Travelers 2006 Annual Report Download - page 177

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
165
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Nature of Operations
The Company is organized into three reportable business segments: Business Insurance, Financial,
Professional & International Insurance and Personal Insurance. In August 2006, the Company announced
a realignment of two of its three reportable business segments. The former Commercial and Specialty
segments were realigned into two new reportable segments: the Business Insurance segment and the
Financial, Professional & International Insurance segment. The Personal segment was renamed Personal
Insurance. The changes were designed to reflect the manner in which the Company’s businesses are
currently managed and represent an aggregation of products and services based on type of customer, how
the business is marketed and the manner in which risks are underwritten. The following discussion reflects
the realigned segment reporting structure, and the financial data for prior periods presented has been
reclassified to be consistent with the new segment structure.
The specific business segments are as follows:
Business Insurance
The BusinessInsurance segment offers a broad array of property and casualty insurance and
insurance-related services to its clients primarily in the United States. Business Insurance is organized into
the following six groups, which collectively comprise Business Insurance Core operations:
•Select Accounts serves small businesses for property and casualty products, including commercial
multi-peril, property,general liability, commercial auto and workers’ compensation insurance.
•Commercial Accounts serves primarily mid-sized businesses for property and casualty products,
including property, general liability, commercial multi-peril, commercial auto and workers’
compensation insurance. Certain units included in Commercial Accounts prior to the realignment
are now included in the Industry-Focused Underwriting, Target Risk Underwriting or Specialized
Distribution groups.
•National Accounts comprises three business units. The largest provides casualty products and
services to large companies, with particular emphasis on workers’ compensation, general liability
and automobile liability. National Accounts also includes Discover Re, which provides property and
casualty insurance products on anunbundled basis using third-party administrators for insureds
who utilize programs such as collateralized deductibles, captive reinsurers and self-insurance. In
addition, National Accounts includes the commercial residual market business, which primarily
offers workers’ compensation products and services to the involuntary market.
•Industry-Focused Underwriting. The following business units serve targeted industries with
differentiated combinations of insurance coverage, risk management, claims handling and other
services:
•Construction serves a broad range of construction businesses, offering guaranteed cost products
for small to mid-sized policyholders and loss sensitive programs for larger accounts. For the
larger accounts, the customer and the Company work together in actively managing and
controlling exposure and claims and they share risk through policy features such as deductibles
or retrospective rating. Products offered include workers’ compensation, general liability and
commercial auto coverages, and other risk management solutions.