The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Investor Day (May 2013)
43 slides from The Travelers Companies's investor day presentation, May 17, 2013
Slide 1: One Underwriter, One Agent, One Account: Why Our Differences Matter
The Travelers Companies, Inc. One Underwriter, One Agent, One Account: Why Our Differences Matter May 17, 2013 1
Slide 2: Explanatory Note
Explanatory Note This presentation contains, and management may make, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “will,” “s
Slide 3: Bill Cunningham
Bill Cunningham Executive Vice President, Business Insurance 3
Slide 4: Travelers Business Segments
Travelers Business Segments 2012 Net Written Premiums: $22.4 Billion Personal Insurance 34% Business Insurance 53% Financial, Professional & International Insurance 13% 4
Slide 5: Business Insurance
Business Insurance 2012 Net Written Premiums: $11.9 Billion By Market By Product Line Commercial Property Commercial 14% Accounts 26% Workers’ Select Compensation Accounts General 29% 23% Liability 15% Industry-Focused National Underwriting 22% Commercial Accounts Automobile Commercial 8% 16% Multi-
Slide 6: Business Insurance: Individually Underwritten Accounts
Business Insurance: Individually Underwritten Accounts 2012 Net Written Premiums: $10.2 Billion By Market Select Accounts: Express Plus Commercial 9% Accounts 26% Select Accounts: Express 14% Industry-Focused National Underwriting Accounts 22% 8% Specialized Distribution Target Risk 7% Underwriting
Slide 7: Superior Execution
Business Insurance: Individually Underwritten Accounts TRV Differentiation Specialization Talent Superior Data & Execution Analytics Service Distribution Capabilities Position Superior execution = top tier returns 7
Slide 8: Distribution Position
Distribution Position Distributors Want Travelers Delivers • Broadest capabilities • Solutions for a wide range of customers • Specialization / expertise • Carriers that understand their customers • Superior risk control and claim • Risk improvement services management • Ease of doing business • Eff
Slide 9: Distribution Position: Leadership Advantage
Distribution Position Leadership Advantage Booz Allen Hamilton Analysis1 IIABA Study2 Agency Book of Business How Often in Top 3 53% #1 Carrier 42% 80% Top 3 36% Carriers #2 Carrier 23% 25% #3 Carrier 15% 13% 11% 8% All Other 20% TRV Average 15-20 carriers within an agency Accounts over $100,000 Str
Slide 10: Distribution Position: Leadership Advantage
Distribution Position Leadership Advantage Agent Survey1: 2007 - 2013 75% How Often in Top 5 How Often In Top 5 50% 25% 0% 2007 2008 2009 2010 TRV 2011 2012 2013 TRV Consistently named as a top 5 commercial lines carrier 1 Bi-Annual Goldman Sachs Property & Casualty Pricing Survey: 1 st half of the
Slide 11: Specialization
Specialization Product & Appetite Breadth & Depth Commercial Accounts Construction Public Sector • Architects & Engineers • General Building • American Indian Nations • Automobile Dealers • Highway, Street & Road • K-12 Public Schools • Building Service Contractors • Bridges • Municipalities/Countie
Slide 12: Data & Analytics
Data & Analytics Underwriting Sophistication Predictive Models Business Metrics • Large scale of proprietary data • Granular views of profit, loss, production metrics • More robust management information + • Views include by: region, office, account, industry, underwriter, etc. • Better pricing segm
Slide 13: Service Capabilities
Service Capabilities Leveraging Services for Middle Market Accounts Risk Claim Control Account Consultants Executives TravComp e-CARMA Tours Value-added services make a difference 13
Slide 14: Service Capabilities
Service Capabilities Industry-Leading Risk Control Services Field Services 700+ Risk Control Consultants & Specialists • Commercial Accounts • National Property • Inland Marine • Select Accounts • National Accounts Laboratory • Industrial Hygiene • Forensic Claim • Instrumentation • Forensic Service
Slide 15: Service Capabilities
Service Capabilities Industry-Leading Claim Management • Resolution excellence compressing claim process (improve customer satisfaction, pay right amount and eliminate fraud) • Speed, flexible delivery of claim service that customers value, share risk management knowledge Claim effectiveness gives u
Slide 16: Talent
Talent Business Insurance Underwriting Approximately 2,270 Employees in Business Insurance Underwriting Functions • ~ 1,900 located in the field • Regional Vice President (RVP) average tenure is ~24 years • Managing Director (MD) average tenure is ~16 years • Account Executive (AE) average tenure is
Slide 17: Talent: Investing in the Future
Talent Investing in the Future Underwriting Professional Development Program: New Hires 95 85 82 76 76 78 72 2006 2007 2008 2009 2010 2011 2012 564 new underwriting trainees hired since 2006 17
Slide 18: Talent: Investing in Agent Talent
Talent Investing in Agent Talent • 3-week new producer training – 7 courses; 150 participants • 2,200 site visits on average per month • 15,000 online courses completed • 900+ agents completed CE-credit courses 18
Slide 19: Superior Execution
Business Insurance: Individually Underwritten Accounts TRV Differentiation Specialization Talent Superior Data & Execution Analytics Service Distribution Capabilities Position One Underwriter, One Agent, One Account at a Time 19
Slide 20: Scott Higgins
Scott Higgins President, Commercial Accounts 20
Slide 21: Business Insurance
Business Insurance 2012 Net Written Premiums: $11.9 Billion By Market Commercial Accounts 26% Select Accounts 23% Industry-Focused National Underwriting Accounts 22% 8% Specialized Distribution Target Risk 7% Underwriting 14% Commercial Accounts has approximately 22,000 customers at an average of $1
Slide 22: Commercial Accounts: Range of Travelers Accounts
Commercial Accounts Travelers Accounts Large Marketplace for Mid-Sized Business Range of Travelers Accounts • Employees: 50 to 1,000 • Sales: $25 million to $250 million • Property value: $10 million to $50 million • Fleet count: 5 to 100 22
Slide 23: Commercial Accounts: Product Lines
Commercial Accounts Product Lines • Commercial Automobile • General Liability • Global • Property • Umbrella • Workers’ Compensation Approximately 60% of our customers buy 4 or more lines of coverage 23
Slide 24: Specialization: Multiple Lines of Business
Specialization Multiple Lines of Business Commercial Accounts: Retention 85% +9 Points 1 2 3 4 5 Lines of Business Written We keep more of our business when we write more lines 24
Slide 25: Specialization
Specialization Product & Appetite Breadth & Depth Commercial Accounts • Architects & Engineers • Automobile Dealers • Building Service Contractors • Educational Institutions • Equipment Dealers • Healthcare • Hotels/Restaurants • Manufacturing - Electrical Equipment - Food - High Hazard Products - M
Slide 26: IndustryEdge: An Industry Focused Approach
Specialization Commercial Accounts IndustryEdge® - An Industry Focused Approach • Tailored coverage • Specialized services – Dedicated risk control and claim • Consistent appetite • Expertise driven by scale and experience Specialized underwriting in industry specific coverages and services to match
Slide 27: Distribution Position: Field Office Locations
Distribution Position Commercial Accounts: Field Office Locations In Over 50 Locations With 2,600 Independent Agent and Broker Relationships A national reach with local decision making 27
Slide 28: Commercial Accounts Organizational Structure
Talent Commercial Accounts Organizational Structure Scott Higgins President of Commercial Accounts Regional Vice President (12) Managing Director Managing Director (45) AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE AE (400+) AE = Account Executive (Underwriter) The flat organizational structure foste
Slide 29: Drivers of a strong AE / Agent relationship
Distribution Position Drivers of a strong AE / Agent relationship • Extremely responsive • Authority to make decisions • Provides solutions to write complex risks • Expertise and knowledge of the local market • Communication Account executives produce opportunities, have underwriting authority to ma
Slide 30: Superior Execution
Commercial Accounts: Individually Underwritten Accounts TRV Differentiation Specialization Talent Superior Data & Execution Analytics Service Distribution Capabilities Position A collaborative, disciplined and repeatable process 30
Slide 31: Commercial Accounts: Individually Underwritten Accounts
Commercial Accounts: Individually Underwritten Accounts TRV Differentiation One One One Underwriter… Agent… Account… …at a Time 31
Slide 32: Northeast Region Team
Northeast Region Team One Underwriter, One Agent, One Account: Why Our Differences Matter 32
Slide 33: Barbara Insero
Talent Our Team Barbara Insero Northeast Regional Vice President • 22 years of experience • Responsible for: – Seven underwriting locations in New England & Upstate New York – 3,000 customers at $290 million in premium – Over 300 distributor relationships 33
Slide 34: Bill Hayes, Managing Director for Upstate New York
Talent Our Team • Bill Hayes, Managing Director for Upstate New York • Patrick Salonia, Account Executive for Upstate New York • Deborah Conklin, Claim Account Executive • Scott Humphrey, Risk Control Consultant 34
Slide 35: Superior Execution
Commercial Accounts: Individually Underwritten Accounts TRV Differentiation Specialization Talent Superior Data & Execution Analytics Service Distribution Capabilities Position Superior execution = top tier returns 35
Slide 36: Today's Agenda
Today’s Agenda Three IndustryEdge® Manufacturing Accounts in the Northeast Acme • A prospect to a satisfied customer Manufacturing ABC • A new opportunity declined International XYZ • A customer with an exposure change Packaging Travelers differentiation in action 36
Slide 37: Bill Cunningham
Bill Cunningham Executive Vice President, Business Insurance 37
Slide 38: Commercial Accounts: 1Q'13 Renewal Pricing Results
Commercial Accounts: 1Q’13 Renewal Pricing Results Thoughtful Execution 100% 20% 90% 16% Renewal Rate Change1 Retention Rate 80% 12% 12% 70% 8% 60% 4% 50% 0% < 60% 60% - 90% > 90% Long-Term Loss Ratio Bands2 – All Lines of Business 1 Represents the estimated change in average premium on policies tha
Slide 39: Commercial Accounts: 1Q'13 Renewal Pricing Results
Commercial Accounts: 1Q’13 Renewal Pricing Results Thoughtful Execution 100% 40% 20% 90% 30% 16% Renewal Rate Change1 Renewal Rate Change1 Retention Rate 20% 80% 12% ~560 accounts 10% 12% 12% average rate 70% 8% 0% 60% 4% (10%) 50% 0% (20%) < 60% 60% - 90% > 90% 60% – 90% Long-Term Loss Ratio Bands2
Slide 40: Underwriting Profit
Business Insurance U.S. Commercial Lines Growth & Profitability – 5 Year Trend Top 10 Commercial Lines Carriers: Profit vs. Growth 2008-2012 Chubb TRV ACE QBE Underwriting Profit Hartford Zurich Industry Average Nationwide CNA Liberty Mutual AIG Industry Average Average Annual Growth 1 Source: 2012
Slide 41: Superior Execution
Business Insurance: Individually Underwritten Accounts TRV Differentiation Specialization Talent Superior Data & Execution Analytics Service Distribution Capabilities Position One Underwriter, One Agent, One Account at a Time 41
Slide 42: Disclosure
Disclosure In this presentation, we may refer to some non-GAAP financial measures. For a reconciliation of these measures to the most comparable GAAP measures and a glossary of financial measures, we refer you to the press release and financial supplement that we have made available in connection wi
Slide 43: Additional Information
The Travelers Companies, Inc. Additional Information Additional Information 43