Alan Schnitzer, the new chief executive officer of insurer Travelers Cos., called on U.S. lawmakers to reduce corporate taxes or risk harming business in country.
“We continue to see the U.S. corporate income tax rate — the highest of any industrialized nation — as encouraging insurers to shift capital offshore, ultimately harming the U.S. economy,” Schnitzer said Friday in his first annual letter as CEO of the New York-based insurer. “Ensuring that U.S. companies remain competitive should be a priority for Congress.”
The remarks build on the case by his predecessor Jay Fishman, who led Travelers since the late 1990s and stepped down in December because of his health. Fishman lamented in September that Bermuda has become the favored destinations for insurance startups over the past 15 years. The acquisition this year of Warren, New Jersey-based Chubb Corp. by Switzerland’s Ace Ltd. marked another shift in the U.S. industry.
Money managers including Goldman Sachs Group Inc. and BlackRock Inc. have helped support insurance startups offshore in recent years. Ace, which took the name Chubb Ltd. after its transaction, started in Bermuda during the 1980s and now has a market value of more than $55 billion. XL Group Plc also began with operations on the island, and the insurer is now based in Ireland and worth more than $10 billion.
Schnitzer said the U.S. remains an ideal market in which to sell insurance, given economic instability in other parts of the world. The company has made deals in recent years to expand in Brazil and Canada, and the new CEO said Travelers will proceed “thoughtfully and deliberately” in pursuing transactions. Rival American International Group Inc. is retreating in some non-U.S. markets including Honduras and Guatemala.
Fishman is the insurer’s executive chairman and stepped down as CEO after being diagnosed with amyotrophic lateral sclerosis, or ALS. He led Travelers when it was still a part of Citigroup Inc., departed in 2001 to oversee St. Paul Cos., then engineered a more than $17 billion merger with Travelers, which had been spun off from the bank. Schnitzer joined Travelers in 2007 as chief legal officer and was later named to oversee international operations and business insurance. He became CEO in December.
“Jay’s legacy is far more than a decade of success in the books,” Schnitzer said in the letter to shareholders. “It’s also a culture that will enable us to achieve the next decade of success.”