Travelers 2005 Annual Report Download - page 21

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•Underwriting Facilities underwrites liability and property facilities produced by wholesalers and
managing general agents (MGAs). MGAs are licensed insurance agents that manage
customers with unique requirements, primarily those with moderate- to high-hazard exposures
requiring expertise in the surplus lines marketplace and the ability to use policy forms not
subject to regulatory requirements. Coverages include property, commercial auto and general
liability.
•Umbrella/Excess and Surplus Group, which consists of two distinct business units:
(a) Specialty Excess and Umbrella (SEU) focuses on umbrella and excess liability business
distributed by retail agents and brokers, where other insurance companies are providing
the primary coverage. This group also provides coverages in the case where other
Company business groups prefer to outsource the underwriting of umbrella and excess
business based on the expertise and/or limit capacity of SEU. The coverages
underwritten are typically commercial auto, general liability and product liability.
Umbrella coverage may also be underwritten over a company that retains risk or has a
self-insured retention, instead of a scheduled underlying policy.
(b) Excess & Surplus Lines (E&S Lines) offers mono-line umbrella and excess coverage
where the Company does not write the primary casualty coverage, or where other
business groups within the Company prefer to outsource the underwriting of umbrella
and excess business based on the expertise and/or limit capacity of E&S Lines. Business
is written on a non-admitted basis through established wholesalers. The coverages
typically underwritten include commercial auto, general liability and product liability.
In November 2005, the Company sold its Personal Catastrophe Risk business, which had been
included in the Specialty segment. In accordance with the terms of the agreement, the Company retained
responsibility for the pre-sale claims and claim adjustment expense reserves related to this business and
remains responsible for any changes in estimates in those reserves through a quota-share reinsurance
agreement.
International Specialty includes coverages marketed and underwritten to several specialty customer
groups within the United Kingdom, Canada and the Republic of Ireland, the Company’s participation in
Lloyd’s, and the Global Underwriting business group.
Specialty’s International Operations are located in the United Kingdom, Canada and the Republic of
Ireland, where it offers specialized insurance and risk management services to several specialty customer
groups, including those in the technology, public services, and financial and professional services industry
sectors. The Company’s international operations primarily underwrite employers’ liability (similar to
workers’ compensation coverage in the United States), public and product liability (the equivalent of
general liability), professional indemnity (similar to professional liability coverage), motor (similar to
automobile coverage in the United States) and property.
The Global Underwriting business group underwrites “home-foreign” business, representingcoverage
for a U.S. organization’s property-liability exposures in a foreign country, and “reverse-flow” business,
which involves coverage of a foreign organization’s property or liability exposures located in the United
States, as part of a global program controlled by foreign insurers.
At Lloyd’s, Specialty underwrites four principal lines of business—aviation, marine, global property,
and accident and special risks—through Syndicate 5000, for which the Company provides 100% of the
capital. During the secondhalf of 2004, the Company made a decision to exit certain portions of the
Lloyd’s personal lines business. In early 2005, the Company sold the right to renew this business as well as
the operating companies that supported it.