Travelers 2009 Annual Report Download - page 22

Commercial Accounts business has historically been principally written through independent agents
and brokers. Competitors in this market are primarily national property and casualty insurance
companies that write most classes of business using traditional products and pricing, and regional
insurance companies. Companies compete based on product offerings, service levels, price and claim
and loss prevention services. Efficiency through automation and rapid response time to customer needs
is key to success in this market.
The National Accounts group is comprised of three business units:
• National Accounts business is typically written through national brokers and, to a lesser extent,
regional brokers. Insurance companies compete in this market based on price, product offerings,
claim and loss prevention services, managed care cost containment, risk management
information systems and collateral requirements. National Accounts also offers a large network
of localized claim service centers which allows National Accounts the flexibility to respond more
quickly to the needs of its customers.
• Discover Re competes with traditional providers of commercial insurance coverages, as well as
other underwriters of property and casualty insurance in the alternative risk transfer market,
such as risk retention groups, self-insurance plans, captives managed by others, and a variety of
other risk-financing vehicles and mechanisms.
• National Accounts’ residual market business competes for state contracts to provide claims and
policy management services. These contracts, which generally have three-year terms, are selected
by state agencies through a bid process based on the quality of service and price. National
Accounts services approximately 32% of the total workers’ compensation assigned risk market,
making the Company one of the largest servicing carriers in the industry.
There are several other business groups in Business Insurance that compete in focused target
markets. Each of these markets is different and requires unique combinations of industry knowledge,
customized coverage, specialized risk control and loss handling services, and partnerships with agents
and brokers that also focus on these markets. Some of these business groups compete with national
carriers with similarly dedicated underwriting and marketing groups, whereas others compete with
smaller regional companies. Each of these business groups has regional structures that allow them to
deliver personalized service and local knowledge to their customer base. Specialized agents and
brokers, including managing general agents and wholesale agents, supplement this strategy. In all of
these business groups, the competitive strategy is market leadership attained through focused industry
knowledge applied to insurance and risk needs.
FINANCIAL, PROFESSIONAL & INTERNATIONAL INSURANCE
The Financial, Professional & International Insurance segment includes surety and financial
liability coverages, which primarily use credit-based underwriting processes, as well as property and
casualty products that are primarily marketed on a domestic basis in the United Kingdom, Canada and
the Republic of Ireland, and on an international basis through Lloyd’s. The segment includes the
following groups:
•Bond & Financial Products provides a wide range of customers with bond and insurance products
and risk management services. The range of coverages includes performance, payment and
commercial surety and fidelity bonds for construction and general commercial enterprises;
management liability for losses caused by the negligence or misconduct of directors and officers,
employee dishonesty, employment practices liability and fiduciary coverages for public
corporations, private companies and not-for-profit organizations; professional liability from
errors and omissions committed in the course of professional conduct or practice for a variety of
professionals including lawyers, design professionals and real estate agents; and professional and
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