Travelers 2009 Annual Report Download - page 26

Bond & Financial Products underwrites and markets its products to national, mid-sized and small
businesses and organizations, as well as individuals, and distributes them through both national and
wholesale brokers, regional brokers and retail agents. Its reputation for timely and consistent decision
making, a nationwide network of local underwriting, claims and industry experts and strong producer
and customer relationships, as well as its ability to offer its customers a full range of products, provides
Bond & Financial Products an advantage over many of its competitors and enables it to compete
effectively in a complex, dynamic marketplace. The ability of Bond & Financial Products to cross-sell
its products to customers of the Business Insurance and Personal Insurance segments provides
additional competitive advantages for the Company.
International competes with numerous international and domestic insurers in the United Kingdom,
Canada and the Republic of Ireland. Companies compete on the basis of price, product offerings and
the level of claim and risk management services provided. The Company has developed expertise in
various markets in these countries similar to those served in the United States and provides both
property and casualty coverage for these markets. Products are generally distributed through a
relatively small broker base whose customer groups align with the Company’s targeted markets.
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. 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: marine, global property, accident & special risks, power & utilities and aviation.
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 the Personal Insurance segment’s business
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) 2009 2008 2007 2009
By product line:
Automobile...................................... $3,629 $3,660 $3,628 50.8%
Homeowners and Other............................. 3,520 3,335 3,207 49.2
Total Personal Insurance........................... $7,149 $6,995 $6,835 100.0%
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 of
net written premiums in the year ended December 31, 2007. The sale was not material to the
Company’s results of operations or financial position.
14