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 (the largest percentage of business) and the UK. The company also offers surety and fidelity bonds as well as professional and management liability coverage for commercial operations.
Travelers operates in three segments -- Business and International Insurance, Bond & Specialty Insurance, and Personal Insurance.
Business and International (which accounted for more than 60% of net earned premiums in 2015) offers property/casualty insurance and related services to clients -- primarily in the US, as well as in Canada, the UK, Ireland, and throughout other parts of the world as a corporate member of Lloyd's.
Bond & Specialty Insurance writes fidelity and surety, general liability and property, workers' compensation, commercial automobile, and commercial multi-peril lines. It accounted for about 10% of net earned premiums in 2015. Meanwhile, Personal Insurance offers homeowners, auto, flood, and umbrella policies. That segment, which is growing by geographic expansion, accounts for some 30% of the group's premiums.
Travelers also offers reinsurance.
While the vast majority (about 95%) 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 Management within Lloyd's of London. The two businesses offer commercial property/casualty and risk management services. Travelers also has modest operations in Canada, Brazil, India, China, and Ireland. It's looking to expand in Latin America.
The company employs field claim management teams in 21 centers and 53 satellite and specialty-only offices in 45 states.
Sales and Marketing
Customers include commercial businesses, government agencies, associations, and individuals.
Travelers' offerings are distributed through about 13,000 independent agents and brokers across the US. In business and international, some 11,300 agents are supported by three customer service centers and about 130 field offices. International also writes business abroad, where its products are distributed through Lloyd's wholesale and retail brokers.
Personal products are distributed through some 11,000 independent agents, employee and affinity groups, and direct marketing. Meanwhile, the Bond & Specialty Insurance segment distributes products through some 5,900 independent agents and brokers.
Despite general market turmoil, Travelers' revenues have maintained a slow-but-steady growth rate in recent years -- a sign that the company has spread itself smoothly across industries and took no significant hits to its premiums. In 2015, revenue was flat at around $27 billion due to marginally higher premiums offset by lower investment income.
Net income rose sharply in 2013 but has remained relatively flat since then. It dropped slightly (by 1%) to $3.4 billion in 2015, due to the lower revenue as well as higher administrative expenses. Offsetting those factors were declines in claims and claim adjustment expenses.
Cash flow from operations has followed net income's lead in the past five years. It fell 7% to $3.4 billion in 2015.
In the US, the company has pursued growth through deepening its market penetration. To that end, in 2014 it more than doubled its network of ConciergeCLAIM Nurse sites to 30 locations throughout the US. It doubled that number again in 2015; Travelers now has more than 60 ConciergeCLAIM sites across the nation.
Though Travelers has reduced its international holdings in recent years, the company is pursuing opportunities in emerging markets such as Brazil. For example, in 2015 it bought a 95% stake in the property/casualty operations of its J. Malucelli joint venture in that country (which now operates under the Travelers brand). The firm is also considering expansion in high-growth countries such as India and China.
The company's claims management strategy is focused on segmentation of claims and appropriate technical specialization to drive effective claim resolution practices.