Travelers 2007 Annual Report Download - page 13

PART I
Item 1. BUSINESS
The Travelers Companies, Inc. (together with its consolidated subsidiaries, the Company) is a
holding company principally engaged, through its subsidiaries, in providing a wide range of commercial
and personal property and casualty insurance products and services to businesses, government units,
associations and individuals. The Company, known as The St. Paul Companies, Inc. (SPC) prior to its
merger with Travelers Property Casualty Corp. (TPC) in 2004, is incorporated as a general business
corporation under the laws of the state of Minnesota and is one of the oldest insurance organizations
in the United States, dating back to 1853. The principal executive offices of the Company are located
at 385 Washington Street, St. Paul, Minnesota 55102, and the telephone number is [phone]. The
Company also maintains executive offices in New York, NY and Hartford, CT. The term ‘‘TRV’’ in this
document refers to The Travelers Companies, Inc., the parent holding company excluding subsidiaries.
On April 1, 2004, TPC merged with a subsidiary of SPC, as a result of which TPC became a
wholly-owned subsidiary of SPC, and SPC changed its name to The St. Paul Travelers Companies, Inc.
For accounting purposes, this transaction was accounted for as a reverse acquisition with TPC treated
as the accounting acquirer. Accordingly, this transaction was accounted for as a purchase business
combination, using TPC’s historical financial information and applying fair value estimates to the
acquired assets, liabilities and commitments of SPC as of April 1, 2004. Beginning on April 1, 2004, the
results of operations and financial position of SPC were consolidated with TPC’s results of operations
and financial position.
On February 26, 2007, The St. Paul Travelers Companies, Inc. changed its name to The Travelers
Companies, Inc. and began trading on the New York Stock Exchange under the new stock symbol
‘‘TRV.’’
For a summary of the Company’s revenues, operating income and total assets by reportable
business segments, see note 2 of notes to the Company’s consolidated financial statements.
PROPERTY AND CASUALTY INSURANCE OPERATIONS
The property and casualty insurance industry is highly competitive in the areas of price, service,
product offerings, agent relationships and method of distribution, i.e. use of independent agents,
exclusive agents, direct marketing (including use of toll-free numbers and the internet) and/or salaried
employees. According to A.M. Best, there are approximately 970 property casualty organizations in the
United States, comprising approximately 2,300 property and casualty companies. Of those organizations,
the top 150 accounted for approximately 91% of the consolidated industry’s total net written premiums
in 2006. The Company competes with both foreign and domestic insurers. In addition, several property
and casualty insurers writing commercial lines of business, including the Company, offer products for
alternative forms of risk protection in addition to traditional insurance products. These products
include large deductible programs and various forms of self-insurance that utilize captive insurance
companies and risk retention groups. The Company’s competitive position in the marketplace is based
on many factors, including the following:
• premiums charged;
• contract terms and conditions;
• products and services offered;
• claim service;
• agent, broker and client relationships;
• ratings assigned by independent rating agencies;
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