Travelers 2006 Annual Report Download - page 23

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There are several other business groups in Business Insurance that compete in focused target markets.
Each of these markets is different and requires unique combinations of industry knowledge, proprietary
coverage forms, specialized risk control and loss handling services, and partnerships with agents and
brokers that also focus on thesemarkets. In some cases the competition is national carriers with similarly
dedicated underwriting and marketinggroups. In othercases, smaller regional companies tend to be the
primary competition. In either case, these businesses have regional structures that allow them to deliver
personalizedservice and local knowledge to their customer base. Specialized agents and brokers, including
managing general agents and wholesale agents, supplement this strategy. In all of these businesses, the
competitive strategy is market leadership attained through focused industry knowledge applied to
insurance and risk needs.
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
businesses:
•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
professionals, such as lawyers, design professionals andreal estate agents for liability from errors
and omissions committed in the course of professional conduct or practice; and a full range of
property, auto, liability, fidelity and professional/management liability insurance for financial
institutions. This 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.