The Travelers Companies

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The Travelers Companies, Inc.
Public
Traded asNYSE: TRV
DJIA Component
S&P 500 Component
IndustryInsurance
PredecessorCitigroup
Founded1853; 171 years ago (1853) (as St. Paul Fire & Marine)
2004 (2004) (as The Travelers Companies)
HeadquartersNew York City, New York, United States[1]
Key people
Alan D. Schnitzer
(Chairman and CEO)
Jay S. Benet
(Vice Chairman)
ProductsInsurance policies
Risk management
RevenueIncrease US$28.902 billion (2017)[2]
Decrease US$2.730 billion (2017)[2]
Decrease US$2.056 billion (2017)[2]
Total assetsIncrease US$103.483 billion (2017)[2]
Total equityIncrease US$23.731 billion (2017)[2]
Number of employees
~30,800 (December 2017)[2]
WebsiteTravelers.com
Travelers Tower
in Hartford, Connecticut

The Travelers Companies, Inc. is an American insurance company. It is the second largest writer of U.S. commercial property casualty insurance and the third largest writer of U.S. personal insurance through independent agents. Travelers is incorporated in Minnesota, with headquarters in New York City and its largest office in Hartford, Connecticut. Travelers also maintains a large office in St. Paul, Minnesota.[1] It has been a component of the Dow Jones Industrial Average since June 8, 2009.[3]

The company has field offices in every U.S. state, plus operations in the United Kingdom, Ireland, Singapore, China, Canada, and Brazil. In 2014, the company reported revenues of US $27 billion and total assets of US $103 billion.

Travelers, through its subsidiaries and approximately 14,000 independent agents and brokers, provides commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals. The company offers insurance through three segments:

  • Personal Insurance, which includes home, auto and other insurance products for individuals
  • Business Insurance, which includes a broad array of property and casualty insurance and insurance-related services in the United States
  • Bond and Specialty Insurance, which includes surety, crime, and financial liability businesses which primarily use credit-based underwriting processes, as well as property and casualty products that are predominantly marketed on an international basis.

History

File:150px-sttravlogo.png
Top: The familiar umbrella logo of the Travelers, used until its spinoff from Citigroup. Bottom: The logo that The St. Paul used prior to the merger with Travelers.

The main predecessor companies of The Travelers Companies, Inc. are The St. Paul Companies, Inc. and Travelers Property Casualty Corporation.

Saint Paul Fire and Marine Insurance Co. was founded March 5, 1853, in St. Paul, Minnesota, serving local customers who were having a difficult time getting claim payments in a timely manner from insurance companies on the east coast of the United States. It barely survived the Panic of 1857 by dramatically paring down its operations and later reorganizing itself into a stock company (as opposed to a mutual company). It soon spread its operations across the country. In 1998 it acquired USF&G, known formerly as United States Fidelity and Guaranty Company, an insurance company based in Baltimore, Maryland, for $3.9 billion in stock and assumed debt.[4][5] By buying USF&G, they went from the 13th to the eighth largest property and casualty insurance company in the United States. Through economies of scale between the two companies, and a difficult business environment, they downsized the company substantially over the coming years by selling certain business units to focus on more profitable business units.[6][7]

Travelers was founded in 1864 in Hartford. It was founded to provide travel insurance to railroad travelers at a time when travel was far more risky and dangerous than today, hence the name. Along the way it had many industry firsts, including the first automobile policy, the first commercial airline policy, and the first policy for space travel.[8] It also established and operated the world's first privately-owned weather research facility, the Travelers Weather Research Center, which was the first organization to state weather predictions by probabilities ("20% chance of rain"). By the early 1990s, Travelers was predominantly a general property and casualty insurer that also happened to do some travel insurance on the side, and it quietly exited its original business in 1994. What was left of Travelers' travel insurance business was acquired by three former employees and is now known as Travel Insured International, a Crum and Forster Company.

File:Travelers 1993 logo.png
The Travelers logo, ca. 1993

In the 1990s, it went through a series of mergers and acquisitions. It was bought by Primerica in 1993,[9] but the resulting company retained the Travelers name. In 1995 it became The Travelers Group.[8] It bought Aetna's property and casualty business in 1996.[10]

In 1998, the Travelers Group merged with Citicorp to form Citigroup.[9] However, the synergies between the banking and insurance arms of the company did not work as well as planned, so Citigroup spun off Travelers Property and Casualty into a subsidiary company in 2002,[11] although it kept the red umbrella logo. Three years later, Citigroup sold Travelers Life & Annuity to MetLife.[12] In 2003, Travelers bought renewal rights for Royal & SunAlliance Personal Insurance and Commercial businesses.[13][14]

In 2004, the St. Paul and Travelers Companies merged and renamed itself St. Paul Travelers, with the headquarters set in St. Paul, Minnesota.[15] In August of that year, it was charged of misleading statements associated with the merger.[16][17] Despite many assurances from CEO Jay Fishman that the newly formed company would retain the St. Paul name, the corporate name only lasted until 2007, when the company repurchased the rights to the famous red umbrella logo from Citigroup and readopted it as its main corporate symbol, while also changing the corporate name to The Travelers Companies.[18][19][20][21]

Many of Travelers' ancestor companies, such as St. Paul and USF&G, are technically still around today, and still write policies and accept claims in their own names (under the overarching Travelers brand name). As is typical of most insurers in the United States, Travelers never dissolved the various companies it acquired, but simply made them wholly owned subsidiaries and trained its employees to act on behalf of those subsidiaries. This is a common risk management strategy used by U.S. insurance groups. If any one company in the group gets hit with too many claims, the situation can be easily contained to that one company (which is placed in runoff and allowed to run its policies to completion), while the remainder of the group continues to operate normally.

In November 2010, Travelers entered into a joint venture agreement under which the company would invest in J. Malucelli Participações em Seguros e Resseguros S.A., the market leader in the surety insurance business in Brazil. The transaction closed in June 2011 with Travelers acquiring a 43.4 percent interest. Travelers' investment in newly issued shares significantly increased J. Malucelli's capital level, positioning it for substantial growth in Brazil. At the time, Travelers had the option to increase its investment to retain a 49.5 percent interest, which the company later did in 2012.[22]

In June 2013, Travelers announced the acquisition of Dominion of Canada General Insurance Company from E-L Financial Corporation Limited (TSX: ELF).[23] The transaction later closed in November 2013. The combined organization, referred to as Travelers Canada, remains headquartered in Toronto.[24]

The company’s joint venture with J. Malucelli in Brazil completed the acquisition of a majority interest in Cardinal Compañía de Seguros, a Colombian start-up surety provider in September 2015. The business, which is based in Bogotá, operates under the co-branded name J. Malucelli Travelers.[25]

In October 2015, Travelers acquired a majority interest in the property casualty business of its J. Malucelli joint venture in Brazil. J. Malucelli commenced writing property casualty business in 2012.[26] The property casualty business operates under the Travelers brand and focuses on property, general liability, construction and financial insurance products. The business is based in São Paulo.

As a result of the transaction, Travelers now owns 95 percent of the property casualty business with Paraná Banco, the parent company of J. Malucelli, retaining a five percent interest. Travelers’ interest in the surety business of the J. Malucelli joint venture remains at 49.5 percent.[27]

In March 2017, Travelers agreed to acquire UK-based Simply Business from Aquiline Capital Partners for approximately $490 million. Simply Business is a leading U.K. distributor of small business insurance policies, offering products online on behalf of a broad panel of carriers. It has more than 425,000 microbusiness customers covering more than 1,000 classes of business, and was named “Best Company to Work For” by The Sunday Times in 2015 and 2016. The transaction adds to Travelers' digital capabilities.[28][29][30]

In 2018, Travelers ranked 106 on the Fortune 500 list of largest U.S. companies[31]. On June 8, 2009, Travelers replaced its former parent Citigroup on the Dow Jones Industrial Average.[32]

On August 4, 2015, the company announced that Alan Schnitzer would succeed Jay Fishman as Chief Executive Officer effective December 1, 2015.[33]

On August 4, 2017, Travelers completed its previously announced acquisition of Simply Business, a leading provider of small business insurance policies in the United Kingdom..[34]

Finances

For the fiscal year 2017, The Travelers Companies reported earnings of US$2.041 billion, with an annual revenue of US$28.902 billion, an increase of 4.6% over the previous fiscal cycle. The Travelers Companies shares traded at over $122 per share, and its market capitalization was valued at over US$33.3 billion in October 2018.[35]

Year Revenue
in mil. USD$ 		Net Income
in mil. USD$ 		Total Assets
in mil. USD$ 		Price per Share
in USD$ 		Employees
2005 24,365 1,622 113,187 29.53
2006 25,090 4,208 115,292 34.10
2007 26,017 4,601 115,224 39.91
2008 24,477 2,924 109,632 35.09
2009 24,680 3,622 109,560 35.39
2010 25,112 3,188 105,656 42.65
2011 25,446 1,414 104,575 47.66
2012 25,740 2,454 104,938 55.84
2013 26,191 3,646 103,812 74.34 30,800
2014 27,174 3,665 103,078 84.40 30,200
2015 26,815 3,414 100,184 98.57 30,900
2016 27,625 2,992 100,245 108.29 30,900
2017 28,902 2,041 103,483 122.14 30,800

Alleged anticompetitive practices

In January 2007, Travelers agreed to pay US$77 million to six states to settle a class action suit and end investigations into its insurance practices.[36][37] The charges involved paying the insurance broker Marsh & McLennan Companies contingent commissions to win business without the knowledge of clients, thus creating a conflict of interest.[38] Additionally, the investigation examined whether Travelers had created the illusion of competition by submitting fake bids,[39] thus misleading clients into believing they were receiving competitive commercial premiums.[40]

National Football League lawsuit

In August 2012, Travelers sued the National Football League for forcing the company and its subsidiaries to pay to defend the league for failing to protect players from brain injury, in a case filed in the New York State Supreme Court called Discover Property & Casualty Co. et al. vs. National Football League et al., New York State Supreme Court, New York County, No. 652933/2012. The league had sued over three dozen insurance companies the week before in an attempt to cover the claims that players made against the league.[41][42][43]

Advertising

File:205px-SPTLogotrans.png
St. Paul Travelers logo used until February 2007

The original logo of the red umbrella started in 1870 when it appeared in a newspaper ad for the young insurance company. It was revived in the early 1960s, when it was given its signature red color by Harry W. Knettell, then the account executive for The Travelers and Vice President at the Charles Brunelle advertising agency. During the late 1960s Charles Brunelle was the largest advertising agency in Hartford, a city known as "the insurance capital of the world" due to the many insurance companies in that town. The Travelers was one of their many insurance company clients.[44][better source needed]

In 2006, a Travelers commercial titled Snowball was nominated for an Emmy. Snowball featured a man, walking down a steep San Francisco sidewalk, who trips and knocks over a table of items at a garage sale. The man and the items roll down the street, forming a ball which gathers garbage cans, pedestrians, construction materials, motorcycles, light poles, and other items, in a manner very reminiscent of the familiar cartoon "snowball" effect or the cult video game Katamari Damacy.[45] The creators of the ad say it is simply based on the snowball effect, they have never heard of the game, and that the resulting similarity was a surprise to them.[46]

In 2007, the company secured naming rights for an annual event to be called the Travelers Championship golf tournament, formerly the Greater Hartford Open, on the PGA Tour.

In April 2008, The Travelers purchased back the rights to the famous red umbrella, which is featured in several commercials starring Paul Freeman as well as other advertisements. In July 2008, the spot "Delivery," also starring Freeman, was nominated for an Emmy.

Notable former employees

Notes

  1. ↑ 1.0 1.1 Travelers' NYC address = HQ move?
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 "The Travelers Companies, Inc. 2017 Annual Report (Form 10-K)". sec.gov. U.S. Securities and Exchange Commission. January 2018.
  3. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  4. ↑ Browning, E.S. (2009-06-01). "Travelers, Cisco Replace Citi, GM in Dow". The Wall Street Journal. Retrieved 2017-04-19.
  5. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  6. ↑ "The St. Paul Travelers Companies, Inc. - Company Profile, Information, Business Description, History, Background Information on The St. Paul Travelers Companies, Inc". www.referenceforbusiness.com. Retrieved 2016-11-13.
  7. ↑ Moylan, Martin. "Travelers drops the "St. Paul." Will it drop the other shoe?". Retrieved 2016-12-28.
  8. ↑ 8.0 8.1 Citigroup history - Travelers
  9. ↑ 9.0 9.1 Primerica Financial Services history, Citigroup. Retrieved March 2, 2007.
  10. ↑ Aetna Completes Previously Announced Sale Of Property/Casualty Operations To Travellers, Aetna press release, April 2, 1996
  11. ↑ Citigroup Announces Completion of its Spin-off of Travelers Property Casualty, Citigroup press release, August 20, 2002
  12. ↑ MetLife Completes Acquisition Of Travelers Life & Annuity, MetLife press release, July 1, 2005.
  13. ↑ Travelers Property Casualty Corp. Buys Renewal Rights To Commercial and Personal Lines Businesses of Royal & SunAlliance, Travelers Property Casualty Press Release, September 4, 2003.
  14. ↑ "Travelers Buys Some Royal & SunAlliance Lines". www.propertycasualty360.com. Retrieved 2016-12-28.
  15. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  16. ↑ "The St. Paul Travelers Companies, Inc. : Travelers Property Casualty Corp.'s Class A and Class B common stock Securities Litigation". Stanford Law School. Retrieved April 19, 2017.
  17. ↑ "Securities Class Action Clearinghouse: Case Page". securities.stanford.edu. Retrieved 2016-12-28.
  18. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  19. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  20. ↑ "St. Paul Travelers To Change Company Name To Travelers And Bring Back Iconic Red Umbrella". Business Wire. 13 February 2007. Retrieved 2 September 2018.
  21. ↑ Mullman, Jeremy (February 13, 2007). "Travelers Reunites With Red Umbrella". Advertising Age. Retrieved April 19, 2017.
  22. ↑ "Travelers Taps Into Brazil With Joint Venture". Forbes. November 4, 2010. Retrieved 2016-08-15.
  23. ↑ "Travelers Eyes Canada Growth with $1.1B Acquisition of The Dominion". Insurance Journal. June 10, 2013. Retrieved 2016-08-15.
  24. ↑ "Travelers completes acquisition of The Dominion". Canadian Underwriter. November 1, 2013. Retrieved 2016-08-15.
  25. ↑ "Travelers Dives into Colombia Through Brazilian Joint Venture". Carrier Management. 10 December 2014. Retrieved 2 September 2018.
  26. ↑ "Travelers Buys Majority Stake in J. Malucelli to Grow in Brazil". Zacks.com. October 2, 2015. Retrieved 2016-08-18.
  27. ↑ "Travelers makes major commitment in Brazil". Hartford Business Journal. October 5, 2015. Retrieved 2016-07-17.
  28. ↑ "Travelers buys Simply Business for £400m in digital push". Financial Times. March 13, 2017. Retrieved March 13, 2017.
  29. ↑ "Travelers to Buy UK-Based Simply Business for $490M". Insurance Journal. Retrieved March 13, 2017.
  30. ↑ "Travelers shores up online distribution with U.K. purchase". Digital Insurance. Retrieved March 14, 2017.
  31. ↑ "Travelers Cos. - Fortune 500". Fortune. Retrieved 2018-06-22.
  32. ↑ Lua error in Module:Citation/CS1/Identifiers at line 47: attempt to index field 'wikibase' (a nil value).
  33. ↑ "Read the Travelers Statement on Alan Schnitzer and Jay Fishman". The Wall Street Journal. August 4, 2015.
  34. ↑ "Travelers Completes Acquisition of UK-Based Simply Business". Retrieved 2017-08-04.
  35. ↑ "Travelers Revenue 2006-2018 | TRV". www.macrotrends.net. Retrieved 2018-10-31.
  36. ↑ Garrison-Sprenger, Nicole (January 6, 2008). "Travelers to pay $77 million to settle merger-related suit". Pioneer Press. Retrieved April 19, 2017.
  37. ↑ "Insurer Agrees To Halt Contingent Commissions - Law360". www.law360.com. Retrieved 2016-12-28.
  38. ↑ "Travelers to Pay $6 Million, Ending Inquiry on Brokers' Fees". The New York Times. January 1, 2008.
  39. ↑ "UPDATE 1-Travelers to settle compensation case with states". Reuters. December 31, 2007.
  40. ↑ "Travelers Settles With States Over Brokers' Contingent Commissions". Insurance Journal. 2008-01-13. Retrieved 2017-04-19.
  41. ↑ Ax, Joseph (2012-08-22). "Travelers sues NFL over brain injury lawsuits - Yahoo! News". News.yahoo.com. Archived from the original on 2012-11-18. Retrieved 2012-09-15.
  42. ↑ "UPDATE 1-Travelers sues NFL over brain injury lawsuits". Reuters. August 22, 2012. Retrieved 2012-09-15.
  43. ↑ "Travelers Sues NFL Over Ex-Players' Brain Injury Lawsuits - Law360". www.law360.com. Retrieved 2016-12-28.
  44. ↑ Knettell family history further documented by other Hartford insurance client colleagues including former V.P. of Connecticut General Insurance
  45. ↑ Stern, Zack (25 September 2006). "Real-life Katamari in Travelers Insurance ad". engadget. Retrieved 2 September 2018.
  46. ↑ Stern, Zack (28 September 2006). "Travelers ad imitating Katamari: just coincidence". engadget. Retrieved 2 September 2018.
  47. ↑ JILL ANDRESKY FRASER; Jill Andresky Fraser, the financial strategies editor at Inc., has been following the insurance industry for 10 years. (1990-12-02). "COVER STORY - COVER STORY - The Travelers Rides Into The Storm". NYTimes.com. Retrieved 2010-07-30.
  48. ↑ Mathews, Jay (September 24, 1993). "The Making of a Financial Services Empire". Washington Post. Retrieved 2018-09-02.
  49. ↑ Levick, Diane (1994-03-27). "No Gain Without Pain At Travelers". Hartford Courant. Retrieved 2018-09-02.
  50. ↑ Scism, Erik Holm and Leslie. "New Travelers CEO Has Family Ties". WSJ. Retrieved 2016-12-28.
  51. ↑ "Robert I. Lipp J.D.: Executive Profile & Biography - Bloomberg". www.bloomberg.com. Retrieved 2016-12-28.
  52. ↑ Edelstein, Jeff (May 17, 2010). "Look Who's Talking: Samuel J. Plumeri Jr". The Trentonian News. The Trentonian News. Retrieved July 15, 2010.
  53. ↑ Bianco, Anthony (March 30, 1998). "Joe Plumeri: The Apostle of Life Insurance". Bloomberg. Business Week. Retrieved July 15, 2010.
  54. ↑ "Joseph J. Plumeri Profile - Forbes.com". 2010-09-30. Archived from the original on 2010-09-30. Retrieved 2016-12-28.
  55. ↑ "Newspaper Archive". Nl.newsbank.com. 1994-10-23. Retrieved 2010-07-30.
  56. ↑ Lubanko, Matthew (1998-03-12). "Travelers Chairman Reaps $227 Million". Hartford Courant. Retrieved 2018-09-02.
  57. ↑ Singer, Natasha (2016-08-25). "Jay Fishman, Who Led Travelers Safely Through the Financial Crisis, Dies at 63". New York Times. Retrieved 2018-09-02.

External links

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