Travelers 2004 Annual Report Download - page 41

lesser extent, regional insurance companies and companies that have developed niche programs for specific
industry segments. In addition, many large commercial customers self-insure their risks or utilize large
deductibles on purchased insurance.
Bond underwrites and markets its products to national, mid-sized and small businesses and organizations as
well as individuals, and distributes them through both national and wholesale brokers, and retail agents and
regional brokers. Bond competes in the highly competitive surety and executive liability marketplaces. Both
national and regional property casualty insurance companies compete with Bond. Bond’s reputation for timely
and consistent decision-making, a nationwide network of local underwriting, claims and industry experts and
strong producer and customer relationships as well as its ability to offer its customers a full range of products,
enable it to compete effectively. Bond’s ability to cross-sell its products to customers of the Commercial and
Personal segments provides further competitive advantages for the Company.
Construction business has historically been written through independent agents and brokers. Competitors in
this industry include both national property casualty insurance companies and regional insurance companies.
Companies compete on price, coverage offerings, claim and loss prevention services, managed care cost
containment and risk management information systems. Construction offers a nationwide network of localized,
dedicated claim service professionals that provide greater flexibility in claims adjusting and allows Construction
to more quickly respond to the needs of its customers. In addition, dedicated risk control professionals work
directly with customers in the evaluation, design and implementation of safety programs to better control risk and
exposure to loss.
Financial and Professional Services business is typically written through national brokers, regional brokers,
and independent agents. Insurance companies compete on price and product offerings. The Company has
developed a strong reputation in this complex, dynamic market segment and has an advantage over many of its
competitors in offering a wide breadth of professional and general property and casualty coverages to its
financial and professional customers.
There are several other domestic business groups in Specialty that compete in focused target markets. Each
of these markets are different and require unique combinations of industry knowledge, proprietary coverage
forms, specialized risk control and loss handling services, and partnerships with agents and brokers that also
focus on these markets. In some cases the competition is national carriers with similarly dedicated underwriting
and marketing groups. In other cases smaller regional companies tend to be the primary competition. In either
case these businesses have regional structures that allow them to deliver personalized service and local
knowledge to their customer base. Specialized agents and brokers supplement this strategy. In all of these
businesses, the competitive strategy is market leadership attained through focused industry knowledge applied to
insurance and risk needs.
International Specialty competes with numerous international and local country insurers in the United
Kingdom, Canada and the Republic of Ireland. Companies compete on the basis of price, product offerings and
the level of claim and risk management services provided. Specialty has developed expertise in various specialty
markets in these countries similar to those served in the United States and provides both property and casualty
coverage for these markets. This specialty focus is a particular competitive advantage in these countries where
our competitors tend to be more product or line of business oriented. Products are generally distributed through a
fairly small number of local country brokers and agents whose customer groups align with the Company’s
specialty markets.
At Lloyd’s, International Specialty competes with other syndicates operating in the Lloyd’s market as well
as international and domestic insurers in the various markets where International Specialty writes business
worldwide. Syndicates are increasingly capitalized by corporate capital, much of which is provided by large
international insurance enterprises. Competition is again based on price and product offerings. International
Specialty has an exclusive focus on lines it believes it can underwrite effectively and profitably with an emphasis
on short-tail insurance (versus reinsurance) lines. Specialty underwrites four major classes of business at Lloyd’s:
Marine, Personal, Property and Aviation.
29