Travelers 2005 Annual Report Download - page 29

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advanced management information and dat a analysis, training, financial reporting an d control, and human
resources strategy. In addition to the field teams, claim staff is dedicated to each of Personal’s single state
companies in Florida, Massachusetts and New Jersey. This structure permits the Company to maintain the
economies of scale of a larger, established company while retaining the agility to respond promptly to the
needs of customers, brokers, agents and underwriters.
An integral part of the Company’s strategy to benefit customers and shareholders is its continuing
industry leadership in the fight against insurance fraud through its Investigative Services unit. The
Company has a nationwide staff of experts that investigate a wide array of insurance fraud schemes using
in-house forensic resources and other technological tools. This staff also has specialized expertise in fire
scene examinations, medical provider fraud schemes and data mining. The Company also dedicates
investigative resources to ensure that violations of law are reported to and prosecuted by law enforcement
agencies.
Claim Services uses advanced technology, management information, and data analysis to assist the
Company in reviewing its claim practices and results to evaluate and improve its performance. The
Company’s claim management strategy is focused on segmentation of claims and appropriate technical
specialization to drive effective claim resolution. The Company continually monitors its investment in
claim resources to maintain an effective focus on claim outcomes and a disciplined approach to continual
improvement. In recent years, the Company has invested significant additional resources in many of its
claim handling operations and routinelymonitors the effect of its investments to ensure a consistent
optimization between outcomes, cost, and service.
The Company’s proven catastrophe response strategy and its catastrophe claim handling teams were
instrumental in its response to a variety of weather-related losses that impacted the insurance industry in
both 2005 and 2004, including Hurricanes Katrina, Rita and Wilma (2005), and Hurricanes Charley,
Frances, Ivan and Jeanne (2004).
The Company is also a leader in bringing effective claim solutions that provide superior customer
service. One example of this is Concierge ClaimSM , a new worry-free auto claim service that features select
auto repair facilities with Company appraisers on site to complete an estimate, handle all rental
arrangements and monitor the repair process from start to finish. By managing theclaim in this way, the
Company can help ensure prompt, quality results and create a differentiated, superior claim experience for
customers.
Another strategic advantage is TravCompSM , a workers’ compensation claim resolution and medical
management program that assists adjusters in the prompt investigation and effective management of
workers’ compensation claims. Innovative medical and claims management technologies permit nurse,
medical and claims professionals to share appropriate vital information that supports prompt investigation,
effective return to work and claim resolution strategies. These technologies, together with effective
matching of professional skills and authority to specific claim issues, have resulted in more efficient
management of workers’ compensation claims with lower medical, wage replacement costs and loss
adjustment expenses.
REINSURANCE
The Company reinsures a portion of the risks it underwrites in order to control its exposure to losses
and protect capital resources. The Company cedes to reinsurers a portion of these risks and pays premiums
based upon the risk and exposure of the policies subject to such reinsurance. Ceded reinsurance involves
credit risk, except with regard to mandatory pools, and is generally subject to aggregate loss limits.
Although the reinsurer is liable to the Company to the extent of the reinsurance ceded, the Company
remains liable as the direct insurer on all risks reinsured. Reinsurance recoverables are reported after
reductions for known insolvencies and after allowancesfor uncollectible amounts. The Company also holds