Travelers 2011 Annual Report Download - page 46

Chief Executive Officer and the other most senior members of management), the Enterprise and
Underwriting Risk Committees of management, the Credit Committee, the Chief Compliance Officer,
the Business Conduct Officer, the Corporate Actuarial group, the Corporate Audit group, the
Accounting Policy group, the Enterprise Underwriting group and many others. A senior executive
oversees the ERM process. The mission of this executive is to facilitate risk assessment and to
collaborate in implementing effective risk management strategies throughout the Company. Another
strategic ERM objective of this executive includes working across the Company to enhance effective
and realistic risk modeling capabilities as part of the Company’s overall effort to understand and
manage its portfolio of risks to be within its risk appetite. Board oversight of ERM is provided by the
Risk Committee of the board of directors, which reviews the strategies, processes and controls
pertaining to the Company’s insurance operations and oversees the implementation, execution and
performance of the Company’s ERM program.
The Company’s ERM efforts build upon the foundation of an effective internal control
environment. ERM expands the internal control objectives of effective and efficient operations, reliable
financial reporting and compliance with applicable laws and regulations, to fostering, leading and
supporting an integrated, risk-based culture within the Company that focuses on value creation and
preservation. However, the Company can provide only reasonable, not absolute, assurance that these
objectives will be met. Further, the design of any risk management or control system must reflect the
fact that there are resource constraints, and the benefits must be considered relative to their costs. As a
result, the possibility of material financial loss remains in spite of the Company’s significant ERM
efforts. An investor should carefully consider the risks and all of the other information set forth in this
annual report, including the discussions included in ‘‘Item 1A—Risk Factors,’’ ‘‘Item 7A—Quantitative
and Qualitative Disclosures About Market Risk,’’ and ‘‘Item 8—Financial Statements and
Supplementary Data.’’
OTHER INFORMATION
Customer Concentration
In the opinion of the Company’s management, no material part of the business of the Company
and its subsidiaries is dependent upon a single customer or group of customers, the loss of any one of
which would have a material adverse effect on the Company, and no one customer or group of
affiliated customers accounts for 10% or more of the Company’s consolidated revenues.
Employees
At December 31, 2011, the Company had approximately 30,600 employees. The Company believes
that its employee relations are satisfactory. None of the Company’s employees are subject to collective
bargaining agreements.
Sources of Liquidity
For a discussion of the Company’s sources of funds and maturities of the long-term debt of the
Company, see ‘‘Item 7—Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources,’’ and note 8 of notes to the Company’s consolidated
financial statements.
Taxation
For a discussion of tax matters affecting the Company and its operations, see note 11 of notes to
the Company’s consolidated financial statements.
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