Travelers 2015 Annual Report Download - page 17

The Company’s ability or willingness to raise prices, modify underwriting terms or reduce exposure
to certain geographies may be limited due to considerations of public policy, the competitive
environment, the evolving political environment and/or changes in the general economic climate. The
Company also may choose to write business it might not otherwise write in some states for strategic
purposes, such as improving access to other commercial or personal underwriting opportunities. In
choosing to write business in some states, the Company also considers the costs and benefits of those
states’ residual markets and guaranty funds, as well as other property and casualty business the
Company writes in those states.
Product Lines
The primary coverages in Personal Insurance are personal automobile and homeowners and other
insurance sold to individuals. Personal Insurance had approximately 6.4 million active policies (e.g.,
policies-in-force) at December 31, 2015.
The Personal Insurance segment writes the following types of coverages:
•Personal Automobile provides coverage for liability to others for both bodily injury and property
damage, uninsured motorist protection, and for physical damage to an insured’s own vehicle
from collision, fire, flood, hail and theft. In addition, many states require policies to provide
first-party personal injury protection, frequently referred to as no-fault coverage.
•Homeowners and Other provides protection against losses to residences and contents from a
variety of perils (excluding flooding) as well as coverage for personal liability. The Company
writes homeowners insurance for dwellings, condominiums and tenants, and rental properties.
The Company also writes coverage for boats and yachts and valuable personal items such as
jewelry, and also writes coverages for umbrella liability, identity fraud, and weddings and special
events.
Net Retention Policy Per Risk
The following discussion reflects the Company’s retention policy with respect to the Personal
Insurance segment as of January 1, 2016. Personal Insurance generally retains its primary personal auto
exposures in their entirety. For personal property insurance, there is an $8.0 million maximum retention
per risk, net of reinsurance. Personal Insurance uses facultative reinsurance to provide additional limits
capacity or to reduce retentions on an individual risk basis. Personal Insurance issues umbrella policies
up to a maximum limit of $10.0 million per risk. Personal Insurance may also retain amounts greater
than those described herein based upon the individual characteristics of the risk.
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