Travelers 2007 Annual Report Download - page 27

emphasis on short-tail insurance lines. The Company underwrites through five principal lines of
business at Lloyd’s: aviation, marine, global property, accident and special risks, and power and utilities.
PERSONAL INSURANCE
Personal Insurance writes a broad range 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, joint marketing arrangements with other insurers, and direct
marketing.
Selected Product and Distribution Channel Information
The following table sets forth net written premiums for Personal Insurance by product line for the
periods indicated. For a description of the product lines referred to in the following table, see
‘‘—Product Lines.’’ In addition, see ‘‘—Principal Markets and Methods of Distribution’’ for a discussion
of distribution channels for Personal Insurance’s product lines.
% of Total
(for the year ended December 31, in millions) 2007 2006 2005 2007
By product line:
Personal automobile ................................ $3,628 $3,692 $3,477 53.1%
Homeowners and other ............................. 3,207 3,019 2,751 46.9
Total Personal Insurance ........................... $6,835 $6,711 $6,228 100.0%
In April 2007, the Company completed the sale of 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 $49 million,
$187 million and $137 million of net written premiums in the years ended December 31, 2007, 2006
and 2005, respectively. The sale was not material to the Company’s results of operations or financial
position.
Principal Markets and Methods of Distribution
Personal Insurance products are distributed primarily through approximately 8,400 independent
agents located throughout the United States, supported by personnel in eleven marketing regions, three
single state companies and six service centers. In selecting new independent agencies to distribute its
products, Personal Insurance considers, among other matters, each agency’s profitability, financial
stability, staff experience and strategic fit with Personal Insurance’s operating and marketing plans.
Once an agency is appointed, Personal Insurance carefully monitors its performance. While the
principal markets for Personal Insurance’s insurance products are in states along the East Coast, in the
South and Texas, Personal Insurance continues to expand its geographic presence across the United
States.
Personal Insurance operates single state companies in Massachusetts, New Jersey and Florida with
products marketed primarily through independent agents. These states represented approximately 17%
of Personal Insurance direct written premiums in 2007. The companies were established to manage
complex markets in Massachusetts and New Jersey and property catastrophe exposure in Florida. The
companies in Massachusetts and New Jersey have dedicated resources in underwriting, claim, finance,
legal and service functions. The company in Florida has dedicated resources for claim, finance and
legal functions.
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