Travelers 2007 Annual Report Download - page 18

inquiries, policy changes, the assistance of licensed service professionals and extended hours of
operations.
Commercial Accounts sells a broad range of property and casualty insurance products 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 for the most part select
loss-sensitive products in connection with a large deductible or self-insured program and, to a much
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 77% of
sales to National Accounts customers during 2007, based on direct written premiums and fees. National
Accounts generated $293 million of fee income in 2007, 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 and property 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 $151 million in fee income in
2007.
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 include risk 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 management or other insurance-related products and services. The following Industry-
Focused units, which are described in more detail earlier in this report, 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 written with agents that also
specialize in servicing the needs of certain of these industries.
Target Risk Underwriting services a wide customer base with unique and 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, Excess Casualty, Boiler & Machinery, and Global Accounts, which are described in more detail
later in this report.
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