Running a business is a risk The Travelers Companies will insure. While it does offer personal auto and homeowners insurance, the company's largest segment is commercial property/casualty insurance to businesses big and small. It is one of the largest business insurers in the US, providing commercial auto, property, workers' compensation, marine, and general and financial liability coverage to companies in North America and the UK. The company also offers surety and fidelity bonds as well as professional and management liability coverage for commercial operations. The Travelers distributes its products through independent agencies and brokers.
In addition to serving general commercial accounts, The Travelers maintains a group of industry-specific underwriting units serving the agribusiness, construction, oil and gas, and technology industries, as well as the public sector.
Personal insurance now accounts for a third of the company's premiums and it is slowly building up the business with geographic expansion. The personal products are distributed through some 12,500 independent agents, employee and affinity groups, and direct marketing.
While the vast majority (over 90%) of the company's business is in the US, it does have a presence in the UK, where it operates through two arms: Travelers Insurance Company and Travelers Syndicate 5000 within Lloyd's of London. The two businesses offer commercial property/casualty and risk management services. Travelers also has modest operations in the neighboring countries of Canada and Ireland.
After reducing its international holdings, in 2010 the company made a move to expand outside of its comfort zone by acquiring a 43% stake in J. Malucelli, a leading provider of surety policies in the fast-growing Brazilian market. The move is part of Travelers' strategy to pursue opportunities in emerging markets; the firm is also considering expansion in high-growth countries such as India and China.
Despite general market turmoil, The Traveler's revenues have remained placid in recent years -- a sign that the company has spread itself smoothly across industries and took no significant hits to its premiums. Its investment income sagged briefly when its (and everyone else's) investments slipped in value during 2008. However, the company's investment income revived just in time for an uptick of catastrophe claims in 2010 and 2011due to harsh weather events. Its net income dropped both years following common share repurchases. – less