Travelers 2011 Annual Report Download - page 3

  Annual Report 2011 Annual Report 
ŴTO OUR SHAREHOLDERS
One measure of a great company is how it performs in challenging
times The year  the costliest natural catastrophe year
on record proved to be challenging for both Travelers and the
insurance industry globally Weather events in the United States
were astonishing in their breadth and intensity  devastating
April tornadoes in Alabama and Missouri Hurricane Irene’s
onslaught along the East Coast wildfi res in Texas and an
October snowstorm dubbed “Storm Alfred” in the Northeast
Many of our customers lost their homes their cars and their
businesses And Travelers stood by them
In the insurance business we recognize that there will be years
 hopefully not too many  in which bad weather signifi cantly
aff ects our results This was one of those years
Travelers also continued to face a challenging economic
environment in  In particular yields on both treasury
securities and shortterm investments reached record lows
which adversely aff ected our investment income
Given this backdrop we are proud of how our company performed
in  Despite the punishing weather and low interest rates the
strength and competitive advantages of our businesses enabled
us to generate  operating income of  billion a return
on equity of  percent and an operating return on equity of 
percent We also produced net income per diluted share of 
Performance is never revealed in numbers alone We must also
assess how we arrived at a particular result and ask ourselves if
we did all we could do for the longterm success of our franchise
In this most challenging year we believe that we did so
“ We take seriously our customers’ reliance
on us to serve them in times of need Indeed
our reliability in responding to customers
during the century and a half that we have
been in business is a source of great pride
to all who work here
”
JAY S. FISHMAN — Chairman and Chief Executive Officer
Our catastrophe response strategy
It was not by luck or by accident that we were able to respond so
well to this year’s natural catastrophes Several years ago we took
the bold step of implementing an industryleading catastrophe
response strategy through which our customers are served almost
exclusively by Travelers employees This approach diff ers from the
common industry practice of employing third party claim adjusters
to fi ll in during periods of heavy claim volume Outside adjusters
can be in demand during a largescale event so we believe that
drawing on our own employee population allows us to respond
more quickly and effi ciently Furthermore as our employees
benefi t from Travelers’ extensive technical and customer
service training the service our employees deliver meaningfully
distinguishes Travelers in the marketplace Our response strategy
together with the expertise and commitment of our dedicated
employees allowed us to provide an exceptional response to these
catastrophic events
We have received a great deal of positive feedback from our
agents and customers about our response to the natural disasters
in  We would like you to be able to hear directly from them
 in their own words On our website we are providing brief
video accounts of their ordeals and our response specifi cally to
the April  tornadoes in Alabama See  Alabama Tornadoes
on page  of this report
We take seriously our customers’ reliance on us to serve them in
times of need Indeed our reliability in responding to customers
during the century and a half that we have been in business is a
source of great pride to all who work here and we believe this is
critical to the foundation of our successful future