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85-577: The Travelers Companies, Inc. , commonly known as Travelers , is an American insurance company. It is the second-largest writer of U.S. commercial property casualty insurance, and the sixth-largest writer of U.S. personal insurance through independent agents. Travelers is incorporated in Minnesota, with headquarters in New York City , and its largest office in Hartford, Connecticut . It has been
170-684: A Nerva–Antonine dynasty -era tablet from the ruins of the Temple of Antinous in Antinoöpolis , Aegyptus . The tablet prescribed the rules and membership dues of a burial society collegium established in Lanuvium , Italia in approximately 133 AD during the reign of Hadrian (117–138) of the Roman Empire . In 1851 AD, future U.S. Supreme Court Associate Justice Joseph P. Bradley (1870–1892 AD), once employed as an actuary for
255-592: A sea captain , ship-manager , or ship charterer that saved a ship from total loss was only required to pay one-half the value of the ship to the ship-owner . In the Digesta seu Pandectae (533), the second volume of the codification of laws ordered by Justinian I (527–565), a legal opinion written by the Roman jurist Paulus in 235 AD was included about the Lex Rhodia ("Rhodian law"). It articulates
340-534: A stone contractor who became aware for the first time of accident insurance for travelers (i.e., an early form of travel insurance ) while traveling in England in 1859 from Leamington to London. His railway ticket included accidental death insurance coverage up to the amount of £1,000, and lesser indemnities for non-fatal injuries. Batterson visited the London and Paris offices of European insurers to learn about
425-458: A claim arises on the occurrence of a specified event). There are generally three types of insurance contracts that seek to indemnify an insured: From an insured's standpoint, the result is usually the same: the insurer pays the loss and claims expenses. If the Insured has a "reimbursement" policy, the insured can be required to pay for a loss and then be "reimbursed" by the insurance carrier for
510-448: A claim. Adjusting liability-insurance claims is particularly difficult because they involve a third party, the plaintiff , who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a deep pocket . The adjuster must obtain legal counsel for the insured—either inside ("house") counsel or outside ("panel") counsel, monitor litigation that may take years to complete, and appear in person or over
595-601: A combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn investment profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The Association of British Insurers (grouping together 400 insurance companies and 94% of UK insurance services) has almost 20% of
680-455: A company insures an individual entity, there are basic legal requirements and regulations. Several commonly cited legal principles of insurance include: To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e.,
765-685: A component of the Dow Jones Industrial Average since June 8, 2009. The company has field offices in every U.S. state, plus operations in the United Kingdom , Ireland , Singapore , China , Canada , and Brazil . Travelers ranked No. 98 in the 2021 Fortune 500 list of the largest United States corporations with total revenue of $ 32 billion. The main predecessor companies of The Travelers Companies, Inc. are The St. Paul Companies, Inc. and Travelers Property Casualty Corporation. Saint Paul Fire and Marine Insurance Co.
850-480: A cost of $ 344 million, and a market value of $ 546 million. The market value of these swaps had fluctuated significantly in the 3rd quarter of 2007 from less than $ 200 million at the end of June, to $ 537 million at the end of July to almost $ 1 billion (twice that value) in August to $ 544 million at the end of September. As of December 31, 2010, Fairfax had total assets of approximately $ 31.7 billion, and its revenue for
935-410: A fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management , primarily used to protect against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer , insurance company , insurance carrier , or underwriter . A person or entity who buys insurance is known as a policyholder , while
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#17327872927821020-573: A manner very reminiscent of the "snowball" effect or the cult video game Katamari Damacy . The creators of the ad said it was simply based on the snowball effect , that they had never heard of the game, and were surprised by the resulting similarity. In 2007, the company secured naming rights for an annual golf event to be called the Travelers Championship golf tournament, formerly the Greater Hartford Open , on
1105-413: A minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be " indemnified " against the loss covered in
1190-453: A more active role in loss mitigation, such as through building codes . According to the study books of The Chartered Insurance Institute, there are variant methods of insurance as follows: Insurers may use the subscription business model , collecting premium payments periodically in return for on-going and/or compounding benefits offered to policyholders. Insurers' business model aims to collect more in premium and investment income than
1275-634: A newspaper ad for the insurance company. It was revived in the early 1960s, when it was given its signature red color by Harry W. Knettell, then the account executive for The Travelers and Vice President at the Charles Brunelle advertising agency. During the late 1960s Charles Brunelle was the largest advertising agency in Hartford, a city known as "the insurance capital of the world," "the Hollywood of insurance," or "America's file cabinet" due to
1360-458: A person or entity covered under the policy is called an insured . The insurance transaction involves the policyholder assuming a guaranteed, known, and relatively small loss in the form of a payment to the insurer (a premium) in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms. Furthermore, it usually involves something in which
1445-631: A premium paid independently of loans began in Belgium about 1300 AD. Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. The first known insurance contract dates from Genoa in 1347. In the next century, maritime insurance developed widely, and premiums were varied with risks. These new insurance contracts allowed insurance to be separated from investment,
1530-697: A relatively few claimants – and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit . Policies typically include a number of exclusions, for example: Insurers may prohibit certain activities which are considered dangerous and therefore excluded from coverage. One system for classifying activities according to whether they are authorised by insurers refers to "green light" approved activities and events, "yellow light" activities and events which require insurer consultation and/or waivers of liability, and "red light" activities and events which are prohibited and outside
1615-556: A separation of roles that first proved useful in marine insurance . The earliest known policy of life insurance was made in the Royal Exchange, London , on 18 June 1583, for £383, 6s. 8d. for twelve months on the life of William Gibbons. Insurance became far more sophisticated in Enlightenment-era Europe , where specialized varieties developed. Property insurance as we know it today can be traced to
1700-399: A staff of records management and data entry clerks . Incoming claims are classified based on severity and are assigned to adjusters, whose settlement authority varies with their knowledge and experience. An adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract (and if so,
1785-649: A tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s Chancellor Otto von Bismarck introduced old age pensions, accident insurance and medical care that formed the basis for Germany's welfare state . In Britain more extensive legislation was introduced by the Liberal government in the National Insurance Act 1911 . This gave the British working classes
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#17327872927821870-572: A univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected minus the amount paid out in claims is the insurer's underwriting profit on that policy. Underwriting performance is measured by something called the "combined ratio", which is the ratio of expenses/losses to premiums. A combined ratio of less than 100% indicates an underwriting profit, while anything over 100 indicates an underwriting loss. A company with
1955-410: Is a common risk management strategy used by U.S. insurance groups. If any one company in the group gets hit with too many claims, the situation can be easily contained to that one company (which is placed in runoff and allowed to run its policies to completion), while the remainder of the group continues to operate normally. In November 2010, Travelers entered into a joint venture agreement under which
2040-569: Is a leading U.K. distributor of small business insurance policies, offering products online on behalf of a broad panel of carriers. It has more than 425,000 microbusiness customers covering more than 1,000 classes of business, and was named “Best Company to Work For” by The Sunday Times in 2015 and 2016. The transaction adds to Travelers' digital capabilities. In 2018, Travelers ranked 106 on the Fortune 500 list of largest U.S. companies. On June 8, 2009, Travelers replaced its former parent Citigroup on
2125-468: Is a minority investor in Scion Capital LLC), they have used derivatives to bet on the housing bubble . As of September 30, 2007, Fairfax and its subsidiaries owned an enormous credit default swap (CDS) book with a $ 18.5 billion notional amount and an average term to expiry of 4.2 years, on about 25 to 30 companies, the majority of which were bond insurers and mortgage lenders. The CDS book had
2210-770: Is a wholly-owned subsidiary of Fairfax. Based in Miami, Florida, it offers a wide range of general insurance products, including property, automobile and various specialty lines, through its subsidiaries located in Argentina, Chile, Colombia and Uruguay. Fairfax Latin America has approximately 970 employees and, in 2021, generated annual gross premiums that exceeded US$ 727 million. Fairfax Latin America underwrites through SBS Seguros Colombia S.A., Southbridge Insurance Company, Meridional Seguros and SBI Seguros Uruguay S.A. Fairfax Financial has over 8,200 employees worldwide (5,000 of them in
2295-538: Is by far the largest. Many of Travelers' ancestor companies, such as St. Paul and USF&G , are technically still around today, and still write policies and accept claims in their own names (under the overarching Travelers brand name). As is typical of most insurers in the United States , Travelers never dissolved the various companies it acquired, but simply made them wholly owned subsidiaries and trained its employees to act on behalf of those subsidiaries. This
2380-621: Is now known as Travel Insured International, a Crum and Forster Company . In the 1990s, Travelers went through a series of mergers and acquisitions. It was bought by Primerica in December 1993, but the resulting company retained the Travelers name. In 1995 it became The Travelers Group . It bought Aetna 's property and casualty business in 1996. In April 1998, the Travelers Group merged with Citicorp to form Citigroup . However,
2465-409: Is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: Insurers make money in two ways: The most complicated aspect of insuring is the actuarial science of ratemaking (price-setting) of policies, which uses statistics and probability to approximate the rate of future claims based on a given risk. After producing rates,
2550-426: Is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents . The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by ACORD . Insurance-company claims departments employ a large number of claims adjusters, supported by
2635-463: The Dow Jones Industrial Average . On August 4, 2015, the company announced that Alan Schnitzer would succeed Jay Fishman as chief executive officer effective December 1, 2015. On August 4, 2017, Travelers completed its previously announced acquisition of Simply Business , a leading provider of small business insurance policies in the United Kingdom. On August 15, 2018, Travelers acquired
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2720-680: The Great Fire of London , which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir Christopher Wren 's inclusion of a site for "the Insurance Office" in his new plan for London in 1667." A number of attempted fire insurance schemes came to nothing, but in 1681, economist Nicholas Barbon and eleven associates established
2805-742: The Mutual Benefit Life Insurance Company , submitted an article to the Journal of the Institute of Actuaries . His article detailed an historical account of a Severan dynasty -era life table compiled by the Roman jurist Ulpian in approximately 220 AD that was also included in the Digesta . Concepts of insurance has been also found in 3rd century BC Hindu scriptures such as Dharmasastra , Arthashastra and Manusmriti . The ancient Greeks had marine loans. Money
2890-585: The National Football League for forcing the company and its subsidiaries to pay to defend the league for failing to protect players from brain injury , in a case filed in the New York State Supreme Court . The league had sued over three dozen insurance companies the week before in an attempt to cover the claims that players made against the league. The logo of the red umbrella was created in 1870 when it appeared in
2975-498: The PGA Tour . In April 2008, The Travelers repurchased the rights to the famous red umbrella, which is featured in several commercials starring Paul Freeman as well as other advertisements. In July 2008, the spot "Delivery," also starring Freeman, was nominated for an Emmy Primetime Emmy Award for Outstanding Commercial . Insurance Insurance is a means of protection from financial loss in which, in exchange for
3060-593: The Travelers Weather Research Center , the first organization to make weather predictions using probabilities ("20% chance of rain"). By the early 1990s, Travelers was predominantly a general property and casualty insurer that also happened to do some travel insurance on the side, and in February 1994, Travelers quietly exited its original travel insurance business by selling the unit to a retiring Travelers executive. The resulting company
3145-782: The United States housing bubble . In an interview in The Globe and Mail in 2007, Watsa said believed that the global credit squeeze is in its "early days", and indicated he believed there may be similarities to the Japanese asset price bubble . The investment team of HWIC benefited from the subprime fallout, like John Paulson 's New York-based Paulson & Co. , Kyle Bass ' Hayman Capital, Andrew Lahde 's California-based Lahde Capital, Julian Robertson 's "Tiger Cubs" (formerly known as " Tiger Management Corp. "), and Michael Burry 's Scion Capital (White Mountains Insurance Group
3230-617: The general average principle of marine insurance established on the island of Rhodes in approximately 1000 to 800 BC, plausibly by the Phoenicians during the proposed Dorian invasion and emergence of the purported Sea Peoples during the Greek Dark Ages (c. 1100–c. 750). The law of general average is the fundamental principle that underlies all insurance. In 1816, an archeological excavation in Minya, Egypt produced
3315-408: The 13th to the eighth largest property and casualty insurance company in the United States. Through economies of scale between the two companies, and a difficult business environment, they downsized the company substantially over the coming years by selling certain business units to focus on more profitable business units. The Travelers Insurance Company was founded in Hartford by James G. Batterson,
3400-507: The Colorado-based BaseCamp Equity Partners pitch in 2019. This pitch landed DOZR with $ 14 million CAD. In 2017, Fairfax Financial Holdings increased its ownership of Torstar's non-voting shares from 20% to 40%. In late May 2020, Torstar accepted an offer of a sale of the company to NordStar Capital. The $ 52 million deal, supported by Fairfax, was expected to close by year end. On April 24, 2018, it
3485-465: The St. Paul and Travelers Companies merged and renamed itself St. Paul Travelers , with its headquarters set in St. Paul, Minnesota. In August of that year, it was charged with making misleading statements in connection with the merger. Despite many assurances from CEO Jay Fishman that the newly formed company would retain the St. Paul name, the corporate name only lasted until 2007, when the company repurchased
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3570-553: The Travelers Tower in 1920, and then replaced that with the red umbrella in 1959. During the 20th century, Travelers was responsible for many insurance industry firsts, including the first automobile policy (1897), the first air travel policy (1919), and the first space travel policy (late 1960s, for astronauts in the Apollo program ). In 1954, the company established the world's first privately owned weather research facility,
3655-641: The Travelers brand and focuses on property, general liability, construction and financial insurance products. The business is based in São Paulo. As a result of the transaction, Travelers now owns 95 percent of the property casualty business with Paraná Banco, the parent company of J. Malucelli, retaining a five percent interest. Travelers’ interest in the surety business of the J. Malucelli joint venture remains at 49.5 percent. In March 2017, Travelers agreed to acquire UK-based Simply Business from Aquiline Capital Partners for approximately $ 490 million. Simply Business
3740-538: The accident insurance business, then went home to Hartford and raised $ 500,000 in capital to launch a company to provide accident insurance to American travelers. Travelers obtained its official state charter on June 17, 1863. The company did not issue its first regular insurance policy until April 5, 1864, but informally entered into its first insurance agreement a month earlier. On March 1, 1864, local banker James Bolter jokingly inquired of Batterson how much it would cost to insure him up to $ 5,000 for accidental death for
3825-710: The acquisition of a majority interest in Cardinal Compañía de Seguros, a Colombian start-up surety provider in September 2015. The business, which is based in Bogotá , operates under the co-branded name J. Malucelli Travelers. In October 2015, Travelers acquired a majority interest in the property casualty business of its J. Malucelli joint venture in Brazil. J. Malucelli commenced writing property casualty business in 2012. The property casualty business operates under
3910-458: The company would invest in J. Malucelli Participações em Seguros e Resseguros S.A., the market leader in the surety insurance business in Brazil. The transaction closed in June 2011 with Travelers acquiring a 43.4 percent interest. Travelers' investment in newly issued shares significantly increased J. Malucelli's capital level, positioning it for substantial growth in Brazil. At the time, Travelers had
3995-429: The controlling equity voting interest of Fairfax Financial Holdings Limited ("Fairfax"). He owns roughly 10% of Fairfax, which accounts for 99% of his personal wealth. His 10-for-1 multiple voting shares give him just over 50% ownership. As early as the 2003, in an annual report issued by the company, chief executive Prem Watsa raised concerns about securitized products and talks about the subprime mortgage crisis and
4080-446: The demand for marine insurance . In the late 1680s, Edward Lloyd opened a coffee house , which became the meeting place for parties in the shipping industry wishing to insure cargoes and ships, including those willing to underwrite such ventures. These informal beginnings led to the establishment of the insurance market Lloyd's of London and several related shipping and insurance businesses. Life insurance policies were taken out in
4165-738: The early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office , founded in London in 1706 by William Talbot and Sir Thomas Allen . Upon the same principle, Edward Rowe Mores established the Society for Equitable Assurances on Lives and Survivorship in 1762. It was the world's first mutual insurer and it pioneered age based premiums based on mortality rate laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based." In
4250-562: The end of 2010, the firm had a compound growth rate of approximately 25% in book value per share (per year), it is about 243 times what Fairfax began with in 1985. Prem Watsa has served as chairman and chief executive officer of Fairfax Financial Holdings Limited since 1985 and as vice president of Hamblin Watsa Investment Counsel since 1985. Watsa, directly, and indirectly through 1109519 Ontario Limited, The Sixty Two Investment Company Limited and 810679 Ontario Ltd., owns
4335-695: The event of general average. In 1873 the "Association for the Reform and Codification of the Law of Nations", the forerunner of the International Law Association (ILA), was founded in Brussels. It published the first YAR in 1890, before switching to the present title of the "International Law Association" in 1895. By the late 19th century governments began to initiate national insurance programs against sickness and old age. Germany built on
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#17327872927824420-706: The first contributory system of insurance against illness and unemployment. This system was greatly expanded after the Second World War under the influence of the Beveridge Report , to form the first modern welfare state . In 2008, the International Network of Insurance Associations (INIA), then an informal network, became active and it has been succeeded by the Global Federation of Insurance Associations (GFIA), which
4505-472: The first fire insurance company, the "Insurance Office for Houses", at the back of the Royal Exchange to insure brick and frame homes. Initially, 5,000 homes were insured by his Insurance Office. At the same time, the first insurance schemes for the underwriting of business ventures became available. By the end of the seventeenth century, London's growth as a centre for trade was increasing due to
4590-419: The float method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance-premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle . Claims and loss handling
4675-415: The insurance broker Marsh & McLennan Companies contingent commissions to win business without the knowledge of clients, thus creating a conflict of interest. Additionally, the investigation examined whether Travelers had created the illusion of competition by submitting fake bids , thus misleading clients into believing they were receiving competitive commercial premiums. In August 2012, Travelers sued
4760-447: The insurance carrier can generally either "reimburse" or "pay on behalf of", whichever is more beneficial to it and the insured in the claim handling process. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the "insured" party once risk is assumed by an "insurer", the insuring party, by means of a contract , called an insurance policy . Generally, an insurance contract includes, at
4845-774: The insurance company. Insurance scholars have typically used moral hazard to refer to the increased loss due to unintentional carelessness and insurance fraud to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures—particularly to prevent disaster losses such as hurricanes—because of concerns over rate reductions and legal battles. However, since about 1996 insurers have begun to take
4930-529: The insurance policy is called the premium . If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster. A mandatory out-of-pocket expense required by an insurance policy before an insurer will pay a claim is called a deductible (or if required by a health insurance policy, a copayment ). The insurer may hedge its own risk by taking out reinsurance , whereby another insurance company agrees to carry some of
5015-413: The insured has an insurable interest established by ownership, possession, or pre-existing relationship. The insured receives a contract , called the insurance policy , which details the conditions and circumstances under which the insurer will compensate the insured, or their designated beneficiary or assignee. The amount of money charged by the insurer to the policyholder for the coverage set forth in
5100-409: The insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial rate-making involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss-data, bring the loss data to present value , and compare these prior losses to
5185-480: The investments in the London Stock Exchange . In 2007, U.S. industry profits from float totaled $ 58 billion. In a 2009 letter to investors, Warren Buffett wrote, "we were paid $ 2.8 billion to hold our float in 2008". In the United States , the underwriting loss of property and casualty insurance companies was $ 142.3 billion in the five years ending 2003. But overall profit for the same period
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#17327872927825270-408: The journey from the post office to his home. Batterson replied, "Two cents," which Bolter promptly tendered; those coins have been kept by Travelers ever since. The original company logo was a knight's suit of armor . The red umbrella first appeared in Travelers advertising as early as 1870, but at that time was not yet the official logo. The company changed its official logo from a suit of armor to
5355-565: The late 19th century "accident insurance" began to become available. The first company to offer accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the rising number of fatalities on the nascent railway system. The first international insurance rule was the York Antwerp Rules (YAR) for the distribution of costs between ship and cargo in
5440-443: The loss and out of pocket costs including, with the permission of the insurer, claim expenses. Under a "pay on behalf" policy, the insurance carrier would defend and pay a claim on behalf of the insured who would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language, which enables the insurance carrier to manage and control the claim. Under an "indemnification" policy,
5525-612: The losses that only some insureds may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be an insurable risk , the risk insured against must meet certain characteristics. Insurance as a financial intermediary is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses. Risk which can be insured by private companies typically share seven common characteristics: When
5610-534: The majority stake of Zensurance, a digital business insurance brokerage in Canada. Travelers provides commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals. The company offers insurance through three segments: In January 2007, Travelers agreed to pay US$ 77 million to six states to settle a class action suit and end investigations into its insurance practices. The charges involved paying
5695-485: The many insurance companies in that town. The Travelers was one of their many insurance company clients. In 2006, a Travelers commercial titled Snowball was nominated for an Emmy. Snowball featured a man, walking down a steep San Francisco sidewalk, who trips and knocks over a table of items at a garage sale. The man and the items roll down the street, forming a ball which gathers garbage cans, pedestrians, construction materials, motorcycles, light poles, and other items, in
5780-583: The option to increase its investment to retain a 49.5 percent interest, which the company later did in 2012. In June 2013, Travelers announced the acquisition of Dominion of Canada General Insurance Company from E-L Financial Corporation Limited (TSX: ELF). The transaction later closed in November 2013. The combined organization, referred to as Travelers Canada, remains headquartered in Toronto . The company's joint venture with J. Malucelli in Brazil completed
5865-414: The policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims – in theory for
5950-406: The premium collected in order to assess rate adequacy. Loss ratios and expense loads are also used. Rating for different risk characteristics involves—at the most basic level—comparing the losses with "loss relativities"—a policy with twice as many losses would, therefore, be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and
6035-500: The prior twelve months was approximately $ 6.2 billion. Since Watsa took over, the company book value per share has compounded by 23% per year, while the common stock price has followed the growth at 19% per year. On September 23, 2013, Fairfax made an offer to purchase cell phone maker BlackBerry for $ 4.7 billion or $ 9.00 a share. BlackBerry announced it had signed a letter of intent but would be open to other offers until November 4, 2013. Fairfax already held 10% of BlackBerry. The deal
6120-404: The reasonable monetary value of the claim), and authorizes payment. Policyholders may hire their own public adjusters to negotiate settlements with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance-policy add-on, called loss-recovery insurance, which covers the cost of a public adjuster in the case of
6205-405: The rights to the famous red umbrella logo from Citigroup and readopted it as its main corporate symbol, while also changing the corporate name to The Travelers Companies . In 2009, Travelers designated its New York City office as its headquarters for legal purposes, but as a practical matter, the company considers its "executive offices" to be New York City, Hartford, and St. Paul, of which Hartford
6290-473: The risks, especially if the primary insurer deems the risk too large for it to carry. Methods for transferring or distributing risk were practiced by Chinese and Indian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel capsizing. Codex Hammurabi Law 238 (c. 1755–1750 BC) stipulated that
6375-456: The scope of insurance cover. Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud; on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through moral hazard , insurance fraud , and preventive steps by
6460-436: The synergies between the banking and insurance arms of the company did not work as well as planned, so Citigroup spun off Travelers Property and Casualty into a subsidiary company in 2002, although it kept the red umbrella logo . Three years later, Citigroup sold Travelers Life & Annuity to MetLife . In 2003, Travelers bought renewal rights for Royal & SunAlliance Personal Insurance and Commercial businesses. In 2004,
6545-591: The telephone with settlement authority at a mandatory settlement-conference when requested by a judge. Fairfax Financial Fairfax Financial Holdings Limited is a Canadian financial holding company based in Toronto , Ontario, engaged in property, casualty, insurance and reinsurance , investment management , and insurance claims management. The company operates primarily through several subsidiaries, including Allied World, Odyssey Re , Northbridge Financial, Crum & Forster, Verassure Insurance, Onlia Agency Inc., and Zenith Insurance Company . The company
6630-452: Was $ 68.4 billion, as the result of float. Some insurance-industry insiders, most notably Hank Greenberg , do not believe that it is possible to sustain a profit from float forever without an underwriting profit as well, but this opinion is not universally held. Reliance on float for profit has led some industry experts to call insurance companies "investment companies that raise the money for their investments by selling insurance". Naturally,
6715-485: Was advanced on a ship or cargo, to be repaid with large interest if the voyage prospers. However, the money would not be repaid at all if the ship were lost, thus making the rate of interest high enough to pay for not only for the use of the capital but also for the risk of losing it (fully described by Demosthenes ). Loans of this character have ever since been common in maritime lands under the name of bottomry and respondentia bonds. The direct insurance of sea-risks for
6800-804: Was also the largest shareholder of Torstar with 40% of the Class B shares, as of May 2020. Fairfax is led by chairman and CEO Prem Watsa , who controls nearly half of the firm. Fairfax was incorporated as Markel Service of Canada on March 13, 1951, and continued under the Canada Business Corporations Act in 1976. The name was subsequently changed to Markel Financial Holdings Ltd. In 1984, Prem Watsa left GW Asset Management to found his own asset management firm, Hamblin Watsa Investment Counsel Ltd. together with his former boss from Confed, Tony Hamblin. Tony
6885-590: Was announced that Fairfax Financial Holdings Ltd. would acquire the Canadian division of Toys "R" Us for approximately $ 234 million with the intention to keep the 82 remaining stores in Canada open under the Toys "R" Us brand even after the chain's liquidation in the United States. The deal was completed on June 1, 2018. Fairfax sold Toys R Us Canada to businessman Doug Putman in 2021. Fairfax Latin America Ltd.
6970-492: Was formally founded in 2012 to aim to increase insurance industry effectiveness in providing input to international regulatory bodies and to contribute more effectively to the international dialogue on issues of common interest. It consists of its 40 member associations and 1 observer association in 67 countries, which companies account for around 89% of total insurance premiums worldwide. Insurance involves pooling funds from many insured entities (known as exposures) to pay for
7055-779: Was founded March 5, 1853, in Saint Paul, Minnesota, to serve local customers in lieu of waiting for claim payments from insurance companies on the east coast . It barely survived the Panic of 1857 by dramatically paring down its operations and later reorganizing itself into a stock company (as opposed to a mutual company ). It then spread its operations across the country. In 1998 it acquired USF&G , known formerly as United States Fidelity and Guaranty Company, an insurance company based in Baltimore, Maryland , for $ 3.9 billion in stock and assumed debt. By buying USF&G, they went from
7140-411: Was later scrapped in favor of a US$ 1 billion cash injection which, according to one analyst, represented the level of confidence BlackBerry's largest shareholder had in the company. In 2016, Fairfax offered seed funding to Kitchener startup, DOZR Inc. through their investment and innovation unit, Fair Ventures. Fair Ventures and Fairfax went on to support DOZR through multiple funding pitches, including
7225-655: Was the Chief Investment Officer at Confed. The five founding partners were: Tony Hamblin, Prem Watsa, Roger Lace, Brian Bradstreet and Frances Burke. In 1985, Watsa took control of Markel Financial , a Canadian-based specialist in trucking insurance. The company was controlled by the Virginia-based Markel family. In May 1987, Watsa re-organized Markel Financial Holdings Limited and renamed it Fairfax Financial Holdings Limited (FAIRFAX: short for "fair, friendly acquisitions") . From 1985 to
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