The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Investor Day (November 2017)
107 slides from The Travelers Companies's investor day presentation, Nov 13, 2017
Slide 1: Investor Day 2017
INVESTOR DAY 2017
Slide 2: Disclosure
Disclosure Copies of this presentation and the accompanying audio webcast are publicly available on the Travelers website (www.travelers.com). This presentation and the accompanying audio webcast (or transcript) should be reviewed together. In this presentation, we may refer to some non-GAAP financi
Slide 3: Explanatory Note
Explanatory Note This presentation contains, and management may make, certain “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,” “w
Slide 4: Agenda
Agenda 9:30 a.m. Opening Alan Schnitzer, Chairman and Chief Executive Officer Business Insurance Greg Toczydlowski, President of Business Insurance BREAK Bond & Specialty Insurance Tom Kunkel, President of Bond & Specialty Insurance Personal Insurance Michael Klein, President of Personal Insurance Q
Slide 5: Investor Day 2017
INVESTOR DAY 2017
Slide 6: Welcome to Claim University
Welcome to Claim University https://youtu.be/V8a4OXDvGko | INVESTOR DAY 2017 6
Slide 7: Long-Term Financial Strategy
Long-Term Financial Strategy Generation of Balanced approach Meaningful and top tier earnings to rightsizing sustainable and capital capital and competitive substantially in growing book value advantages excess of growth per share over time needs CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 8: Leading Property & Casualty Insurer
Leading Property & Casualty Insurer 2016 Net Written Premiums of $25 billion Personal Insurance Over 6 million customers insured $8.8B Business Business Insurance Insurance $13.9B $13.9B Leading carrier in the independent Bond & agency and broker channel Specialty Insurance $2.3B 30,000+ employees D
Slide 9: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate Risk Selection, Underwriting & Competitive advantages enabled by: Pricing Segmentation Talent & Expertise Product Claim Breadth & Services Data & Analytics Specialization Financial Strength Risk Distribution Mitigation & Relationships I
Slide 10: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate Risk Selection, • 4,600+ underwriters supported by 3,000+ Underwriting & operations specialists across 100+ Pricing Segmentation locations Enablers Product Claim • Average underwriter tenure at TRV of Services Talent & Expertise Breadth
Slide 11: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate • Only commercial insurer with a top 5 position Risk Selection, Underwriting & in seven major product lines1, including a #1 Pricing position in three Segmentation Product Enablers • Broad appetite with a deep underwriting Claim Breadth
Slide 12: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate Risk Selection, Underwriting & • Consistently #1 in the Goldman Sachs Pricing survey “Top 5 Companies My Agency Segmentation Does Business With” Enablers Product Claim Talent & Expertise Breadth & Services Specialization Data & Analytic
Slide 13: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate • 700+ risk control professionals, including Risk Selection, Underwriting & 550+ engineers and industry specialists Pricing Segmentation • Unique and highly sophisticated Enablers Product Forensic Lab Claim Breadth & Services Talent & E
Slide 14: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate • 10,000+ claim professionals • 870 high severity claim professionals, with an Risk Selection, average tenure at TRV of 18 years Underwriting & • 600 nurses; 680 staff counsel Pricing Segmentation • Unique and flexible catastrophe respo
Slide 15: Our Competitive Advantages are Meaningful and Hard to Replicate
Our Competitive Advantages are Meaningful and Hard to Replicate Risk Selection, Underwriting & Competitive advantages enabled by: Pricing Segmentation Talent & Expertise Product Claim Breadth & Services Data & Analytics Specialization Financial Strength Risk Distribution Mitigation & Relationships I
Slide 16: Providing Solutions to a Complex Industry – Construction P&C
Our Competitive Advantages Matter: Providing Solutions to a Complex Industry – Construction P&C 2016 Net Written Premium of $1.6B with a 5 Year CAGR of 9% Relevant, innovative and industry Deep industry expertise leading products & services 700+ dedicated underwriting, claim and risk control profess
Slide 17: Innovative Risk Mitigation – Workers’ Compensation
Our Competitive Advantages Matter: Innovative Risk Mitigation – Workers’ Compensation 2016 Net Written Premiums of $4.0B with a 10 Year CAGR of 6% Early Severity Predictor® • Proprietary predictive model speeds up chronic pain identification from 6-9 months to 30-60 days • Travelers nurses work dire
Slide 18: Innovative Risk Mitigation – Workers’ Compensation
Our Competitive Advantages Matter: Innovative Risk Mitigation – Workers’ Compensation 2016 Net Written Premiums of $4.0B with a 10 Year CAGR of 6% Early Severity Predictor® First Integrated Digital Platform for Injured Employees • Proprietary predictive model speeds up chronic pain identification fr
Slide 19: Innovative Risk Mitigation – Workers’ Compensation
Our Competitive Advantages Matter: Innovative Risk Mitigation – Workers’ Compensation 2016 Net Written Premiums of $4.0B with a 10 Year CAGR of 6% Early Severity Predictor® First Integrated Digital Platform for Injured Employees • Proprietary predictive model speeds up chronic pain identification fr
Slide 20: Long-Term Financial Strategy
Long-Term Financial Strategy Generation of Balanced approach Meaningful and top tier earnings to rightsizing sustainable and capital capital and competitive substantially in growing book value advantages excess of growth per share over time needs CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 21: Competitive Advantages Drive Superior ROE Performance Over Time
Competitive Advantages Drive Superior ROE Performance Over Time Return on Equity 20% Travelers US P&C Insurers 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 | INVESTOR DAY 2017 21 Source: Average GAAP return on equity from Insurance Information Institute for 2008-2016
Slide 22: Superior ROE Performance Drives Leading Shareholder Returns Over Time
Superior ROE Performance Drives Leading Shareholder Returns Over Time Total Return to Shareholders 250% Travelers 200% Dow 30 S&P 500 150% S&P 500 Property & Casualty 100% Insurance Index 50% 0% -50% Jan. 1, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Nov. 10, 20
Slide 23: Leading Through the Forces of Change
Leading Through the Forces of Change Changing Emerging Consumer Technology Expectations Trends Customer expectations are being shaped Emergence of new technology enables us by their experiences in other industries. to reimagine every aspect of our business. Data & Changing Analytics Distribution Dat
Slide 24: Relentless Focus on Our Competitive Advantages
Relentless Focus on Our Competitive Advantages Leading Through the Forces of Change Changing Consumer Expectations Emerging Technology Trends Data & Analytics Changing Distribution | INVESTOR DAY 2017 24
Slide 25: Our Vision
Relentless Focus on Our Competitive Advantages Our Vision To be… Changing Consumer Expectations The undeniable choice for the customer Emerging Technology Trends and An indispensable partner for Data & Analytics our agents and brokers Changing Distribution | INVESTOR DAY 2017 25
Slide 26: Our Vision + Our Priorities
Relentless Focus on Our Competitive Advantages Our Vision + Our Priorities To be… Changing Consumer Expectations The undeniable choice for the customer Emerging Technology Trends and An indispensable partner for Data & Analytics our agents and brokers Changing Extend Our Provide Improve Distribution
Slide 27: Relentless Focus on Our Competitive Advantages
Relentless Focus on Our Competitive Advantages We’ve been investing in these priorities for several years while delivering industry-leading return on equity and an improving expense ratio Changing Consumer Return on Equity Expense Ratio 20% 33.5% Expectations Travelers US P&C Insurers 15% 32.5% Emer
Slide 28: Business Insurance, Bond & Specialty Insurance, Personal Insurance
Business Insurance Greg Toczydlowski, President Bond & Specialty Insurance Tom Kunkel, President Personal Insurance Michael Klein, President | INVESTOR DAY 2017 28
Slide 29: Business Insurance
Business Insurance Greg Toczydlowski, President | INVESTOR DAY 2017 29
Slide 30: Leading Business Insurance Franchise
Leading Business Insurance Franchise 2016 Consolidated Net Written Premiums: $25 Billion Workers’ Compensation $3.9B Personal Insurance $8.8B Business Multi-Peril (CMP) $3.2B Insurance $13.9B Auto $2.0B Bond & General Specialty Liability Insurance $2.0B Property $2.3B $1.8B Int’l & Other $1.0B | INV
Slide 31: Extensive Product Breadth and Deep Expertise
Extensive Product Breadth and Deep Expertise • Significant market share Workers’ Commercial Multi Commercial Compensation Peril 1 Auto 2 and diversified portfolio Company Mkt Share Company Mkt Share Company Mkt Share (%) (%) (%) TRAVELERS 7.8 TRAVELERS 7.7 Progressive 7.9 • Only carrier with a top 5
Slide 32: Broad Capability Across the Customer Continuum
Broad Capability Across the Customer Continuum Small & Less Complex Select $250 premium Standard CMP policy w/ Digitally transacted 2 workers + delivery van flow business $2.7B Personal Insurance $8.8B Account Risk Engagement Middle Size Complexity Preference Market $7.4B Bond & Large payroll Team u
Slide 33: Long Track Record of Successful Execution
Long Track Record of Successful Execution DOMESTIC BI - ILLUSTRATIVE BUSINESS STATISTICS (ex. National Accounts) ($ in millions) YTD Sept 2010 2011 2012 2013 2014 2015 2016 2016 2017 Retention 83% 82% 80% 80% 82% 84% 85% 85% 85% Renewal Rate Change (0.6%) 2.5% 7.2% 6.8% 3.4% 0.8% 0.1% 0.0% 0.6% Expo
Slide 34: Strengths and Competitive Advantages
Strengths and Competitive Advantages Risk Selection, Our success comes from Underwriting & Pricing strong execution across Segmentation industry-leading capabilities... Product Claim Enablers Breadth & Services Talent & Expertise Specialization Data & Analytics Financial Strength …supported by a fou
Slide 35: Leading Through the Forces of Change: Transforming Our Business Model
Leading Through the Forces of Change Transforming Our Business Model Changing Emerging Consumer Technology Expectations Trends Customer expectations are being shaped by their Emergence of new technology enables us experiences in other industries. to reimagine every aspect of our business. Data & Cha
Slide 36: Transforming Our Business Model
Leading Through the Forces of Change Transforming Our Business Model The undeniable Changing choice for the Emerging Consumer customer… Technology Expectations Trends Customer expectations are being shaped by their Emergence of new technology enables us experiences in other industries. to reimagine
Slide 37: Transforming Our Business Model
Leading Through the Forces of Change Transforming Our Business Model The undeniable Changing choice for the Emerging Consumer customer… Technology Expectations Trends Customer expectations are being shaped by their Customer Emergence of new technology enables us experiences in other industries. Solu
Slide 38: Investments to Drive Better Experience and Productivity
Transforming Our Business Model Customer Solutions Convenient Processes Lower Cost Structure KEY INVESTMENTS Artificial New Policy Right-Sized Intelligent Intelligence Digital Service Administration Underwriting Routing Decision Models Systems Models Support Strategic investments in technology and w
Slide 39: Core Capability – Our Underwriting Specialization
Core Capability – Our Underwriting Specialization How we have gone to market: Business Units • Our 18 business units are the foundation of our deep specialization in underwriting • This specialization provides us with a key competitive advantage in risk selection, mitigation and pricing sophisticati
Slide 40: Core Capability – Deep and Extensive Local Relationships
Core Capability – Deep and Extensive Local Relationships How we have gone to market: • A local office presence to provide local underwriting and risk control services • Engaging distribution through one- 81 LOCAL OFFICES on-one relationships • For each line: 1 agent working with 1 1 1 Agent Underwri
Slide 41: How We Have Gone to Market: Specialization at a Local Level
How We Have Gone to Market: Specialization at a Local Level Local Specialized Dedicated Underwriters Account Managers Agent + LOCAL 81 OFFICES In each local office • Our distribution partners want to engage with 1111 specialized underwriters who know the products, not generalists Technology and work
Slide 42: Investments to Drive Better Experience and Productivity
Investments to Drive Better Experience and Productivity Local Specialized Dedicated Underwriters Account Managers Our investments are enabling a better experience for our agents + and customers and greater productivity for us, while retaining the benefits of specialization and local presence Agent L
Slide 43: Investments to Drive Better Experience and Productivity
Investments to Drive Better Experience and Productivity LOCAL 81 OFFICES Technology and workflow investments will improve the effectiveness and efficiency of our specialized and local business model | INVESTOR DAY 2017 43
Slide 44: Technology Investments Enable How We Will Go to Market
Technology Investments Enable How We Will Go to Market • From 25+ legacy systems to 5 modernized and streamlined systems Policy Rate, Quote and • Substantial reduction in manual data input Issuance • Holistic approach: integration of all product lines for an account Unified • Digitized underwriting
Slide 45: Underwriting Workstation
Technology Investments Enable How We Will Go to Market: Underwriting Workstation PRIOR TO 2016 TODAY 100+ Systems/Tools One Underwriting Workstation Loss Experience Price Adequacy 360º view of customer risk promotes account rounding and significantly improves efficiency of underwriting | INVESTOR DA
Slide 46: Standardizing, Simplifying and Streamlining
How We Will Go to Market Standardizing, Simplifying and Streamlining Large & Highly Complex An Indispensable Partner to Our Agents… Automated Exchange of Account Information Automated Account Assessment and Routing Determination of: Appetite, “Customers Like You Bought…”, Underwriting Assignment Rig
Slide 47: Seamless Distribution Engagement
How We Will Go to Market Seamless Distribution Engagement Automated Exchange of Account Information • More efficient process for exchanging data Standard INSURANCE with distribution Paper, Fax, Email COMPANY Industry Model: TURNAROUND MEASURED IN DAYS INC. partners • Begin scraping How We Will Autom
Slide 48: Standardizing, Simplifying and Streamlining
How We Will Go to Market Standardizing, Simplifying and Streamlining Large & Highly Complex An Indispensable Partner to Our Agents… Automated Exchange of Account Information Automated Account Assessment and Routing Determination of: Appetite, “Customers Like You Bought…”, Underwriting Assignment Rig
Slide 49: Automated Account Assessment of Customer Needs
How We Will Go to Market Automated Account Assessment of Customer Needs Automated Account Assessment and Routing Determination of: Appetite, “Customers Like You Bought…”, Underwriting Assignment • Leverage third-party sources for available customer information • Automated indication of underwriting
Slide 50: Standardizing, Simplifying and Streamlining
How We Will Go to Market Standardizing, Simplifying and Streamlining Large & Highly Complex An Indispensable Partner to Our Agents… Automated Exchange of Account Information Automated Account Assessment and Routing Determination of: Appetite, “Customers Like You Bought…”, Underwriting Assignment Rig
Slide 51: Right-Sized Business Model – Business Centers
How We Will Go to Market Right-Sized Business Model – Business Centers Right-Sized Underwriting Model Low-Touch Transactional & Flow Business Centers Complex with local support Local underwriter Business Centers: • 1 agent engaging with 1 local underwriter, supported by centralized and specialized L
Slide 52: Standardizing, Simplifying and Streamlining
How We Will Go to Market Standardizing, Simplifying and Streamlining An Indispensable Partner to Our Agents… Large & Highly Complex Automated Exchange of Account Information Automated Account Assessment and Routing Determination of: Appetite, “Customers Like You Bought…”, Underwriting Assignment Rig
Slide 53: The Undeniable Choice for the Customer
How We Will Go to Market The Undeniable Choice for the Customer Customer Solutions Breadth of Products Risk Control Digital Service Personalized customer service however and Better positioning to provide full account solutions Right-sized risk control from onsite surveys to wherever our customers wa
Slide 54: Simply Business Overview
Simply Business Overview https://youtu.be/6QnBk8Qw-zY | INVESTOR DAY 2017 54
Slide 55: Investing in Innovation while Delivering Leading Returns
Investing in Innovation while Delivering Leading Returns The undeniable Changing choice for the Emerging Consumer customer… Technology Expectations Trends Customer expectations are being shaped by their Customer Emergence of new technology enables us experiences in other industries. Solutions to rei
Slide 56: Bond & Specialty Insurance
Bond & Specialty Insurance Tom Kunkel, President | INVESTOR DAY 2017 56
Slide 57: Leading Bond & Specialty Insurance Franchise
Leading Bond & Specialty Insurance Franchise 2016 Consolidated Net Written Premiums: $25 Billion Personal Insurance $8.8B Business Insurance $13.9B Bond & Specialty Insurance $2.3B | INVESTOR DAY 2017 57
Slide 58: A Leading Specialty Lines Insurer
A Leading Specialty Lines Insurer Management & Surety Professional Liability Company1 DWP ($) Mkt Share (%) Company2 DWP ($) Mkt Share (%) TRAVELERS 785 13.3 Chubb 2,687 11.9 Liberty Mutual 751 12.7 AIG 2,684 11.9 Zurich 542 9.2 C.N.A. 1,665 7.4 C.N.A. 438 7.4 XL 1,642 7.3 Chubb 385 6.5 TRAVELERS 1,
Slide 59: A Leading Specialty Lines Insurer
A Leading Specialty Lines Insurer Specialized Business Units Product Distribution Construction Services 2016 NWP: $2.3 Billion D&O Crime/ Commercial Surety Fidelity EPL Private & Non-Profit E&O P&C Financial Institutions Fiduciary Professional Cyber Surety Public Company Diversified business and pro
Slide 60: Disciplined Management of Severity Businesses
Disciplined Management of Severity Businesses $ in millions Net Written Premiums $2,123 $2,126 $2,103 $2,081 $2,099 $2,040 $2,030 $1,981 $1,953 $1,924 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Focus on risk-adjusted returns throughout varying economic cycles | INVESTOR DAY 2017 Note: Domesti
Slide 61: Strong Performance Over Time
Strong Performance Over Time Accident Year Combined Ratio 85% 85% 83% 83% 82% 80% 79% 78% 77% 68% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Consistent profitability throughout challenging economic environments Note: Net accident year combined ratios as of September 2017. See “Combined Ratio”
Slide 62: A Foundation of Competitive Advantages
A Foundation of Competitive Advantages Travelers Bond & Specialty Insurance | INVESTOR DAY 2017 62
Slide 63: Helping Construction Surety Clients Succeed
Helping Construction Surety Clients Succeed Leverages Improve Improve Obtains surety Contractor bond value-added operations profits Grow Revenue services Attracts Improves Improve risk Deepen TRV customer retention profile relationship Grow Premium | INVESTOR DAY 2017 63
Slide 64: Helping Construction Surety Clients Succeed
Helping Construction Surety Clients Succeed Leverages Improve Obtains surety Improves Contractor bond value-added operations profits Grow Revenue services Attracts Improves Improves risk Deepen TRV customer retention profile relationship Grow Premium | INVESTOR DAY 2017 64
Slide 65: Helping Construction Surety Clients Succeed
Helping Construction Surety Clients Succeed Leverages Improves Obtains surety Improves Contractor bond value-added operations profits Grow Revenue services Attracts Improves Improves risk Deepens TRV customer retention profile relationship Grow Premium | INVESTOR DAY 2017 65
Slide 66: Helping Construction Surety Clients Succeed
Helping Construction Surety Clients Succeed Leverages Improves Grows Obtains surety Improves Contractor bond value-added operations profits Revenue services Attracts Improves Improves risk Deepens Grows TRV customer retention profile relationship Premium | INVESTOR DAY 2017 66
Slide 67: Helping Construction Surety Clients Succeed
Helping Construction Surety Clients Succeed Leverages Improves Grows Obtains surety Improves Contractor bond value-added operations profits Revenue services Attracts Improves Improves risk Deepens Grows TRV customer retention profile relationship Premium Value-added services support contractors’ bus
Slide 68: Competitive Financial Benchmarking & Analysis – Next Generation
Competitive Financial Benchmarking & Analysis – Next Generation 2009 Value-Added Analytical Insight to Improve Operations • Database of 5,000+ contractors, largely privately held 2017 • Ability to construct representative peer groups o Type of contractor o Revenue range o Geographic region • Analyti
Slide 69: Competitive Financial Benchmarking & Analysis: New and Deeper Insights
Competitive Financial Benchmarking & Analysis: New and Deeper Insights Contractor’s Question: Is now the time to grow given current market conditions? 3% Subject company Benchmarking illustration Change in Operating Income Ratio 2% 1% 0% -1% -2% -3% -10% 0% 10% 20% 30% 40% 50% Project Pipeline % Cha
Slide 70: Competitive Financial Benchmarking & Analysis: New and Deeper Insights
Competitive Financial Benchmarking & Analysis: New and Deeper Insights Contractor’s Question: Is now the time to grow given current market conditions? 3% Subject company Benchmarking illustration Change in Operating Income Ratio 2% Peers 1% 0% -1% -2% -3% -10% 0% 10% 20% 30% 40% 50% Project Pipeline
Slide 71: Competitive Financial Benchmarking & Analysis: New and Deeper Insights
Competitive Financial Benchmarking & Analysis: New and Deeper Insights Contractor’s Question: Is now the time to grow given current market conditions? 3% Subject company Benchmarking illustration Change in Operating Income Ratio 2% Peers 1% 0% -1% -2% -3% -10% 0% 10% 20% 30% 40% 50% Project Pipeline
Slide 72: Competitive Financial Benchmarking & Analysis: New and Deeper Insights
Competitive Financial Benchmarking & Analysis: New and Deeper Insights Contractor’s Question: Is now the time to grow given current market conditions? 3% Subject company Benchmarking illustration Change in Operating Income Ratio 2% Peers 1% 0% -1% -2% -3% -10% 0% 10% 20% 30% 40% 50% Project Pipeline
Slide 73: Travelers Acquired Family Business Institute
Travelers Acquired Family Business Institute Professional advisory and consulting services provided to the construction industry • Facilitates CEO Peer to Peer Mentoring • Strategic planning 11K blog subscribers • Expense reduction • Leadership development • Succession planning Helping our contracto
Slide 74: Travelers Management Liability in the Future
Travelers Management Liability in the Future Existing competitive advantages Capabilities in development Omnichannel engagement Seamless front-end interactions & cross-sell capabilities Enhanced agility of already robust technology platforms Digital application intake capabilities Ease of doing busi
Slide 75: Travelers Management Liability in the Future
Travelers Management Liability in the Future Existing competitive advantages Capabilities in development Omnichannel engagement Seamless front-end interactions & cross-sell capabilities Enhanced agility of already robust technology platforms Digital application intake capabilities Ease of doing busi
Slide 76: Management Liability Markets Today
Management Liability Markets Today Lengthy applications Manual data entry Disaggregated & unstructured data | INVESTOR DAY 2017 76
Slide 77: Optimizing Data Intake & Effectiveness
Optimizing Data Intake & Effectiveness Lengthy applications Manual data entry Disaggregated & unstructured data Streamlined applications Ease of doing Digital application intake Holistic structured data capture business through data & analytics and Application third-party ~~~~~~~~~~~ data ~~~~~~~~~~
Slide 78: Management Liability Markets Today
Management Liability Markets Today Limited system prequalification Labor-intensive workflows Non-scalable model Growth People | INVESTOR DAY 2017 78
Slide 79: Driving Productivity & Efficiency Improvements
Driving Productivity & Efficiency Improvements Limited system prequalification Labor-intensive workflows Non-scalable model Growth People Differential handling of flow vs. Ease of doing business for Scalable growth complex business agents & customers Growth People | INVESTOR DAY 2017 79
Slide 80: Well-Positioned in Cyber Insurance
Well-Positioned in Cyber Insurance 2016 2013 Ranked #1 carrier by Agents Small Business - PC360 Magazine Cyber Product & 2007 eRisk Hub Portal Breach Remediation Expense Coverage 2006 2016 Community Bank Cyber Product 2010 Top 5 Cyber writer1 2017 CyberRisk Symantec™ Pre Expanded Breach Services Pro
Slide 81: Well-Positioned in Cyber Insurance
Well-Positioned in Cyber Insurance $ in millions Cyber Gross Written Premiums PIF Distribution of Current Limits Profile >$10M-$20M: < 0.3% >$5M - $10M >$20M-$25M: < 0.1% $100 $80 >$1M - $5M $60 $40 $1M and under $20 $- 2011 2012 2013 2014 2015 2016 Disciplined approach driving sensible growth | INV
Slide 82: Pre-Breach Risk Management Services
Pre-Breach Risk Management Services Cybersecurity Cybersecurity assessment tools awareness training partners with Cybersecurity Discounted products A global leader in expertise and services cyber security Providing products and services our customers value | INVESTOR DAY 2017 82
Slide 83: Trusted Partner Delivering Value for Our Customers
Trusted Partner Delivering Value for Our Customers Changing Emerging The undeniable Consumer choice for the Technology Expectations customer… Trends Customer expectations are being shaped by their Emergence of new technology enables us experiences in other industries. Travelers Bond & Specialty Insu
Slide 84: Personal Insurance
Personal Insurance Michael Klein, President | INVESTOR DAY 2017 84
Slide 85: Leading Personal Insurance Agency Franchise
Leading Personal Insurance Agency Franchise 2016 Consolidated Net Written Premiums: $25 Billion Personal Insurance $8.8B Business Insurance $13.9B Bond & Specialty Insurance $2.3B | INVESTOR DAY 2017 85
Slide 86: Balanced Portfolio Delivers Superior Returns
Balanced Portfolio Delivers Superior Returns 2016 U.S. Agency Net Written Premiums: $7.9 Billion Total Account Solutions 48% • Better for customers Agency Homeowners & Agency Auto Other $3.8B $4.1B • Better for agents • Better for us 52% Diversification benefit and differentiator in the marketplace
Slide 87: Top Market Share With Leading Position Among Independent Agents
Top 10 Market Share With Leading Position Among Independent Agents U.S. Auto Market U.S. Home Market Company DWP ($B) % Mkt Company DWP ($B) % Mkt State Farm $39.2 18.3 State Farm $17.6 19.4 GEICO $25.5 11.9 Allstate $7.9 8.7 Allstate $20.8 9.7 Liberty Mutual $6.2 6.9 Progressive $19.6 9.2 Farmers $
Slide 88: Balanced Portfolio Consistently Outperforms
Balanced Portfolio Consistently Outperforms Combined Ratio 120% Travelers Industry 110% 100% 90% 80% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Travelers 10 year Combined Ratio has outperformed the industry by ~6 points | INVESTOR DAY 2017 88 Source: U.S. AM Best 2016, written premiums on a d
Slide 89: Realizing Benefits of Scale and Efficiency
Realizing Benefits of Scale and Efficiency Net Written Premiums and Expense Ratio $9 $s in Billions 31% $8 30% • Growth in premiums $7 29% $6 28% • ~Flat operating expenses $5 27% $4 $3 26% • Lower commission structure 25% $2 $1 24% • Lower ULAE (not reflected in $0 23% expense ratio) 2012 2013 2014
Slide 90: Successful Execution of 2017 Objectives
Successful Execution of 2017 Objectives Agency Automobile Agency Homeowners & Other 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 YoY PIF Change RPC YoY PIF Change Improving profitability and managing growth
Slide 91: Leading Through the Forces of Change: Investing for the Future
Leading Through the Forces of Change Investing for the Future The undeniable Changing choice for the Emerging Consumer customer… Technology Expectations Trends Customer expectations are being shaped by their Compelling Emergence of new technology enables us experiences in other industries. Offerings
Slide 92: Investing In a Broad Range of Capabilities
Investing In a Broad Range of Capabilities Compelling Offerings Consumer Engagement Digital self-service https://inspections.travelers.com/ + x Home Self-Inspection | INVESTOR DAY 2017 Streamlined Experience 92
Slide 93: Compelling Offerings: Launch of Quantum Home 2.0
Compelling Offerings: Launch of Quantum Home 2.0 • Pilot 1 in 4Q ’17 • Colorado • Oregon • Wisconsin • 4 additional states in 2Q ’18 • Remaining states rolled out 2018-2019 New product introduction to drive continued momentum in our highly profitable homeowners business | INVESTOR DAY 2017 93
Slide 94: Introducing Quantum Home 2.0
Introducing Quantum Home 2.0 https://youtu.be/gt5QNVms9GQ | INVESTOR DAY 2017 94
Slide 95: Quantum Home 2.0 is More Flexible and User Friendly
Compelling Offerings: Quantum Home 2.0 is More Flexible and User Friendly Before After | INVESTOR DAY 2017 95
Slide 96: Quantum Home 2.0 is More Flexible and User Friendly
Compelling Offerings: Quantum Home 2.0 is More Flexible and User Friendly After Modular product design enables: • Tailoring coverage to customer needs • Better experience for customers and agents • Enhanced position on comparative rater Modular product designed to improve conversion | INVESTOR DAY 2
Slide 97: Quantum Home 2.0 is More Sophisticated and Advanced
Compelling Offerings: Quantum Home 2.0 is More Sophisticated and Advanced | INVESTOR DAY 2017 97
Slide 98: Quantum Home 2.0 is More Sophisticated and Advanced
Compelling Offerings: Quantum Home 2.0 is More Sophisticated and Advanced | INVESTOR DAY 2017 98
Slide 99: Quantum Home 2.0 is More Sophisticated and Advanced
Compelling Offerings: Quantum Home 2.0 is More Sophisticated and Advanced • More sophisticated multivariate model • 20+ new rating variables • Geography • Perils • Customer • Building • 3x more third-party data Profitable growth through improved segmentation | INVESTOR DAY 2017 99
Slide 100: New Platform Promotes Total Account Solutions
Streamlined Experience: New Platform Promotes Total Account Solutions • Streamlined Process • 36% reduction in screens • 5x more prefilled data • Easy Account Bundling • Auto • Home • Specialty | INVESTOR DAY 2017 100
Slide 101: New Platform Promotes Total Account Solutions
Streamlined Experience: New Platform Promotes Total Account Solutions • Streamlined Process • 36% reduction in screens • 5x more prefilled data • Easy Account Bundling • Auto • Home • Specialty “ Early consumer results Early agent feedback “Super easy to quote” • Increase in auto quote complete rate
Slide 102: Streamlined Experience: Property Self-Inspection
Streamlined Experience: Property Self-Inspection Before • Better experience for customers and agents • More efficient for us After https://inspections.travelers.com/ +x • Market test underway • Initial results encouraging Just one of many examples of investments in digital capabilities | INVESTOR DA
Slide 103: Reaching Potential Customers in Key Life Moments
Consumer Engagement: Reaching Potential Customers in Key Life Moments Consumers Agents One example of connecting with customers outside the insurance buying process | INVESTOR DAY 2017 103
Slide 104: Home Central
Home Central https://youtu.be/6Hq6rxrbVdQ | INVESTOR DAY 2017 104
Slide 105: Home Central Resonates with Customers and Agents
Consumer Engagement: Home Central Resonates with Customers and Agents Strong response from consumers: Agents leveraging capability: 2x Web traffic to the Personal Insurance website 17x Increase in page view traffic from agent posts Expanding our pipeline of potential insurance customers | INVESTOR D
Slide 106: Investments Will Generate Industry-Leading Results
Investments Will Generate Industry-Leading Results The undeniable Changing choice for the Emerging Consumer customer… Technology Expectations Trends Customer expectations are being shaped by their Compelling Emergence of new technology enables us experiences in other industries. Offerings to reimagi
Slide 107: Investor Day 2017
INVESTOR DAY 2017
The Travelers Companies — Investor Day (November 2017) on 6ix