
Asset Management
The Asset Management segment is comprised of the Company’s majority interest in Nuveen Investments,
Inc., whose core businesses are asset management and related research, as well as the development, marketing
and distribution of investment products and services for the affluent, high-net-worth and institutional market
segments. Nuveen Investments distributes its investment products and services, including individually managed
accounts, closed-end exchange-traded funds and mutual funds, to the affluent and high-net-worth market
segments through unaffiliated intermediary firms including broker/dealers, commercial banks, affiliates of
insurance providers, financial planners, accountants, consultants and investment advisors. Nuveen Investments
also provides managed account services to several institutional market segments and channels. Nuveen
Investments markets its capabilities under four distinct brands: Rittenhouse (“blue-chip” growth-style equities);
NWQ (value-style equities); Nuveen (fixed-income investments); and Symphony (an institutional manager of
market-neutral alternative investment portfolios). Nuveen Investments is listed on the New York Stock
Exchange, trading under the symbol “JNC.” The Company’s interest in Nuveen Investments was approximately
79% at December 31, 2004.
Catastrophe Exposure
The Company has geographic exposure to catastrophe losses in certain areas of the country. Catastrophes
can be caused by various natural and man-made events including hurricanes, windstorms, earthquakes, hail,
severe winter weather, explosions and fires. The incidence and severity of catastrophes are inherently
unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure
in the area affected by the event and the severity of the event. Most catastrophes are restricted to small
geographic areas; however, hurricanes and earthquakes may produce significant damage in larger areas,
especially those that are heavily populated. The Company generally seeks to reduce its exposure to catastrophes
through individual risk selection and the purchase of catastrophe reinsurance.
On November 26, 2002, the Terrorism Risk Insurance Act of 2002 (the Terrorism Act) was enacted into
Federal law and established the Terrorism Insurance Program (the Program), a temporary Federal program in the
Department of the Treasury, that provides for a system of shared public and private compensation for insured
losses resulting from acts of terrorism or war committed by or on behalf of a foreign interest. In order for a loss
to be covered under the Program (subject losses), the loss must be the result of an event that is certified as an act
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