Consolidating Financial Statements (Unaudited) (Tables)

9 Months Ended

Sep. 30, 2018

Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries (Unaudited) disclosure

Consolidating Statement of Income (Unaudited) [Table Text Block]

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended September 30, 2018

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,715	$	2,167	$	—		$	—		$	6,882
Net investment income	444		193		9			—			646
Fee income	108		1		—			—			109
Net realized investment gains (1)	13		9		7			—			29
Other revenues	29		30		—			(2		)	57
Total revenues	5,309		2,400		16			(2		)	7,723
Claims and expenses
Claims and claim adjustment expenses	3,149		1,506		—			—			4,655
Amortization of deferred acquisition costs	757		360		—			—			1,117
General and administrative expenses	728		326		7			(2		)	1,059
Interest expense	12		—		74			—			86
Total claims and expenses	4,646		2,192		81			(2		)	6,917
Income (loss) before income taxes	663		208		(65		)	—			806
Income tax expense (benefit)	104		36		(43		)	—			97
Net income of subsidiaries	—		—		731			(731		)	—
Net income	$	559	$	172	$	709		$	(731	)	$	709

____________________________________________________

(1) Total other-than-temporary impairments (OTTI) for the three months ended September 30, 2018, and the amounts comprising total OTTI that were recognized in net realized investment gains 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	$	—	$	—	$	—	$	—	$	—
OTTI losses recognized in OCI	$	—	$	—	$	—	$	—	$	—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended September 30, 2017

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,466	$	2,057	$	—		$	—		$	6,523
Net investment income	405		189		7			(13		)	588
Fee income	113		—		—			—			113
Net realized investment gains (losses) (1)	6		56		(1		)	—			61
Other revenues	21		21		—			(2		)	40
Total revenues	5,011		2,323		6			(15		)	7,325
Claims and expenses
Claims and claim adjustment expenses	3,191		1,615		—			—			4,806
Amortization of deferred acquisition costs	716		343		—			—			1,059
General and administrative expenses	723		314		10			(2		)	1,045
Interest expense	12		—		83			—			95
Total claims and expenses	4,642		2,272		93			(2		)	7,005
Income (loss) before income taxes	369		51		(87		)	(13		)	320
Income tax expense (benefit)	74		17		(60		)	(4		)	27
Net income of subsidiaries	—		—		329			(329		)	—
Net income	$	295	$	34	$	302		$	(338	)	$	293

_________________________________________________________

(1) Total other-than-temporary impairments (OTTI) for the three months ended September 30, 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	$	(2	)	$	(3	)	$	—	$	—	$	(5	)
OTTI losses recognized in net realized investment gains (losses)	$	(2	)	$	(3	)	$	—	$	—	$	(5	)
OTTI losses recognized in OCI	$	—		$	—		$	—	$	—	$	—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the nine months ended September 30, 2018

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	13,760	$	6,354	$	—		$	—		$	20,114
Net investment income	1,268		553		23			—			1,844
Fee income	323		1		—			—			324
Net realized investment gains (1)	33		13		8			—			54
Other revenues	69		85		—			(4		)	150
Total revenues	15,453		7,006		31			(4		)	22,486
Claims and expenses
Claims and claim adjustment expenses	9,123		4,390		—			—			13,513
Amortization of deferred acquisition costs	2,189		1,070		—			—			3,259
General and administrative expenses	2,223		997		18			(4		)	3,234
Interest expense	36		—		229			—			265
Total claims and expenses	13,571		6,457		247			(4		)	20,271
Income (loss) before income taxes	1,882		549		(216		)	—			2,215
Income tax expense (benefit)	314		89		(90		)	—			313
Net income of subsidiaries	—		—		2,028			(2,028		)	—
Net income	$	1,568	$	460	$	1,902		$	(2,028	)	$	1,902

_________________________________________________________ 

(1) Total other-than-temporary impairments (OTTI) for the nine months ended September 30, 2018, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (loss) (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	$	(1	)	$	—	$	—	$	—	$	(1	)
OTTI gains (losses) recognized in OCI	$	—		$	—	$	—	$	—	$	—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the nine months ended September 30, 2017

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	13,039		$	6,018	$	—		$	—		$	19,057
Net investment income	1,218			574		17			(13		)	1,796
Fee income	342			—		—			—			342
Net realized investment gains (losses) (1)	(2		)	90		58			—			146
Other revenues	75			42		—			(7		)	110
Total revenues	14,672			6,724		75			(20		)	21,451
Claims and expenses
Claims and claim adjustment expenses	8,794			4,331		—			—			13,125
Amortization of deferred acquisition costs	2,077			1,017		—			—			3,094
General and administrative expenses	2,163			911		19			(7		)	3,086
Interest expense	36			—		240			—			276
Total claims and expenses	13,070			6,259		259			(7		)	19,581
Income (loss) before income taxes	1,602			465		(184		)	(13		)	1,870
Income tax expense (benefit)	361			125		(117		)	(4		)	365
Net income of subsidiaries	—			—		1,581			(1,581		)	—
Net income	$	1,241		$	340	$	1,514		$	(1,590	)	$	1,505

_________________________________________________________

(1) Total other-than-temporary impairments (OTTI) for the nine months ended September 30, 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	$	(4	)	$	(7	)	$	—	$	—	$	(11	)
OTTI losses recognized in net realized investment gains (losses)	$	(5	)	$	(7	)	$	—	$	—	$	(12	)
OTTI gains recognized in OCI	$	1		$	—		$	—	$	—	$	1

Consolidating Statement of Comprehensive Income (Loss) (Unaudited) [Table Text Block]

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended September 30, 2018

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	559		$	172		$	709		$	(731	)	$	709
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income	(299		)	(115		)	—			—			(414		)
Having credit losses recognized in the consolidated statement of income	(8		)	(3		)	—			—			(11		)
Net changes in benefit plan assets and obligations	—			1			21			—			22
Net changes in unrealized foreign currency translation	6			(6		)	—			—			—
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(301		)	(123		)	21			—			(403		)
Income tax expense (benefit)	(67		)	(24		)	3			—			(88		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(234		)	(99		)	18			—			(315		)
Other comprehensive loss of subsidiaries	—			—			(333		)	333			—
Other comprehensive loss	(234		)	(99		)	(315		)	333			(315		)
Comprehensive income	$	325		$	73		$	394		$	(398	)	$	394

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended September 30, 2017

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	295	$	34		$	302		$	(338	)	$	293
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	—		(47		)	5			—			(42		)
Having credit losses recognized in the consolidated statement of income	1		1			—			—			2
Net changes in benefit plan assets and obligations	—		(1		)	(8		)	—			(9		)
Net changes in unrealized foreign currency translation	61		52			—			—			113
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries	62		5			(3		)	—			64
Income tax expense (benefit)	12		(11		)	4			—			5
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	50		16			(7		)	—			59
Other comprehensive income of subsidiaries	—		—			66			(66		)	—
Other comprehensive income	50		16			59			(66		)	59
Comprehensive income	$	345	$	50		$	361		$	(404	)	$	352

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

For the nine months ended September 30, 2018

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,568		$	460		$	1,902		$	(2,028	)	$	1,902
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income	(1,346		)	(568		)	(1		)	—			(1,915		)
Having credit losses recognized in the consolidated statement of income	(19		)	(6		)	—			—			(25		)
Net changes in benefit plan assets and obligations	—			1			64			—			65
Net changes in unrealized foreign currency translation	(96		)	(56		)	—			—			(152		)
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(1,461		)	(629		)	63			—			(2,027		)
Income tax expense (benefit)	(300		)	(122		)	9			—			(413		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(1,161		)	(507		)	54			—			(1,614		)
Other comprehensive loss of subsidiaries	—			—			(1,668		)	1,668			—
Other comprehensive loss	(1,161		)	(507		)	(1,614		)	1,668			(1,614		)
Comprehensive income (loss)	$	407		$	(47	)	$	288		$	(360	)	$	288

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the nine months ended September 30, 2017

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,241	$	340		$	1,514		$	(1,590	)	$	1,505
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	389		82			(42		)	—			429
Having credit losses recognized in the consolidated statement of income	3		1			—			—			4
Net changes in benefit plan assets and obligations	—		(2		)	27			—			25
Net changes in unrealized foreign currency translation	100		102			—			—			202
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries	492		183			(15		)	—			660
Income tax expense	151		38			1			—			190
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	341		145			(16		)	—			470
Other comprehensive income of subsidiaries	—		—			486			(486		)	—
Other comprehensive income	341		145			470			(486		)	470
Comprehensive income	$	1,582	$	485		$	1,984		$	(2,076	)	$	1,975

Consolidating Balance Sheet (Unaudited) [Table Text Block]

CONSOLIDATING BALANCE SHEET (Unaudited)

At September 30, 2018

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $62,985)	$	42,923		$	19,419		$	82		$	—		$	62,424
Equity securities, at fair value (cost $408)	130			105			191			—			426
Real estate investments	54			897			—			—			951
Short-term securities	2,386			704			1,347			—			4,437
Other investments	2,779			835			1			—			3,615
Total investments	48,272			21,960			1,621			—			71,853
Cash	174			185			—			—			359
Investment income accrued	403			176			4			—			583
Premiums receivable	5,182			2,457			—			—			7,639
Reinsurance recoverables	5,812			2,502			—			—			8,314
Ceded unearned premiums	635			80			—			—			715
Deferred acquisition costs	1,986			200			—			—			2,186
Deferred taxes	239			339			(57		)	—			521
Contractholder receivables	3,960			927			—			—			4,887
Goodwill	2,586			1,381			—			(9		)	3,958
Other intangible assets	225			126			—			—			351
Investment in subsidiaries	—			—			26,412			(26,412		)	—
Other assets	2,068			452			525			(21		)	3,024
Total assets	$	71,542		$	30,785		$	28,505		$	(26,442	)	$	104,390
Liabilities
Claims and claim adjustment expense reserves	$	33,862		$	16,568		$	—		$	—		$	50,430
Unearned premium reserves	9,735			4,244			—			—			13,979
Contractholder payables	3,960			927			—			—			4,887
Payables for reinsurance premiums	250			168			—			—			418
Debt	693			21			5,871			(21		)	6,564
Other liabilities	4,287			1,188			177			—			5,652
Total liabilities	52,787			23,116			6,048			(21		)	81,930
Shareholders’ equity
Common stock (1,750.0 shares authorized; 264.9 shares issued and 264.8 shares outstanding)	—			390			23,089			(390		)	23,089
Additional paid-in capital	11,634			6,986			—			(18,620		)	—
Retained earnings	7,883			772			34,796			(8,652		)	34,799
Accumulated other comprehensive loss	(762		)	(479		)	(2,003		)	1,241			(2,003		)
Treasury stock, at cost (509.5 shares)	—			—			(33,425		)	—			(33,425		)
Total shareholders’ equity	18,755			7,669			22,457			(26,421		)	22,460
Total liabilities and shareholders’ equity	$	71,542		$	30,785		$	28,505		$	(26,442	)	$	104,390

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) [Table Text Block]

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the nine months ended September 30, 2018

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,568		$	460		$	1,902		$	(2,028	)	$	1,902
Net adjustments to reconcile net income to net cash provided by operating activities	1,156			373			(126		)	127			1,530
Net cash provided by operating activities	2,724			833			1,776			(1,901		)	3,432
Cash flows from investing activities
Proceeds from maturities of fixed maturities	4,197			1,439			19			—			5,655
Proceeds from sales of investments:
Fixed maturities	2,219			965			1			—			3,185
Equity securities	39			82			6			—			127
Real estate investments	—			8			—			—			8
Other investments	198			72			—			—			270
Purchases of investments:
Fixed maturities	(7,625		)	(3,215		)	(22		)	—			(10,862		)
Equity securities	(3		)	(74		)	(9		)	—			(86		)
Real estate investments	(1		)	(56		)	—			—			(57		)
Other investments	(329		)	(63		)	—			—			(392		)
Net sales (purchases) of short-term securities	364			209			(117		)	—			456
Securities transactions in course of settlement	113			60			—			—			173
Acquisition, net of cash acquired	—			(4		)	—			—			(4		)
Other	(225		)	(7		)	—			—			(232		)
Net cash used in investing activities	(1,053		)	(584		)	(122		)	—			(1,759		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,100		)	—			(1,100		)
Treasury stock acquired — net employee share-based compensation	—			—			(51		)	—			(51		)
Dividends paid to shareholders	—			—			(611		)	—			(611		)
Payment of debt	—			—			(600		)	—			(600		)
Issuance of debt	—			7			591			(7		)	591
Issuance of common stock — employee share options	—			—			117			—			117
Dividends paid to parent company	(1,653		)	(255		)	—			1,908			—
Net cash used in financing activities	(1,653		)	(248		)	(1,654		)	1,901			(1,654		)
Effect of exchange rate changes on cash	(1		)	(3		)	—			—			(4		)
Net increase (decrease) in cash	17			(2		)	—			—			15
Cash at beginning of year	157			187			—			—			344
Cash at end of period	$	174		$	185		$	—		$	—		$	359
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	198		$	172		$	(126	)	$	—		$	244
Interest paid	$	40		$	—		$	185		$	—		$	225

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the nine months ended September 30, 2017

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,241		$	340		$	1,514		$	(1,590	)	$	1,505
Net adjustments to reconcile net income to net cash provided by operating activities	1,140			604			285			(49		)	1,980
Net cash provided by operating activities	2,381			944			1,799			(1,639		)	3,485
Cash flows from investing activities
Proceeds from maturities of fixed maturities	4,961			1,618			2			—			6,581
Proceeds from sales of investments:
Fixed maturities	463			397			—			—			860
Equity securities	18			202			120			—			340
Real estate investments	—			23			—			—			23
Other investments	260			94			—			(13		)	341
Purchases of investments:
Fixed maturities	(5,906		)	(2,493		)	(4		)	—			(8,403		)
Equity securities	(5		)	(65		)	(123		)	—			(193		)
Real estate investments	—			(40		)	—			—			(40		)
Other investments	(305		)	(87		)	—			—			(392		)
Net purchases of short-term securities	(488		)	(230		)	(272		)	—			(990		)
Securities transactions in course of settlement	18			103			1			—			122
Acquisition, net of cash acquired	—			25			(477		)	13			(439		)
Other	(191		)	5			—			—			(186		)
Net cash used in investing activities	(1,175		)	(448		)	(753		)	—			(2,376		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,028		)	—			(1,028		)
Treasury stock acquired — net employee share-based compensation	—			—			(61		)	—			(61		)
Dividends paid to shareholders	—			—			(589		)	—			(589		)
Payment of debt	—			—			(207		)	—			(207		)
Issuance of debt	—			—			689			—			689
Issuance of common stock — employee share options	—			—			148			—			148
Dividends paid to parent company	(1,185		)	(454		)	—			1,639			—
Net cash used in financing activities	(1,185		)	(454		)	(1,048		)	1,639			(1,048		)
Effect of exchange rate changes on cash	3			8			—			—			11
Net increase (decrease) in cash	24			50			(2		)	—			72
Cash at beginning of year	141			164			2			—			307
Cash at end of period	$	165		$	214		$	—		$	—		$	379
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	493		$	174		$	(200	)	$	—		$	467
Interest paid	$	40		$	—		$	177		$	—		$	217