Travelers 2009 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 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 485 Lexington
Avenue, New York, New York 10017, and the telephone number is [phone]. The Company also
maintains executive offices in Hartford, Connecticut, and St. Paul, Minnesota. The term ‘‘TRV’’ in this
document refers to The Travelers Companies, Inc., the parent holding company excluding subsidiaries.
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. Distribution methods include the 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 997 property and
casualty groups in the United States, comprising approximately 2,400 property and casualty companies.
Of those groups, the top 150 accounted for approximately 92% of the consolidated industry’s total net
written premiums in 2008. 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, some
of which 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;
• local presence;
• geographic scope of business;
• overall financial strength;
• ratings assigned by independent rating agencies;
• experience and qualifications of employees; and
• technology and information systems.
In addition, the marketplace is affected by available capacity of the insurance industry, as
measured by policyholders’ surplus, and the availability of reinsurance. Industry capacity as measured
by surplus expands and contracts primarily in conjunction with profit levels generated by the industry.
Capital raised by debt and equity offerings may also increase a company’s surplus.
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