Travelers 2014 Annual Report Download - page 74

Table of Contents
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unforeseen liabilities;
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the cultural challenges associated with integrating employees; and
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the impact on our financial position and/or credit ratings.
Acquired businesses may not perform as projected, any cost savings and other synergies anticipated from the acquisition may not materialize
and costs associated with the integration may be greater than anticipated. Acquired businesses may not be successfully integrated, resulting in
substantial costs or delays and adversely affecting our ability to compete. Accordingly, our results of operations might be materially and adversely
affected.
We could be adversely affected if our controls designed to ensure compliance with guidelines, policies and legal and regulatory standards
are not effective. Our business is highly dependent on our ability to engage on a daily basis in a large number of insurance underwriting, claim
processing and investment activities, many of which are highly complex. These activities often are subject to internal guidelines and policies, as
well as legal and regulatory standards. A control system, no matter how well designed and operated, can provide only reasonable assurance that
the control system's objectives will be met. If our controls are not effective, it could lead to financial loss, unanticipated risk exposure (including
underwriting, credit and investment risk) or damage to our reputation.
In addition, ineffective controls, including with respect to our recently acquired businesses, could lead to litigation or regulatory action. The
volume of claims and amount of damages and penalties claimed in litigation and regulatory proceedings against various types of financial
institutions have increased in recent years. Substantial legal liability or significant regulatory action against us could have a material adverse
financial impact. See note 16 of notes to our consolidated financial statements for a discussion of certain legal proceedings in which we are
involved.
Our businesses may be adversely affected if we are unable to hire and retain qualified employees. There is significant competition from
within the property and casualty insurance industry and from businesses outside the industry for qualified employees, especially those in key
positions and those possessing highly specialized underwriting knowledge. Our performance is largely dependent on the talents, efforts and
proper conduct of highly
- skilled individuals, including our senior executives (many of whom have decades of experience in the insurance industry),
and the Board of Directors regularly engages in succession discussions. Each of our Chief Executive Officer, President, Chief Financial Officer and
Chief Investment Officer is highly experienced and over 61 years of age, and our Chief Executive Officer announced in 2014 that he had been
diagnosed with a neuromuscular condition. See "Item 10—Directors, Executive Officers and Corporate Governance" for more information relating to
our executive officers, including our senior leaders. For many of our senior positions, we compete for talent not just with insurance or financial
service companies, but with other large companies and other businesses. Our continued ability to compete effectively in our businesses and to
expand into new business areas depends on our ability to attract new employees and to retain and motivate our existing employees. If we are not
able to successfully attract, retain and motivate our employees, our business, financial results and reputation could be materially and adversely
affected.
Intellectual property is important to our business, and we may be unable to protect and enforce our own intellectual property or we may be
subject to claims for infringing the intellectual property of others. Our success depends in part upon our ability to protect our proprietary
trademarks, technology and other intellectual property. See "Item 1—Other Information—Intellectual Property." We may not, however, be able to
protect our intellectual property from unauthorized use and disclosure by others. Further, the intellectual property laws may not prevent our
competitors from independently developing trademarks, products and services that are similar to ours. Moreover, the agreements we execute to
protect our intellectual property rights may be breached, and we may not have adequate remedies in response. Our attempts to patent or register
our intellectual property rights
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