All Stocks

Products: The Travelers Companies, Inc. (TRV)

Commercial Automobile & Property(Commercial Automobile & Property)
General Liability & Others(General Liability & Others)
Worker's Compensation(Worker's Compensation)
Commercial Multi-peril(Commercial Multi-peril)
Bond & Specialty Insurance(Bond & Specialty Insurance)
Personal Insurance(Personal Insurance)
Investment of Insurance Premiums(Investment of Insurance Premiums)

Commercial Automobile & Property

What is being offered?

It provides coverage to businesses for bodily injury and property damage, from the use of automobiles and trucks in a business operation. Travelers is the second largest commercial automobile underwriter on the basis of direct written premiums and this product line contributes 9% to the company's net written premiums.

Who is buying?

It comes under the Business Insurance division of the company which caters to small, mid-sized, and large businesses.

Competitors

Market Share of Travelers' Commercial Automobile product line compared with industry leaders, as per a National Association of Insurance Commissioners' report, 2018.

Progressive Group - 8.81%

Travelers Group - 6.27%

Liberty Mutual Group - 4.80%

Zurich Insurance - 4.68%

Nationwide Corp Group - 4.65%

Berkshire Hathaway Group - 3.28%

What the customers care about?

Customers are businesses which are bound to obtain a commercial automobile insurance policy under state or federal laws. They would like an authorized carrier to provide a law-abiding, business-specific, and suitable policy.

Geographic Distribution

About 12% of the Business Insurance division’s direct written premiums come from the state of California. New York and Texas account for 9.5% and 6.9% of the premiums respectively while Illinois accounts for 4.6%. Florida, Pennsylvania, New Jersey, and Massachusetts account for around 3%-4% of the premiums each. No other state accounts for more than 3% of the premium volume.

Commercial Automobile & Property Insurance Premiums

Commercial Automobile & Property Insurance Premiums represent the total premiums collected by travelers from its commercial Automobile Insurance division. The product covers bodily injury and property damage from the use of automobiles and trucks in business.

Commercial Automobile & Property Insurance Premiums increased from $1.9 billion in 2013 to $2.2 billion in 2017.

Chart: Commercial Automobile & Property Insurance Premiums

General Liability & Others

What is being offered?

This includes the Commercial Multiperil line, which includes a combination of property and liability insurance - like commercial automobile insurance and workers' compensation - typically for small businesses. Because it is a combination, these premiums are not included in the separate workers' compensation or commercial auto segments. Travelers also offers other business insurance products like fidelity and surety insurance, commercial property insurance and general liability insurance which covers third party claims occurring on the premises of the insured party.

Who is buying?

This division's customers are primarily small or medium-sized businesses.

Competitors

State Farm, Zurich Insurance, Liberty Mutual Group, Allstate Insurance, AIG, Berkshire Hathaway

What the customers care about?

Customers are primarily business which would like the best insurance coverage at suitable insurance rates.

Geographic Distribution

About 12% of the Business Insurance division’s direct written premiums come from the state of California. New York and Texas account for 9.5% and 6.9% of the premiums respectively while Illinois accounts for 4.6%. Florida, Pennsylvania, New Jersey, and Massachusetts account for around 3%-4% of the premiums each. No other state accounts for more than 3% of the premium volume.

Worker's Compensation

What is being offered?

It provides coverage for employers, who are mandated by law to pay for workplace-related injuries to employees. The benefits covered under the product's policy include medical, disability, death benefits, and vocational rehabilitation. The product types offered are guaranteed-cost insurance products, loss-sensitive insurance products, and service programs. Workers’ Compensation is one of the prominent product lines and accounts for almost 14% of the net written premiums of the company.

Who is buying?

It comes under the Business Insurance division of the company which caters to small, mid-sized, and large businesses.

Competitors

Market Share of Travelers' Workers' Compensation product line compared with industry leaders, as per a National Association of Insurance Commissioners' report, 2018.

Travelers Group - 6.98%

Hartford Group - 5.46%

Zurich Insurance Group - 4.69%

Amtrust Group - 4.68%

Berkshire Hathaway Group - 4.49%

What the customers care about?

Customers are businesses which are legally bound to obtain a worker's compensation policy under state or federal laws. They would like an authorized carrier to provide a law-abiding and suitable policy.

Geographic Distribution

About 12% of the Business Insurance division’s direct written premiums come from the state of California. New York and Texas account for 9.5% and 6.9% of the premiums respectively while Illinois accounts for 4.6%. Florida, Pennsylvania, New Jersey, and Massachusetts account for around 3%-4% of the premiums each. No other state accounts for more than 3% of the premium volume.

Workers' Compensation Insurance Premiums

Workers' Compensation Insurance Premiums represent the total premiums collected by travelers from its workers’ compensation division. This division covers employers for workplace injuries to employees and the benefits offered include medical benefits, disability benefits, death benefits and vocational rehabilitation benefits.

Workers' Compensation Insurance Premiums increased from $3.64 billion in 2013 to $3.96 billion in 2017 driven by growth in the U.S. economy and rate increases by insurers looking to compensate for low investment returns.

Chart: Workers' Compensation Insurance Premiums

Commercial Multi-peril

What is being offered?

Commercial muti-peril offers different types of property and casualty coverages in a single policy. Travelers provides all its Business Insurance products such as commercial property, commercial automobile, workers' compensation, and general liability in a multiple peril policy. Commercial muti-peril contributes around 12% to the company's net written premiums.

Who is buying?

It comes under the Business Insurance division of the company which caters to small, mid-sized, and large businesses.

Competitors

Market Share of Travelers' Commercial Multiperil product line compared with industry leaders, as per a National Association of Insurance Commissioners' report, 2018.

Travelers Group - 8.02%

Nationwide Group - 6.19%

Liberty Mutual Group - 5.78%

Chubb Ltd Group - 4.84%

Tokio Marine Holdings - 4.56%

Hartford Group - 4.50%

What the customers care about?

Customers are businesses which are bound to obtain a business insurance under state or federal laws. They would like an authorized carrier to provide a law-abiding and suitable policy.

Geographic Distribution

About 12% of the Business Insurance division's direct written premiums come from the state of California. New York and Texas account for 9.5% and 6.9% of the premiums respectively while Illinois accounts for 4.6%. Florida, Pennsylvania, New Jersey, and Massachusetts account for around 3%-4% of the premiums each. No other state accounts for more than 3% of the premium volume.

Commercial Multi-peril Insurance Premiums

Commercial Multi-peril Insurance Premiums represent the total premiums collected by travelers from its commercial multiperil division. Commercial mutiperil is a combination of commercial property, automobile, workers' compensation and general liability insurance is Travelers' second biggest product line, accounting for 26% of the business insurance premiums.

Commercial Multi-peril Insurance Premiums increased marginally from $3.08 billion in 2013 to $3.16 billion in 2016.

Chart: Commercial Multi-peril Insurance Premiums

Bond & Specialty Insurance

It provides coverage for losses to an individual's house and its contents from a variety of perils (except flood). Additionally, the company provides coverage for valuable personal items, special events, and boats and yachts, under this product line. It contributes around 15% to the company's net written premiums.

Who is buying?

Individuals who take a home loan are required by the lender to purchase a home insurance policy to safeguard lenders' interests if the house is destroyed. It is not mandatory to purchase a home insurance policy as per law.

Competitors

Market Share of Travelers' Homeowners Insurance product line compared with industry leaders, as per a National Association of Insurance Commissioners' report, 2018.

State Farm Group - 18.63%

Allstate Insurance Group - 8.44%

Liberty Mutual Group - 6.86%

USAA Group - 6.05%

Farmers Insurance Group - 5.96%

Travelers Group - 3.76%

What buyers care about:

Customers would like the best insurance coverage at suitable insurance rates.

Geographic Distribution

Almost 15% of the direct written premiums in the personal insurance division come from the state of New York. Texas and Pennsylvania account for 8% of the premiums, while California, Florida and New Jersey account for more than 5% each. Other states accounting for more than 3% of the premiums written in the personal insurance division include Georgia, Connecticut, Virginia, Massachusetts and Maryland.

Personal Insurance

Personal Automobile product line provides coverage for bodily injury and property damage caused by a personal vehicle. It also provides coverage for vehicle damage caused by natural disasters and theft. It contributes around 18% to the company's net written premiums.

The company tries to maintain underwriting discipline by offering the right rates for the risk assumed per assured party. By setting a very high premium rate for “rash†drivers, the company ensures that the underwriting margins remain high. On the other hand, the company tries to retain "safe" drivers by offering lower rates.

Who is buying?

Individuals who purchase a personal vehicle are required by state or federal laws to obtain insurance coverage for their vehicle.

Competitors:

Market Share of Travelers' Personal Automobile product line compared with industry leaders, as per a National Association of Insurance Commissioners' report, 2018.

State Farm Group - 18.07%

Berkshire Hathaway Group - 12.79%

Progressive Group - 9.84%

Allstate Insurance Group - 9.26%

USAA Group - 5.68%

Travelers Group - 1.90%

What buyers care about:

Customers would like an authorized carrier to provide a law-abiding and suitable policy.

Geographic Distribution

Almost 11% of the direct written premiums in the personal insurance division come from the state of New York. Texas and Pennsylvania account for 9.7% and 6.1% of the premiums respectively, while California, Pennsylvania, and Georgia account for around 5%-6% each. Other states accounting for more than 3% of the premiums written in the personal insurance division include Florida, New Jersey, and Virginia.

Personal Automobiles Premiums

Personal Automobiles Premiums represent the total premiums collected by travelers from its Personal Automobiles division.

Personal Automobiles Premiums increased from $3.37 billion in 2013 to $4.7 billion in 2017 primarily due to rate increases imposed by insurance companies to compensate for low yields from their investments.

Homeowners and Other Insurance Premiums

Homeowners and Other Insurance Premiums represent the total premiums collected by travelers from its Homeowners' Insurance division. This insurance covers losses occurring to the insured party’s home and its contents, personal possessions of the homeowner, and also covers liabilities for accidents that might happen at the insured premises.

Homeowners and Other Insurance Premiums remained around $3.8 billion in the last few years.

Chart: Personal Automobiles Premiums

Chart: Homeowners and Other Insurance Premiums

Investment of Insurance Premiums

Insurance companies like Travelers collect premiums from their insurance customers which they then invest to generate income and capital appreciation. Insurance companies invest in the bond and stock markets, as well as alternative assets like real estate and mortgage-backed securities.

Insurance companies use their invested assets to pay for the insurance claims of their customers and to generate additional income that can be paid out as dividends to shareholders.

This division consists of Travelers' investment activities which includes:

Fixed Maturity Securities Mortgage Loans Real Estate and Real Estate Joint Ventures Policy Loans Equity Securities Other Limited Partnership Interests Cash and Short-Term Investments Other Investments

Travelers' investment objectives are driven by the business model for each of the businesses: General Insurance, life insurance, retirement services and the Matched Investment Program. The primary objectives are generation of investment income, preservation of capital, liquidity management and growth of surplus to support the insurance products.

Travelers' Invested Assets

These represent the assets invested by Travelers to generate investment income to support its insurance activities.

Invested assets declined from $73.2 billion in 2013 to $72.5 billion in 2017.

Travelers' Yield on Invested Assets

This represents the annualized yield that Travelers is able to generate on its investments.

The yield dropped from over 4.62% in 2011 to 3.36% in 2015. Since the company's investments are primarily in fixed maturity securities like government and corporate bonds. However, the figure improved in 2017.

Chart: Travelers' Invested Assets

Chart: Travelers' Yield on Invested Assets