Running a business is a risk The Travelers Companies will insure. While it also offers personal auto and homeowners insurance, the company’s largest segment is commercial property/casualty insurance to businesses big and small. It is the second largest business insurer in the US, behind AIG, and provides commercial auto, property, workers’ compensation, marine, and general and financial liability coverage to companies in North America and the UK. The company also offers surety and fidelity bonds as well as professional and management liability coverage for commercial operations. The Travelers distributes its products through independent agencies and brokers.

Criticism

Worker Rights

• Travelers achieved a score of 50 on the Human Rights Campaign 2008 Corporate Equality Index which rates large corporations on policies that affect their gay, lesbian, bisexual and transgender employees, consumers and investors. Travelers was cited for its failure to prohibit “Discrimination Based on Gender Identity and/or Expression,” failure to provide “Diversity Training Covering Gender Identity OR Has Supportive Gender Transition Guidelines,” failure to offer “at Least One Transgender Wellness Benefit,” failure to offer “Domestic Partners Dental, Vision, COBRA and Dependent Coverage Benefits,” failure to offer “at Least Three Other ‘Soft’ Benefits for Domestic Partners,” and failure to engage in “Appropriate and Respectful Advertising, Marketing or Philanthropy” Source: Human Rights Campaign 2008 Corporate Equality Index [1]

Human Rights

• “The insurance industry says it has settled over 90 percent of its Hurricane Katrina claims, proving it’s meeting its obligations to policy holders. But consumer advocates say insurers settled numerous claims for only a fraction of the actual damages, using numerous exclusions to reduce payouts . . . Louisiana’s top insurance regulator recently ordered reviews of consumer complaints regarding Allstate and St. Paul Travelers Cos. In District Court in New Orleans, a class action lawsuit was filed last month against 15 insurers, claiming they capriciously denied claims . . . Part of what really rankles consumers is the record profits property-and-casualty insurers are posting despite the unprecedented losses inflicted by Katrina” Source: CorpWatch, June 2006 [2]

Business Ethics

• Florida, eight other states and the District of Columbia brought a class action lawsuit against Travelers Cos., alleging that the company engaged in bid rigging along with the insurance broker Marsh & McLennan. The suit claimed that Travelers engaged in improper business steering in the commercial insurance market, which resulted in higher premiums being paid by Florida governmental entities, companies and nonprofit organizations. Further, Travelers allegedly conspired with Marsh & McLennan and other brokers to create the illusion of a competitive bidding process by submitting fake bids even though the brokers had already determined which insurer would receive a particular policyholder’s business, the Florida officials said. Source: Lawyers and Settlements Dec 2007, [3]

• Attorney General Richard Blumenthal today announced that The St. Paul Travelers Companies, Inc., (St. Paul Travelers) has agreed to pay $77 million to settle charges of illegal business steering, customer allocation, and bid rigging . . . The settlement – with Connecticut, Illinois and New York – provides $37 million in restitution to policyholders who purchased St. Paul excess casualty insurance through Marsh, Inc., from 2000 through 2004, including approximately 44 Connecticut businesses. The settlement also provides $40 million in penalties paid to the states – $24 million to New York and $8 million each to Connecticut and Illinois. Source: Connecticut Attorney General’s Office, August 2006 [4]

• The St. Paul Travelers Companies, Inc. was under investigation regarding its producer compensation, insurance placement practices and “non-traditional” insurance products. The company has settled regulatory charges and awarded $42 million to The Attorneys General of New York, Connecticut and Illinois and the New York State Dept. of Insurance. The company agreed to pay $37 million into a fund for certain excess casualty policyholders and pay $40 million in fines. Source: Lawyers and Settlements, August 2006 [5]

• The state of New Mexico brought a punitive class action suit against St. Paul Travelers Companies, alleging that the company engaged in securities fraud. The state and Attorney General Gary King’s office claimed that St. Paul gave out false and misleading financial statements that were artificially inflated. Due to that, King said New Mexico and its retirement systems lost an estimated $8 million. As part of a settlement reached, sources stated that the company had agreed to pay $77 million to resolve allegations. Source: Lawyers and Settlements, Jan 2008 [6]

Praise

Human Rights

• “The Travelers Companies, Inc. and its private foundations granted more than $17 million to charitable organizations across the country in fiscal year 2007. Travelers has been active in the communities where it does business for decades, investing in organizations committed to education, community development and arts and culture, and increasing opportunities for people to succeed.” Sources: Travelers News Release, Feb 2008 [7]

Environmental Impact

• “In support of the growing trend toward more efficient and environmentally friendly building practices, Travelers Commercial Property Division today launched its Green Building Coverage Enhancements for mid-sized businesses . . . Travelers’ Green Building Coverage Enhancements for mid-sized businesses promote the use of environmentally friendly building materials as replacement components following a covered cause or type of loss.” Source: Reuters, March 2008 [8]

• “Hybrid-driving Americans can now take advantage of a 10 percent discount(a) on auto insurance offered by Travelers personal lines, a member of St. Paul Travelers (NYSE:STA). Travelers made the discount available today in 27 states with plans to roll it out in most remaining states in the coming months. Travelers is the first auto insurance company to begin implementing a discount for hybrid owners nationally.” Source: Business Wire, Feb 2006 [9]