Travelers 2005 Annual Report Download - page 24

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Workers’ Compensation provides coverage for employers for specified benefits payable under state or
federal law for workplace injuries to employees. There are typically four types of benefits payable under
workers’ compensation policies: medical benefits, disability benefits , death benefits and vocational
rehabilitation benefits. The Company emphasizes managed care cost containment strategies, which involve
employers, employees and care providers in a cooperative effort that focuses on the injured employee’s
early return to work, cost-effective, quality care and customer service in this market.
Commercial Automobile provides coverage for businesses against losses incurred from personal bodily
injury, bodily injury to third parties, property damage to an insured’s vehicle, and property damage to
other vehicles and other property resulting from the ownership, maintenance or use of automobiles and
trucks in a business.
Property provides coverage for loss or damage to buildings, inventory and equipment from natural
disasters, including hurricanes, windstorms, earthquakes, hail, and severe winter weather. Also covered are
manmade events such as theft, vandalism, fires, explosions, terrorism and financial loss due tobusiness
interruption resulting from covered property damage. For additional information on terrorism coverages,
see “Reinsurance—Terrorism Risk Insurance Act of 2002.” Property also includes ocean and inland
marine insurance, which provides coverage for goods in transit, and unique one-of-a-kind exposures.
Commercial Multi-Peril provides a combination of property and liability coverage. Property insurance
covers damages such as those caused by fire, wind, hail, water, theft and vandalism, and protects businesses
from financial loss due to business interruption resulting from a covered loss. Liability coverage insures
businesses against third parties from accidents occurring on their premises or arising out of their
operations, such as injuries sustained from products sold.
International provides coverage predominantly through operations in the United Kingdom, Canada
and the Republic of Ireland, and at Lloyd’s. The coverage provided in those markets includes employers’
liability (similar to workers’ compensation coverage in the United States), public and product liability (the
equivalent of general liability), professional indemnity (similar to directors and officers or errors and
omissions coverages), motor (similar to automobile coverage in the United States) and property. While the
covered hazard may be similar to those in the U.S. market, the different legal environments can make the
product risks and coverage terms potentially very different from those in the United States. International
does not include surety business written in the Company’s Canadian, Me xican or United Kingdom
subsidiaries.
Geographic Distribution
The following table shows the distribution of Specialty’s direct written premiums for the states that
accounted for the majority of Domestic Specialty premium volume for the year ended December 31, 2005:
State
% of
Total
California ........................................................... 12.2 %
Texas. .............................................................. 8.8
New York........................................................... 7.3
Florida ............................................................. 7.0
Illinois.............................................................. 4.2
Pennsylvania ........................................................ 3.6
New Jersey.......................................................... 3.2
Massachusetts ....................................................... 3.0
All Others(1)........................................................ 50.7
Total............................................................. 100.0 %
(1) No other single state accounted for 3.0% or more of the total direct written premiums written in2005
by the Company.