UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the
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Filed by a Party other than the
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Preliminary
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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Definitive
Proxy Statement |
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Definitive
Additional Materials |
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Soliciting
Material Pursuant to §240.14a-12 |
The Travelers Companies, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Fee
paid previously with preliminary materials |
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computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a-6(i)(1) and 0-11 |
Beginning on May 15, 2023, The Travelers Companies, Inc. sent
the following communication to certain of its shareholders.
Dear [Name of Institutional Shareholder]:
We are writing to ask for your support by voting in accordance with
the recommendations of our Board of Directors on all of the
proposals included in our 2023 Proxy Statement, which was filed on
April 7, 2023, and is available at
https://investor.travelers.com/home/default.aspx and on the SEC’s
website.
The Board has recommended a vote AGAINST each of the shareholder
proposals, as discussed in further detail in our 2023 Proxy
Statement. This supplemental filing reiterates some important
information about why the Board believes that one proposal in
particular is not in the best economic interest of
shareholders:
· Item 8 – Shareholder
Proposal Relating to a Racial Equity Audit
In addition, this supplemental filing articulates the Board’s
approach with respect to reviewing and evaluating shareholder
proposals.
We encourage you to review our 2023 Proxy Statement for a more
complete explanation of the Board’s recommendations.
Racial Equity Audit Proposal
The Board believes that the proposal’s request, which directly
implicates the Company’s insurance offerings, is not in the best
interest of shareholders because it:
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is impossible to implement without violating the insurance
laws of the vast majority of states, which are designed to
protect minorities and people of color and prohibit the
consideration of race in underwriting and pricing decisions; |
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conflicts with the Company’s longstanding practice not
to take race into account in its underwriting and pricing
decisions; |
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conflicts with the highly regulated insurance
environment in which the Company operates and would insert the
Company into decisions that are solely within the ambit of
insurance regulators; and |
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risks prejudicing the Company in potential future
litigation in which insurers are routinely involved, since it
would remove a significant defense of the Company in some of these
actions – namely, that it does not possess or otherwise
utilize racial data on its insureds. |
In addition, the Board believes that the actions requested by the
proposal — which would entail a significant investment of
resources and time, including by senior executives — are
inadvisable, among other reasons, in light of:
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the Company’s thoughtful and comprehensive underwriting and
pricing policies and practices, including robust governance and
controls designed to ensure that its rating factors are
actuarially sound and that its underwriting and pricing practices
comply with all applicable laws and do not consider race or
other legally protected characteristics; and |
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the fact that the insurance industry is subject to
significant oversight, review and regulation of its
underwriting and pricing practices by independent state
regulatory bodies that conduct market conduct and financial
exams, rendering a third-party racial audit unnecessary. |
Based in part on the Company’s engagements with its shareholders,
the Company has published significantly enhanced disclosure with
respect to the Company’s existing and robust governance, processes
and controls designed to ensure that its rating factors are
actuarially sound, comply with all applicable laws and do not
consider race or other protected characteristics. For more
information, we encourage you to review the Ethics &
Responsible Business Practices section of our sustainability
report, available at https://sustainability.travelers.com.
Further, based on the Company’s engagements with its
shareholders, the Company believes that more than a majority of its
shareholders support Travelers’ approach of increased
disclosure.
[Depending on Recipient of Letter: Finally, we would like to note
that when a substantially similar proposal appeared on the proxy
ballot of your institution in [insert year], your board of
directors recommended a vote AGAINST this proposal.]
The Board’s Approach to Reviewing and Evaluating Shareholder
Proposals
In addition to the above discussion, the Company would like to take
this opportunity to address the Board’s approach to reviewing and
evaluating shareholder resolutions more generally.
Increasingly, shareholder proponents are calling upon the insurance
industry to address complex societal or global challenges through
insurance – often through shareholder proposals that seek to alter
insurers’ well-established approaches to underwriting, pricing
and/or investing. While these proposals address important national
or global issues, and while many insurers, including Travelers, are
working hard and in good faith to do their part to contribute to
the solutions, some requests – however well-intentioned and
laudable – cannot be reconciled with the 50-state regulatory
framework in which property casualty insurers operate, or with the
best economic interest of shareholders.
This is particularly the case with shareholder requests that
implicate the property casualty insurance industry’s foundational
principles of risk-based underwriting and pricing, and/or that seek
to limit the flexibility of insurers to invest their assets for the
primary purpose of enabling them to fund future claim payments.
The Company’s Board of Directors is particularly sensitive to
proposals that would require the Company to alter its risk-based
approach to underwriting and pricing – the bedrock principle of the
insurance industry – by incorporating into its underwriting and/or
pricing decisions factors that are not predictive of risk and that
seek to steer the insurance industry away from deploying
underwriting capacity for reasons other than underwriting risk and
returns. Ultimately, the industry’s risk-based approach to
underwriting and pricing benefits consumers by increasing the
availability of insurance at fair prices that appropriately reflect
the related risks and ensures the financial solvency of insurers to
pay covered claims decades into the future. Likewise, this approach
benefits communities by ensuring that businesses can access
traditional forms of risk transfer. The Board is similarly
concerned about proposals that would restrain the Company’s ability
to invest its assets for the primary goal of ensuring its ability
to pay claims as they come due.
The Board believes that an attempt to utilize insurance as a tool
to achieve public policy goals – however admirable – is likely to
have long-term and unintended negative consequences on the Company,
its customers, its communities, its shareholders and the effective
operation of insurance markets.
It is with these concerns in mind that the Board reviews and
evaluates shareholder proposals submitted to the Company. The Board
encourages investors to review its responses to all of the
shareholder proposals included in the Company’s 2023 Proxy
Statement and, in particular, its articulation of the specific ways
in which the Board believes each of the proposals jeopardizes the
ability of the Company to continue to deliver long-term value to
its shareholders.
* * *
We appreciate your time and consideration on these matters and ask
for your support with respect to all of the Board’s
recommendations. Our 2023 Proxy Statement, this supplemental proxy
material and our 2022 Annual Report are available at
https://investor.travelers.com/home/default.aspx.
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