Travelers 2006 Annual Report Download - page 180

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
168
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
business represents the fourth quarter 2006 combination of the Company’s previous Bond and
Financial & Professional Services marketing groups.
In December 2006, the Company reached a definitive agreement to sell its Mexican surety
subsidiary, Afianzadora Insurgentes, S.A. de C.V., which accounted for $79 million of net written
premiums in 2006. The impact of this transaction will not be material to the Company’s results of
operations or financial condition.
•International and Lloyd’s includes coverages marketed to and underwritten for several customer
groups within the United Kingdom, Canada and the Republic of Ireland and business written as a
Corporate Member at Lloyd’s. International offers specialized insurance and risk management
services to several customer groups, including those in the technology, public services, and financial
and professional services industry sectors. International primarily underwrites employers’ liability
(similar to workers’ compensation coverage in the United States), public and product liability (the
equivalent of general liability), professional indemnity (similar to professional liability coverage),
motor (similar to automobile coverage in the United States) and property exposures. The Company
underwrites four principal lines of business—aviation, marine, global property, and accident and
special risks—through its Lloyd’s syndicate (Syndicate 5000), for which the Company provides
100% of the capital. During the second half of 2004, the Company made a decision to exit certain
portions of the Lloyd’s personal lines business and, in early 2005, sold the right to renew this
business as well as the operating companies that supported it.
Personal Insurance
The Personal Insurance segment writes virtually all types of property and casualty insurance covering
personal risks. The primary coverages in Personal Insurance are automobile and homeowners insurance
sold to individuals. These products are distributed through independent agents, sponsoring organizations
such as employee and affinity groups, and jointmarketing arrangements with other insurers.
Automobile policies provide coverage for liability to others for both bodily injury and property
damage, and for physical damage to an insured’s own vehicle from collision and various other perils. In
addition, many states require policies to provide first-party personal injury protection, frequently referred
to as no-fault coverage.
Homeowners policies are available for dwellings, condominiums, mobile homes and rental property
contents. Protection againstlosses to dwellings and contents from a wide variety of perils is included in
these policies, as well as coverage for liability arising from ownership or occupancy.
In January 2007, the Company reached a definitive agreement to sell its subsidiary, Mendota
Insurance Company and its wholly-owned subsidiaries, Mendakota Insurance Company and Mendota
Insurance Agency, Inc. These subsidiaries primarily offered nonstandard automobile coverage and
accounted for approximately $187 million of net written premium volume in 2006. The sale is not expected
to be material to the Company’s results of operations orfinancial condition.
professionals, such as lawyers, design professionals and real estate agents for liability from errors and
omissions committed inthe course of professional conduct or practice; and a full range of property,
auto, liability, fidelity and professional/management liability insurance for financial institutions. This