Travelers 2005 Annual Report Download - page 25

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PERSONAL
Personal writes virtually all types of property and casualty insurance covering personal risks. The
primary coverages in Personal are automobile and homeowners insurance sold to individuals. These
products are distributed through independent agents, sponsoring organizations such as employee and
affinity groups, and joint marketing arrangements with other insurers.
Selected Product and Distribution Channel Information
The following table sets forthnet written premiums for Personal by product line for the periods
indicated. For a description of the product lines referred to in the accompanying table, see “—Product
Lines.” In addition, see “—Principal Markets and Methods of Distribution” for a discussion of distribution
channels for Personal’s product lines.
(for the year ended December 31, in millions) 2005 2004 2003
% of Total
2005
By product line:
Personal automobile................... $3,477 $3,433 $3,054 55.8 %
Homeowners and other. ................ 2,751 2,496 2,027 44.2
Total Personal....................... $6,228 $5,929 $5,081 100.0 %
Principal Markets and Methodsof Distribution
Personal products are distributed primarily through approximately 7,800 independent agents located
throughout the United States, supported by personnel in eleven marketing regions, three single state
companies and six business service centers. In selecting new independent agencies to distribute its
products, Personal considers each agency’s profitability, financial stability, staff experience and strategic fit
with Personal’s operating and marketing plans. Once an agency is appointed, Personal carefully monitors
its performance. While the principal markets for Personal’s insurance products are in states along the East
Coast, in the South and Texas, Personal is expanding its geographic presence across the United States.
Personal operates single state companies in Massachusetts, New Jersey and Florida with products
marketed primarily through independent agents. These states represented approximately 19% of Personal
direct written premiums in 2005. The companies were established to manage complex markets in
Massachusetts and New Jersey and property catastrophe exposure in Florida. Eachcompany has dedicated
resources in underwriting, claim, finance, legal and service functions.
Personal uses a consistent operating model with agents outside of the single state companies (see
discussion above). The model provides technological alternatives to agents to maximize their ease of doing
business. Personal agents quote and issue approximately 98% of Personal’s policies directly from their
agencies by leveraging either their own agency management system or using Personal’s proprietary quote
and issuance systems which allows agents to rate, quote and issue policies on line. All of these quote and
issue platforms interface with Personal’s underwriting and rating systems, which edit transactions for
compliance with Personal’s underwriting and pricing programs. Business processed by agents on these
platforms is subject to consultative review by Personal’s in-house underwriters. Personal also provides a
download capability that refreshes the individual agency system databases of approximately 4,800 agents
each day with updated policy information.
Personal continues to develop functionality to provide its agents witha comprehensive array of online
service capabilities packaged together inan easy-to-use agency service portal, including customer service,
marketing and claim functionality. Agencies can also choose to shift the ongoing core service responsibility
for Personal’s customers to one of the Company’s four Customer Care Centers, where the Company
renders customer service on behalf of an agency by providing a comprehensive array of direct customer