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Case StudyFOSTERING A COMPLIANCE CULTURE AT TRAVELERSThe views expressed in this presentation are those of the author and do not necessarily reflect the views of The Travelers Companies, Inc. or any of its subsidiaries. This presentation is for general informational purposes only.

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Important note

The information provided in this presentation is intended for use as a guideline and is not intended as, nor does it constitute, legal or

professional advice. Travelers does not warrant that adherence to, or compliance with, any recommendations, best practices, checklists,

or guidelines will result in a particular outcome.

The content of this document is only for the informational use of the reader. Information contained herein is not intended as, and does

not constitute, legal or professional advice, nor is it an endorsement of any source cited or information provided. In no event will The

Travelers Companies, Inc. or any of their subsidiaries or affiliates be liable in contract or in tort to anyone who has access to this

document for the accuracy or completeness of the information relied upon in the preparation of this document or for the completeness of

any recommendations from cited sources. Readers should consult source articles for more detail.

This document contains proprietary and confidential information of Travelers Management Limited and/or its subsidiaries and affiliates.

Do not distribute this document or any part of it to any other person.

Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other

countries.

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Agenda

• Who is Travelers?

– Company at a Glance

– Compliance at Travelers

• Compliance Awareness and Communication

• Ethical Culture Training

• Embedding Compliance into Business Culture

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Travelers at a GlanceCompliance at Travelers

By: Stacy Smith Walsh, Senior Counsel

October, 2017

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Travelers at a Glance

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Founded in 1853, Travelers is one of the oldest insurance organizations in the U.S.

Travelers at a Glance

• Travelers has approximately 30,000 employees

• Travelers is represented by thousands of independent agencies and brokerages

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• Travelers has operations in the United States, Canada, the United Kingdom,

Ireland, Brazil and Colombia (through a joint venture with J. Malucelli and

Cardinal).

• Travelers corporate headquarters are in New York, NY, and its two largest centers

of operation are in Hartford, Connecticut and Saint Paul, Minnesota

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Travelers at a Glance

Business Lines

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Business Insurance

Bond & Specialty Insurance

Personal Insurance

Claim

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Compliance at Travelers

US Business Unit CCOs

International CCOsSenior Vice President,

Chief Ethics and Compliance Officer, and Group General Counsel

Corporate Compliance Chief Privacy Officer

Business Market

Regulation Leads

VP Corporate Compliance and

Market Regulation

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Ethics and Compliance Office – Responsibilities

• Provide counsel on various issues, including antitrust, competitive intelligence, conflicts of interest, agency licensing/administration, unfair trade practices, state insurance laws and regulation, and ethical issues.

• Oversee market regulatory and consumer affairs functions.

• Distribute law and regulatory changes.

• Administer Code of Conduct and policy governance.

• Oversee Ethics Helpline.

• Oversee privacy and data security compliance.

• Oversee anti-bribery and anti-corruption efforts.

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Compliance Culture: Three Lines of Defense

• Responsible for day-to-day management of business in a compliant manner.

1st Line of Defense: Business Operations

• Compliance, Risk Management, Enterprise Underwriting, IT Security, Finance, HR, Legal, Others

• Set direction, define policy and provide assurance of compliance.

2nd Line of Defense: Oversight Functions

• Independent review of risk management/control environment.

3rd Line of Defense: Internal Audit

Audit

Oversight Functions

Business Operations

Culture of Compliance

“Buzz at the Bottom”

“Mood in the

Middle “

“Tone from the

Top”

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Culture of Compliance

Culture of Compliance

PREVENTION

DETECTIONRESPONSE

Compliance Deliverables

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Code of Conduct

Annual Policy Certification

Code of Conduct Training

Compliance Awareness

Ethical Culture Training

Compliance Symposia

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Compliance Deliverables

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Code of Conduct

Annual Policy Certification

Code of Conduct Training

Compliance Awareness

Ethical Culture Training

Compliance Symposia

Compliance Awareness

• Supplemental Code Materials

–Decision Tree

–Specialized/Focused Training

• Frequent Communications About Compliance Issues

–“Dear Ethics”

–Thank You Notes

– Intranet Articles

–Second City Videos

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Ethical Culture Training at Travelers Canada

By: Jennifer Drost, Chief Ethics and Compliance Officer & Senior Counsel, Canada

October, 2017

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Ethical Culture Training as a supplement

• Training is only a supplement to the Code of Business Conduct and Ethics and online Code training

• Although rules are set out in the Code, want to give it meaning and make it feel real

• Want to help employees work through possible ethical issues that may relate to them

• Helps to set the culture we are trying to advance in the organization

• The more communication, the better

October, 2017

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Content of training

• The training:

– Discusses what ethical culture means

– Emphasizes putting the ethical culture mindset into employees so it will flow in their actions

– Discusses how we get ourselves into trouble ethically

– Helps employees recognize ethical dilemmas going forward

– Gives them tools to work through ethical dilemmas (ethical decision tree)

– Discusses their roles as leaders in the organization (for leadership training only )

– Walks through various hypothetical situations in group work and group discussion then

discuss as a whole

– Asks employees for suggestions for the Senior Leadership Team / Executive Team to

increase the tone at the top for conducting ourselves ethically

October, 2017

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Hypothetical Example

You are at a social function and you bump into a service provider that you deal with at

Travelers. When discussing vacations, you mention how you have been too busy to take one.

He or she then offers you their vacation home in the Caribbean to stay at for a week for free

with your spouse/family. You just have to pay for your airfare.

Are you comfortable accepting this? Why or why not?

What if you don't deal directly with the service provider but someone on your team does?

If you think that this is problematic, would it make a difference if you paid them a nominal cost

for their place? Or market rate for their place?

October, 2017

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Implementing training across the organization

• Live sessions are key:

– Open and honest discussions

– Group work brings various thought processes and discussions

– Dedicated attention and no multi-tasking

• Training group sizes limited to encourage discussion and more one on

one interaction

• Sessions at the management level and higher – allows for discussion

from a leadership perspective

October, 2017

• In order to ensure employees can speak freely without their manager present, conducted sessions at each

level

• Training for non leadership levels conducted based on function / business area in the company, so that

hypotheticals relate to the specific function/ business area which helps it resonate better with the employees

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Implementing training across the organization

• Tracking attendance to ensure all employees attend

• When training below the management level, it made sense in some cases to have someone senior in

the department / business area do the training as it may come across better from someone in their

own area rather than the CCO

• Ensuring all smaller offices / satellite / regional offices also have live training

October, 2017

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Feedback on tone at the top – Improving our Ethical Culture

• Following the session, employees are asked for feedback on how to improve the tone at the top in

conducting ourselves ethically and I report back to the Senior Leadership Team (SLT)

• It was important to raise all the suggestions, highlighting the ones that came up often to the SLT

• It was also important for me to start implementing suggestions so we could show we are doing

something with their feedback

– for example – quarterly on company intranet site a section highlights “getting caught doing the right

thing”

• Other feedback received suggested:

– sharing success stories, recognition of ethical employees (see one example above)

– messaging from SLT, making it a top priority

– link it to performance measures, use language in objectives for the year to reinforce how we act

(including procedural fairness)

October, 2017

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Feedback on training sessions - through surveys

• Soliciting feedback from staff has been critical to our success

• We asked for feedback at our first session (via survey), then implemented some areas for improvement,

and then asked for feedback again at random sessions over the next several months

• Here’s a sample of our survey questions:

– Did you feel you could be honest and forthright with your views and that the scenarios discussed

were realistic and resulting discussions will be useful when faced with an ethical dilemma in the

future?

– How strongly do you agree that each of the Travelers Canada organization, Senior Leadership

Team, and your manager, conducts themselves in a manner consistent with the principles

discussed in the training sessions

– What was the most valuable part for you about the training?

• Live sessions and group work topped the chart

October, 2017

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Embedding Compliance Into The Business Culture

By: Tim Glasby, Compliance Director (Solicitor) and Money Laundering Reporting Officer, Travelers Europe

October, 2017

Speak Up and No Blame

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Accountability

Built-In, Not Bolt-On

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Sharing Value

Business Partner