Travelers 2015 Annual Report Download - page 3

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 consolidated financial statements herein.
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 1,250 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 2014. 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 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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