Travelers 2013 Annual Report Download - page 13

PART I
Item 1. BUSINESS
The Travelers Companies, Inc. (together with its consolidated subsidiaries, the Company) is a
holding company principally engaged, through its subsidiaries, in providing a wide range of commercial
and personal property and casualty insurance products and services to businesses, government units,
associations and individuals. The Company is incorporated as a general business corporation under the
laws of the state of Minnesota and is one of the oldest insurance organizations in the United States,
dating back to 1853. The principal executive offices of the Company are located at 485 Lexington
Avenue, New York, New York 10017, and its telephone number is [phone]. The Company also
maintains executive offices in Hartford, Connecticut, and St. Paul, Minnesota. The term ‘‘TRV’’ in this
document refers to The Travelers Companies, Inc., the parent holding company excluding subsidiaries.
For a summary of the Company’s revenues, operating income and total assets by reportable
business segments, see note 2 of notes to the Company’s consolidated financial statements.
PROPERTY AND CASUALTY INSURANCE OPERATIONS
The property and casualty insurance industry is highly competitive in the areas of price, service,
product offerings, agent relationships and methods of distribution. Distribution methods include the use
of independent agents, exclusive agents, direct marketing (including the use of toll-free numbers and
the internet) and/or salaried employees. According to A.M. Best, there are approximately 1,300
property and casualty groups in the United States, comprising approximately 2,750 property and
casualty companies. Of those groups, the top 150 accounted for approximately 92% of the consolidated
industry’s total net written premiums in 2012. The Company competes with both foreign and domestic
insurers. In addition, several property and casualty insurers writing commercial lines of business,
including the Company, offer products for alternative forms of risk protection in addition to traditional
insurance products. These products include large deductible programs and various forms of
self-insurance, some of which utilize captive insurance companies and risk retention groups. The
Company’s competitive position in the marketplace is based on many factors, including the following:
• premiums charged;
• contract terms and conditions;
• products and services offered;
• claim service;
• agent, broker and client relationships;
• local presence;
• geographic scope of business;
• overall financial strength;
• ratings assigned by independent rating agencies;
• experience and qualifications of employees; and
• technology and information systems.
In addition, the marketplace is affected by available capacity of the insurance industry, as
measured by policyholders’ surplus, and the availability of reinsurance. Industry capacity as measured
by policyholders’ surplus expands and contracts primarily in conjunction with profit levels generated by
the industry, less amounts returned to shareholders through dividends and share repurchases. Capital
raised by debt and equity offerings may also increase policyholders’ surplus.
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