Travelers 2006 Annual Report Download - page 179

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
167
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
property casualty carriers that do not have in-house expertise with reinsurance, underwriting,
engineering, claim handling and risk management services for this type of coverage.
•Global Accounts provides insurance to U.S. companies with foreign property and liability
exposures (“home-foreign”), and foreign organizations with property and liability exposures
located in the United States (“reverse-flow”), as part of a global program.
•Specialized Distribution. The following business units market and underwrite their products to
customers predominantly through licensed wholesale, general andprogram agents that manage
customers’ unique insurance requirements.
•Northland provides insurance coverage forthe commercial transportation industry, as well as
commercial liability and package policies for small, difficult to place specialty classes of
commercial business on an admitted or excess and surplus lines basis.
•National Programs offers tailored property and casualty programs on an admitted basis for
customers with common risk characteristics or coverage requirements. Programs available
include those for entertainment, architects andengineers, equipment rental and golf services.
•Underwriting Facilitiesserves small commercial businesses, offering general liability, property
and commercial auto physical damage coverages on an admitted or excess andsurplus lines
basis.
Business Insurance also includes the Special Liability Group (which manages the Company’s asbestos
and environmental liabilities); the assumed reinsurance, health care, and certain international and other
runoff operations; policies written by theCompany’s Gulf operation (Gulf), which was placedinto runoff
during the second quarter of 2004; and the Company’s Personal Catastrophe Risk operation, which was
sold in November 2005. The Company’s Personal Catastrophe Risk business had been included in the
Specialty segment prior to the August 2006 segment realignment. In accordance with the terms of the sale
agreement, the Company retained responsibility for the pre-saleclaims and claim adjustment expense
reserves related to the Personal Catastrophe Risk operation and remains responsible for any changes in
estimates in those reserves through a quota-share reinsurance agreement. These are collectively referred
to as Business Insurance Other. The Personal Catastrophe Risk operation accounted for the majority of
net written premiums in this category in 2005. In2004, Gulf and the Personal Catastrophe Risk operation
accounted for the majority of written premiums in this category.
Financial, Professional & International Insurance
The Financial, Professional & International Insurancesegment includes surety and financial liability
coverages, which require a primarily credit-based underwriting process, as well as property and casualty
products that are primarily marketed on an international basis. The segment includes the following groups:
•Bond & Financial Products provides a wide range of customers with bond and insurance products
and risk management services. The range of coverages includes surety and fidelity bonds, for
construction and general commercial enterprises; professional liability and management liability for
public corporations, private companies and not-for-profit organizations for losses caused by the
negligence or misconduct of named directors and officers; professional liability for a variety of