Travelers 2014 Annual Report Download - page 15

Table of Contents
Product Lines
The Bond & Specialty Insurance segment writes the following types of coverages:
•
Fidelity and Surety. Provides fidelity insurance coverage, which protects an insured for loss due to embezzlement or
misappropriation of funds by an employee, and surety, which is a three
- party agreement whereby the insurer agrees to pay a third
party or make complete an obligation in response to the default, acts or omissions of an insured. Surety is generally provided for
construction performance, legal matters such as appeals, trustees in bankruptcy and probate and other performance bonds.
•
General Liability. Provides coverage for specialized liability exposures as described above in more detail in the "Business and
International Insurance" section of this report.
•
Other. Coverages include Property, Workers' Compensation, Commercial Automobile and Commercial Multi - Peril, which are
described above in more detail in the "Business and International Insurance" section of this report.
Net Retention Policy Per Risk
The following discussion reflects the Company's retention policy with respect to the Bond & Specialty Insurance segment as of January
1,
2015. For third party liability, including but not limited to umbrella liability, professional liability, directors' and officers' liability, and employment
practices liability, Bond & Specialty Insurance generally limits net retentions to $25.0 million per policy. For surety protection, where insured limits
are often significant, Bond & Specialty Insurance generally retains up to $115.0 million probable maximum loss (PML) per principal but may retain
higher amounts based on the type of obligation, credit quality and other credit risk factors. Reinsurance treaties often have aggregate limits or caps
which may result in larger net per risk retentions if the aggregate limits or caps are reached. Bond & Specialty Insurance utilizes facultative
reinsurance to provide additional limits capacity or to reduce retentions on an individual risk basis. Bond & Specialty Insurance may also retain
amounts greater than those described herein based upon the individual characteristics of the risk.
Geographic Distribution
The following table shows the geographic distribution of Bond & Specialty Insurance's direct written premiums for the year ended
December 31, 2014:
14
State
% of
Total
California
10.5
%
New York
7.8
Texas
7.4
Florida
5.3
Illinois
4.8
Pennsylvania
4.2
Massachusetts
3.3
All other(1)
56.7
Total
100.0
%
(1) No other single state accounted for 3.0% or more of the Bond & Specialty Insurance segment's direct written
premiums in 2014.