Travelers 2006 Annual Report Download - page 105

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Net Written Premiums
(for the year ended December 31, in millions) 2006 2005 2004
Automobile......................................... $ 3 ,692 $3,477 $3,433
Homeowners and Other.............................. 3,019 2,751 2,496
Total Personal Insurance........................... $ 6 ,711 $6,228 $5,929
Gross and net written premiums in 2006 increased 8% over 2005. Net written premium volume in
2006 reflected increased costs for property catastrophe coverage (which reduces net written premiums),
while net written premiums in 2005 were reduced by $21 million of catastrophe-related reinstatement
premiums. In the Automobile line of business, net writtenpremium growth of 6% in 2006 over 2005
primarily reflected a strong increase in new business, partially offset by the impact of transitioning to six-
month policy terms in the second half of the year for the Company’s multivariate pricing product that
resulted in a lower amount of reported net written premiums in2006. Business retention rates in the
Automobile line of business remained strong and consistent with prior year rates. Renewal price changes
in 2006 remained positive but were slightly below those in 2005. New business volume in 2006 was
significantly higher than in 2005. The Company’s multivariate pricing product in the Automobile line of
business had been introduced in 37 states and the District of Columbia by the end of 2006.
In the Homeowners and Other line of business, net written premiums in 2006 grew 10% over 2005.
Business retention rates and new business volume in this line of businessremained strong and increased
over 2005. Renewal price changes in 2006 remained positive but declined from 2005. Net written premium
volume in this line of business in 2006 also benefited from cross-selling initiatives involving the Company’s
automobile multivariate pricing product.
Gross and net written premiums in 2005 increased 6% and 5%, respectively, over 2004. Growth in
2005 was concentrated in the Homeowners and Other product line, driven by continued renewal price
increases andnew business volume. Business retention rates in both the Automobile and Homeowners and
Other lines of business remained strong,and were consistent with 2004. In the Automobile line, renewal
price increases in 2005 remained positive, but declined when compared with 2004. However, new business
volume in 2005 in the Automobile line increased over 2004, primarily due to the introduction of the
Company’s new multivariate pricing product in selected states.
The Personal Insurance segment had approximately 7.1 million and 6.6 million policies in force at
December 31, 2006 and 2005, respectively. In the Automobile line of business,policies in force at
December 31, 2006 increased 10% over the samedate in 2005. Policies in force in the Homeowners and
Other line of business at December 31, 2006 grew by 8% over the same date in 2005.