CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

The following consolidating financial statements of the Company have been prepared pursuant to Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies, Inc. (excluding its subsidiaries, TRV) has fully and unconditionally guaranteed certain debt obligations of Travelers Property Casualty Corp. (TPC) and Travelers Insurance Group Holdings, Inc. (TIGHI), which totaled $700 million at March 31, 2018.

Prior to the merger of TPC and The St. Paul Companies, Inc. in 2004, TPC fully and unconditionally guaranteed the payment of all principal, premiums, if any, and interest on certain debt obligations of its wholly-owned subsidiary, TIGHI. Concurrent with the merger, TRV fully and unconditionally assumed such guarantee obligations of TPC. TPC is deemed to have no assets or operations independent of TIGHI. Consolidating financial information for TIGHI has not been presented herein because such financial information would be substantially the same as the financial information provided for TPC.

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended March 31, 2018



(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,468	$	2,069		$	—		$	—		$	6,537
Net investment income	412		185			6			—			603
Fee income	103		—			—			—			103
Net realized investment gains (losses) ⁽¹⁾	2		(12		)	(1		)	—			(11		)
Other revenues	27		28			—			(1		)	54
Total revenues	5,012		2,270			5			(1		)	7,286

Claims and expenses
Claims and claim adjustment expenses	2,910		1,386			—			—			4,296
Amortization of deferred acquisition costs	705		356			—			—			1,061
General and administrative expenses	729		328			6			(1		)	1,062
Interest expense	11		—			78			—			89
Total claims and expenses	4,355		2,070			84			(1		)	6,508
Income (loss) before income taxes	657		200			(79		)	—			778
Income tax expense (benefit)	106		32			(29		)	—			109
Net income of subsidiaries	—		—			719			(719		)	—
Net income	$	551	$	168		$	669		$	(719	)	$	669

____________________________________________________


(1)	Total other-than-temporary impairments (OTTI) for the three months ended March 31, 2018, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (loss) (OCI) were as follows:

(in millions)

TPC

Other

Subsidiaries

TRV

Eliminations

Consolidated

Total OTTI losses

—

OTTI losses recognized in net realized investment gains (losses)

—

OTTI gains recognized in OCI

—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended March 31, 2017



(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,228		$	1,955	$	—		$	—		$	6,183
Net investment income	412			194		4			—			610
Fee income	113			—		—			—			113
Net realized investment gains (losses) ⁽¹⁾	(4		)	9		—			—			5
Other revenues	24			9		—			(2		)	31
Total revenues	4,773			2,167		4			(2		)	6,942

Claims and expenses
Claims and claim adjustment expenses	2,752			1,342		—			—			4,094
Amortization of deferred acquisition costs	668			335		—			—			1,003
General and administrative expenses	703			292		3			(2		)	996
Interest expense	12			—		77			—			89
Total claims and expenses	4,135			1,969		80			(2		)	6,182
Income (loss) before income taxes	638			198		(76		)	—			760
Income tax expense (benefit)	130			54		(41		)	—			143
Net income of subsidiaries	—			—		652			(652		)	—
Net income	$	508		$	144	$	617		$	(652	)	$	617

_________________________________________________________


(1)	Total other-than-temporary impairments (OTTI) for the three months ended March 31, 2017, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:



(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	—		$	(1	)	$	—	$	—	$	(1	)
OTTI losses recognized in net realized investment gains (losses)	$	(1	)	$	(1	)	$	—	$	—	$	(2	)
OTTI gains recognized in OCI	$	1		$	—		$	—	$	—	$	1

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

For the three months ended March 31, 2018



(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	551		$	168		$	669		$	(719	)	$	669

Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(838		)	(364		)	(1		)	—			(1,203		)
Having credit losses recognized in the consolidated statement of income	(1		)	(1		)	—			—			(2		)
Net changes in benefit plan assets and obligations	—			—			22			—			22
Net changes in unrealized foreign currency translation	(25		)	31			—			—			6
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(864		)	(334		)	21			—			(1,177		)
Income tax expense (benefit)	(175		)	(77		)	8			—			(244		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(689		)	(257		)	13			—			(933		)
Other comprehensive loss of subsidiaries	—			—			(946		)	946			—
Other comprehensive loss	(689		)	(257		)	(933		)	946			(933		)
Comprehensive loss	$	(138	)	$	(89	)	$	(264	)	$	227		$	(264	)

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended March 31, 2017



(in millions)	TPC		Other Subsidiaries			TRV		Eliminations			Consolidated
Net income	$	508	$	144		$	617	$	(652	)	$	617

Other comprehensive income:
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	93		44			7		—			144
Having credit losses recognized in the consolidated statement of income	1		(1		)	—		—			—
Net changes in benefit plan assets and obligations	—		—			17		—			17
Net changes in unrealized foreign currency translation	25		16			—		—			41
Other comprehensive income before income taxes and other comprehensive income of subsidiaries	119		59			24		—			202
Income tax expense	37		16			9		—			62
Other comprehensive income, net of taxes, before other comprehensive income of subsidiaries	82		43			15		—			140
Other comprehensive income of subsidiaries	—		—			125		(125		)	—
Other comprehensive income	82		43			140		(125		)	140
Comprehensive income	$	590	$	187		$	757	$	(777	)	$	757

CONSOLIDATING BALANCE SHEET (Unaudited)

At March 31, 2018



(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $62,093)	$	42,958		$	19,225		$	83		$	—		$	62,266
Equity securities, at fair value (cost $431)	147			103			180			—			430
Real estate investments	54			900			—			—			954
Short-term securities	2,022			714			1,750			—			4,486
Other investments	2,745			842			1			—			3,588
Total investments	47,926			21,784			2,014			—			71,724
Cash	175			221			1			—			397
Investment income accrued	388			175			4			—			567
Premiums receivable	5,073			2,463			—			—			7,536
Reinsurance recoverables	5,823			2,475			—			—			8,298
Ceded unearned premiums	687			90			—			—			777
Deferred acquisition costs	1,887			199			—			—			2,086
Deferred taxes	115			271			(18		)	—			368
Contractholder receivables	3,907			928			—			—			4,835
Goodwill	2,587			1,381			—			(9		)	3,959
Other intangible assets	201			140			—			—			341
Investment in subsidiaries	—			—			27,090			(27,090		)	—
Other assets	2,150			342			310			(14		)	2,788
Total assets	$	70,919		$	30,469		$	29,401		$	(27,113	)	$	103,676

Liabilities
Claims and claim adjustment expense reserves	$	33,447		$	16,363		$	—		$	—		$	49,810
Unearned premium reserves	9,336			4,088			—			—			13,424
Contractholder payables	3,907			928			—			—			4,835
Payables for reinsurance premiums	295			203			—			—			498
Debt	693			14			6,270			(14		)	6,963
Other liabilities	3,922			1,091			154			—			5,167
Total liabilities	51,600			22,687			6,424			(14		)	80,697

Shareholders’ equity
Common stock (1,750.0 shares authorized; 270.3 shares issued and 270.2 shares outstanding)	—			390			22,995			(390		)	22,995
Additional paid-in capital	11,634			6,972			—			(18,606		)	—
Retained earnings	7,974			650			33,979			(8,622		)	33,981
Accumulated other comprehensive loss	(289		)	(230		)	(1,322		)	519			(1,322		)
Treasury stock, at cost (503.7 shares)	—			—			(32,675		)	—			(32,675		)
Total shareholders’ equity	19,319			7,782			22,977			(27,099		)	22,979
Total liabilities and shareholders’ equity	$	70,919		$	30,469		$	29,401		$	(27,113	)	$	103,676

CONSOLIDATING BALANCE SHEET (Unaudited)

At December 31, 2017



(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $61,316)	$	43,240		$	19,372		$	82		$	—		$	62,694
Equity securities, available for sale, at fair value (cost $440)	161			111			181			—			453
Real estate investments	54			878			—			—			932
Short-term securities	2,751			914			1,230			—			4,895
Other investments	2,673			854			1			—			3,528
Total investments	48,879			22,129			1,494			—			72,502
Cash	157			187			—			—			344
Investment income accrued	418			183			5			—			606
Premiums receivable	4,852			2,292			—			—			7,144
Reinsurance recoverables	5,842			2,467			—			—			8,309
Ceded unearned premiums	493			58			—			—			551
Deferred acquisition costs	1,835			190			—			—			2,025
Deferred taxes	(89		)	173			(14		)	—			70
Contractholder receivables	3,854			921			—			—			4,775
Goodwill	2,592			1,368			—			(9		)	3,951
Other intangible assets	202			140			—			—			342
Investment in subsidiaries	—			—			27,946			(27,946		)	—
Other assets	2,181			(3		)	700			(14		)	2,864
Total assets	$	71,216		$	30,105		$	30,131		$	(27,969	)	$	103,483

Liabilities
Claims and claim adjustment expense reserves	$	33,386		$	16,264		$	—		$	—		$	49,650
Unearned premium reserves	8,957			3,958			—			—			12,915
Contractholder payables	3,854			921			—			—			4,775
Payables for reinsurance premiums	165			109			—			—			274
Debt	693			14			5,878			(14		)	6,571
Other liabilities	4,161			882			524			—			5,567
Total liabilities	51,216			22,148			6,402			(14		)	79,752

Shareholders’ equity
Common stock (1,750.0 shares authorized; 271.5 shares issued and 271.4 shares outstanding)	—			390			22,886			(390		)	22,886
Additional paid-in capital	11,634			6,972			—			(18,606		)	—
Retained earnings	8,036			594			33,460			(8,628		)	33,462
Accumulated other comprehensive income (loss)	330			1			(343		)	(331		)	(343		)
Treasury stock, at cost (500.9 shares)	—			—			(32,274		)	—			(32,274		)
Total shareholders’ equity	20,000			7,957			23,729			(27,955		)	23,731
Total liabilities and shareholders’ equity	$	71,216		$	30,105		$	30,131		$	(27,969	)	$	103,483

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the three months ended March 31, 2018



(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	551		$	168		$	669		$	(719	)	$	669
Net adjustments to reconcile net income to net cash provided by operating activities	(126		)	(57		)	(22		)	90			(115		)
Net cash provided by operating activities	425			111			647			(629		)	554
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,453			493			4			—			1,950
Proceeds from sales of investments:
Fixed maturities	729			356			—			—			1,085
Equity securities	8			18			—			—			26
Real estate investments	—			—			—			—			—
Other investments	76			38			—			—			114
Purchases of investments:
Fixed maturities	(2,836		)	(1,078		)	(6		)	—			(3,920		)
Equity securities	(1		)	(18		)	(1		)	—			(20		)
Real estate investments	—			(33		)	—			—			(33		)
Other investments	(115		)	(27		)	—			—			(142		)
Net sales (purchases) of short-term securities	729			201			(520		)	—			410
Securities transactions in course of settlement	147			56			(1		)	—			202
Other	(52		)	(1		)	—			—			(53		)
Net cash provided by (used in) investing activities	138			5			(524		)	—			(381		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(350		)	—			(350		)
Treasury stock acquired — net employee share-based compensation	—			—			(51		)	—			(51		)
Dividends paid to shareholders	—			—			(197		)	—			(197		)
Payment of debt	—			—			(100		)	—			(100		)
Issuance of debt	—			—			491			—			491
Issuance of common stock — employee share options	—			—			85			—			85
Dividends paid to parent company	(544		)	(85		)	—			629			—
Net cash used in financing activities	(544		)	(85		)	(122		)	629			(122		)
Effect of exchange rate changes on cash	(1		)	3			—			—			2
Net increase in cash	18			34			1			—			53
Cash at beginning of year	157			187			—			—			344
Cash at end of period	$	175		$	221		$	1		$	—		$	397
Supplemental disclosure of cash flow information
Income taxes paid	$	13		$	43		$	—		$	—		$	56
Interest paid	$	16		$	—		$	23		$	—		$	39

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the three months ended March 31, 2017



(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	508		$	144		$	617		$	(652	)	$	617
Net adjustments to reconcile net income to net cash provided by operating activities	160			9			205			(143		)	231
Net cash provided by operating activities	668			153			822			(795		)	848
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,638			580			—			—			2,218
Proceeds from sales of investments:
Fixed maturities	88			100			—			—			188
Equity securities	2			19			—			—			21
Real estate investments	—			11			—			—			11
Other investments	96			26			—			—			122
Purchases of investments:
Fixed maturities	(2,191		)	(864		)	(1		)	—			(3,056		)
Equity securities	(1		)	(20		)	(1		)	—			(22		)
Real estate investments	—			(16		)	—			—			(16		)
Other investments	(96		)	(28		)	—			—			(124		)
Net sales (purchases) of short-term securities	245			233			(429		)	—			49
Securities transactions in course of settlement	102			53			2			—			157
Other	(70		)	7			—			—			(63		)
Net cash provided by (used in) investing activities	(187		)	101			(429		)	—			(515		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(225		)	—			(225		)
Treasury stock acquired — net employee share-based compensation	—			—			(61		)	—			(61		)
Dividends paid to shareholders	—			—			(190		)	—			(190		)
Issuance of common stock — employee share options	—			—			83			—			83
Dividends paid to parent company	(532		)	(263		)	—			795			—
Net cash used in financing activities	(532		)	(263		)	(393		)	795			(393		)
Effect of exchange rate changes on cash	1			1			—			—			2
Net decrease in cash	(50		)	(8		)	—			—			(58		)
Cash at beginning of year	141			164			2			—			307
Cash at end of period	$	91		$	156		$	2		$	—		$	249
Supplemental disclosure of cash flow information
Income taxes paid	$	1		$	1		$	—		$	—		$	2
Interest paid	$	16		$	—		$	27		$	—		$	43