Travelers 2008 Annual Report Download - page 4

2008 Annual Report
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the day. It also is reflected in our underwriting operations,
where we underwrite risks with a long-term and patient
orientation.
Strong operating focus — Our employees have not been
distracted by franchise-changing events, but instead have
been focused on consistently executing our strategy in the
marketplace. In other pages in this report, you will see the
specific business accomplishments this year, which build
consistently on our progress in previous years. Our initia-
tives of the past few years have paid off, and our top line
results remained stable throughout 2008.
These approaches, which have served us well in today’s
trying times, are combined with the company’s real com-
petitive advantages to build a foundation on which we
can operate successfully.
Key competitive advantages
Travelers has a series of competitive advantages that allow
us to attract business — in good times and bad — and to
manage it appropriately. Simply put, we focus on providing
quality products and services to our agents and our custom-
ers and in building the long-term value of our franchise. Key
competitive advantages include:
Unparalleled product breadth — Our ability to underwrite
successfully and respond to our agents’ product needs
matters significantly to them in that they can be more
productive in their own businesses. Also, this breadth of
business provides Travelers with diversification of under-
writing risk and assists our company in supporting more
sustainable and consistent profits.
Significant scale — The size of our business affords us an
opportunity in a number of our businesses to analyze data
using predictive modeling, and we believe, as a result, produce
more consistent and predictable underwriting results over
time. Our scale, in concert with our breadth of business, allows
us to have an important position with our independent
agents, and we are able to provide unparalleled information
to them that helps them to manage their businesses.
Ease of doing business — Time is valuable to agents, and
to strengthen our relationship with them, over the past
several years we have initiated a series of products that
have improved their ease of doing business with Travelers.
Among those are the launch of our TravelersExpressSM
product for small businesses and our Quantum Auto® and
Quantum Home® products for individuals, all multivariate
pricing products. We also have developed online quote and
issue tools for Agribusiness, Inland Marine and Ocean Marine,
among others.
Customer focus — Travelers knows that no two industries
are the same, so our IndustryEdge® products and services are
tailored to the specific needs of various industries. Specialized
underwriters create products and services that are designed
to help remove the uncertainty of complex and emerging risks
unique to those industries; dedicated risk control services are
aimed at minimizing risk and preventing loss; and dedicated
claim services ensure the expertise needed to evaluate, defend
and settle claims.
Local access — We have successfully formed a field organiza-
tion, including the appointment of Regional Presidents, which
allows our product breadth to be delivered locally with ease,
and we continue to improve our local approach. This year, to
better leverage our middle market broad product portfolio
and to increase our distribution reach across our middle mar-
ket businesses, we aligned the field staff of our Commercial
Accounts, Construction, Technology and Public Sector busi-
nesses to increase our focus on specialization while also
making it easier for agents to do more business with us.
The future
As our results this year show, we are favorably positioned for
and have effectively managed the challenging environment,
delivering positive experiences for our customers and solid
results for our shareholders. The competitive advantages noted
above matter most in tough conditions, as independent agents
and customers look for companies that will stand the test of time.
Even in these challenging times, there are positive signs. In
our underwriting operations, our recent data suggest that we
may now be starting to see early signs of an improvement in
the pricing environment in some areas. However, any potential
rate increase in 2009 could potentially be offset by an overall
decline in the demand for insurance. On the investment side of
our business, while the market still remains quite difficult, we
are hopeful that some investment areas in 2009 may provide
opportunities. Our results over the last few years have demon-
strated a consistent and successful approach to assuming and
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