<p align="justify">The Travelers Companies, Inc; is an American insurance company incorporated in Minnesota in 1857. It is now headquartered in New York. The company operates through its offices in North America and Europe. Its principal product is integrated insurance (Travelers, 2020). They provide insurance to persons, businesses, bonds, and security insurance. Their main focus is commercial property insurance, personal insurance, and transportation insurance in the United States. It is considered to be the biggest commercial property insurance company in the United States (Travelers, 2018). It operates field offices in all states of the United States. Porter&#8217;s five forces model is a useful tool to identify threats and opportunities faced by Travelers in the insurance sector in the United States.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The insurance industry in the United States is very competitive. It provides a little margin for error to competitors. The major rival of Travelers is Liberty Mutual, Progressive, and Chubb. All of these companies hold major foothold in the United States. The demand for auto and commercial insurance is increasing in the United States. Traveler’s major advantage is having larger commercial property clients in the United States. The revenue of Liberty Mutual, Progressive, and Chubb is $42.685 Billion (Fortune, 2019), $31.979 Billion (Fortune, 2019), and $32.717 Billion (Fortune, 2019) respectively as compared to revenue of Travelers $30.282 Billion (Fortune, 2019). The Travelers&#8217; advantage over the client is due to bigger clientele and multiple products. It caters to individuals, corporate companies, and the government. It is the largest writer of worker compensation and commercial insurance in the United States (Travelers, 2018). It had made it difficult for their rivals to compete with them.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The dawn of the 21st century bought unprecedented technology boom. It is evolving in the insurance industry. The automakers are venturing into their own insurance companies as the law of states in the United States requires insurance. BMW is partnering with Swiss Re for Automated Driver Assistance Systems (ADAS), which will help them with build scores for basic insurance. Tesla is offering its own insurance to its client in California (CNBC, 2019). It is providing facilities cheaper than its competitors. Meanwhile, Travelers is a partner with Amazon for smart home insurance. It provides insurance through its digital storefront at Amazon. Travelers are evolving with time. There is dealing with the growing influence of technology in the insurance industry. The threat to substitute them is relatively low.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The insurance industry is very closely monitored industry in the world. Regulatory bodies have their rules set for the financial market for the safety of their economy. The cost of compliance and litigation poses a massive threat to new entrants (Deloitte, 2017). The higher initial cost and high sunk investment make it difficult for a startup to compete with established insurance companies. The major products in the insurance industry are pretty much the same. Technology is evolving in the insurance industry. Travelers as the company are already working on fintech to fulfill the needs of demanding customers of the 21st century. They have already partnered with Amazon to stay ahead in the race. The new entrants must come with a new innovative product to compete with those well-established financial institutes. It makes it difficult for new entrants.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The buyers of insurance products are individual, business companies, and government institutes. Customers will expect higher bargaining power when there is a volume of purchases is high, and there are alternative sources of supply. The individual doesn&#8217;t hold any bargaining power over the company at all. Individual customer doesn&#8217;t exert buying power as compared to business and companies. The major portion of Travelers&#8217; clientele is workers&#8217; compensation insurance and commercial property insurance. Companies can exert their power because they provide bigger clientele and opt for their services in bulk. They require services on recurring bases as they provide them fixed clientele. This is beneficial for insurance companies in the longer run. It provides them higher buyer power. The overall bargain power of buyers is moderate.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">Suppliers are the insurance industry is mainly of two types. One is the agent and brokerage firms that bring human capital and corporate clients to the insurance company. The other one is the lending institutes, which provide funds in case of payment. Suppliers can exert power if the market has fewer suppliers, and it has clients under him. The bigger breakage firm can hold some power due to its human capital as compared to an individual client. Travelers have their own field offices in all states of the United States. Lending institutes hold higher power because they lend loan due diligence. Overall the bargaining power is moderate against the insurance industry.</p>
<h2 align="justify">References</h2>
<p align="left">CNBC. (2019). Tesla dips into the car insurance business. Whether it would cost less is not clear. Available at: https://www.cnbc.com/2019/09/18/tesla-wants-your-car-insurance-business-it-may-not-save-you-money.html<br />
Deloitte. (2017). The Future of Regulatory Productivity, powered by RegTech. Available at:<br />
Fortune. (2019). Global 500. Available at: https://fortune.com/fortune500/2019/liberty-mutual-insurance-group/<br />
Fortune. (2019). Global 500. Available at: https://fortune.com/fortune500/2019/progressive/<br />
Fortune. (2019). Global 500. Available at: https://fortune.com/global500/2019/chubb/<br />
https://www2.deloitte.com/us/en/pages/regulatory/articles/cost-of-compliance-regulatory-productivity.html<br />
Travelers. (2018). Travelers at a glance. Available at: https://www.travelers.com/iw-documents/about-travelers/2018_fact_sheet.pdf<br />
Travelers. (2020). Travelers History. Available at: https://www.travelers.com/about-travelers/travelers-history</p>