Travelers 2004 Annual Report Download - page 5

of our products and services. Equally important, we are
delivering these products and services to agents and
brokers through user-friendly platforms that make doing
business with us easier and more profitable for them.
Product Innovation. We embarked on a number of
initiatives in 2004 that will further improve our competitive
position. In our Personal segment, we continue to make
significant investments to enhance our pricing and
underwriting segmentation skills and claims-handling
effectiveness in order to drive even stronger performance.
In Select Accounts (our small commercial business), we
are working on an enhanced simple-to-use, web-based
technology that will meaningfully deliver even broader
coverages and product capabilities to the agent’s desk.
We are in the early stages of rolling out this new system,
and we are very excited about our agents’ reaction to it.
In our Specialty segment, understanding the unique
insurance needs and risks of our policyholders is critical
to the success of our business. Our goal is to anticipate
changes in the economic and business environment so
that we may effectively respond to the emerging needs
and risks of our customers. We continue to dedicate
talent and resources to bringing our specialized
approach to new industries and areas of coverage.
Driving economies of scale – systems integration
and expense reductions. We essentially completed our
back office and support conversions, and have turned
our full attention to our key business systems. These
conversions are now underway and are slated to be
completed in 2005 for systems related to policy
issuance and our Commercial business, and in 2006 for
those related to claim and our Specialty business.
In addition, we significantly exceeded the expense
savings we projected when the merger was announced.
Actual expense savings were $114 million in 2004, well
ahead of our initial estimate of $62 million for the year.
We are on track to achieve our targets of $350 million
in annual run-rate expense savings by December 2005
and $450 million in annual run-rate expense savings
by December 2006.
Our Future
Through all of these initiatives, we have created a
company with industry-leading product and service
capabilities and 30 business units focused on the
insurance needs of a wide range of commercial
enterprises and individuals. What sets us apart is not
just the efficiency created through our increased size,
but also the breadth of underwriting skill and claim
management experience we have in such a wide range
of businesses. These characteristics create competitive
advantages and underscore the very real benefits of
bringing together The St. Paul and Travelers.
Properly applying these competitive advantages to
generate profitable growth is our greatest opportunity.
We are confident in our future potential.
Legislative and Legal Environment
As part of their investigations of the insurance industry
trade practices, the Office of the Attorney General of
the State of New York, the Securities and Exchange
Commission and other government agencies have issued
subpoenas to a number of companies in the industry,
including St. Paul Travelers. We are cooperating fully
with each agency’s requests for information. We are
committed to the highest levels of business integrity and
have taken the actions necessary to make certain that our
employees understand our commitment to fair dealing.
St. Paul Travelers 2004 Annual Report 3
What sets us apart is not just the efficiency created
through our increased size, but also the breadth of
underwriting skill and claim management experience
we have in such a wide range of businesses.
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