Travelers 2010 Annual Report Download - page 18

The automated underwriting platform has significantly streamlined the agent desktop underwriting
process, and as a result, it has allowed the Company to expand the number of distributors affiliated
with Select Accounts.
Commercial Accounts sells a broad range of property and casualty insurance products through a
large network of independent agents and brokers, primarily targeting mid-sized businesses with 50 to
1,000 employees. The Company offers a full line of products to its Commercial Accounts customers
with an emphasis on guaranteed cost programs. Each account is underwritten based on the unique risk
characteristics, loss history and coverage needs of the account. The ability to underwrite at this detailed
level allows Commercial Accounts to have a broad risk appetite and a diversified customer base.
National Accounts sells a variety of casualty products and services to large companies through a
network of national and regional brokers, primarily utilizing loss-sensitive products in connection with a
large deductible or self-insured program and, to a lesser extent, a retrospectively rated or a guaranteed
cost insurance policy. Discover Re provides property and casualty products and services through retail
brokers on an unbundled basis, using third-party administrators for insureds who utilize programs such
as collateralized deductibles, captive reinsurers and self-insurance. National Accounts provides
insurance-related services, such as risk management services, claims administration, loss control and risk
management information services, either in addition to, or in lieu of, pure risk coverage and generated
$182 million of fee income in 2010, excluding commercial residual market business. The commercial
residual market business of National Accounts sells claims and policy management services to workers’
compensation pools throughout the United States, and generated $65 million in fee income in 2010.
Workers’ compensation accounted for approximately 76% of sales to National Accounts customers
during 2010, based on direct written premiums and fees.
Industry-Focused Underwriting markets property and casualty insurance products and services
through a large network of agents and brokers. These products and services are tailored to targeted
industry segments of significant size and complexity that require unique underwriting, claim, risk
management or other insurance-related products and services.
Target Risk Underwriting markets property and casualty insurance products and services through a
large network of agents and brokers to a wide customer base having specialized property and casualty
coverage requirements.
Specialized Distribution distributes admitted and excess and surplus lines property and casualty
products predominantly through selected wholesale agents, both on a brokerage and managing general
underwriting basis, and through selected program agents. Brokers, general agents and program agents
operate in certain markets that are not typically served by the Company’s appointed retail agents, or
they maintain certain affinity arrangements in specialized market segments. The wholesale excess and
surplus lines market, which is characterized by the absence of rate and form regulation, allows for more
flexibility to write certain classes of business. In working with wholesale or program agents on a
brokerage basis, Specialized Distribution underwrites the business and sets the premium level. In
working with wholesale or program agents on a managing general underwriting or program manager
basis, the agents produce and underwrite business subject to underwriting guidelines that have been
specifically designed for each facility or program.
Pricing and Underwriting
Business Insurance has developed an underwriting and pricing methodology that incorporates
underwriting, claims, engineering, actuarial and product development disciplines for particular
industries. This approach is designed to maintain high-quality underwriting and pricing discipline. It
utilizes proprietary data gathered and analyzed with respect to its Business Insurance business over
many years. The underwriters and engineers use this information to assess and evaluate risks prior to
quotation. This information provides specialized knowledge about specific industry segments. This
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