Travelers 2008 Annual Report Download - page 27

At Lloyd’s, International competes with other syndicates operating in the Lloyd’s market as well as
international and domestic insurers in the various markets where the Lloyd’s operation writes business
worldwide. Lloyd’s syndicates are increasingly capitalized by corporate capital, much of which is
provided by large international insurance enterprises. Competition is again based on price, product and
service offerings. The Company focuses on lines it believes it can underwrite effectively and profitably
with an emphasis on short-tail insurance lines. The Company underwrites through five principal
business units at Lloyd’s: aviation, marine, global property, accident & special risks, and power &
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) 2008 2007 2006 2008
By product line:
Personal automobile ................................ $3,660 $3,628 $3,692 52.3%
Homeowners and other ............................. 3,335 3,207 3,019 47.7
Total Personal Insurance ........................... $6,995 $6,835 $6,711 100.0%
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
and $187 million of net written premiums in the years ended December 31, 2007 and 2006, 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 10,100 independent
agents located throughout the United States, supported by personnel in 13 marketing regions, three
single state companies and five service centers. In selecting new independent agencies to distribute its
products, Personal Insurance considers, among other attributes, 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 operations in each of Massachusetts, New Jersey and
Florida with products marketed primarily through independent agents. These states represented
approximately 16% of Personal Insurance direct written premiums in 2008. These operations were
established to manage complex markets in Massachusetts and New Jersey and property catastrophe
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