Travelers’ Commercial Renewal Rates Up 8% in Q4

Travelers Companies Inc.’s business insurance had renewal premium rate gains of 8 percent for the fourth quarter 2011 and 10 percent for December, said CEO Jay Fishman.

He offered his remarks during the earnings call last month. Travelers reported $618 million in net profit for the fourth quarter, a 31 percent decline compared to the previous year. But the company also said it had its biggest rate increases in eight years. “We believe that our franchise was strong enough that we could seek improved profitability through improved rate terms and conditions without adverse effect to our business,” Fishman said.

The company said the rate on the business insurance it is writing is up significantly in the last six months and is now meaningfully exceeding the current view of loss trend. Renewal premium change of 8 percent for the quarter included pure rate increases of over 6 percent. The company’s December renewal premium change for business insurance was up 10 percent, with pure rate increase of 8 percent for the segment. Fishman assured that his company takes these actions selectively, “where analytics suggest they are warranted, and we try very hard never to be disruptive to our agents or insureds.” The retention in business insurance for the quarter stood at 79 percent.

Topics Trends Commercial Lines Pricing Trends