Travelers Engages Customers with Insurance Education as Premiums Set to Rise

TRV: The Travelers Companies logo
The Travelers Companies

Travelers Companies (NYSE:TRV) has unveiled a new online tool, “Guide to Better Coverage”, to assist consumers in better assessing their insurance needs. [1] The virtual tool will be available on its website and will present a customized list of coverage and information specific to insurance at different stages of life. This should help users to understand their insurance needs and review their existing policies and raise awareness about insurance related issues, such as probable discounts due to consolidation of all policies with one insurer. This demonstrates the company’s emphasis on customer retention, as competition intensifies and its premiums continue to rise, and could prove beneficial in that regard. Travelers operates in the highly competitive commercial and personal property and casualty insurance market, with such insurers as Metlife (NYSE:MET) and Hartford Financial (NYSE:HIG).

See our complete analysis of Travelers’ stock here

Reaffirming Commitment to Small Business

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The company upheld its efforts to support small businesses in the country by hosting a discussion, in association with the Federal Reserve Bank of Dallas, to tackle and find solutions to the issues faced by entrepreneurs. [2] Travelers, one of the largest insurers of small businesses, has promoted such events to support SMEs in the past also. You can read about the company’s involvement in Small Business Saturday, a day to endorse local businesses that help boost local economies, in our article Travelers Reaffirms Commitment to Clean Energy, Small Businesses

Increase in losses from Irene may hurt earnings

An insurance industry service, the Property Claim Service, has significantly raised insured loss projections from Hurricane Irene to $4.3 billion, up 18% from September estimates. [3] This assessment of losses excludes damage from uninsured property and flood damage insured by National Flood Insurance Program. Travelers reported $489 million in pretax catastrophe losses last quarter, attributable mainly to Hurricane Irene and Tropical Storm Lee.

The increase in loss estimates will likely have an adverse impact on the company’s fourth quarter earnings, in a year which had extraordinary natural disaster losses due to tornadoes, wildfires, tropical storms, and hurricane.

Our price estimate for Travelers is $63, which is about 15% ahead of the current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. Travelers Debuts “Guide to Better Coverage”, Business Wire []
  2. Dallas Small Business Leaders Identify Access to Capital as Top Challenge, MarketWatch []
  3. Insured loss estimate from Irene rises to $4.3 bln, Reuters []