Travelers 2006 Annual Report Download - page 18

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customer service operations, both of which are highly utilized by agencies. Approximately 4,700 agencies
have chosen to take advantage of Select Accounts’ service centers, which offer agencies a wide range of
services, including coverage and billing inquiries, policy changes, the assistance of licensed service
professionals and extended hours of operations.
Commercial Accounts sells a broad range of property and casualty insuranceproducts through a large
network of independent agents and brokers. Commercial Accounts’ primarily targets mid-sized businesses
with 50 to 1,000 employees. The Company offers a full line of products to its Commercial Accounts
customers with an emphasis on guaranteed cost programs. Each account is underwritten based on the
unique risk characteristics, loss history and coverage needs of the account. The ability to underwrite at this
detailed level allows Commercial Accounts to have a broad risk appetite and a diversified customer base.
National Accounts group is comprised of three business units. The largest unit sells a variety of
casualty products and services to large companies. National Accounts clients generally select loss-sensitive
products in connection with a large deductible or self-insured program and, to a lesser extent, a
retrospectively rated or a guaranteed cost insurance policy. Through a network of field offices, the
Company’s underwriting specialists work closely with national and regional brokers to tailor insurance
programs to meet clients’ needs. Workers’ compensation accounted for approximately 78% of sales to
National Accounts customers during 2006, based ondirect written premiums and fees. National Accounts
generated $346 million of fee income in 2006, excluding commercial residual market business discussed
below.
National Accounts includes the Company’s Discover Re operation, which principally provides
commercial auto liability, general liability, workers’ compensation andproperty coverages. It serves retail
brokers and insureds who utilize programs such as collateralized deductibles, captive reinsurers and self-
insurance.
In addition, National Accounts includes the Company’s commercial residual market business. The
Company’s commercial residual market business sells claims and policy management services to workers’
compensation pools throughout the United States. The Company services approximately 36% of the total
workers’ compensation assigned risk market. The Company is one of very few servicing carriers that
operate nationally. Assigned risk plan contracts generated $182 million in fee income in 2006.
Many National Accounts customers require insurance-related services in addition to or in lieu of pure
risk coverage, primarily for workers’ compensation and, to a lesser extent, general liability and commercial
automobile exposures. These types of services includerisk management services, such as claims
administration, loss control and risk management information services, and are generally offered in
connection with large deductible or self-insured programs. These services generate fee income rather than
net written premiums.
Industry-Focused Underwriting markets a wide array of property and casualty products and services
tailored to targeted industry segments. Unique marketing and underwriting groups are focused on
individual industry segments of significant size and complexity that require unique underwriting, claim, risk
managementorother insurance-related products and services. The following Industry-Focused units,
which are described in more detail on page 3 of thisreport, have been established: Construction,
Technology, Public Sector Services, Oil & Gas, and Agribusiness.
Products are distributed primarily through the same agents and brokers servicing Select Accounts and
Commercial Accounts, although there may be more business with agents that also specialize in servicing
the needs of certain of these industries.
Target Risk Underwriting services a wide customer base with uniqueand specialized insurance
products and services. These specialized units have expertise in meeting customers’ specialized property
and casualty coverage requirements. These units include National Property, Inland Marine, Ocean Marine,