Traveler's Insurance Company Has Been Transformed

2007-03-08 10:33:40

( Travel )



You may have wondered what ever became of Traveler's Insurance Company after it merged with one of the largest banks in the country to form a new company. If you will remember, Traveler's Insurance Company at that time was a conglomerate with diversified interests in consumer finance, stock brokerage, mutual funds and investment banking, in addition to Travelers insurance (life, property, casualty) and Travellers medical insurance.

The objective of that merger was to create one group that offered insurance and banking products, and it was packaged as a takeover by Traveler's Insurance Company. The management from Traveler's Insurance Company soon tried to change the corporate culture of the new company by transferring its own corporate practice of cost cutting and cross-selling.

You know that cross-selling is where you have units in the group also selling the products of other units, such as having insurance agents selling mutual funds. Thus you saw the new company's retail banking people selling Travelers insurance.

The integration of the two corporate cultures was a difficult process. Soon afterwards, you could see internecine conflicts taking place. The new company subsequently decided to spin off the property and casualty insurance underwriting business of the former Traveler's Insurance Company, due to its negative effect on the group's share price.

For a while, the new company retained the underwriting business for life insurance and annuities. Eventually, however, the company made the decision to sell the life insurance underwriting business to another company. While the group continues to sell various types of insurance, you will no longer see it engaged in underwriting insurance.

Travelers insurance and Travellers medical insurance products have thus been subsumed into a different company, and the Traveler's Insurance Company that you used to know has quietly faded away. The insurance policies underwritten by Traveler's Insurance Company continue to be serviced by the new buyer.


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