Last time we studied the SWOT analysis of GEICO which is one of the fastest-growing auto insurance companies In America and one of the competitors of Travelers. This time around, let us dive into the detailed study or SWOT analysis on Travelers. Let’s get started.
The sixth-largest writer of U.S. commercial property-casualty insurance -Travelers is an insurance company that cares for its customers’ needs which are the protection of things that are important to them such as home, car, valuables and business. It has been around for more than 165 years in this industry.
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Before we go into the SWOT Analysis of Travelers, let us know about Travelers as a company.
The tenth-largest auto insurer – Travelers is the market leader and serves the people in the US with insurance products that are low in rates but with superior benefits. The main mission is the satisfaction of their customers. Along with this, it also wants to benefit society at large which includes providing equal employment opportunities.
Their headquarters are located in New York City and have earned a reputation as one of the best property casualty insurers in the industry. Their agents are brokers that are spread in the United States, Canada, the United Kingdom and Ireland. Travelers started in 1853 by only dealing with casualty insurance but now it has vast insurance offerings and extended services to all-terrain homes, cars, renters, boats, travel, motorcycle, pet and many more.
|Chairman & CEO||Alan D. Schnitzer|
|No. of Employees||30,800|
|Market Cap||$40.237 Billion (2021)|
|Annual Revenue||$31.581 Billion (2019)|
|Net Income/ Profit||$2.622 Billion (2019)|
Products & Services by Travelers
There is so much more to this insurance company and what it has to offer to its customers than its intelligent and lovable spokesperson. The company also offers a wide variety of affordable insurance products and Travelers mobile and web apps. It deals with:
- Insurance For Individuals
- Insurance For Businesses
- Claim Services
- Prepare & Prevent
- Risk Management
Competitors of Travelers
Traveler’s top five major competitors are
- Liberty Mutual Insurance
- State Farm Insurance
Now that we have understood the company’s core products and services, let’s dive deep into the SWOT analysis of Travelers.
SWOT Analysis of Travelers
SWOT analysis of Travelers is a study which is undertaken by the company to determine its core strengths, weaknesses, opportunities and threats. It is a framework that is used to evaluate a company’s competitive position which later helps in strategic planning.
SWOT analysis can be conducted by any popular brand or any brand which is still new in the market can make use of this template to evaluate internal and external variables that might influence the brand authority and market development.
To better understand the SWOT analysis of Travelers, refer to the infographics image below:
Below is a step-by-step detailed guide to help you with the SWOT analysis of Travelers.
Strengths of Travelers
The strengths are basically what makes the brand different from the other competitors and what the organisation excels at. Following are the strengths:
- First Mover Advantage: Travelers are responsible for many first insurance policies including automobile, air travel, space travel etc which gives travelers a certain edge over its competitors.
- Strong Reach and Customer Support: Travelers has a large number of local agents and customer support for any questions and concerns is available 24/7. This makes sure that the insurance products and care services are made instantly available to their customers at any time.
- Cost Structure: As we read earlier, the main motive is to make the insurance products available at a low rate so that they can be more affordable. Travelers’s low-cost structure helps them provide insurance that is low cost but with superior benefits.
- Financial Position: Travelers has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
- Skilled Labour Force: Travelers have invested heavily in the employees that have made them not only skilled but are also highly motivated. Travelers were also named as the best place to work by the Sunday Times in 2015 & 2016.
- High Level of Customer Satisfaction: Travelers has gained the trust of more than a million customers and has a very strong customer relationship management team through which they keep their current customers very satisfied and also enjoy a good brand equity status among potential customers.
Weaknesses of Travelers
The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:
- Research and Development: Travelers has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
- Diversity in the Workforce: The local workers contribute to the majority of the workforce at Travelers making it difficult for outsiders to adjust and hence resulting in the loss of talent.
- High Employee Turnover Rates: Travelers has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
- Low Interest: Low-interest rate structure in the US decreases the profitability of people buying insurance from Travelers.
Opportunities of Travelers
Opportunities are the favourable external factors that may give the organization a competitive advantage over others. The opportunities of Travelers are as follows:
- Social Media: Over the years the number of active users on social media channels has increased and with this Travelers can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.
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- Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more auto insurance which is helpful for Travelers to scale its business.
- Globalisation: Increased globalisation doesn’t restrict Travelers anymore to conducting activities in its own country which can act as an opportunity to extend operation in other countries and thus enter new markets and unleash potentials of other new markets.
- Future of Insurance Company: Global life premium insurance growth is predicted to rebound to 3% with increased risk awareness owing to COVID-19 and global economic recovery set to accelerate the demand for life insurance products.
- Future Trends: The next 10 years will see the insurance industry moving from traditional to more customer-centric products. In the post-pandemic era, due to personalized services, the products are given based on information collected from external sources and devices.
Threats of Travelers
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of Travelers are as follows:
- Technological Advancements: The technological advancements by a few competitors can pose a threat to Travelers as today’s customers are more attracted towards new technological advancements and may be lost to competitors’ offerings thus reducing the market share of Travelers.
- Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
- Controversies & Allegations: Travelers has been caught in several anti-competitive practices and allegations in 2007. Also, in 2012 the company got sued by the football league for forcing the national football team to pay to defend.
- Fluctuating Interest Rates: The interest rates keep on fluctuating and don’t provide a stable financial and economic environment.
- Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like Travelers because it extends service internationally while its suppliers are local.
This ends our complete SWOT analysis of Travelers. Let us conclude our learning below.
Travelers is a well-known insurance brand with a significant global presence. In the SWOT analysis of Travelers, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.
Also, one point not to miss out on is that Travelers is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.
We hope this blog on the SWOT Analysis of Travelers has given you a good insight into the company’s strengths, weaknesses, opportunities and threats. You can also read our comprehensive study on the SWOT Analysis of JP Morgan Chase.
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