Chapter 1.2. Travelers Group
Travelers Insurance was founded in 1864 and was the first US accident insurer. In practically no time, it added other products to its portfolio: life insurance, annuities, and liability insurance. In 1897 it was the first one to issue an auto policy. Later on, it expended again and was the first one to offer air travel insurance.
Right before the Great Depression it made a smart decision to buy federal bonds, which helped the company to overcome hard times. Having recovered after the World War Two it kept developing new products and even issued a space insurance to NASA astronauts flying on Apollo 11 mission to the Moon.
In the late 1970s Travelers stepped into the financial services industry. By the end of 1980s, when the housing priced dropped, the company sold its home mortgage units.
Weakened, Travelers appeared on the radar of the empire building Sanford Weill. After his struggles to become a CEO of American Express, in 1987 he acquired Gulf Insurance. Then in 1988 he bought Primerica for $1.5 billion, the parent company of Smith Barney and the A. L. Williams insurance company. In 1989 Mr Weill acquired Drexel Burnham Lambert’s retail brokerage outlets. In 1992, he paid $722 million to buy a 27 percent share of Travelers Insurance. In 1993 he reacquired his old Shearson Lehman (that time Shearson brokerage) from American Express for $1.2 billion. By the end of the year, he had completely taken over Travelers in a $4 billion stock deal and officially began calling his corporation Travelers Group Inc. In 1996 he added to his holdings, at a cost of $4 billion, the property and casualty operations of Aetna Life & Casualty. In 1997 Weill acquired Salomon Inc., the parent company of Salomon Brothers Inc. for over $9 billion in stock.