Travelers 2014 Annual Report Download - page 4

Table of Contents
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 (917) 778
- 6000. 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 and/or salaried employees.
According to A.M. Best, there are approximately 1,275 property and casualty groups in the United States, comprising approximately 2,700 property
and casualty companies. Of those groups, the top 150 accounted for approximately 92% of the consolidated industry's total net written premiums in
2013. 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;
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contract terms and conditions;
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products and services offered;
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claim service;
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agent, broker and client relationships;
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local presence;
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geographic scope of business;
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overall financial strength;
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ratings assigned by independent rating agencies;
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experience and qualifications of employees; and
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technology and information systems.
In addition, the marketplace is affected by available capacity of the insurance industry, as measured by statutory capital and surplus, and the
availability of reinsurance from both traditional sources, such as reinsurance companies, and non
- traditional sources, such as hedge funds and
pension plans. Industry capacity as measured by statutory capital and surplus expands and contracts primarily in conjunction with profit levels
generated by the industry, less amounts returned to shareholders through
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