Travelers 2010 Annual Report Download - page 183

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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, the Republic
of Ireland and Canada, 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 coverages for losses caused by the actual or alleged negligence or
misconduct of directors and officers or employee dishonesty; employment practices liability
coverages and fiduciary coverages for public corporations, private companies and not-for-profit
organizations; professional liability coverage for actual or alleged errors and omissions
committed in the course of professional conduct or practice for a variety of professionals
including, among others, lawyers, design professionals and real estate agents; and professional
and management liability, property, auto and general liability and fidelity insurance for financial
institutions.
•International, through its operations in the United Kingdom, Canada and the Republic of
Ireland, offers specialized insurance and risk management services to several customer groups,
including, among others, those in the technology, public services, and financial and professional
services industry sectors. In addition, in the Republic of Ireland, the Company writes personal
automobile coverage. International, through its Lloyd’s syndicate (Syndicate 5000), for which the
Company provides 100% of the capital, underwrites through five principal business units—
marine, global property, accident & special risks, power & utilities and aviation.
On November 3, 2010, an indirect subsidiary of the Company entered into a definitive agreement
to commence a joint venture with J. Malucelli Participa¸c˜ oes em Seguros e Resseguros S.A, a Brazilian
company (‘‘J. Malucelli’’), through the acquisition of approximately 43% of J. Malucelli’s common
stock. J. Malucelli is currently the market leader in surety in Brazil based on market share. The
transaction is subject to customary closing conditions and is expected to be finalized in the first half of
2011.
Personal Insurance
The Personal Insurance segment writes virtually all types 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.
Automobile policies provide coverage for liability to others for both bodily injury and property
damage, and for physical damage to an insured’s own vehicle from collision and various other perils. In
addition, many states require policies to provide first-party personal injury protection, frequently
referred to as no-fault coverage.
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