Travelers Sustainability
Accounting Standards
Board Report 2021
Travelers Sustainability Accounting Standards Board Report 2021
In addition to providing wide-ranging disclosure on our website regarding our approach to sustained value creation, which integrates
environmental, social and governance factors, The Travelers Companies, Inc. (together with its consolidated subsidiaries, Travelers
or the Company) is providing the following disclosures, which are aligned with the Sustainability Accounting Standards Board (SASB)
standards for the insurance industry. Travelers is a leading provider of commercial, personal and specialty insurance products and
services to businesses, government units, associations and individuals. Because Travelers is a property and casualty insurance company,
this report does not address any metrics requesting information regarding other types of insurance products (e.g., life insurance).
[1]
I. Sustainability Disclosure Topics & Accounting Metrics
TOPIC CODE ACCOUNTING METRIC PAGE REFERENCE
Transparent Information
& Fair Advice for Customers
FN-IN-270a.1 Total amount of monetary losses as a result of legal proceedings
associated with marketing and communication of insurance
product-related information to new and returning customers
Page
FN-IN-270a.2 Complaints-to-claims ratio
Page
FN-IN-270a.3 Customer retention rate Page
FN-IN-270a.4 Description of approach to informing customers about products Page
Incorporation of Environmental,
Social & Governance Factors in
Investment Management
FN-IN-410a.1 Total invested assets, by industry and asset class
Page
FN-IN-410a.2 Description of approach to incorporation of environmental, social
and governance (ESG) factors in investment management processes
and strategies
Page
Policies Designed to Incentivize
Responsible Behavior
FN-IN-410b.1 Net premiums written related to energy efficiency and low
carbon technology
Page
FN-IN-410b.2 Discussion of products and/or product features that incentivize health,
safety, and/or environmentally responsible actions and/or behaviors
Page
Environmental Risk Exposure
FN-IN-450a.1 Probable Maximum Loss (PML) of insured products from
weather-related natural catastrophes
Page
FN-IN-450a.2 Total amount of monetary losses attributable to insurance payouts from
(1) modeled natural catastrophes and (2) non-modeled natural
catastrophes, by type of event and geographic segment (net and gross
of reinsurance)
Page
FN-IN-450a.3 Description of approach to incorporation of environmental risks
into (1) the underwriting process for individual contracts and (2)
the management of firm-level risks and capital adequacy
TCFD Report
Systemic Risk Management
FN-IN-550a.1 Exposure to derivative instruments by category: (1) total potential
exposure to non-centrally cleared derivatives, (2) total fair value of
acceptable collateral posted with the Central Clearinghouse and (3) total
potential exposure to centrally cleared derivatives
Page
FN-IN-550a.2 Total fair value of securities lending collateral assets Page
FN-IN-550a.3 Description of approach to managing capital- and liquidity-related
risks associated with systemic non-insurance activities
Page
[1] The inclusion of information in this report should not be construed as a characterization regarding the materiality or financial impact (or potential impact) of that information. For additional
information regarding Travelers, please see our current and periodic reports with the Securities and Exchange Commission, including our Annual Report on Form K and Quarterly Reports
on Form 10-Q.
Travelers Sustainability Accounting Standards Board Report 2021
II. Activity Metric
CODE ACTIVITY METRIC PAGE REFERENCE
FN-IN-000.A
Number of policies in force, by segment Page
III. Discussion & Explanations of Accounting & Activity Metrics
Transparent Information & Fair Advice for Customers
FN-IN-270a.1
Total amount of monetary losses as a result of legal proceedings associated with marketing and
communication of insurance product-related information to new and returning customers
In accordance with Securities and Exchange Commission requirements, Travelers discloses all material legal proceedings, other than
ordinary routine litigation incidental to the business, in its Annual Reports on Form K and Quarterly Reports on Form 10-Q. In 2021,
legal proceedings and/or losses, if any, associated with marketing and communication of insurance product-related information were
de minimis.
FN-IN-270a.2
Complaints-to-claims ratio
Travelers provides a wide range of commercial and personal property and casualty insurance products primarily through its insurance
subsidiaries. Our domestic insurance subsidiaries are subject to insurance regulation in the various states and jurisdictions where
they transact business. Most state insurance departments provide consumer complaint data to the National Association of Insurance
Commissioners (NAIC), and the NAIC produces several reports combining this data. Neither the NAIC nor Travelers, however,
calculates a complaints-to-claims ratio. We do not believe a complaints-to-claims ratio is a meaningful metric for assessing a company’s
claim handling process. For example, companies may track open and closed claims differently, which could result in a comparison that
is not meaningful.
Additionally, a complaint may be received years after a claim is closed, which could overstate a company’s complaints-to-claims ratio
for that reporting period. A complaints-to-claims ratio also would not account for variations in an underwriting company’s concentration
of lines of business or market share, which further diminishes the usefulness of the metric.
The NAIC does provide a resource regarding complaints through its Consumer Insurance Search (CIS) site, which receives complaint
information from the state insurance departments. While the NAIC provides a number of reports through CIS for complaint trends,
the NAIC data does not provide one metric for all of Travelers’ underwriting companies combined. We note that the NAIC’s current
methodology for calculating the Company Complaint Index, which compares a company’s performance (such as that of Travelers) to
other companies in the market, may also skew the index for an underwriting company with little or no written premium, for example.
Accordingly, a Company Complaint Index may appear to be higher than the industrywide National Complaint Index even when the
company received a minimal number of complaints. For this reason, we do not believe that CIS’s current Company Complaint Indexes
of Travelers’ underwriting companies provide meaningful information for our investors or other stakeholders.
Travelers Sustainability Accounting Standards Board Report 2021
FN-IN-270a.3
Customer retention rate
We routinely monitor our customer retention rates for all lines of business, except for surety and other products that are generally
sold on a nonrecurring, project-specific basis.
We report our retention rates as part of our quarterly earnings webcast using a methodology that we believe is meaningful for our
investors and other users of our financial information. Our methodology does not adjust the calculation for involuntarily terminated
customers as provided for by the SASB methodology; this generally results in a lower reported retention rate for our business than
if we had adjusted for these customers in accordance with the SASB methodology. We also report select business groups in our
Business Insurance and Bond & Specialty Insurance segments using customer relationship premium as our metric rather than policy
counts, which are used for our Personal Insurance segment, as we believe this is a more meaningful measure with respect to business
customers. This approach is consistent with our approach for financial reporting. The following provides a summary of our retention
rates by relevant business group as reported as of December 31, 2021.
BUSINESS GROUP 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 2Q’21 3Q’21 4Q’21
Domestic Business Insurance
(excluding National Accounts)
84% 83% 83% 83% 83% 84% 85% 85%
Domestic Business Insurance:
Select Accounts
82% 84% 81% 79% 80% 80% 82% 82%
Domestic Business Insurance:
Middle Market
86% 85% 85% 85% 86% 87% 87% 87%
Domestic Bond and Specialty
Insurance: Management Liability
[1]
89% 89% 91% 89% 87% 86% 86% 87%
Domestic Personal
Insurance: Automobile
[2]
84% 84% 84% 84% 85% 86% 86% 85%
Domestic Personal Insurance:
Homeowners and Other
[2]
85% 85% 84% 84% 84% 85% 85% 85%
Total International Insurance
[1]
71% 80% 79% 81% 80% 80% 80% 82%
[1] This ratio excludes surety and other products that are generally sold on a nonrecurring, project-specific basis.
[2] This ratio represents the expected number of renewal policies that will be retained throughout the annual policy period to the number of available renewal base policies.
Note: Statistics are in part dependent on the use of estimates and are therefore subject to change.
FN-IN-270a.4
Description of approach to informing customers about products
Travelers provides a wide range of commercial and personal property and casualty insurance products and services to businesses,
government units, associations and individuals. Travelers has established comprehensive policies and procedures designed to ensure
that the information we provide to existing and potential customers is transparent, complete and easy to comprehend. The relevant
business unit, Communications group and Legal department are all involved in the preparation and review of communications
disseminated to customers or prospective customers that describe Travelers’ product offerings.
Travelers Sustainability Accounting Standards Board Report 2021
Since Travelers has a wide range of customers, this information
is tailored to meet the needs of the particular customer (taking
into account, for example, whether the customer is an individual
or a business). The information we provide includes the specific
product and policy scope, terms and conditions, and the
suitability of the product for the customer’s needs, as well as
other relevant information. This information may also include
industry- and exposure-related materials, risk management
support and other general information about Travelers, our
brand and/or our financial strength.
We communicate with our existing and potential customers
directly through our employees and indirectly through our
agent and broker partners. Our agent and broker partners are
instrumental in providing information and advisory assistance
to both existing and potential policyholders. We also use other
channels to communicate with our existing and potential
customers, such as (1) direct mailings and email, (2) our
website, travelerscom, (3) social media and (4) advertising
and promotional materials.
The following discussion summarizes how we communicate
with our customers in each of our three business segments:
(1) Personal Insurance, (2) Business Insurance and (3) Bond &
Specialty Insurance. In addition, we describe the communication
approach of our Claim Services organization.
Individual Customers
Our individual customers purchase products that are reported
in our Personal Insurance segment. In Personal Insurance,
we are focused on the end-to-end customer experience and
strive to continually improve that experience. We believe that
transparency is a fundamental element of a good customer
experience and is accomplished by providing information in a
manner that is as clear as possible for consumers who may not
have insurance industry-specific knowledge.
We have invested, and continue to invest, in core capabilities
that are designed to improve the level of transparency with our
individual customers and will allow us to communicate with our
customers in a more personalized fashion. Our investments
include the following:
• MyTravelers
®
Customer Website and the MyTravelers
®
Mobile App. At MyTravelers.com, and in our newly
redesigned MyTravelers mobile app, customers can make
payments, view or change policy information, report
and track the status of a claim, download auto ID cards,
request roadside assistance and otherwise manage their
insurance policies. Both are available 24/7 and enable our
customers to manage their insurance needs more quickly
and conveniently. In addition, through this robust digital
experience, we provide our customers with explanations
about our insurance products and coverage using easy to
understand language and, in some cases, video content.
• Home Insurance Summary Page. Travelers’ Quantum
Home
®
insurance packages include a page designed to
educate and inform customers about some of the basic
terms and coverages included in their policies. The summary
page features an illustration of a home and urges customers
to explore their coverage in an engaging way. The page
describes major coverages in easy-to-understand language. It
also shows which discounts are currently applied to a policy
and which are not. In addition, the page provides a high-level
view of what is and is not typically covered by homeowners
insurance in plain language.
• Insurance Essentials: Your Questions Answered. As
part of our commitment to customers, both existing and
potential, the Travelers Institute
®
(the public policy division
of Travelers) has an initiative called Insurance Essentials
Your Questions Answered to help consumers make
informed decisions about their personal insurance options.
The initiative was introduced following Superstorm Sandy
and other extreme weather events, which demonstrated that
many consumers need, or want, more help understanding
their insurance policies and options. This initiative includes
an educational Insurance Essentials guide that covers
topics such as how insurance works; types of homeowners
and auto insurance coverages; condominium and renters
insurance; wedding insurance; flood insurance; limits and
deductibles; and basic disaster preparedness. Further, the
Travelers Institute partners with independent insurance
agents to bring an educational symposium series to their
communities, also addressing local issues such as wildfires
and hurricanes.
Travelers Sustainability Accounting Standards Board Report 2021
• Travelers Home Central
™
. Travelers Home Central is a set
of online tools and resources that provides information
about moving, refinancing, buying and remodeling a home.
The content is designed to help our current and future
customers protect themselves, feel more confident in
making difficult choices and better understand the risks
involved with being a homeowner.
These digital experiences are offered to the majority of
our customers regardless of how they bought their policies
(i.e., direct, affinity relationship or independent agent).
Business Customers
Our business customers purchase products that are reported
in the Business Insurance or the Bond & Specialty Insurance
business segments. Business insurance products include
more than insurance policies; business customers also
purchase supplemental services, such as risk control and
claim handling services.
Business customers have varying levels of sophistication and
often have dedicated risk management teams or departments
and legal representation when negotiating insurance contracts,
reviewing insurance policies and terms and managing the
insurance relationship once a policy is purchased. Our business
customers are also typically represented by independent,
professionally licensed insurance producers in the procurement
of insurance coverage. As a result, the vast majority of our
dealings in the negotiation of insurance contracts are with the
insured’s or potential insured’s representative. This remains true
after the sale of a policy, as well. The independent producer is
also generally involved even when we directly communicate
with an insured or prospective insured.
Our methods and channels of communication with our business
customers take into account their level of sophistication and the
resources they have available and include:
• Travelers.com Product-Specific Pages. We have website
pages that provide an overview of product offerings
by industry and, where applicable, expanded Insights &
Expertise content. The information provided includes
explanations of industry-specific coverage available, as well
as ways to mitigate and manage the risk associated with
these industries.
• MyTravelers
®
for Business. MyTravelers for Business
offers customers online access to policy, billing and
claim information. In addition, customers can access
our collection of safety resources to help them better
understand, mitigate and manage risk.
• Risk Management Information Services (e-CARMA
®
).
For our larger customers with more sophisticated or
complex operations, we offer e-CARMA, a comprehensive
and customizable analysis tool that makes accessing loss
information faster and easier. This allows our customers to
make timely and informed decisions to keep their businesses
running smoothly.
• For Agents Portal. We offer a tailored portal for our agents
and partners, recognizing that they provide counsel and
guidance throughout all aspects of a customer’s experience
with Travelers. The For Agents portal provides access to
our product and market information, tools for quoting and
issuing policies, billing and policy services, claim and risk
control information and marketing tools.
• Webinars and Conference Educational Sessions. We
offer in-depth presentations that feature specialists and
subject matter experts who explore topics and trends and
provide ways to help mitigate risks. Further, the Travelers
Institute convenes business owners across the country
with industry experts to explore solutions to their everyday
challenges, such as business continuity planning, access
to capital and cybersecurity, through two dedicated
symposium series: Small Business Big Opportunity
®
and
Cyber Prepare Prevent Mitigate Restore
®
. The Travelers
Institute also explores pressing topics in insurance, business
and leadership through the Wednesdays with Woodward
®
webinar series.
• Videos. We offer short-form content that provides
visual examples and information, primarily related to our
products and/or loss prevention; topics covered include, for
example, the Travelers Early Severity Predictor
®
, trends in
manufacturing and risks in crane operations.
• Product and Marketing Materials. Our electronic and
printed materials detail specific product offerings and
include product highlight sheets, coverage checklists, policy
benefits, risk scenarios and thought leadership white papers.
Travelers Sustainability Accounting Standards Board Report 2021
Claim Services
Whether an insurance policy is sold to an individual or to a
business, the policy represents a promise to indemnify the
customer in the event of a covered loss. Our overarching
imperative is to pay what we owe. Our claim process includes
timely identification and communication of all applicable
coverages and limits; informing our customers about the scope
of their coverage is an important part of that process. We
communicate with our customers through a variety of channels,
including our website, travelerscom; our mobile app and
customer portal, MyTravelers; letters; emails; and text messages
and telephone conversations with our Claim professionals. In
addition, for certain claim types, Travelers loss consultants
are available to provide our customers with information about
coverage, deductibles and probable impact to loss history before
a claim is filed to help them make an informed decision about
whether to file a claim.
We continue to expand the availability of digital tools that provide
claim status updates and facilitate communication with Claim
and medical professionals throughout the claim process. These
tools provide access to medical and physical damage reports
and payments issued and allow for secure communications with
Claim and medical professionals.
Each Claim professional is trained on payment processes and
accountable for explaining those processes to customers along
with any relevant informational documentation. Customers may
dispute the resolution of their claim at any time, following which
we will conduct a review of the file to ensure that the claim was
properly handled.
Incorporation of
Environmental, Social &
Governance Factors in
Investment Management
FN-IN-410a.1
Total invested assets, by industry
and asset class
The primary purpose of our investment portfolio is to fund the
payment of future claims. Accordingly, we employ a thoughtful
investment philosophy that focuses on appropriate risk-adjusted
returns. On December 31, 2021, 93% of our investment
portfolio was invested in fixed maturity and short-term
investments. As of that date, the weighted average credit quality
of our fixed maturity portfolio, both including and excluding U.S.
Treasury securities, was “Aa2.”
Information regarding our investments is included for our lead
insurers (i.e., The Travelers Indemnity Company, St. Paul Fire
and Marine Insurance Company, Travelers Casualty and Surety
Company, and The Standard Fire Insurance Company) in our
Annual Statutory Statements, available on our website.
We also include detailed information on the investments
held by investment type, country and credit rating (where
applicable) in the Summary Investment Schedule (Exhibit 2 for
the Travelers Combined Pool Audit and Exhibit 1 for the other
non-pooled entities audits) and Supplemental Investment Risks
Interrogatories (Exhibit 3 for the Travelers Combined Pool Audit
and Exhibit 2 for the other non-pooled entities audits) in our
annual audited statutory basis financial statements that we file
with our regulators. These schedules and interrogatories are
available on our website.
Additionally, for a discussion of our investment portfolio,
please see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Investment Portfolio”
in our Annual Report on Form K for the fiscal year ended
December 31, 2021.
Travelers Sustainability Accounting Standards Board Report 2021
FN-IN-410a.2
Description of approach to incorporation of
environmental, social and governance (ESG)
factors in investment management processes
and strategies
For information responsive to FN-IN-410a.2, please see our
TCFD Report.
Policies Designed
to Incentivize
Responsible Behavior
FN-IN-410b.1
Net premiums written related to energy
efficiency and low carbon technology
Travelers notes that the separate identification of premiums
related to energy efficiency and low carbon technology risks is
dependent on whether those risks are separately rated (and
priced) from the other risks included in a policyholder’s total
coverage. Currently, we do not capture premium data based
on energy efficiency and low carbon technology. We currently
capture premium data by line of business and by state, as
required by our insurance regulators.
We believe Travelers is positioned to benefit from the increased
economic activity related to renewable energy by insuring more
offshore wind projects globally. We participate in the insurance
program for the first U.S. offshore wind farm project, Block
Island Wind Farm, as well as offshore wind projects in the North
Sea and Asia. Revenues from our Global Renewable Energy
Practice have increased nearly 120% since 2018, translating to
a 3-year compound annual growth rate (CAGR) of 30%.
FN-IN-410b.2
Discussion of products and/or product
features that incentivize health, safety,
and/or environmentally responsible
actions and/or behaviors
Travelers offers several products and services with features that
are designed to incentivize health, safety, and/or environmentally
responsible actions or behaviors.
Health & Safety
As a leading workers compensation carrier, we offer various
products and services designed to maximize employee health,
ensure workplace safety and, when work-related injuries do
occur, enable injured employees to return to work as soon as
medically appropriate. We also have products and services in our
other commercial and personal insurance lines to incentivize the
safety of our customers and our customers’ employees.
• Early Severity Predictor
®
. By analyzing claim data, Travelers
created the Early Severity Predictor model that can help
identify an injured employee’s likelihood of experiencing
chronic pain using weighted predictors at key points during
the life of a claim. By adjusting medical care and resources,
the Early Severity Predictor model can help address
potential drivers of chronic pain – a condition that is largely
treated with opioids or other painkillers – reducing the risk
of opioid addiction. Since its inception in 2015, our Early
Severity Predictor model has benefited more than 90,000
injured employees. In addition to improving the recovery
experience for tens of thousands of injured employees, the
program has resulted in loss cost savings of more than $150
million by helping reduce surgeries performed and opioids
prescribed. Today, we apply this model to all of the lost-time
workers compensation claims we receive.
• Injured Employee Portal. Responding to the evolving needs
of our customers and their injured employees, we have
made numerous investments in our workers compensation
claim handling model, TravComp
®
. For example, we
introduced our self-service workers compensation claim
portal, MyTravelers
®
for Injured Employees. Through this
innovative platform, injured employees are empowered
to engage in their return-to-work journey and interact
with us digitally throughout the claim process. In-portal
claim notifications, messaging with Claim and medical
professionals, two-way document sharing and tailored
digital content help ensure we quickly get the right claim
information into the hands of injured employees.
Travelers Sustainability Accounting Standards Board Report 2021
• Helping Injured Employees Return to Work. When an
employee is injured at work, navigating the claim process
can be challenging. A one-on-one connection between a
nurse and the injured employee, pioneered by the Travelers
ConciergeCLAIM
®
Nurse program, helps injured employees
access quality health care, stay engaged in the workforce
and return to work as soon as medically appropriate. By
placing nurse case managers in local health care clinics
across the country, we can offer this service to all our
customers. When the Travelers ConciergeCLAIM Nurse
program is used, overall claim costs and the days out of
work are reduced.
This program can also be paired with our Cultural Advantage
program and align a Spanish-speaking injured employee
with a Spanish-speaking nurse to build trust and improve
outcomes. On average, when we provide Spanish-language
workers compensation Claim and medical professionals,
we see a reduction in lost time and claim, legal and medical
expenses, with improved medical and return-to-work
outcomes. In our Southern California Claim Center, workers
compensation claims handled by culturally and linguistically
aligned Claim professionals through our Cultural Advantage
program saw a 22% improvement in return to work within
30 days (Travelers Claim Data – Accident Years 2014-2021,
evaluated at 12 months).
Employers can also help injured employees avoid opioid
dependency and other barriers to a successful return to
work by implementing a post-injury management strategy.
This is a key part of the Travelers Corridor of Care
®
process, which takes a systematic and positive approach to
handling employee injuries. This process, which is designed
to assist employers in supporting injured employees from
the moment they are injured through their return to work,
can help employees receive prompt, quality medical care;
facilitate collaboration among the employee, the employee’s
medical provider, the employer and the insurance
professional; and with an effective transitional-duty
program, help build employee morale, keep injured workers
connected to the workforce and help them transition back
to work as soon as medically appropriate.
• Biopsychosocial Approach to Claim Handling. Our
application of a biopsychosocial approach to claim handling
helps us understand, identify and acknowledge the many
factors involved in an individual’s recovery after an injury or
illness. The application of this approach engages employees
in managing their recovery, leading to a reduction in chronic
pain and unnecessary medical treatments, and results in a
more likely return to work as soon as medically appropriate.
• Industrial Hygiene Laboratory. The Travelers Industrial
Hygiene (IH) Laboratory, nationally accredited by the
American Industrial Hygiene Association, provides
specialized services to our commercial customers to help
them understand occupational health exposures in order to
minimize occupational diseases. The IH Laboratory supports
our field organization and offers our customers a wide array
of sampling and analysis protocols based on Occupational
Safety and Health Administration (OSHA) and National
Institute for Occupational Safety and Health methodologies.
The IH Laboratory, equipped to analyze more than 500
chemicals, performs on average more than 50,000
analyses on approximately 30,000 samples annually. The
experienced staff develops innovative analytical methods
and recommends products and services for monitoring
workplace environments and helping customers improve the
health and safety of their employees. When COVID travel
restrictions impacted on-site evaluations, virtual consulting
tools were adopted in order to continue providing timely
support and guidance to our customers.
• Ergonomics Initiative. Musculoskeletal disorders resulting
from job demands, workstation arrangement or work
habits can lead to serious health issues that can impair an
employee’s ability to work safely and comfortably. By using
the full range of our ergonomics services, we can collaborate
with our insureds on-site or remotely to help reduce the risk
of injury and related costs. Our staff of dedicated certified
ergonomists and our field consultants focus on helping
customers identify and reduce significant risk factors for
workplace injuries related to musculoskeletal disorders.
Travelers was the first insurance carrier to offer its business
customers both virtual and on-site ergonomic assessments
by ergonomists using an artificial intelligence (AI)-enhanced
tool to help quantify task characteristics such as postures,
direction of movement and distances. Using a video of a
worker performing a task, the software assists a Travelers
ergonomics professional with developing consultative
solutions that can help keep workers safe.
Travelers Sustainability Accounting Standards Board Report 2021
Our core consulting services include:
• Ergonomic assessments, which leverage
AI-enhanced video capabilities, to help identify
the “vital few” tasks with the highest potential for
reducing employee injuries.
• The Ergonomic Job Improvement Process, our
four-phase process to help customers self-identify and
address key ergonomic issues using a team approach.
• Ergonomic task force development assistance to
empower teams to make workplace ergonomic
improvements through employee engagement.
In addition to our on-site services, our ergonomics
specialists provide on-demand virtual consulting to
customers to help them assess their risks and offer
effective solutions.
• Crane Safety Training Programs. Cranes are one of the
most dangerous and expensive pieces of equipment found
on construction job sites. When a crane fails, workers and
bystanders can be seriously injured or killed, property can
be damaged and production deadlines and budgets can
be negatively impacted. Having a knowledgeable crane
operations team that is well versed in crane safety is critical.
Travelers has numerous crane safety training programs
and resources to help contractors and their staff learn how
to operate cranes safely. Travelers has trained more than
10,000 professionals in crane safety.
• Leveraging Technology to Improve Worker Safety.
Travelers Risk Control is working with select vendors,
such as Triax Technologies, to explore how using wearable
devices at construction sites may help improve safety. Triax
provides workers with an unobtrusive wearable device that
enables faster response times to suspected injuries with
real-time, worker-generated safety notifications that include
the worker’s location. The Internet of Things (IoT) device
also includes smart evacuation and muster functionality
and provides insights into worker risk key performance
indicators and behavior analytics. Additionally, it offers
other safety and workforce management benefits, such as
identifying individuals entering the worksite with expired
OSHA training and using other coded data to identify work
areas with a high density of workers who are most at risk
of injury.
• Fire Protection System Impairment Management
Tool. Available on our secure MyTravelers for Business
website, this tool is designed to help customers record and
communicate with Travelers when a sprinkler system, fire
pump, special extinguishing system or other fire protection
system component is out of service. Customers can track
impairments at multiple properties and get reminder emails
to help return a system back to service in a timely manner,
helping to protect their business and employees.
• Safe Driving. Our Risk Control staff works with customers
to help them manage employee drivers to improve their
on-the-road safety performance. Our staff also provides
safety resources to personal and business drivers to
help them become safer, more aware drivers. Travelers
Risk Control also promotes safe driving through (1) our
dedicated staff of transportation safety specialists; (2)
customer outreach with our Lives@Risk program, which is
designed to build awareness of common distractions that
can affect a driver’s ability to focus on the task of driving;
and (3) supporting enterprisewide education efforts, such
as the Travelers Institute Every Second Matters
®
education
campaign to combat distracted driving.
We also incentivize safe driving behaviors for our customers
through IntelliDrive
®
, a mobile-app telematics program
that allows customers to better understand their driving
habits by collecting and assessing data on behaviors, such
as hard braking, rapid acceleration, speed, the time of day
customers drive and distracted driving. IntelliDrive, which
captures driving information for all enrolled drivers in the
household for 90 days to determine their overall driving
performance, allows customers to influence their auto
insurance price according to how they drive. In most states,
safe drivers can see savings of up to 30% on their auto
premiums at renewal, as well as savings of up to 10% for
new customers at the time of enrollment. In most states,
riskier driving habits can result in higher premiums. In 2020,
we introduced a number of significant enhancements to
IntelliDrive. Our redesigned app allows customers to more
easily monitor driving performance, challenges drivers
to put their phones down while driving with the new
“Distraction-Free Streak” and provides users with content
from the Travelers Institute Every Second Matters initiative,
including tips and advice to encourage safer driving
behaviors. IntelliDrive is currently available in 43 states
and Canada.
Travelers Sustainability Accounting Standards Board Report 2021
Building on the success of the IntelliDrive program, in
2021 Travelers introduced IntelliDrivePlus
™
in three states.
IntelliDrivePlus is a continuous driving program that uses a
smartphone app to capture data relating to driving behavior
and miles driven and adjusts a customer’s rate based on how
and how much they drive. By enrolling, new customers could
save up to 12% on their car insurance policy’s first term. At
renewal, safe driving habits can lead to savings of up to 30%,
plus additional savings for lower mileage, while riskier driving
and higher mileage could lead to higher premiums.
• Everyday Safety. Travelers Risk Control provides our
customers and communities with risk management
information applicable to a wide variety of everyday
concerns. In a typical day, people encounter an array of
risks, from driving a car to using a ladder to making an
online purchase with a credit card, each of which has its
own associated risks. Risk Control helps explain the risks we
may face in our daily lives and provides practical insights on
how to help reduce exposure to personal injury or property
damage. Understanding everyday risks enables us to take
actions to avoid or manage them. In addition to resources
provided by Travelers Risk Control, the Travelers Institute
addressed various health and safety issues through its
Wednesdays With Woodward
®
webinar series, from mental
health issues to employee safety during COVID.
Environmental Responsibility
As a core part of our business, we continually monitor, assess
and respond not only to the risks but also to the opportunities
posed by changing climate conditions. As a result, we have
identified several business opportunities associated with more
environmentally friendly trends and provide products and
product features that address our customers’ evolving needs
and incentivize responsible environmental behavior, while being
priced to meet our long-term financial objectives.
• Discounts. We offer discounts where permissible to
incentivize environmentally responsible behavior –
specifically, to encourage adoption of FORTIFIED Home
™
construction, green buildings and hybrid-electric vehicles.
For example, customers in Personal Insurance can save
up to 5% for homes that are Leadership in Energy and
Environmental Design (LEED) certified. Additionally, we
offer Personal Insurance customers a discount if they own
or lease a hybrid or electric vehicle. We also offer a discount
of up to 10% for hull and liability coverages on hybrid boats
and yachts, as well as a discount of up to 10% for electric
boats run by motors instead of engines – in each case,
available in certain states and subject to individual eligibility.
Furthermore, in many states, our newest homeowners
program offers a discount of up to 18% on hurricane
premium for homes built to the Insurance Institute for
Business & Home Safety (IBHS) FORTIFIED Gold
™
standard.
In Alabama, depending on the location, the discount can be
up to 55% on hurricane premium for this designation.
• Green Building Coverages. For our Business Insurance
customers, Travelers offers multiple options for green
building coverages. One example, Travelers Deluxe
®
property
insurance, offers “Green Building Alternatives – Increased
Cost” coverage to pay for additional costs incurred to repair
or replace damaged buildings using “green” products
and materials.
• Global Renewable Energy Practice. Travelers’ deep
knowledge of renewable energy risks means we can deliver
a full range of tailored coverage solutions for businesses
across the renewables spectrum, from the investors and
developers to operations and maintenance of commercial
and utility-scale operations. As the renewable energy
industry, domestically and internationally, continues to
expand, this practice analyzes industry trends, market data
and loss trends to design and develop insurance products
tailored to specific needs of renewable energy businesses.
For example, our proprietary WindPak
®
and SolarPak
®
insurance products respond to unique coverage issues for
the wind and solar industries.
Travelers Sustainability Accounting Standards Board Report 2021
• Sponsorships and Partnerships. Travelers sponsors the
IBHS, the BuildStrong Coalition, Habitat for Humanity
®
, SBP
and the Wharton Risk Center to promote stronger building
codes and more resilient communities and to influence
industry standards and best practices. We participate on
the board of IBHS, an independent, nonprofit, scientific
research organization supported by the insurance industry.
IBHS translates top-tier research into action to strengthen
homes and businesses, inform the insurance industry and
increase community resiliency. Over the last decade, IBHS
has identified gaps through full-scale laboratory testing
at its state-of-the-art facility and has influenced changes
to existing building code standards and best practices to
mitigate potential losses. Through our research partnership
with IBHS, we have gained a better understanding of severe
wind, hail and fire impacts on building engineering standards.
Better science, testing and understanding lead to improved
building codes and standards. The IBHS FORTIFIED
™
building code standards were developed based on full-scale
performance testing in the laboratory. As noted earlier, at
Travelers, mitigation discounts are available in many states
for homes designated as FORTIFIED by IBHS.
• Educational Resources and Real-Time Tips. Through
the Prepare & Prevent section of our corporate website,
we provide customers, agents and brokers and the general
public with extensive educational resources to help them
plan for, stay safe during and recover from natural disasters
of all types. Business Insurance customers, agents and
brokers can access our collection of more than 1,000 safety
and loss control resources on the MyTravelers for Business
site. We also provide real-time weather alerts, bulletins and
mitigation tips to our clients prior to and during events.
Environmental
Risk Exposure
FN-IN-450a.1
Probable Maximum Loss (PML) of
insured products from weather-related
natural catastrophes
We use various analyses and methods, including proprietary
and third-party modeling processes, to make underwriting
and reinsurance decisions designed to manage our exposure
to catastrophic events. There are no industry-standard
methodologies or assumptions for projecting catastrophe
exposure. Accordingly, catastrophe estimates provided by
different insurers may not be comparable.
We actively monitor and evaluate changes in third-party
models and, when necessary, calibrate the catastrophe risk
model estimates delivered via our own proprietary modeling
processes. We consider historical loss experience, recent events,
underwriting practices, market share analyses, external scientific
analyses and various other factors, including non-modeled
losses, to refine our proprietary view of catastrophe risk. These
proprietary models are updated regularly as new information
and techniques emerge.
Travelers Sustainability Accounting Standards Board Report 2021
The table below sets forth the probabilities that estimated losses, comprising claims and allocated claim adjustment expenses
(but excluding unallocated claim adjustment expenses), from a single event occurring in a one-year timeframe will equal or exceed
the indicated loss amounts (expressed in dollars, net of tax, and as a percentage of the Company’s common equity), based on the
proprietary and third-party models utilized by the Company. For example, on the basis described below the table, the Company
estimates that there is a one percent chance that the Company’s loss from a single U.S. and Canadian hurricane in a one-year
timeframe would equal or exceed $2.0 billion, or 8% of the Company’s common equity at December 31, 2021.
DOLLARS (IN BILLIONS) PERCENTAGE OF COMMON EQUITY
[1]
LIKELIHOOD OF
EXCEEDANCE
[2]
SINGLE U.S.
AND CANADIAN
HURRICANE
SINGLE U.S.
AND CANADIAN
EARTHQUAKE
SINGLE U.S.
AND CANADIAN
HURRICANE
SINGLE U.S.
AND CANADIAN
EARTHQUAKE
2.0% (1-in-50) $1.5 $0.5 6% 2%
1.0% (1-in-100) $2.0 $0.7 8% 3%
0.4% (1-in-250) $2.5 $1.2 9% 4%
0.1% (1-in-1,000) $6.4 $1.7 24% 6%
[1] The percentage of common equity is calculated by dividing (a) indicated loss amounts in dollars by (b) total common equity excluding net unrealized investment gains and losses, net of
taxes, included in shareholders’ equity. Net unrealized investment gains and losses can be significantly impacted by both discretionary and other economic factors, and are not necessarily
indicative of operating trends. Accordingly, the Company’s management uses the percentage of common equity calculated on this basis as a metric to evaluate the potential impact of a single
hurricane or single earthquake on the Company’s financial position for purposes of making underwriting and reinsurance decisions.
[2] An event that has, for example, a 2% likelihood of exceedance is sometimes described as a ‘‘1-in-50 year event.’’ As noted above, however, the probabilities in the table represent the likelihood
of losses from a single event equaling or exceeding the indicated threshold loss amount in a one-year timeframe, not over a multi-year timeframe. Also, because the probabilities relate
to a single event, the probabilities do not address the likelihood of more than one event occurring in a particular period, and, therefore, the amounts do not address potential aggregate
catastrophe losses occurring in a one-year timeframe.
The threshold loss amounts in the table above, which are based on the Company’s in-force portfolio at December 31, 2021, and
catastrophe reinsurance program at January 1, 2022, are net of reinsurance, after-tax and exclude unallocated claim adjustment
expenses, which historically have been less than 10% of loss estimates. For further information regarding the Company’s reinsurance,
see “Item 1 – Business – Reinsurance” in our Annual Report on Form K for the fiscal year ended December 31, 2021. The amounts
for hurricanes reflect U.S. and Canadian exposures and include property exposures, property residual market exposures and an
adjustment for certain non-property exposures. The hurricane loss amounts are based on the Company’s catastrophe risk model
estimates and include losses from the hurricane hazards of wind and storm surge. The amounts for earthquakes reflect U.S. and
Canadian property and workers compensation exposures. The Company does not believe that the inclusion of hurricane or earthquake
losses arising from other geographical areas or other exposures would materially change the estimated threshold loss amounts.
Catastrophe modeling relies upon inputs based on experience, science, engineering and history. These inputs reflect a significant
amount of judgment and are subject to changes, which may result in volatility in the modeled output. Catastrophe modeling output
may also fail to account for risks that are outside the range of normal probability or are otherwise unforeseeable. Catastrophe modeling
assumptions include, among others, the portion of purchased reinsurance that is collectible after a catastrophic event, which may prove
to be materially incorrect. Consequently, catastrophe modeling estimates are subject to significant uncertainty. In the table above, the
uncertainty associated with the estimated threshold loss amounts increases significantly as the likelihood of exceedance decreases.
In other words, in the case of a relatively more remote event (e.g., 1-in-1,000), the estimated threshold loss amount is relatively less
reliable. Actual losses from an event could materially exceed the indicated threshold loss amount. In addition, more than one such event
could occur in any period.
Travelers Sustainability Accounting Standards Board Report 2021
Moreover, Travelers is exposed to the risk of material losses
from coverages other than property and workers compensation
arising out of hurricanes and earthquakes, and it is exposed
to catastrophe losses from perils other than hurricanes and
earthquakes, such as tornadoes and other windstorms, hail,
wildfires, severe winter weather, floods, tsunamis, volcanic
eruptions, solar flares and other naturally occurring events,
as well as terrorism and cyber events.
In addition, compared to models for hurricanes, models for
earthquakes are less reliable due to there being a more limited
number of significant historical events to analyze, while models
for tornadoes, hail storms, wildfires and winter storms are newer
and may be less reliable due to the highly random geographic
nature and size of these events. Accordingly, these models may
be less accurate in predicting risks and estimating losses. Further,
changes in climate conditions could cause our underlying
modeling data to be less predictive, thus limiting our ability to
effectively evaluate and manage catastrophe risk. In addition,
models for some events are either in early stages of development
and, therefore, not widely adopted or are not yet available.
For more information about Travelers’ exposure to catastrophe
losses, see our Annual Report on Form K for the fiscal year
ended December 31, 2021, under “Item 1A – Risk Factors – High
levels of catastrophe losses, including as a result of factors such
as increased concentrations of insured exposures in catastrophe-
prone areas, could materially and adversely affect our results
of operations, our financial position and/or liquidity, and could
adversely impact our ratings, our ability to raise capital and the
availability and cost of reinsurance” and “Item 1A – Risk Factors
– We may be adversely affected if our pricing and capital models
provide materially different indications than actual results.”
FN-IN-450a.2
Total amount of monetary losses attributable
to insurance payouts from (1) modeled
natural catastrophes and (2) non-modeled
natural catastrophes, by type of event
and geographic segment (net and gross
of reinsurance)
We do not separately identify our losses by modeled and
non-modeled catastrophes, as we do not believe this categorization
is meaningful to our business. We do not view catastrophe
peril modeling as binary (modeled versus non-modeled).
Available models have widely varying levels of maturity and
sophistication, making it impossible to determine when a
particular process is developed enough to qualify as a model or,
conversely, is too immature to qualify as a model.
Our approach to evaluating catastrophe risk takes into account
“models” along the entire continuum, from the most mature
and sophisticated models to those that are in the earliest stage
of development. In each case, we also utilize our own data and
analytics and apply our informed judgment and expertise in our
underwriting, pricing and capital management decisions.
Travelers defines a ‘‘catastrophe’’ as an event:
• That is designated a catastrophe by internationally
recognized organizations that track and report on insured
losses resulting from catastrophic events, such as Property
Claim Services (PCS) for events in the United States and
Canada; and
• For which the Company’s estimates of its ultimate losses
before reinsurance and taxes exceed a pre-established
dollar threshold.
Our threshold for disclosing catastrophes is primarily determined
at the reportable segment level. If a threshold for one segment
or a combination thereof is exceeded and other segments
have losses from the same event, losses from the event are
identified as catastrophe losses in the segment results and
for the consolidated results of Travelers. Additionally, an
aggregate threshold is applied for International business across
all reportable segments. The threshold for 2021 ranged from
approximately $20 million to $30 million of losses before
reinsurance and taxes.
The following table presents the amount of losses recorded by
Travelers for significant catastrophes that occurred in 2021,
2020 and 2019; the amount of net unfavorable (favorable)
prior year reserve development recognized in 2021 and 2020 for
catastrophes that occurred in 2020 and 2019; and the estimate
of ultimate losses for those catastrophes at December 31,
2021, 2020 and 2019. For purposes of the table, a significant
catastrophe is an event for which we estimate our ultimate losses
will be $100 million or more after reinsurance and before taxes.
Travelers Sustainability Accounting Standards Board Report 2021
(IN MILLIONS, PRE-TAX
AND NET OF REINSURANCE)
[1]
LOSSES INCURRED /
UNFAVORABLE (FAVORABLE)
PRIOR YEAR RESERVE
DEVELOPMENT FOR THE YEAR
ENDED DECEMBER 31,
ESTIMATED ULTIMATE
LOSSES AT DECEMBER 31,
TOPIC 2021 2020 2019 2021 2020 2019
2019 PCS Serial Number:
33 – Severe wind storms (9) 8 250 249 258 250
61 – Severe wind storms and tornadoes (13) 8 109 104 117 109
2020 PCS Serial Number:
16 – Tennessee tornado activity (9) 151 n/a 142 151 n/a
19 – Severe storms (9) 134 n/a 125 134 n/a
20 – Severe storms (25) 165 n/a 140 165 n/a
33 – Civil unrest (7) 100 n/a 93 100 n/a
44 – Tropical Storm Isaias (22) 140 n/a 118 140 n/a
46 – Midwest derecho (10) 212 n/a 202 212 n/a
68 – California wildfire – Glass fire
[2]
(9) 145 n/a 136 145 n/a
2021 PCS Serial Number:
15 – Winter storms 228 n/a n/a 228 n/a n/a
17 – Winter storms 508 n/a n/a 508 n/a n/a
29 – Severe wind storms 105 n/a n/a 105 n/a n/a
60 – Hurricane Ida 417 n/a n/a 417 n/a n/a
76 – Tornado outbreak 131 n/a n/a 131 n/a n/a
[1] Amounts are reported pre-tax and net of recoveries under all applicable reinsurance treaties, except for the Company’s 2021, 2020 and 2019 Underlying Property Aggregate Catastrophe
Excess-of-Loss Treaties. Those treaties covered the accumulation of certain property losses arising from one or multiple occurrences (both catastrophe and on-catastrophe events) for the
period January 1, 2021, through and including December 31, 2021, and the period January 1, 2020, through and including December 31, 2020, and the period January 1, 2019 through and
including December 31, 2019, respectively. As a result, the benefits from those treaties are not included in the table as the allocation of the treaties’ benefit to each identified catastrophe
changes each time there are additional events or changes in estimated losses from any covered event.
[2] In addition to the Glass fire, there were 16 other PCS-designated wildfires in 2020. While none of the 16 wildfires were individually large enough to meet the Company’s threshold for
disclosure as a significant catastrophe in this table, total losses in 2020 from those wildfires were $169 million, of which two wildfires totaling $73 million met the Company’s threshold
for disclosure as catastrophes.
Travelers Sustainability Accounting Standards Board Report 2021
Travelers does not have geographic segments and, therefore, does not break down policy losses and benefits expenses by geographic
segment. The following table, however, summarizes the geographic distribution of our consolidated direct written premiums for the
year ended December 31, 2021:
LOCATION % OF TOTAL
Domestic:
California 10.5%
New York 8.8%
Texas 8.0%
Pennsylvania 4.2%
Florida 4.1%
New Jersey 3.8%
Illinois 3.8%
Georgia 3.7%
Massachusetts 3.0%
All other domestic
[1]
43.6%
Total Domestic 93.5%
International:
Canada 3.8%
All other international 2.7%
Total International 6.5%
Consolidated total 100.0%
[1] No other single state accounted for 3.0% or more of the Company’s consolidated direct written premiums written in 2021.
FN-IN-450a.3
Description of approach to incorporation of environmental risks into (1) the underwriting
process for individual contracts and (2) the management of firm-level risks and capital adequacy
For information responsive to FN-IN-450a.3, please see our TCFD Report.
Travelers Sustainability Accounting Standards Board Report 2021
Systemic Risk
Management
FN-IN-550a.1
Exposure to derivative instruments by
category: (1) total potential exposure to
non-centrally cleared derivatives, (2) total fair
value of acceptable collateral posted with the
Central Clearing house and (3) total potential
exposure to centrally cleared derivatives
Market Risk
Market risk is the risk of loss arising from adverse changes in
market rates and prices, such as interest rates (inclusive of credit
spreads), foreign currency exchange rates and other relevant
market rate or price changes. Market risk is directly influenced
by the volatility and liquidity in the markets in which the related
underlying assets are traded. The following is a discussion of
our primary market risk exposures and how those exposures are
managed as of December 31, 2021. Our market risk sensitive
instruments, including derivatives, are primarily entered into for
purposes other than trading.
The carrying value of our investment portfolio at December
31, 2021 and 2020, was $87.38 billion and $84.42 billion,
respectively, of which 89% and 88% were invested in fixed
maturity securities, respectively. At December 31, 2021 and
2020, approximately 6.8% and 6.6%, respectively, of our invested
assets were denominated in foreign currencies. Our exposure
to equity price risk is not significant. Travelers has no direct
commodity risk and is not a party to any credit default swaps.
The primary market risks to the investment portfolio are
interest rate risk and credit risk associated with investments
in fixed maturity securities. The portfolio duration is primarily
managed through cash market transactions and treasury
futures transactions.
The primary market risk for all of our debt is interest rate risk
at the time of refinancing. Travelers monitors the interest rate
environment and evaluates refinancing opportunities as maturity
dates approach.
Our foreign exchange market risk exposure is concentrated
in our invested assets, insurance reserves and shareholders’
equity denominated in foreign currencies. Cash flows from
our foreign operations are the primary source of funds for the
purchase of investments denominated in foreign currencies.
Travelers purchases these investments primarily to fund
insurance reserves and other liabilities denominated in the same
currency, effectively reducing its foreign currency exchange rate
exposure. Invested assets denominated in the Canadian dollar
comprised approximately 4.2% of the total invested assets at
both December 31, 2021 and 2020. Invested assets denominated
in the British Pound Sterling comprised approximately 2.1% and
1.8% of total invested assets at December 31, 2021 and 2020,
respectively. Invested assets denominated in other currencies at
December 31, 2021 and 2020 were not material.
There were no significant changes in our primary market risk
exposures or in how those exposures were managed for the
year ended December 31, 2021, compared to the year ended
December 31, 2020. Travelers does not currently anticipate
significant changes in its primary market risk exposures or in
how those exposures are managed in future reporting periods
based upon what is known or expected to be in effect in future
reporting periods.
Derivative Financial Instruments
From time to time, Travelers enters into U.S. Treasury note
futures contracts to modify the effective duration of specific
assets within the investment portfolio.
U.S. Treasury futures contracts require a daily mark-to-market
and settlement with the broker. At December 31, 2021 and
2020, Travelers had no open U.S. Treasury futures contracts.
Net realized investment gains and losses related to U.S. Treasury
futures contracts in 2021, 2020 and 2019 were not significant.
Travelers has a put/call option that was entered into in
connection with a business acquisition that allows the Company
to acquire the remaining shares of the acquired company at a
future date. Net realized investment gains and losses related to
this put/call option in 2021, 2020 and 2019 were not significant.
Travelers also sells a small amount of U.S. equity index put
option contracts that are settled for cash upon their expiration
or when they are rolled over. Net realized investment gains and
losses related to these derivatives in 2021, 2020 and 2019 were
not significant.
Travelers Sustainability Accounting Standards Board Report 2021
FN-IN-550a.2
Total fair value of securities lending
collateral assets
Travelers has, from time to time, engaged in securities lending
activities from which it generates net investment income by
lending certain of its investments to other institutions for short
periods of time. At December 31, 2021 and 2020, Travelers had
$253 million and $139 million of securities on loan, respectively,
as part of a tri-party lending agreement. The average monthly
balance of securities on loan during 2021 and 2020 was $329
million and $254 million, respectively.
Borrowers of these securities provide collateral equal to at
least 102% of the market value of the loaned securities plus
accrued interest. We did not incur any investment losses in our
securities lending program for the years ended December 31,
2021 and 2020.
FN-IN-550a.3
Description of approach to managing
capital- and liquidity-related risks associated
with systemic non-insurance activities
Travelers Enterprise Risk Management (ERM) activities involve
both the identification and assessment of a broad range of
risks and the execution of coordinated strategies to effectively
manage such risks. The ERM process also includes the
determination of our risk capital needs, which takes into account
regulatory requirements and credit rating considerations, in
addition to economic and other factors. ERM at Travelers is an
integral part of our business operations. All risk owners across
all functions, all corporate leaders and the Board of Directors
are engaged in ERM. ERM involves risk-based analytics, as well as
reporting and feedback throughout the enterprise, in support of
our long-term financial strategies and objectives.
Our ERM framework includes five types of noninsurance
entities: (1) the ultimate parent holding company and the
intermediate holding companies, (2) the servicing companies
for the group’s operational activities, (3) providers of
insurance-related services, (4) managing general agents
for certain of our insurance entities and (5) investment
holding companies. These entities all relate to the insurance
operations and are not considered to be material sources of
risk to the enterprise.
Travelers uses various analyses and methods, including
proprietary and third-party modeling processes, to make
underwriting and reinsurance decisions designed to manage
the Company’s exposure to catastrophic events.
In addition to catastrophe modeling and analysis, Travelers
also models and analyzes the Company’s exposure to other
extreme events. We also utilize proprietary and third-party
modeling processes to evaluate capital adequacy. These
analytical techniques are an integral component of our ERM
process and further support our long-term financial strategies
and objectives.
Travelers Sustainability Accounting Standards Board Report 2021
Activity Metric
FN-IN-000.A
Number of policies in force, by segment
In 2020, we updated our presentation of certain statistical data for our Personal Insurance Automobile and Personal Insurance
Homeowners and Other product lines to include the results of Direct-to-Consumer and International, including selected policies-in-force
data on a quarterly basis. The updated information regarding our policies in force for 2020 and 2021 is disclosed in the tables below.
PERSONAL INSURANCE: AUTOMOBILE
TOPIC 1Q ’20 2Q ’20 3Q ’20 4Q ’20 1Q ’21 2Q ’21 3Q ’21 4Q ’21
Policies in force (in thousands) 2,970 2,993 3,015 3,029 3,056 3,098 3,141 3,179
Change from prior year quarter (0.4)% 0.4% 1.2% 1.9% 2.9% 3.5% 4.2% 5.0%
Change from prior quarter (0.1)% 0.8% 0.7% 0.5% 0.9% 1.4% 1.4% 1.2%
PERSONAL INSURANCE: HOMEOWNERS AND OTHER LINES
TOPIC 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 2Q’21 3Q’21 4Q’21
Policies in force (in thousands) 5,534 5,679 5,790 5,858 5,944 6,076 6,168 6,230
Change from prior year quarter 7.2% 7.9% 8.0% 7.6% 7.4% 7.0% 6.5% 6.4%
Change from prior quarter 1.7% 2.6% 2.0% 1.2% 1.5% 2.2% 1.5% 1.0%
The number of policies in force is not an activity metric we use for the insurance coverages we sell to businesses, as this measure is not
a meaningful metric for coverages that are sold and managed on an account or customer relationship basis. Instead, we provide data
regarding our retention, renewal premium change and new business statistics for our relevant business groups.
We do not use policies in force for our Business Insurance and certain Bond & Specialty Insurance customers, as we manage these
relationships on an account basis. Additionally, we do not provide policies-in-force statistics for our surety business, as surety products
are generally sold on a nonrecurring, project-specific basis.
sustainability.travelers.com
Important Legal Information
This report contains information about Travelers. Travelers disclaims any duty or obligation to update such information. Any “forward-looking statement” is made
only as of the date such information was originally prepared by Travelers and is intended to fall within the safe harbor for forward-looking information provided in 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,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking
statements. These statements include, among other things, statements about our future results of operations and financial condition; our share repurchases and
dividends; our strategy and competitive advantages; our strategic and operational initiatives to improve profitability and competitiveness; our new product offerings; our
innovation agenda; our investment portfolio; our risk management, including climate-related risks and opportunities; our catastrophe modeling, including statements
about probabilities or likelihood of exceedance; our scenario analyses; our cybersecurity, business resiliency and data privacy; our underwriting strategy; and our carbon
footprint. Results may differ materially from those expressed or implied by forward-looking statements. Factors that can cause results to differ materially include those
described under “Forward Looking Statements” in the Corporation’s most recent Form 10-K and Form 10-Qs filed with the Securities and Exchange Commission and
linked in this report, and with respect to our scenario analyses, those factors described under “Climate Scenario Analysis With Respect to the Hurricane Peril” and
“Climate Scenario Analysis With Respect to Our Investment Portfolio” in Travelers TCFD Report included on this site.
This report may contain links to other internet sites and may frame material from other internet sites. Such links or frames are not endorsements of any products or
services in such sites, and no information in such site has been endorsed or approved by Travelers.
Except where noted, the information covered in this report highlights our performance and initiatives in fiscal year 2021.
The inclusion of information in this report should not be construed as a characterization regarding the materiality or financial impact of that additional information about
Travelers, please see our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
© 2022 The Travelers Indemnity Company. All rights reserved.
Travelers and The Travelers Umbrella are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries.
© 2022 The Travelers Indemnity Company. All rights reserved.
S&P Global Market Intelligence (“SPGMI”) Disclaimer. Information obtained from SPGMI should not be relied on as investment advice. SPGMI does not guarantee the
accuracy or completeness of information obtained from it and shall not be responsible for any errors or omissions with respect to such information or be liable for any
results or losses arising out of the use of such information. Reproduction of SPGMI information is prohibited without the prior written permission of SPGMI.
