Travelers Producers Compensation Disclosure

Producers

We primarily sell our insurance products and services through an extensive network of independent insurance agents and brokers, and we consider this the preferred way of distributing our products. We call these independent agents and brokers "producers."

Producers are not our employees. However, producers may receive compensation from us for placing your insurance with us. This is an overview of how we compensate producers.

Producer Compensation

We design our compensation system to encourage producers to sell our products, to assist us in evaluating risks and servicing accounts, and to maintain a volume of profitable business with us. Currently, our compensation programs fall into five basic types: 1) base commissions; 2) contingent commissions; 3) fixed, value-based compensation; 4) business production incentives; and 5) promotional expense reimbursements. We might not pay all these types of compensation, or any compensation, to a producer who places a policy with us.

For example, we do not pay contingent compensation on Personal Insurance, Excess Casualty, Fidelity, Burglary & Theft, or Boiler & Machinery policies at this time. In addition, with respect to policies that are eligible for contingent commissions, a producer may elect to receive either fixed, value-based compensation or contingent commissions, but not both.

• Base Commission Programs

  We generally pay producers a fixed commission for business placed with us. We pay commission on new and renewal policies. This commission is usually a fixed percentage of the premium a policyholder pays. The percentage varies according to factors such as the type of business, the type of risk, and the state where a risk is located.

• Contingent Commission Programs

  • Contingent commission agreements, sometimes referred to as performance plans or profit sharing programs, provide for payment when the producer achieves various pre-set goals. A producer may have separate contingent commission plans with our different business units. We normally evaluate performance against the pre-set goals annually. If the producer has met the goals, the payment amount is usually a percentage of the premium a producer has placed with us for specific types of insurance
  • A contingent commission plan generally uses one or more goals, separately or in combination, to determine if a producer will receive a payment. These goals may include:

    Profitability

    We measure a producer's profitability by comparing losses to premium on the policies the producer placed with us for specific types of insurance. The policies the producer has placed with us must achieve a pre-set ratio of losses to premium to be considered profitable.

    Volume

    We measure the premium volume of policies a producer places with us. We may measure one or more types of insurance.

    Growth and Retention

    We measure whether the amount of business a producer has with us is increasing or decreasing. We may look at change in premium volume, change in the actual number of policies, number of newly written polices or a combination of these. These calculations may vary by type of insurance.

    Tactical Performance

    We measure if a producer has met pre-set tactical performance goals relating to account services, such as the percentage of the producer's customers who sign up for electronic fund transfer premium payments. These goals often differ by business unit and by producer.

• Fixed, Value-Based Compensation Programs

  On Personal Insurance products and on certain commercial lines policies as well, we pay some producers fixed, value-based compensation on eligible new and renewal policies written during a pre-determined period of time.

• Business Production Incentive Programs

  At times we will provide producers or their employees the opportunity to receive additional compensation for placing specific types of polices with us, helping us pursue new business opportunities with their customers, or performing other tasks. We generally compensate agents by paying additional commission or a specific dollar amount on new policies that we sell as a result of these agreements.

   

  A book roll or book transfer -- an agreement by a producer to move policies from a specified insurance company to us -- is one type of business production incentive program. Another example is a new business override: an increase in compensation for new policies in one or more product lines, for a defined period of time.

  This category also includes sales contests, where cash or other prizes are awarded for policies written with us. These incentives are designed to encourage the placement of new business with us.

• Promotional Expense Reimbursements

  We may also reimburse certain producers' expenses relating to marketing activities. Reimbursable expenses may include advertising costs, travel to and attendance at Travelers-sponsored conferences or events, training expenses, or the costs of other goods and services that help to promote our company and our products.

Additional Information

You can view information on the ranges and types of compensation we pay producers on various products we offer by clicking on the applicable link below.

If you would like additional information regarding compensation arrangements applicable to your account, please contact your insurance broker or your independent insurance agent directly.

Commercial Lines

• Boiler & Machinery
• Commercial Auto
• Commercial Liability
• Commercial Multi-Peril
• Commercial Property
• Fidelity
• Inland Marine
• Ocean Marine
• Surety
• Workers Compensation

Personal Lines

• Homeowners
• Personal Auto
• Other Personal Lines Products

The Travelers Indemnity Company and its property casualty insurance affiliates, One Tower Square, Hartford, Connecticut 06183.

Some of our business units provide insurance and related products and services through separate and distinct companies. These include:

1. First Floridian Auto and Home Insurance Company (Travelers of Florida brand); First Trenton Indemnity Company and Travelers Auto Insurance Company of New Jersey (Travelers of New Jersey brand); The Premier Insurance Company of Massachusetts (Travelers of Massachusetts brand). Policies of these separate companies are not underwritten or guaranteed by other members of the Travelers group of companies;
2. Northland Insurance Company and its affiliates (Northland brand); and
3. Discover Re Insurance Company and it affiliates (Discover Re brand).