The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — J.P. Morgan 2010 Insurance Conference
27 slides from The Travelers Companies's conference presentation, Mar 22, 2010
Slide 1: J.P. Morgan 2010 Insurance Conference
Bill Cunningham Executive Vice President, Business Insurance The Travelers Companies, Inc. J.P. Morgan 2010 Insurance Conference March 22, 2010
Slide 2: 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. Specifically, earnings
Slide 3: Overview, Commercial Accounts Strategy, Results
¾ Overview ¾ Commercial Accounts Strategy • Leverage size and scale while executing locally • Capitalize on leadership position within distribution ¾ Results • Renewal business • New business 2
Slide 4: Overview: Travelers Segments
Overview: Travelers Segments Travelers Full Year 2009 Net Written Premiums: $21.3 Billion Personal Insurance $7.1 Billion Select Accounts Homeowners & Other Commercial Accounts Business Insurance Automobile $10.9 Billion Industry-Focused Underwriting Target Risk Bond & Financial Underwriting Product
Slide 5: Overview: Business Insurance
Overview: Business Insurance Business Insurance Full Year 2009 Net Written Premiums: $10.9 Billion Core Multi-Line Middle Market Businesses Select Accounts 2009 NWP: $6.3 Billion Homeowners & Other Characteristics: Commercial ¾ Underwriting and pricing Accounts driven by loss experience and exposure
Slide 6: Overview: Business Insurance
Overview: Business Insurance Business Insurance Full Year 2009 Net Written Premiums: $10.9 Billion Commercial Accounts 2009 NWP: $2.5 Billion Select Accounts ¾ $50,000 - $1 million premium Homeowners & Other per account Commercial Accounts ¾ Primarily general liability, property, auto, workers’ comp
Slide 7: Overview, Commercial Accounts Strategy, Results
¾ Overview ¾ Commercial Accounts Strategy • Leverage size and scale while executing locally • Capitalize on leadership position within distribution ¾ Results • Renewal business • New business 6
Slide 8: Strategy - Commercial Accounts: Relationship-Oriented Value Proposition
Strategy - Commercial Accounts Providing Relationship-Oriented Value Proposition to Customers and Agents Leverage size and scale while executing locally ¾ Enhance industry leading analytics and predictive modeling ¾ Build upon product breadth, expertise and specialization with new and enhanced produ
Slide 9: Leverage Size and Scale While Executing Locally
Leverage Size and Scale While Executing Locally Industry Leading Analytics and Predictive Modeling Scale Æ Significant Data Æ Analytics Æ Underwriting Advantage Predictive models Business metrics • Large scale of proprietary data • Granular views of profit, loss, production metrics • More robust man
Slide 10: Renewal Rate Change Distribution
Leverage Size and Scale While Executing Locally Renewal Rate Change Distribution Commercial Accounts1: Renewal Rate Change by Band – Full Year 2009 8,000 Number of Accounts 6,000 4,000 2,000 0 < -10% -10% to -5% -5% to 0% 0% to 5% 5% to 10% >10% Combinationof Combination ofsophisticated sophisticate
Slide 11: Build Upon Product Breadth, Expertise & Specialization
Leverage Size and Scale While Executing Locally Build Upon Product Breadth, Expertise & Specialization ¾ Suite of products and services providing tailored risk management solutions • Tailored coverage solutions • Packaged sales kits and joint advertising for agents • Pre-qualified leads Commercial A
Slide 12: Execute on Excellence in Underwriting and Risk Selection
Leverage Size and Scale While Executing Locally Execute on Excellence in Underwriting and Risk Selection ¾ Effective tools for underwriters and agents • Underwriting knowledge edge • Pricing ¾ Industry leading risk control organization • Over 700 specialists help customers assess risk and mitigate l
Slide 13: Increase Penetration With Top Performing Agents
Capitalize on Leadership Position Within Distribution Increase Penetration With Top Performing Agents An Agency’s Average Share of Middle Market Written Premium With Their Top 3 Carriers1 Agency Preference Survey2 ¾ Percentage of agents who 80% of an responded that Travelers was agency’s one of the
Slide 14: Add New Agency Relationships
Capitalize on Leadership Position Within Distribution Add New Agency Relationships Commercial Accounts: Agency Relationships rea se Inc 12% 2007 2008 2009 Expanding on Expanding on broad broad distribution distribution plant plant 13
Slide 15: Overview, Commercial Accounts Strategy, Results
¾ Overview ¾ Commercial Accounts Strategy • Leverage size and scale while executing locally • Capitalize on leadership position within distribution ¾ Results • Renewal business • New business 14
Slide 16: Renewal Business Results: Retention
Renewal Business Results Retention Commercial Accounts 86% 85% 86% 85% 2006 2007 2008 2009 Retaining business Retaining business at at historically historically high high levels levels Note: statistics are subject to change based on a number of factors, including changes in actuarial estimates. 15
Slide 17: Renewal Business Results: Pricing
Renewal Business Results Pricing Commercial Accounts ♦ Renewal Rate Change1 % • Exposure/Other % ▲ Renewal Premium Change2 % 0% 2006 2007 2008 1Q 2Q 3Q 4Q 1QTD3 2009 2009 2009 2009 2010 1 Each percentage represents the estimated change in average premium on policies that renew, excluding exposure ch
Slide 18: New Business Results: New Business Premium
New Business Results Commercial Accounts: New Business Premium se Increased r e a Opportunities Inc 23% New Product Account Rounding New Agency Relationships 2006 2009 Creating opportunities Creating opportunities to to drive drive positive positive new new business results business results 17
Slide 19: New Business Results: Increased Opportunities
New Business Results Increased Opportunities Generating more opportunities… Submissions Quotes Inc rease c rease 70% 79% In 2006 2007 2008 2009 2006 2007 2008 2009 …while continuing to apply discipline Quote Ratio Hit Ratio Decrease Generally consistent of 11.4 po ints 2006 2007 2008 2009 2006 2007
Slide 20: New Business Results: New Products
New Business Results New Products Commercial Accounts: New Business Premium from New Products ($ in millions) c r ease $106 In 1 72% $85 $73 $39 2006 2007 2008 2009 New products New products helping helping drive drive new new business business Note: New business from the following products: Auto De
Slide 21: New Business Results: Account Rounding
New Business Results Account Rounding Commercial Accounts: New Business from Existing Customers ($ in millions) reas e Inc 25% $89 $71 2006 2009 Leveraging existing Leveraging existing relationships relationships 20
Slide 22: Increasing the Number of Lines per Account
New Business Results Increasing the Number of Lines per Account Commercial Accounts: Accounts With 5 Lines of Coverage r owt h: 49% G 3-Year 2006 2007 2008 2009 Retention improves Retention improves as as the the number number of of lines lines increase increase 21
Slide 23: New Business Results: New Agency Relationships
New Business Results New Agency Relationships Agency Relationships New Business from New Agency Relationships ($ in millions) a se se Incre Incre a 12% 49% $79 $53 $56 2007 2008 2009 2007 2008 2009 Utilizing the Utilizing the strength strength of of the the franchise franchise to to build build succ
Slide 24: Net Gain in Accounts from Top Competitors
New Business Results Net Gain in Accounts from Top Competitors Commercial Accounts: Net Gain in Accounts1 399 Full Year 2009 366 Full Year 2008 188 302 160 156 153 145 78 107 99 94 178 97 82 49 54 51 Carrier 1 Carrier 2 Carrier 3 Carrier 4 Carrier 5 Carrier 6 Significant advantage Significant advant
Slide 25: Widening the Gap Through Superior Execution
Travelers Commercial Accounts Widening the Gap Through Superior Execution ¾ Industry leading analytics ¾ Product breadth ¾ Disciplined underwriting ¾ Agency relationships Optimizing results Optimizing results in in any any market market environment environment 24
Slide 26: Disclosure
Disclosure • For further information, please see Travelers reports filed with the SEC pursuant to the Securities Exchange Act of 1934 which are available at the SEC’s website (www.sec.gov) • Copies of this presentation and related financial supplement are publicly available on the Travelers website
Slide 27: End Slide
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