Shareholders' Equity and Dividend Availability

12 Months Ended

Dec. 31, 2011

Shareholders' Equity and Dividend Availability disclosure

Shareholders' Equity and Dividend Availability disclosure [Text Block]

9. SHAREHOLDERS' EQUITY AND DIVIDEND AVAILABILITY

Common Stock

        The Company is governed by the Minnesota Business Corporation Act. All authorized shares of voting common stock have no par value. Shares of common stock reacquired are considered authorized and unissued shares. The number of authorized shares of the company is 1.75 billion, consisting of 1.745 billion shares of voting common stock and five million undesignated shares. The Company's articles of incorporation authorize the board of directors to establish, from the undesignated shares, one or more classes and series of shares, and to further designate the type of shares and terms thereof.

Treasury Stock

        The Company's board of directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorizations do not have a stated expiration date. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company's financial position, earnings, share price, catastrophe losses, funding of the Company's qualified pension plan, capital requirements of the Company's operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions), market conditions and other factors. The following table summarizes repurchase activity in 2011 and remaining repurchase capacity at December 31, 2011.

Quarterly Period Ending (in millions, except per share amounts)	Number of shares purchased		Cost of shares repurchased		Average price paid per share		Remaining capacity under share repurchase authorization
March 31, 2011		18.9	$	1,100	$	58.23	$	5,409
June 30, 2011		3.9		237		60.27		5,172
September 30, 2011		7.3		375		51.77		4,797
December 31, 2011		20.9		1,188		56.74		3,609
Total		51.0	$	2,900	$	56.86	$	3,609

        The Company's Amended and Restated 2004 Stock Incentive Plan provides settlement alternatives to employees in which the Company retains shares to cover tax withholding costs and exercise costs. During the years ended December 31, 2011 and 2010, the Company acquired $82 million and $66 million, respectively, of its common stock under this plan.

        Common shares acquired are reported as treasury stock in the consolidated balance sheet.

Preferred Stock

        The Company's preferred shareholders' equity at December 31, 2010 represented the par value of preferred shares outstanding related to a legacy Stock Ownership Plan (SOP) Trust which was subsequently merged into The Travelers 401(k) Savings Plan (the Savings Plan). The SOP Trust could at any time convert any or all of the preferred shares into shares of the Company's common stock at a rate of eight shares of common stock for each preferred share. In May 2011, the Company's board of directors authorized the redemption of the Company's preferred stock held by the Savings Plan and gave notice of that redemption to the appropriate fiduciaries of the Savings Plan. Following a fiduciary review, the Savings Plan exercised its right to convert each preferred share into eight shares of the Company's common stock. As a result, all preferred shares outstanding on June 7, 2011 (190,083 shares) were converted into a total of 1.52 million shares of the Company's common stock.

Dividend Availability

        The Company's insurance subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to their parent without prior approval of insurance regulatory authorities. A maximum of $1.96 billion is available by the end of 2012 for such dividends without prior approval of the Connecticut Insurance Department. The Company may choose to accelerate the timing within 2012 and/or increase the amount of dividends from its insurance subsidiaries in 2012, which could result in certain dividends being subject to approval by the Connecticut Insurance Department. The holding company received $2.33 billion of dividends from its domestic insurance subsidiaries in 2011.

Statutory Net Income and Policyholder Surplus

        Statutory net income of the Company's domestic and international insurance subsidiaries was $1.50 billion, $3.69 billion and $3.90 billion for the years ended December 31, 2011, 2010 and 2009, respectively. Policyholder surplus of the Company's domestic and international insurance subsidiaries was $19.17 billion and $20.07 billion at December 31, 2011 and 2010, respectively.

Accumulated Other Changes in Equity from Nonowner Sources, Net of Tax

        Changes in each component of Accumulated Other Changes in Equity from Nonowner Sources were as follows:

(at and for the year ended December 31, in millions)	Net Unrealized Gains (Losses) on Investment Securities			Net Benefit Plan Assets and Obligations Recognized in Equity			Net Unrealized Foreign Currency Translation and Other			Accumulated Other Changes in Equity from Nonowner Sources
Balance, December 31, 2008	$	(146	)	$	(549	)	$	(205	)	$	(900	)
Cumulative effect of adoption of updated accounting guidance at April 1, 2009 net of tax benefit of $(38) (see note 1)		(71	)		—			—			(71	)
Net change in unrealized gains on investment securities, net of tax expense of $1,119		2,085			—			—			2,085
Less: Reclassification adjustment for net realized gains included in net income, net of tax benefit of $(6)		(12	)		—			—			(12	)
Net change in benefit plan assets and obligations recognized in equity, net of tax benefit of $(47)		—			(88	)		—			(88	)
Change in other, net of tax expense of $46		—			—			205			205
Current period change		2,002			(88	)		205			2,119
Balance, December 31, 2009		1,856			(637	)		—			1,219
Net change in unrealized gains on investment securities, net of tax expense of $110		204			—			—			204
Less: Reclassification adjustment for net realized gains included in net income, net of tax benefit of $(108)		(201	)		—			—			(201	)
Net change in benefit plan assets and obligations recognized in equity, net of tax expense of $12		—			27			—			27
Change in other, net of tax expense of $6		—			—			6			6
Current period change		3			27			6			36
Balance, December 31, 2010		1,859			(610	)		6			1,255
Net change in unrealized gains on investment securities, net of tax expense of $600		1,083			—			—			1,083
Less: Reclassification adjustment for net realized gains included in net income, net of tax benefit of $(38)		(71	)		—			—			(71	)
Net change in benefit plan assets and obligations recognized in equity, net of tax benefit of $(106)		—			(201	)		—			(201	)
Change in other, net of tax benefit of $(29)		—			—			(61	)		(61	)
Current period change		1,012			(201	)		(61	)		750
Balance, December 31, 2011	$	2,871		$	(811	)	$	(55	)	$	2,005