Travelers’ Q2 Profit Climbs 85% to $925M; Auto Unit Layoffs Planned

By Young Ha | July 23, 2013

  • July 23, 2013 at 12:02 pm
    Frank Financials says:
    Well-loved. Like or Dislike:
    Thumb up 35
    Thumb down 0

    It would be informative to see the results for their auto unit, which is being downsized; e.g. total and auto unit only. I assume they will be posted elsewhere.

    Catastrophe losses contributed about 4% to their combined ratio, whereas last year it was close to 7%. I wonder which is closer to their long run average percentage? Could the decrease be due to lower frequency of cats, improvements in their risk profile through stricter underwriting, or both?

  • July 23, 2013 at 1:34 pm
    Jay says:
    Well-loved. Like or Dislike:
    Thumb up 75
    Thumb down 6

    You are concerned that they ONLY made a $925 million dollar profit? Try explaining this ONLY to the consumer whose rates increased 20% without a claim!

    • July 23, 2013 at 2:09 pm
      EBA says:
      Well-loved. Like or Dislike:
      Thumb up 88
      Thumb down 1

      Or the 450 employees losing their jobs.

    • July 24, 2013 at 11:35 am
      Agent says:
      Well-loved. Like or Dislike:
      Thumb up 46
      Thumb down 4

      They seemed to find the money to buy the Canadian company for $1.2 Billion recently. Too bad they haven’t taken steps to get more competitive in the US. I think they woke up and realized their agent forces are moving blocks of their business to competitors. Fish eyes Fishman has been asleep at the switch for at least 3 years.

      • July 25, 2013 at 12:27 pm
        insureance guru says:
        Poorly-rated. Like or Dislike:
        Thumb up 11
        Thumb down 25

        Hidden due to low comment rating. Click here to see.

  • July 23, 2013 at 2:33 pm
    Jon says:
    Well-loved. Like or Dislike:
    Thumb up 58
    Thumb down 3

    Either Travelers auto business is declining and they’re trying to focus on the commercial market, or they’re making a bad move.

    Eliminating jobs might seem like a good move short term, but customer retention follows customer service more than anything else.

    People who have accidents, and get crappy service from the remaining diminished workforce, or worse yet, TPA’s, are going to leave Travelers for better service at another company.

    • July 24, 2013 at 6:18 pm
      Carrier Rep says:
      Poorly-rated. Like or Dislike:
      Thumb up 6
      Thumb down 28

      Hidden due to low comment rating. Click here to see.

      • July 25, 2013 at 10:37 am
        Libby says:
        Well-loved. Like or Dislike:
        Thumb up 39
        Thumb down 3

        Carrier Rep – It’s obvious you do not live in the world of Independent Agents. For one, agents don’t SELL the lowest price, the client BUYS the lower price. It’s hard to sell a higher price for when businesses are tanking right and left.

        Two, insurance is not a commodity. That’s the kind of thinking that has ruined the professionalism of our industry. I sell service and expertise, not products.

        Three, I have a fiduciary responsibility to present all options to the insured. If I believe it is in their best interests to buy a higher-priced program, I will recommend that. But ultimately it is their decision as a business owner what they wnat to do.

        Stick to being a carrier rep. I doubt you could hang with the agents and brokers that have to work on commission.

        • July 25, 2013 at 12:16 pm
          Agent says:
          Well-loved. Like or Dislike:
          Thumb up 34
          Thumb down 3

          I actually like your comment Libby for a change. You basically handed the Carrier Rep his/her head. These people can’t make it in the real world we live in. I have had several reps say to me that they used to be in the agency business. They couldn’t handle looking a customer in the eye and explain an insurance program or a rate increase of a renewal and get their name on the dotted line and ask for a down payment. These people like the comfort of traveling to agents, buying them lunch, giving them production reports and glad handing. Often, they tell us things the company is doing and when we run it by underwriting, they can’t do it. How wierd is that?

        • July 25, 2013 at 12:30 pm
          insureance guru says:
          Poorly-rated. Like or Dislike:
          Thumb up 18
          Thumb down 37

          Hidden due to low comment rating. Click here to see.

          • July 25, 2013 at 1:49 pm
            Libby says:
            Well-loved. Like or Dislike:
            Thumb up 28
            Thumb down 1

            That’s not we work, Guru. If you’re just looking for the lowest price, go elsewhere. You are not the kind of business we’re looking for. We don’t offer in-house claims and loss control and an account service team of 4 to play that game every year. And I have worked at agencies that have put $1M on the books every quarter (revenue, not premium.) The key is to qualify and specialize. When you are the best of the best, clients will know.

          • July 26, 2013 at 2:41 pm
            Donna says:
            Well-loved. Like or Dislike:
            Thumb up 22
            Thumb down 1

            Not trying to be rude, but you may want to correct the spelling of insurance for your screen name. It’s hard to take you seriously. Sorry.

          • July 26, 2013 at 4:27 pm
            Agent says:
            Like or Dislike:
            Thumb up 11
            Thumb down 4

            You are supposed to be so know it all and you can’t even spell Insurance Mr Guru. Were you trained by Travelers to be a rep?

        • July 25, 2013 at 1:16 pm
          Becca says:
          Well-loved. Like or Dislike:
          Thumb up 22
          Thumb down 8

          Libby, you rock!!!!

  • July 23, 2013 at 3:43 pm
    Dave in Hartford says:
    Well-loved. Like or Dislike:
    Thumb up 53
    Thumb down 2

    Travelers made a big deal about having a staffing model that would allow ‘contractors’ (lower paid outsourced staff from India)to be increased or decreased as needed thereby allowing American full-time employees job security. I guess that was all a crock. I’m sure all the management will get huge bonuses for this ‘money saving’ effort. Loyalty? Looks like it doesn’t exist at Travelers.

    • July 25, 2013 at 10:44 am
      Libby says:
      Well-loved. Like or Dislike:
      Thumb up 34
      Thumb down 2

      Using outside contractors from India in order to allow American full-time employees job security sounds like a crock, in and of itself. How about using outside contractors in AMERICA! They use people in India because they pay them cents on the dollar and no benefits. Greedy bastards.

  • July 23, 2013 at 4:41 pm
    SWFL Agent says:
    Well-loved. Like or Dislike:
    Thumb up 46
    Thumb down 2

    Typical. Comparative rating software has been around since the early 1990′s and Jay Fishman has just figured it out.

    • July 23, 2013 at 5:57 pm
      Agent says:
      Well-loved. Like or Dislike:
      Thumb up 47
      Thumb down 1

      Actually, in Texas, Travelers rates suck on both Personal & Commercial. They have taken a lot of rate and expect the others to follow down that road. The truth is that other companies have also taken some rate, but they never catch up to Travelers on price. We have had to move many accounts or lose them. I keep asking their marketing reps how we can grow with them. You can have a national brand, but if the premiums are not competitive, someone else will write the account.

      • September 5, 2013 at 12:02 pm
        Agent says:
        Like or Dislike:
        Thumb up 2
        Thumb down 0

        I just moved another long time Travelers account to Safeco. Travelers renewal was about double on the Auto and several hundred dollars higher on the Home. This is on a high credit score, no losses acount. We are wondering where their sweet spot is on customers. The good news is they are giving a webinar on their new Auto product they will be rolling out. The problem with it is it won’t be started until February. I wonder how many other accounts will be moved before they get their act together.

  • July 23, 2013 at 8:44 pm
    Hubby says:
    Well-loved. Like or Dislike:
    Thumb up 51
    Thumb down 3

    Wonder how much of the reduction will be in JF’s salary? My wife works there, gets outstanding reviews, and hasn’t had a raise in 5 yrs. Cutting staff in 2013 is a sure sign someone in charge doesn’t have a clue how to gain market share.

  • July 24, 2013 at 8:29 am
    K in Massachusetts says:
    Well-loved. Like or Dislike:
    Thumb up 38
    Thumb down 3

    We terminated our Personal Lines contract in MA because their rates kept going up and their claims people are overworked. Came in asking to stay within the agency, but when we asked them if they are pushing to be a direct writer, dead silence.
    But then again, on the commercial side, they look for every reason possible to deny a claim. They go so far as on a couple small claims, they sent out denial letters because the claimant didn’t put the right “door” number on the address. Travelers said not covered because of designated premises endorsement. It is a 60K square foot facility with ten different doors. It is almost like they are the old AIG. Increase rates and deductibles, then brag about profit, then say laying off more people? Who wrote his speech?

    • July 24, 2013 at 10:35 am
      Agent says:
      Well-loved. Like or Dislike:
      Thumb up 42
      Thumb down 1

      Back in the day about 7 or 8 years ago, Travelers provided a good market with competitive rates. We moved some good personal lines to them from a market that was in the doldrums. Now, Travelers is busy running off that good business with much higher rates than the other markets we represent. We had a sit down with their management in our office and showed them their quotes compared to the others. They said they would take it back and see if they could adjust the rates. The problem was the adjustment was more rate increases. That is not the way to grow your business. We have an obligation to our customers to get the best coverage at the best cost or they will go somewhere else. Our volume with Travelers is 35% less than 3 years ago as a result of their “strategy”.

    • July 25, 2013 at 12:45 pm
      insureance guru says:
      Poorly-rated. Like or Dislike:
      Thumb up 5
      Thumb down 28

      Hidden due to low comment rating. Click here to see.

      • July 25, 2013 at 2:05 pm
        Libby says:
        Well-loved. Like or Dislike:
        Thumb up 28
        Thumb down 5

        Another non-agent heard from. You get $925M in profit from squeezing your expenses, dragging your feet paying claims, and manipulating the books. That’s how. Travelers may be a great market for National Accounts or International business, but on American Middle Market business they suck. And don’t act like Travelers has any product that a dozen other carriers don’t have. With better service, too. Travelers has turned it’s back on the very people that helped them get to a $925M profit per quarter. Any carrier can be there to write the cream accounts. Agents need a partner. And yes, I am the trusted advisor so in good conscience I have to find alternatives for my client.

  • July 24, 2013 at 10:41 am
    Cat says:
    Well-loved. Like or Dislike:
    Thumb up 41
    Thumb down 2

    Travelers is a horrible company to work for. They treat their employees like work horses and aren’t afraid to c**p all over them at every turn. The best thing that ever happened to my husband and me as well as many of our friends was being layed off from Travelers.

    • July 24, 2013 at 11:00 am
      workhorse says:
      Well-loved. Like or Dislike:
      Thumb up 48
      Thumb down 4

      I work for Travelers at the present time… and we have not been told about any of the lay offs… this article is how we were notified…. saw on line that 90 in CT and 180 in NY… still no information from the leaders we work for to ease our minds or to get in front of this story…makes it hard to focus on the million claims you have when you are wating for the other shoe to drop! If anyone knows where they plan on making cuts it would be nice to be told as the leaders of the company are not disclosing anything to its workers!!!!

      • July 24, 2013 at 5:10 pm
        Agent says:
        Well-loved. Like or Dislike:
        Thumb up 30
        Thumb down 0

        Workhorse, the perils of working for a very large company is that the lines of communication are long. I worked for Liberty Mutual as a rep for several years before getting into the agency business. They trained me well, but the remuneration was not great and got almost no renewal credit. A salesman had to hit a lot of big accounts each year to do decently. They also wanted me to transfer to a different office every two years. That got old after the second one so I made my break and haven’t looked back. Now, all I have to do is stay up with all the changes of direction from 5 major markets. What fun!

        • July 25, 2013 at 10:39 am
          Libby says:
          Well-loved. Like or Dislike:
          Thumb up 22
          Thumb down 0

          Only 5, Agent???

          • July 25, 2013 at 12:07 pm
            Agent says:
            Well-loved. Like or Dislike:
            Thumb up 23
            Thumb down 0

            Yes Libby. I don’t count Progressive since they are a direct and agency market and are a necessary evil when I can’t place a difficult account with the other standards. If you were an Independent Agent, you would know how hard it is to stay up with changes of direction with numerous carriers. If we can’t do any good with who we represent, they can’t generally be helped. I can generally beat the big captives State Farm, Allstate & Farmers Group on most Personal Lines business. I have a different line up on Commercial only carriers so I have plenty of facilities.

          • July 25, 2013 at 2:10 pm
            Libby says:
            Well-loved. Like or Dislike:
            Thumb up 19
            Thumb down 0

            I am an Independent Agent, Agent. Have been for 33 years. And yes, I know how hard it is to keep up. I was being playful with you because as Independents we usually have 3-5 “go to” markets, but contracts with 50 to 100. That’s all I meant. Lighten up on me.

      • July 25, 2013 at 5:05 pm
        really? says:
        Poorly-rated. Like or Dislike:
        Thumb up 10
        Thumb down 22

        Hidden due to low comment rating. Click here to see.

        • July 26, 2013 at 10:25 am
          Libby says:
          Well-loved. Like or Dislike:
          Thumb up 26
          Thumb down 6

          Clueless comments from agents??? That is rich coming from a company person that doesn’t have the slightest clue what it takes to be a successful agent and I guarantee you wouldn’t last one week on this side of the fence. I’ve seen plenty of you try, but only a very few succeed. And they sure as heck didn’t have an attitude like you do. Don’t forget who pays your salary, pal. It’s not the clients. Those are OUR clients. We placed them with Travelers and we can move them from Travelers and don’t you forget it. WE are your clients. So the next time an Agent has something to say, you’d best perk up your ears and listen.

          • July 26, 2013 at 2:34 pm
            Donna says:
            Well-loved. Like or Dislike:
            Thumb up 22
            Thumb down 2

            Libby, LOVE, LOVE, LOVE your comment. I am getting so tired of these companies with there “changes” in direction, etc. Most couldn’t fight there way out of a wet paper bag, much less sell insurance.

          • July 26, 2013 at 4:18 pm
            Libby says:
            Well-loved. Like or Dislike:
            Thumb up 25
            Thumb down 2

            Thanks, Donna. I’m just a little cranky when it comes to carriers thinking they can shake a big stick at the lowly agent and have no ramifications. They need to remember who their client is and what it means to be a partner.

    • July 24, 2013 at 11:02 am
      workhorse says:
      Well-loved. Like or Dislike:
      Thumb up 45
      Thumb down 4

      The funny thing is I work for this company and had to hear about the layoffs by reading this article… sent to me by others in the insurance industry… now that it is on the internet you would think that the leaders would tell us something!

      • July 24, 2013 at 12:07 pm
        Agent says:
        Well-loved. Like or Dislike:
        Thumb up 31
        Thumb down 2

        Unfortunately, the employees are sometimes the last to know. By the way, agents are sometimes the last to know on rating changes or premium increases to customers. The last thing I want is for an unhappy customer calling me up complaining about their renewal premium. I have told my CSR’s to watch the download and let me know what the renewals are coming in at and take action to move them if there is a problem.

  • July 24, 2013 at 11:20 am
    RDM says:
    Poorly-rated. Like or Dislike:
    Thumb up 5
    Thumb down 24

    Hidden due to low comment rating. Click here to see.

    • July 24, 2013 at 3:25 pm
      Well then, RDM says:
      Well-loved. Like or Dislike:
      Thumb up 31
      Thumb down 0

      One would think you would have a little more compassion for those folks. Travelers laid me off also.

  • July 25, 2013 at 10:05 am
    CB500 says:
    Well-loved. Like or Dislike:
    Thumb up 33
    Thumb down 2

    Talk about bad press, profits climb and layoffs planned. The profits were due to good luck, and the layoffs due to poor management. As an agent, it lowers my confidence in placing business with a company that dumps people like that. I am sure the best people remaining at Travelers will be wondering if is worth trying to invest themselves in a career at Travelers. The next time a recruiter calls many more Travelers employees will take the call and start looking around. The short term financial savings in dumping people now will cost ten times as much in the long term loss as the brightest and best start to leave. But Fishman and his cronies won’t suffer the effects because they will be long gone hanging out on the beaches of some Caribbean island living it up. I hope the board of directors is paying attention to this mismanagement.

    I feel sorry for the PR people having to deal with this nightmare scenario.

    • July 25, 2013 at 12:39 pm
      insureance guru says:
      Poorly-rated. Like or Dislike:
      Thumb up 6
      Thumb down 25

      Hidden due to low comment rating. Click here to see.

      • July 25, 2013 at 1:06 pm
        Agent says:
        Well-loved. Like or Dislike:
        Thumb up 29
        Thumb down 1

        Guru, you are about the only one defending Travelers on this forum. I have had them for 15 years and they are about the most agent unfriendly company we have now. Completely different than when we appointed. They pay their measley monthly commissions on direct bill business, reduced commissions on monoline homes while not providing a decent auto market we could bundle accounts with and expect us to like it. Their contingency contract also sucks. On the same premium volume with our leading carrier and loss ratio, we would get twice as much bonus. Save us your platitudes about how wonderful Fishman and his cohorts are.

        • July 25, 2013 at 1:25 pm
          Becca says:
          Well-loved. Like or Dislike:
          Thumb up 26
          Thumb down 0

          Agent you took the words right out of my mouth!!!!

          I would put Hartford on the same platform as Travelers. Try getting an audit they screwed up fixed — of course all electronic because they save money by not having real people go out and physically do audits; it takes 6 to 10 weeks — and I am not kidding.

          It is totally ridiculous that automation in the minds of these big companies makes sense; rather than paying for some actual brain power with some authority as the way to go. If they lose money with this model — I feel no sympathy for them.

          • July 25, 2013 at 5:41 pm
            Agent says:
            Well-loved. Like or Dislike:
            Thumb up 19
            Thumb down 0

            Becca, a lot of companies outsource audits, inspections to independents. Some of those people are not very good at what they do and I have had to have a heart to heart with the carrier. One example was on an inspection. The outsourced independent went out to one of my insureds and sent a report back to underwriting that the risk was 7 miles outside the city limits with no water or fire protection. I don’t know where they found that goofy guy. I went out and took pictures of the city limits sign right in front of the insureds building and the fire hydrant about 100 ft away. I think I got the guy fired since he was totally incompetent. I told the carrier not to send that company out to inspect our accounts so they are now using another service. This is the quality or lack therof you get sometimes.

      • July 25, 2013 at 2:14 pm
        Libby says:
        Well-loved. Like or Dislike:
        Thumb up 27
        Thumb down 1

        I worked for a very successful local agency in Denver that had a very healthy balance sheet until they fired the President and hired the branch manager of Denver’s Travelers office. In two years the company was selling off 2 branch offices and laid off half of their staff. No more bonuses (which had been a minimum of 10% every year) and no more raises. This guy descimated the agency then left to be branch manager at another carrier. So no, I don’t have all the faith in company executives to always know what is the right thing to do.

        • July 25, 2013 at 4:13 pm
          Agent says:
          Well-loved. Like or Dislike:
          Thumb up 21
          Thumb down 0

          If it was a very successful agency with a healthy balance sheet, why would the President be fired? It seems to me he would get a raise for guiding it to success. Was it just a personality disagreement with the board?

          Just to show you how stupid companies can be sometimes, years ago, Safeco ran out and bought American States, which was a multiline company we represented for Commercial and Personal Lines. Within a year, Safeco made a huge mess, ran off a bunch of good employees, closed down offices, replaced underwriters with their own and started running business off. We had to deal with a lot on that little transaction and it was not a pretty sight.

          • July 25, 2013 at 4:22 pm
            Libby says:
            Well-loved. Like or Dislike:
            Thumb up 24
            Thumb down 0

            Yeah, been through it a few times myself, Agent. And yes, it was a personality thing. Father hands reins over to son and son brings in best drinking buddy. Recipe for disaster. Son now found guilty of insider trading and father back in charge. Will probably be a good company to work for again.

          • July 25, 2013 at 4:35 pm
            Agent says:
            Well-loved. Like or Dislike:
            Thumb up 22
            Thumb down 0

            Yes, I have seen some of those agencies where the father turned it over to a son. Ended up being like the Prodigal son story in the bible. The son would blow it because he was born with the silver spoon and never had to beat the streets for business, took it all for granted thinking it would just pay him a handsome income and didn’t do the work to manage properly. I can think of two large agencies in our area it happened to and both are less than half the size they were when daddy was in charge. We benefited from the largesse of the son and picked up some of their business due to customer dissatisfaction and their poor management.

      • July 26, 2013 at 2:33 pm
        former TRV PI employee says:
        Well-loved. Like or Dislike:
        Thumb up 15
        Thumb down 0

        I worked in the personal lines side of Travelers for 4 years. A few years ago when it was decided to start jacking up rates, thoes of us in the trenches started calling foul and complaining that we were going to be sacrificing long-term stability with customers and agents for short term profitability claims. Management didn’t listen to us and forced us to push the rates through anyway. About a year ago I saw the writing on the wall. I knew that something would fall apart soon and I jumped ship. I’m glad I did. One of the departments I used to work with lost 67% of its employees to the layoff. I don’t know who is in worse shape, those that lost their jobs, or those that are left behind and now have to figure out how to do the same amount of work with a thrid of the people. I know some of the people that were let go. They were hard workers that know their stuff. Yes, measures were needed to clean up the mess in the auto lines, but mayeb the measures should have been to do something about the execs who made the poor choices to begin with, not the hard-working employees who voiced their concerns but were not listened to.

        • July 26, 2013 at 4:21 pm
          Libby says:
          Well-loved. Like or Dislike:
          Thumb up 11
          Thumb down 0

          Here, here Former. Glad you were able to get out in time. Hope you’re happy wherever you landed.

          • July 26, 2013 at 4:43 pm
            former TRV PI employee says:
            Like or Dislike:
            Thumb up 9
            Thumb down 0

            I am much happier now. I am making about the same pay, but much MUCH less stress.

        • July 26, 2013 at 4:37 pm
          Agent says:
          Like or Dislike:
          Thumb up 11
          Thumb down 3

          Good comment Former. Travelers has lied to agents as well. they instructed their reps to tell us they were rolling out a new Auto market about 2 years ago and we would notice a more competitive product. We are “Still “Waiting” for that new product. Our answer was more rate increases. They have also gone back and forth on doing 6 month or 12 month Auto policies. They just can’t make up their minds. I just don’t know how Safeco and others make a buck on Personal Auto at much lower rates when Travelers has issues.

  • July 25, 2013 at 11:33 pm
    Industry Guy says:
    Poorly-rated. Like or Dislike:
    Thumb up 12
    Thumb down 22

    Hidden due to low comment rating. Click here to see.

    • July 26, 2013 at 10:22 am
      Libby says:
      Well-loved. Like or Dislike:
      Thumb up 23
      Thumb down 2

      Why should we resign our appointments. They’ll come crawling back just like they all do sooner or later. They can’t make it without us. That’s what they keep forgetting. We have to remind them every now and then.

    • July 26, 2013 at 10:40 am
      Agent says:
      Well-loved. Like or Dislike:
      Thumb up 26
      Thumb down 1

      Industry Guy, we recognize Travelers is a very large company. That is part of their problem since they are very slow to react to the changes in the marketplace. It has taken them about 4 years to recognize that they have a problem being competitive in the Personal and Small Business segment no matter how much evidence we have presented to them. They are like a giant octopus with many arms with some segments written by St Paul. They are more competitive in the larger account market or Specialty area like Finance, Public Entity business, but they suck at Personal Lines and main street business. Smaller regional companies are far more nimble on their feet and more innovative in coverage offerings.

  • August 16, 2013 at 6:41 pm
    Ditto:Former TRV PL employee says:
    Like or Dislike:
    Thumb up 4
    Thumb down 0

    To the other “former TRV PI employee”: YES!
    The company strategy has been to get wealthy customers to buy-in to the idea of using a premier company in spite of the price and to cross-sell products. (Travelers has always been a little snooty.) Meanwhile, GEICO and Progressive low-brow the ads and the rates and they get the business that Travelers turns their nose up at.
    If anyone should have been fired it should have been the Personal Lines strategists who came up with the lame idea to target this “preferred” customer. Any customer you can write should be a preferred customer.

    • August 19, 2013 at 11:22 am
      Agent says:
      Like or Dislike:
      Thumb up 3
      Thumb down 0

      Hey Ditto, Travelers also thought it was a good idea to sell Auto direct on their site. I wonder how that is working out for them. Supposedly, they were going to refer Home business to agents after they had the Auto so it could be bundled. We are still waiting for our first referral. I wonder how many policies have been sold by Esurance for Travelers. My guess is, not many.

  • September 4, 2013 at 7:21 pm
    S says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    Pretty good profit, guess they made that by not replacing parts on brand new vehicles after their clients damage the vehicle. And not only is the client belligerent but travelers thinks it is no big deal. We worked hard to get a nice vehicle and when it is less than a week old and travelers client damages the piece should be replaced not repaired.



Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features