Knowing which insurers are viable and helping clients make informed choices is standard practice for insurance brokers. To achieve this, understanding the financial strength and ratings of insurers is essential. Apart from those metrics, examining an insurance company’s performance and industry reputation can help brokers make sound recommendations.
These are the latest financial strength ratings (FSR) for Travelers from the four major insurance rating agencies:
|
Ratings agency |
Rating |
Notes |
|---|---|---|
|
A.M. Best |
A++ (Superior) |
Highest possible rating; indicates Travelers can pay claims, even under difficult economic conditions |
|
Fitch |
AA (Very Strong) |
Very low risk of default and a very strong capacity to meet policyholder and contractual obligations, even in difficult economic conditions |
|
Moody’s |
Aa2 (High Quality) |
Third-highest rating; very low credit risk; insurers with this rating can meet their financial commitments but may be susceptible to long-term risks compared to highest-rated insurers |
|
S&P Global |
AA (Very Strong) |
Second-highest rating; indicates a “very strong” capacity to meet financial obligations and is only slightly more susceptible to adverse economic conditions than higher-rated insurers |
Across these insurance ratings agencies, Travelers has been found to have robust financial strength, strong claims-paying capabilities, and very low risk of default. While Travelers' insurance ratings suggest that it's a good choice for brokers and their clients, other key factors must be considered.
For instance, Travelers is also part of the top ten P&C insurers in the US, ranking in seventh place.
For those who may be wondering how Travelers Insurance is rated, check out our guide on insurance ratings agencies, their methodology, and the impact of their ratings.
When discussing Travelers’ insurance ratings (or any insurer’s ratings), it's important to note that FSR differs from insurance credit rating (ICR). Although in practice, insurance professionals typically focus on an insurance company’s financial strength ratings rather than its credit rating.
However, credit ratings are worth looking into, since a recent report shows that insurance companies with better creditworthiness are more likely to have better cybersecurity measures in place. This can further boost an insurer like Travelers’ appeal to brokers and consumers alike.
Here are the latest data on Travelers’ insurance credit ratings:
|
Agency/type of debt |
Senior debt |
Subordinated debt |
Junior subordinated debt |
|---|---|---|---|
|
A.M. Best |
a+ |
a |
a- |
|
Fitch |
A |
BBB+ |
BBB+ |
|
Moody’s |
A2 |
A3 |
A3 |
|
S&P |
A |
A- |
BBB+ |
These credit ratings reflect Travelers’ strong ability to meet its financial obligations, including both policyholder claims and debt repayments. When assessing or comparing financial strength with insurance creditworthiness, keep in mind:
|
FSRs focus on claims-paying capacity |
|
ICRs consider an insurer’s overall financial obligations, including debt payments |
The long-term issuer credit ratings for Travelers are as follows:
There can be some confusion with long-term issuer credit ratings and insurance credit ratings. These two terms are sometimes used interchangeably, especially when A.M. Best reports on an insurance company’s credit ratings. However, an “insurance credit rating” can also refer more broadly to any credit rating assigned to an insurer, including both their issuer credit ratings and financial strength ratings.
To avoid confusion, be sure to check the rating agency’s definitions to ascertain which aspect of creditworthiness and which credit rating for Travelers’ Insurance is being measured.
Just keep in mind that insurance credit ratings and long-term issuer credit ratings evaluate an insurance company’s overall ability to meet its long-term financial obligations, which include debt payments and other liabilities.
Yes, Travelers does have ERM. ERM is a standard practice among all the major insurance companies in the US and globally. Here are key points to remember regarding ERM and insurers like Travelers:
Insurance regulators in the US and international standards, like those of the NAIC and Solvency II in Europe, require insurers to have robust risk management frameworks like ERM.
A.M. Best, Fitch, Moody’s and S&P consider the quality of an insurance company’s ERM program as well. This is applicable when assessing and assigning an insurer’s financial strength and credit ratings.
Insurers face complex and diverse risks like underwriting, investment, operational, legal, and catastrophe risks. All these require a coordinated, enterprise-wide approach to manage effectively.
Keep in mind that this can also impact Travelers’ insurance ratings, as ratings agencies also take ERM into account when rating an insurer.
As with most insurance providers, Travelers offers several types of personal and business insurance policies. Here are the most popular insurance products:
While Travelers offers many similar products as other highly rated insurance companies in the US, it has some standout products. These include:
Travelers offers specialized insurance for weddings and private events. This coverage is meant to cover losses due to cancellations, vendor no-shows, illness, severe weather, and even property damage at the event. Some insurers may offer event insurance, but Travelers is recognized for its comprehensive and flexible coverage for this category.
This is tailored coverage for high-value personal property like jewelry, fine art, collectibles, and musical instruments. Valuable items insurance offers broader protection than standard homeowners’ insurance policies, including cover for accidental loss and mysterious disappearance.
It wouldn’t make sense for Travelers to not offer travel insurance. Through its subsidiary InsuraMatch, Travelers provides travel insurance plans that cover trip cancellations, trip interruptions, medical coverage, and baggage protection.
Although other insurers offer travel insurance, Travelers’ partnership with Travel Insured International allows for customizable plans and unique add-ons like “cancel for any reason” coverage.
The table below lists the commonly purchased insurance products for Travelers. They are placed side by side with the national average yearly premiums, so you can determine if your clients will pay more or less for them.
|
Insurance product |
National average |
Travelers average cost |
|---|---|---|
|
Auto insurance (full cover) |
$1,794 |
$2,571 (+$777) |
|
Auto insurance (min. cover) |
$510 |
$619 (+$109) |
|
Homeowners’ insurance |
$2,213 |
$2,377 (+$164) |
|
Renters' insurance |
$212 |
$180 (-$32) |
For these data, take note that:
the average rates of auto insurers listed are for a 35-year-old driver with good credit and a clean record
the homeowners’ insurance rates are for a policy with $300,000 worth of dwelling cover
renters’ insurance premiums listed are average costs and can vary from state to state
Travelers' insurance products are available in all 50 states and Washington D.C. This insurer offers a full range of personal and business insurance products and solutions nationwide, although specific product availability and coverage options can vary by state. These variations are typically due to local regulations and underwriting guidelines.
A good example of state regulation that can affect Travelers’ or any other insurance company’s product availability is Proposition 103 in the state of California. The application of this state regulation figured prominently in California recently, when two major insurance companies decided to pull back from the California market. The reason is that it would be “financially unviable” to service California’s home insurance needs.
But in Travelers’ case, the company remains one of the few major insurers with a broad national footprint, making it accessible for brokers and clients across the country.
Apart from being available in the US, Travelers has a major presence in Canada. In 2013, the company acquired the Dominion of Canada General Insurance Company, which now serves as Travelers’ Canadian P&C insurance operations hub. This acquisition also enabled Travelers to broaden its reach and capabilities in the North American market.
Customers of Travelers mainly say they appreciate the company’s competitive rates, wide product offerings, and financial stability. They also find that their digital tools and bundling discounts are big draws for them.
After poring through several reviews, some customers expressed disappointment with the claims process, citing delays and communication issues. Customer service experiences are described as inconsistent, with some policyholders having difficulty reaching customer service representatives or resolving issues.
With a history dating back to 1853, Travelers is one of the most established and reputable insurance companies in the US. Headquartered in New York City, Travelers offers a broad range of insurance products that include auto, home, and business coverage.
At one point, Travelers and Citibank made a historic merger in 1998, forming Citigroup Inc. The merger combined Travelers Group with Citicorp, Citibank’s parent company, resulting in one of the world’s largest financial services organizations at the time.
The merger came undone in 2002, after Citigroup decided to spin off Travelers Property and Casualty. Travelers fully separated from Citigroup in 2005 but bought back the umbrella logo. Citigroup opted to focus on its core banking and financial services, while Travelers returned to its roots as an independent insurance company.
Poring over the information about Travelers can make a compelling case for purchasing its products. After seeing Travelers’ insurance ratings, Travelers' insurance ratings from A.M. Best, its S&P rating, home insurance ratings, financial strength, etc. – should brokers recommend Travelers to clients?
These are the points to consider: Travelers is a very stable, reputable, and comprehensive insurer, making it a strong choice for clients. Its financial strength, broad product offerings, competitive pricing, and insurance ratings in the high end make it a solid recommendation. However, always consider your client’s specific needs and compare them with other top-rated carriers to ensure the best fit.
Subscribe to Insurance Business Premium for exclusive access to IB+ Data Hub and other premium content.
