8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 27, 2009

The Travelers Companies, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	001-10898	41-0518860
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

385 Washington Street Saint Paul, Minnesota	55102
(Address of principal executive offices)	(Zip Code)

(651) 310-7911

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On January 27, 2009, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended December 31, 2008, and the availability of the Company’s fourth quarter financial supplement on the Company’s web site.  The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated January 27, 2009, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth Quarter 2008 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:       January 27, 2009	THE TRAVELERS COMPANIES, INC.
	By:	/s/ Matthew S. Furman
		Name:  Matthew S. Furman
		Title:  Senior Vice President

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated January 27, 2009, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth Quarter 2008 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.)

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EX-99.1

Exhibit 99.1

The Travelers Companies, Inc. 385 Washington Street St. Paul, MN 55102-1396 www.travelers.com

NEWS RELEASE

Travelers Reports Fourth Quarter 2008 Net Income of $801 Million, or $1.35 per Diluted Share

Fourth Quarter 2008 Operating Income of $939 Million, or $1.58 per Diluted Share

Full Year 2008 Net Income of $2.924 Billion, or $4.82 per Diluted Share

NEW YORK (January 27, 2009) – The Travelers Companies, Inc. (“Travelers,” NYSE: TRV) today reported net income of $801 million, or $1.37 per basic share and $1.35 per diluted share, for the quarter ended December 31, 2008, compared to $1.063 billion, or $1.67 per basic share and $1.64 per diluted share, for the quarter ended December 31, 2007.  Operating income in the current quarter was $939 million, or $1.61 per basic share and $1.58 per diluted share, compared to $1.057 billion, or $1.66 per basic share and $1.63 per diluted share, in the prior year quarter.

“Travelers produced operating income of $939 million and an operating return on equity of 14.7% in the fourth quarter of 2008,” commented Jay Fishman, Chairman and Chief Executive Officer.  “These results reflected solid underwriting performance as evidenced by a combined ratio of 85.9% and were achieved despite lower net investment income due to difficult investment markets.  Notwithstanding these lower returns, we continue to be very pleased with the high quality and diversification of our investment portfolio.  Net written premiums grew slightly in the quarter.  Business retention remained at historically high levels, and the impact of a slightly improving rate trend was partially offset by lower coverage demands from existing policyholders due to general economic conditions.

“For the full year, despite significant storm activity and difficult investment markets, we recorded operating income of $3.2 billion and an operating return on equity of 12.4%, and book value per share increased by 2% after repurchasing approximately $2.1 billion of common stock and paying common stock dividends of $712 million. These results helped us continue to achieve our goal of delivering a mid-teens annual operating return on equity over time.  Average annual operating return on equity from January 1, 2005 through year-end 2008 was approximately 14.5%.

“Looking forward to 2009, we believe that Travelers is well positioned in the current uncertain economic environment.  Our balance sheet is strong with capital at or above all of our target levels, our debt to capital ratio of 19.5% is below our target of 20% and holding company liquidity of $2.1 billion is approximately twice our target level. Equally important, our disciplined approach to evaluating risk and reward in both our underwriting and investment activities remains deeply embedded in the culture of the company and has been strengthened by experience.  We are all very proud of what this franchise has continued to accomplish,” concluded Mr. Fishman.

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Current Quarter Highlights

·Return on equity and operating return on equity of 12.8 percent and 14.7 percent, respectively.

·Strong underwriting results in all segments with GAAP combined ratios in Business Insurance of 85.7 percent; Financial, Professional & International Insurance of 87.2 percent; and Personal Insurance of 85.6 percent.  Consolidated GAAP combined ratio of 85.9 percent.

·Positive impact to net and operating income of $56 million after-tax ($85 million pre-tax) due to a downward adjustment of current year catastrophe losses, compared to catastrophe losses of $45 million after-tax ($68 million pre-tax) in the prior year quarter.

·Net favorable prior year reserve development of $189 million after-tax ($278 million pre-tax), compared to $83 million after-tax ($128 million pre-tax) in the prior year quarter.

·Sale of Unionamerica Holdings Limited, the company’s United Kingdom-based runoff insurance and reinsurance businesses, recording a tax benefit of $89 million in operating income along with an insignificant net realized investment gain.

·Net written premiums of $5.385 billion, compared to $5.366 billion in the prior year quarter.

·Net investment income of $438 million after-tax ($483 million pre-tax), compared to $696 million after-tax ($882 million pre-tax) in the prior year quarter.  Net investment income in the current quarter was impacted by negative returns in the non-fixed income portfolio and very low short-term interest rates.

·Net realized investment losses of $138 million after-tax ($219 million pre-tax), compared to net realized investment gains of $6 million after-tax ($12 million pre-tax) in the prior year quarter.

·Book value per share of $43.12, a 3 percent increase from September 30, 2008, after repurchasing 2.7 million common shares for a total cost of $100 million and paying common stock dividends of $177 million.  Adjusted book value per share (which excludes FAS 115) of $43.37, a slight increase from September 30, 2008.

Full Year 2008 Highlights

·Return on equity and operating return on equity of 11.4 percent and 12.4 percent, respectively.

·Consolidated GAAP combined ratio of 91.9 percent, compared to 87.4 percent in the prior year.

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·Catastrophe losses of $919 million after-tax ($1.408 billion pre-tax), compared to $109 million after-tax ($167 million pre-tax) in the prior year.

·Net favorable prior year reserve development of $1.000 billion after-tax ($1.538 billion pre-tax), compared to $351 million after-tax ($546 million pre-tax) in the prior year.

·Net written premiums of $21.683 billion, compared to $21.618 billion in the prior year.

·Net investment income of $2.299 billion after-tax ($2.792 billion pre-tax), compared to $2.915 billion after-tax ($3.761 billion pre-tax) in the prior year.  Net investment income in the current year was impacted by negative returns in the non-fixed income portfolio and low short-term interest rates.

·Net realized investment losses of $271 million after-tax ($415 million pre-tax), compared to net realized investment gains of $101 million after-tax ($154 million pre-tax) in the prior year.

·Book value per share of $43.12 and adjusted book value per share (which excludes FAS 115) of $43.37, increased 2 percent and 5 percent, respectively, from December 31, 2007, after repurchasing 45 million common shares for a total cost of $2.122 billion and paying common stock dividends of $712 million.

Consolidated Highlights

($ in millions, except for per share amounts,	Three Months Ended December 31,								Twelve Months Ended December 31,
and after-tax, except for premiums)	2008			2007			Change		2008			2007			Change
Gross written premiums	$	5,709		$	5,768		(1	)%	$	23,837		$	24,198		(1	)%
Net written premiums	5,385			5,366			—		21,683			21,618			—
Net earned premiums	5,434			5,432			—		21,579			21,470			1
Underwriting gain	545			389			40		1,076			1,699			(37	)
Net investment income	438			696			(37	)	2,299			2,915			(21	)
Operating income	939			1,057			(11	)	3,195			4,500			(29	)
per diluted share	$	1.58		$	1.63		(3	)	$	5.27		$	6.71		(21	)
Net income	801			1,063			(25	)	2,924			4,601			(36	)
per diluted share	$	1.35		$	1.64		(18	)	$	4.82		$	6.86		(30	)
Book value per share	$	43.12		$	42.22		2		$	43.12		$	42.22		2
Adjusted book value per share	$	43.37		$	41.23		5		$	43.37		$	41.23		5
GAAP combined ratio	85.9		%	88.4		%	(2.5	)pts	91.9		%	87.4		%	4.5	pts
Operating return on equity	14.7		%	16.3		%	(1.6	)pts	12.4		%	17.7		%	(5.3	)pts
Return on equity	12.8		%	16.1		%	(3.3	)pts	11.4		%	18.0		%	(6.6	)pts
See Glossary of Financial Measures for definitions and the statistical supplement for additional financial data.

Fourth Quarter 2008 Consolidated Results

Net and operating income in the current quarter of $801 million and $939 million, respectively, include an after-tax underwriting gain of $545 million and after-tax net investment income of $438 million.  The current and prior year quarters included the following:

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($ in millions)	Three Months Ended December 31,
	2008			2007			2008			2007
	Pre-tax						After-tax
Underwriting gain	$	729		$	596		$	545		$	389
GAAP combined ratio	85.9		%	88.4		%
Underwriting gain includes:
Net favorable prior year reserve development	278			128			189			83
Impact on GAAP combined ratio	(5.1		)pts	(2.4		)pts
Catastrophe (losses) / reduction in losses, net of reinsurance	85			(68		)	56			(45		)
Impact on GAAP combined ratio	(1.6		)pts	1.3		pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(42		)	54			(27		)	35
Impact on GAAP combined ratio	0.8		pts	(1.0		)pts
Tax benefit related to sale of subsidiary							89			—
Net investment income	483			882			438			696
Average yield	2.6		%	4.7		%	2.4		%	3.7		%
Other, including interest expense	(66		)	(49		)	(44		)	(28		)
Net realized investment gains (losses)	(219		)	12			(138		)	6

The current quarter underwriting result reflects a GAAP combined ratio of 91.8 percent, excluding net favorable prior year reserve development, catastrophes and re-estimation of the current year loss ratios for the first three quarters of the year, as compared to 90.5 percent in the prior year quarter.  This increase of 1.3 points primarily resulted from pricing and loss cost experience that were generally consistent with prior quarters and a small number of large losses that exceeded expectations.

Net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in each segment, particularly in Business Insurance.  The company also benefited in the quarter from a downward adjustment in its current year catastrophe loss estimates. The largest component of this favorable adjustment was due to the company’s re-estimation of the Texas Windstorm Insurance Association (TWIA) losses arising out of Hurricane Ike, a storm that occurred late in the third quarter. This resulted in a reduction of the company’s share of TWIA losses.  There was also a favorable re-estimation of direct catastrophe losses primarily related to Hurricanes Ike and Gustav, as additional company-specific information became available.  In addition, the current quarter included an $89 million tax benefit related to the sale of Unionamerica, the company’s United Kingdom-based runoff insurance and reinsurance businesses, primarily resulting from the difference between its book basis and tax basis.

Net investment income in the current quarter declined from the prior year quarter due to negative returns in the non-fixed income portfolio as well as a 220 basis point reduction in average after-tax short-term interest rates in the fixed-income portfolio.  The non-fixed income portfolio, comprised substantially of private equity funds, real estate partnerships and hedge funds, recorded an investment loss of $164 million after-tax ($256 million pre-tax) in the current quarter reflective of difficult investment markets.  Private equity funds, real estate partnerships and hedge funds typically report returns on a lag.  As in past quarters, the value of many of these investments was updated through quarter-end

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(December 31) based upon information made available by certain of the investment managers.  This update accounted for $56 million after-tax ($87 million pre-tax) of the non-fixed income portfolio’s investment loss described above.

Net realized investment losses in the current quarter included impairments of $129 million after-tax ($198 million pre-tax).  Net realized investment gains in the prior year quarter included impairments of $25 million after-tax ($38 million pre-tax).

Net written premiums of $5.385 billion in the current quarter were slightly higher than in the prior year quarter.  Overall, business retention remained at historically high levels and the impact of a slightly improving rate trend was partially offset by lower coverage demands from existing policyholders due to general economic conditions.  New business volumes increased from the prior year quarter driven by growth in Financial Professional & International Insurance and Personal Insurance.

Capital Management

The company remains very well capitalized, with all of its financial strength indicators at or better than target levels.  During the fourth quarter 2008, the company repurchased 2.7 million of its common shares under its share repurchase authorization for a total cost of approximately $100 million.  At the end of 2008, the company had $3.8 billion of capacity remaining under the share repurchase program.  Since the initial share repurchase authorization granted by the Board in the second quarter of 2006, the company has repurchased 123.9 million shares for a total cost of $6.2 billion.

At the end of 2008, shareholders’ equity was $25.3 billion, a decline of 5 percent from the end of the prior year.  This decline was due in part to share repurchases and common stock dividends totaling $2.8 billion and net unrealized investment losses of $144 million after-tax at the end of the current year as compared to net unrealized investment gains of $620 million after-tax at the end of the prior year.  This change in unrealized investment gains and losses was largely driven by widening credit spreads across fixed income securities, partially offset by lower treasury rates.  The decline in shareholders’ equity was also due in part to the impact of current market conditions on the company’s qualified pension plan assets.  Statutory surplus was $21.5 billion at the end of 2008, a decline of 6 percent from the end of the prior year.  The company’s debt to capital ratio of 19.5 percent (excluding FAS 115) at the end of 2008 was slightly below its 20.0 percent target level and holding company liquidity of $2.1 billion was approximately twice the company’s target level.  

Full Year 2008 Consolidated Results

Net and operating income for the twelve-month period ended December 31, 2008 of $2.924 billion and $3.195 billion, respectively, include an after-tax underwriting gain of $1.076 billion and after-tax net investment income of $2.299 billion.  The current and prior years included the following:

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($ in millions)	Twelve Months Ended December 31,
	2008			2007			2008			2007
	Pre-tax						After-tax
Underwriting gain	$	1,606		$	2,558		$	1,076		$	1,699
GAAP combined ratio	91.9		%	87.4		%
Underwriting gain includes:
Net favorable prior year reserve development	1,538			546			1,000			351
Impact on GAAP combined ratio	(7.1		)pts	(2.5		)pts
Catastrophes, net of reinsurance	(1,408		)	(167		)	(919		)	(109		)
Impact on GAAP combined ratio	6.5		pts	0.7		pts
Timing impact for the transition to fixed, value- based agent compensation program	—			163			—			106
Impact on GAAP combined ratio	—		pts	(0.8		)pts
Tax benefit related to sale of subsidiary							89			—
Resolution of prior year tax matters							—			34
Net investment income	2,792			3,761			2,299			2,915
Average yield	3.8		%	5.1		%	3.1		%	3.9		%
Other, including interest expense	(267		)	(257		)	(180		)	(114		)
Other also includes:
Loss on the redemption of securities	—			(39		)	—			(25		)
Resolution of prior year tax matters							—			52
Net realized investment gains (losses)	(415		)	154			(271		)	101

The current year underwriting result reflects a GAAP combined ratio of 92.5 percent, excluding net favorable prior year reserve development and catastrophes, as compared to 90.0 percent in the prior year, which also excludes the timing impact for the transition to the fixed, value-based agent compensation program adopted in the first quarter 2007, which lowered reported expenses in the period from what otherwise would have been reported.  This increase of 2.5 points primarily resulted from pricing and loss cost experience that were anticipated, a small number of large losses that exceeded expectations and an increase in non-catastrophe related weather losses.

Net favorable prior year reserve development in the current year resulted from better than expected loss experience in each segment, particularly in Business Insurance. Catastrophe losses in the current year were primarily related to Hurricanes Ike, Gustav and Dolly, as well as other severe weather events in various regions of the United States.

Net investment income in the current year was impacted by negative returns in the non-fixed income portfolio and low short-term interest rates.

Net written premiums in the current year were $21.683 billion, compared to $21.618 billion in the prior year.

Business Insurance Segment Financial Results

For the fourth quarter 2008, the Business Insurance segment reported operating income of $619 million, including an after-tax underwriting gain of $325 million and after-tax net investment income of $291 million. The current and prior year quarters included the following:

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($ in millions)	Three Months Ended December 31,
	2008			2007			2008			2007
	Pre-tax						After-tax
Underwriting gain	$	390		$	342		$	325		$	221
GAAP combined ratio	85.7		%	87.8		%
Underwriting gain includes:
Net favorable prior year reserve development	205			49			140			29
Impact on GAAP combined ratio	(7.3		)pts	(1.7		)pts
Catastrophe (losses) / reduction in losses, net of reinsurance	24			(4		)	16			(3		)
Impact on GAAP combined ratio	(0.8		)pts	0.1		pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(16		)	54			(10		)	35
Impact on GAAP combined ratio	0.6		pts	(1.9		)pts
Tax benefit related to sale of subsidiary							89			—
Net investment income	310			633			291			502
Other	9			9			3			6

The current quarter underwriting result reflects a GAAP combined ratio of 93.2 percent, excluding net favorable prior year reserve development, catastrophes and re-estimation of the current year loss ratios for the first three quarters of the year, as compared to 91.3 percent in the prior year quarter.  This increase of 1.9 points primarily resulted from pricing and loss cost experience that were generally consistent with prior quarters.

Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the general liability, commercial auto and commercial multi-peril product lines.  The segment also benefited in the quarter from a downward adjustment in current year catastrophe loss estimates due in large part to favorable re-estimation of losses related to Hurricane Gustav.  In addition, the current quarter included the $89 million tax benefit related to the sale of Unionamerica.

Business Insurance net written premiums of $2.756 billion declined 1 percent from the prior year quarter.  Retention rates continued to be very strong and improved from the prior year quarter particularly in Commercial Accounts.  Renewal price changes, while generally slightly negative, improved from the prior year quarter due to the impact of a slightly improving rate trend across several lines, partially offset by lower coverage demands from existing policyholders due to general economic conditions.  New business volumes were consistent with the prior year quarter as growth in Select Accounts was offset by declines in Target Risk Underwriting and Specialized Distribution.

Select Accounts

·Net written premiums of $662 million increased 3 percent from the prior year quarter.

·Retention rates remained strong and improved from the prior year quarter.

·Renewal price changes were slightly lower than recent quarters due to lower coverage demands from existing policyholders.

·New business volume increased from the prior year quarter due to significant increases in submission flows related to TravelersExpressSM , the enhanced quote-to-issue

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agency platform and multivariate pricing program for smaller businesses, as well as from growth in business from larger accounts served by Select.

Commercial Accounts

·Net written premiums of $666 million declined 2 percent from the prior year quarter.

·Retention rates remained very strong and improved from the prior year quarter.

·Renewal price changes remained negative and generally consistent with recent quarters as the impact of a slightly improving rate trend was partially offset by lower coverage demands from existing policyholders.

·New business volumes were generally consistent with the prior year quarter.

National Accounts

·Net written premiums of $269 million were consistent with the prior year quarter.

Industry-Focused Underwriting

·Net written premiums of $586 million increased 6 percent from the prior year quarter primarily driven by Construction, Oil & Gas and Technology.

Target Risk Underwriting

·Net written premiums of $359 million declined 5 percent from the prior year quarter primarily due to the overall pricing environment and lower new business volumes in National Property.

Specialized Distribution

·Net written premiums of $208 million declined 15 percent from the prior year quarter primarily due to weaknesses in the commercial trucking industry.

Financial, Professional & International Insurance Segment Financial Results

For the fourth quarter 2008, the Financial, Professional & International Insurance segment reported operating income of $154 million, including an after-tax underwriting gain of $72 million and after-tax net investment income of $78 million. The current and prior year quarters included the following:

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($ in millions)	Three Months Ended December 31,
	2008			2007			2008			2007
	Pre-tax						After-tax
Underwriting gain	$	106		$	119		$	72		$	83
GAAP combined ratio	87.2		%	85.3		%
Underwriting gain includes:
Net favorable prior year reserve development	36			36			25			26
Impact on GAAP combined ratio	(4.2		)pts	(4.3		)pts
Catastrophe (losses) / reduction in losses, net of reinsurance	13			—			10			—
Impact on GAAP combined ratio	(1.6		)pts	—		pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(5		)	—			(3		)	—
Impact on GAAP combined ratio	0.6		pts	—		pts
Net investment income	98			122			78			94
Other	6			13			4			7

The current quarter underwriting result reflects a GAAP combined ratio of 92.4 percent, excluding net favorable prior year reserve development, catastrophes and re-estimation of the current year loss ratios for the first three quarters of the year, as compared to 89.6 percent in the prior year quarter.  The significant components of the 2.8 point increase are a small number of large losses that exceeded expectations within International and increased loss activity within the Financial Institutions business unit of Bond & Financial Products resulting from the difficult conditions in financial markets, partially offset by favorable results in the Commercial Surety and Construction Services business units of Bond & Financial Products.

The net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience across various lines of business within International.  The segment also benefited in the quarter from a downward adjustment in current year catastrophe loss estimates due in large part to favorable re-estimation of direct losses related to Hurricanes Ike and Gustav.

Financial, Professional & International Insurance net written premiums of $938 million declined 3 percent from the prior year quarter primarily due to changes in foreign currency exchange rates.

Bond & Financial Products

·Net written premiums of $586 million declined 3 percent from the prior year quarter, driven primarily by lower business volumes in surety.

·Retention rates in the management liability business continued to be strong.

·Renewal price changes were slightly positive driven by an improving rate trend across several lines.

·New business volumes increased from the prior year quarter due in part to higher submission flows.

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·The retention, renewal price change and new business volume metrics exclude the surety line of business because these products are sold on a non-recurring, project-specific basis.

International

·Net written premiums of $352 million declined 2 percent from the prior year quarter primarily due to changes in foreign currency exchange rates.

·Retention rates were lower than the prior year quarter primarily due to the intentional non-renewal of certain business in Canada and Ireland, as well as underwriting actions taken within the property and marine businesses at the company’s Lloyd’s operations.

·Renewal price changes were positive and improved from recent quarters driven by the company’s Lloyd’s operations.

·New business volumes declined from the prior year quarter due to changes in foreign currency exchange rates.

Personal Insurance Segment Financial Results

For the fourth quarter 2008, the Personal Insurance segment reported operating income of $226 million, including an after-tax underwriting gain of $148 million and after-tax net investment income of $69 million. The current and prior year quarters included the following:

($ in millions)	Three Months Ended December 31,
	2008			2007			2008			2007
	Pre-tax						After-tax
Underwriting gain	$	233		$	135		$	148		$	85
GAAP combined ratio	85.6		%	90.8		%
Underwriting gain includes:
Net favorable prior year reserve development	37			43			24			28
Impact on GAAP combined ratio	(2.1		)pts	(2.5		)pts
Catastrophe (losses) / reduction in losses, net of reinsurance	48			(64		)	30			(42		)
Impact on GAAP combined ratio	(2.7		)pts	3.7		pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(21		)	—			(14		)	—
Impact on GAAP combined ratio	1.2		pts	—		pts
Net investment income	75			127			69			100
Other	17			21			9			16

The current quarter underwriting result reflects a GAAP combined ratio of 89.2 percent, excluding net favorable prior year reserve development, catastrophes and re-estimation of the current year loss ratios for the first three quarters of the year, as compared to 89.6 percent in the prior year quarter.  This decrease of 0.4 points was primarily due to favorable automobile loss trends.

Net favorable prior year reserve development in the current quarter was primarily driven by favorable loss experience related to Hurricane Katrina and other prior year weather-related losses within Homeowners and Other.  The segment also benefited in the quarter from a downward adjustment in current year catastrophe loss estimates due in large part to the

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company’s re-estimation of the TWIA losses arising out of Hurricane Ike.  There was also favorable re-estimation of direct catastrophe losses primarily related to Hurricane Ike.

Personal Insurance net written premiums of $1.691 billion increased 4 percent from the prior year quarter.  This result was primarily due to continued strong retention rates, positive renewal price changes and higher new business volume.

Automobile

·Net written premiums of $876 million increased 3 percent, and policies in force increased 2 percent, from the prior year quarter.

·Retention rates were strong and renewal price changes were positive, both generally consistent with recent quarters.

·New business volume increased from the prior year quarter due to continued agent and channel expansion of QuantumAutoSM distribution.

Homeowners and Other

·Net written premiums of $815 million increased 5 percent, and policies in force increased 3 percent, from the prior year quarter.

·Retention rates were strong and renewal price changes were positive, both generally consistent with recent quarters.

·New business volume increased from the prior year quarter as new business growth in non-coastal areas was partially offset by ongoing coastal risk management initiatives.

2009 Annual Guidance

Travelers expects 2009 operating income per diluted share in the range of $4.50 to $4.90.  This guidance is based on a number of assumptions, including:

·Catastrophe losses of $552 million pre-tax and $360 million after-tax, or $0.62 per diluted share;

·No prior year reserve development, favorable or unfavorable;

·Non-fixed income investment yield of 2.4 percent;

·No significant change in average invested assets (excluding FAS 115), after taking into account dividends and approximately $1.0 billion of share repurchases for the full year; and

·Weighted average diluted shares of approximately 585 million.

Financial Supplement and Conference Call

The information in this press release should be read in conjunction with a financial supplement that is available on our Web site at www.travelers.com.  The management of Travelers will discuss the contents of this release and other relevant topics via webcast at 9 a.m. Eastern (8 a.m. Central) on Tuesday, January 27, 2009.  Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the company’s Web site.  Following the live event, an audio playback of the webcast and the slide presentation will be available on the company’s Web site.

11

To view the slides or to listen to the webcast or the playback, visit the “Webcasts & Presentations” section of the Travelers investor relations Web site at http://investor.travelers.com/.

About Travelers

Travelers is a leading provider of property casualty insurance for auto, home and business.  For more information, visit www.travelers.com.

From time to time Travelers may use its Web site as a channel of distribution of material company information. Financial and other material information regarding the company is routinely posted on and accessible at http://investor.travelers.com.  In addition, you may automatically receive email alerts and other information about Travelers by enrolling your email by visiting the “Email Alert Service” section at http://investor.travelers.com.

Glossary of Financial Measures

The following measures are used by the company’s management to evaluate financial performance against historical results and establish targets on a consolidated basis.  In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated statement of income or required to be disclosed in the notes to financial statements, and in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure. In the opinion of the company’s management, a discussion of these measures provides investors with a better understanding of the significant factors that comprise the company’s periodic results of operations and how management evaluates the company’s financial performance.

Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses).  Operating income (loss) per share is operating income (loss) on a per share basis.

Return on equity is the ratio of net income to average equity.  Operating return on equity is the ratio of operating income to average equity excluding net unrealized investment gains and losses, net of tax.

In the opinion of the company’s management, operating income, operating income per share and operating return on equity are meaningful indicators of underwriting and operating results.  These measures exclude net realized investment gains or losses, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.  Internally, the company’s management uses operating income, operating income per share and operating return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis.

Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses.

A catastrophe is a severe loss, resulting from natural and man-made events, including risks such as fire, earthquake, windstorm, explosion, terrorism and other similar events.  Each catastrophe has unique characteristics, and catastrophes are not predictable as to timing or amount. Their effects are included in net and operating income and claims and claim adjustment expense reserves upon occurrence.  A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools.  In the opinion of the company’s management, a discussion of the impact of catastrophes is meaningful for investors to understand the variability in periodic earnings.

Loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims.  Loss reserve development may be related to one or more prior years or

12

the current year.  In the opinion of the company’s management, discussion of loss reserve development is useful to investors as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and operating income, and changes in claims and claim adjustment expense reserve levels from period to period.

GAAP combined ratio is the sum of the loss and loss adjustment expense ratio (loss and LAE ratio), the underwriting expense ratio and, where applicable, the ratio of dividends to policyholders to net earned premiums.  For GAAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses reduced by an allocation of fee income to net earned premiums.  The underwriting expense ratio is the ratio of underwriting expenses incurred reduced by an allocation of fee income, billing and policy fees to net earned premiums. A GAAP combined ratio under 100 percent generally indicates an underwriting profit. A GAAP combined ratio over 100 percent generally indicates an underwriting loss. The GAAP combined ratio is an operating statistic that includes GAAP measures in the numerator and the denominator.

Gross written premiums reflect the direct and assumed contractually determined amounts charged to the policyholders for the effective period of the contract based on the terms and conditions of the insurance contract.  Gross written premiums are a measure of overall business volume. Net written premiums reflect gross written premiums less premiums ceded to reinsurers.

Book value per share is total common shareholders’ equity divided by the number of common shares outstanding.  Adjusted book value per share is total common shareholders’ equity excluding the after-tax impact of net unrealized investment gains and losses (i.e., excluding FAS 115), divided by the number of common shares outstanding. In the opinion of the company’s management, adjusted book value is useful in an analysis of a property casualty company’s book value as it removes the effect of changing prices on invested assets (i.e., net unrealized investment gains (losses), net of tax), which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves. Tangible book value per share is adjusted book value per share excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding. In the opinion of the company’s management, tangible book value per share is useful in an analysis of a property casualty company’s book value on a nominal basis as it removes certain effects of purchase accounting (i.e., goodwill and other intangible assets), in addition to the effect of changing prices on invested assets.

Travelers has organized its businesses into the following reportable business segments:

Business Insurance: The Business Insurance segment offers a broad array of property and casualty insurance and insurance-related services to its clients primarily in the United States.  Business Insurance is organized into the following six groups, which collectively comprise Business Insurance Core operations: Select Accounts; Commercial Accounts; National Accounts; Industry-Focused Underwriting including Construction, Technology, Public Sector Services, Oil & Gas and Agribusiness; Target Risk Underwriting including National Property, Inland Marine, Ocean Marine, Excess Casualty, Boiler & Machinery and Global Accounts; and Specialized Distribution including Northland and National Programs.  Business Insurance also includes the Special Liability Group (which manages the company’s asbestos and environmental liabilities) and other runoff operations, which collectively are referred to as Business Insurance Other.

Financial, Professional & International Insurance: The Financial, Professional & International Insurance segment includes surety and financial liability businesses, which primarily use credit-based underwriting processes, as well as property and casualty products that are primarily marketed on a domestic basis in the United Kingdom, Ireland and Canada, and on an international basis through Lloyd’s.  The businesses in Financial, Professional & International Insurance are Bond & Financial Products and International.

Personal Insurance: The Personal Insurance segment writes virtually all types of property and casualty insurance covering personal risks.  The primary coverages in this segment are personal automobile and homeowners insurance sold to individuals.

* * * * *

13

Forward Looking Statement

This press release contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements, other than statements of historical facts, may be forward-looking statements.  Specifically, earnings guidance, statements about our share repurchase plans, statements about the potential impact of the recent disruption in the investment markets and other economic conditions on our investment portfolio and underwriting results are forward looking, and we may make forward-looking statements about our results of operations (including, among others, premium volume, net and operating income, investment income, return on equity, expected current returns and combined ratio), and financial condition (including, among others, invested assets and liquidity); the sufficiency of our asbestos and other reserves (including, among others, asbestos claim payment patterns); the cost and availability of reinsurance coverage; catastrophe losses; investment performance; investment, economic and underwriting market conditions; and strategic initiatives.  Such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Some of the factors that could cause actual results to differ include, but are not limited to, the following: catastrophe losses could materially and adversely affect our results of operations, our financial position and/or liquidity and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance; if actual claims exceed our loss reserves, or if changes in the estimated level of loss reserves are necessary, our financial results could be materially and adversely affected; our business could be harmed because of our potential exposure to asbestos and environmental claims and related litigation; we are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances; the effects of emerging claim and coverage issues on our business are uncertain; we may not be able to collect all amounts due to us from reinsurers, and reinsurance coverage may not be available to us in the future at commercially reasonable rates or at all; the intense competition that we face could harm our ability to maintain or increase our profitability and premium volume; we are exposed to credit risk in certain of our business operations and in our investment portfolio; the insurance industry and we are the subject of a number of investigations by state and federal authorities in the United States, and we cannot predict the outcome of these investigations or their impact on our business or financial results; our businesses are heavily regulated, and changes in regulation may reduce our profitability and limit our growth; a downgrade in our claims-paying and debt ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs; our investment portfolio may suffer reduced returns or losses; deteriorating economic conditions in the United States and abroad could adversely impact our ability to grow our business profitably, and inflation or other adverse economic circumstances could result in an increase in loss costs which could negatively impact our profitability; the inability of our insurance subsidiaries to pay dividends to our holding company in sufficient amounts would harm our ability to meet our obligations and to pay future shareholder dividends; disruptions to our relationships with our independent agents and brokers could adversely affect us; we are subject to a number of risks associated with our business outside the United States including operational, legal and foreign exchange rate risk; we could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective; loss or significant restriction of the use of credit scoring in the pricing and underwriting of insurance products could reduce future profitibilty; our business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology; certain significant multiyear technology projects are currently in process but may not be successful; and if we experience difficulties with technology, data security and/or outsourcing relationships, our ability to conduct our business could be negatively impacted.

Our forward-looking statements speak only as of the date of this press release or as of the date they are made, and we undertake no obligation to update forward-looking statements.  For a more detailed discussion of these factors, see the information under the caption “Risk Factors” in our most recent annual report on Form 10-K, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent annual report on Form 10-K and quarterly report on Form 10-Q, filed with the Securities and Exchange Commission.

##

14

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions, except per share amounts, and after-tax)	2008			2007			2008			2007
Operating income	$	939		$	1,057		$	3,195		$	4,500
Net realized investment gains (losses)	(138		)	6			(271		)	101
Net income	$	801		$	1,063		$	2,924		$	4,601
Basic earnings per share
Operating income	$	1.61		$	1.66		$	5.35		$	6.89
Net realized investment gains (losses)	(0.24		)	0.01			(0.45		)	0.15
Net income	$	1.37		$	1.67		$	4.90		$	7.04
Diluted earnings per share
Operating income	$	1.58		$	1.63		$	5.27		$	6.71
Net realized investment gains (losses)	(0.23		)	0.01			(0.45		)	0.15
Net income	$	1.35		$	1.64		$	4.82		$	6.86
Weighted average number of common shares outstanding (basic)	583.6			634.5			596.4			652.7
Weighted average number of common shares outstanding and common stock equivalents (diluted)	593.0			648.7			607.3			672.3
Common shares outstanding at period end	585.1			627.8			585.1			627.8
Common stock dividends declared	$	177		$	184		$	712		$	738
Operating income by segment
Business Insurance	$	619		$	729		$	2,338		$	3,015
Financial, Professional & International Insurance	154			184			649			675
Personal Insurance	226			201			465			1,019
Total segment operating income	999			1,114			3,452			4,709
Interest Expense and Other	(60		)	(57		)	(257		)	(209		)
	$	939		$	1,057		$	3,195		$	4,500
Operating return on equity	14.7		%	16.3		%	12.4		%	17.7		%
Return on equity	12.8		%	16.1		%	11.4		%	18.0		%

See Glossary of Financial Measures and the statistical supplement for additional financial data.

15

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions, pre-tax)	2008			2007			2008			2007
Revenues
Premiums	$	5,434		$	5,432		$	21,579		$	21,470
Net investment income	483			882			2,792			3,761
Fee income	75			113			390			508
Net realized investment gains (losses)	(219		)	12			(415		)	154
Other revenues	32			52			131			124
	$	5,805		$	6,491		$	24,477		$	26,017
Revenues
Business Insurance	$	3,184		$	3,623		$	13,517		$	14,523
Financial, Professional & International Insurance	971			977			3,907			3,907
Personal Insurance	1,869			1,871			7,466			7,452
Total segment revenues	6,024			6,471			24,890			25,882
Interest Expense and Other	—			8			2			(19		)
	6,024			6,479			24,892			25,863
Net realized investment gains (losses)	(219		)	12			(415		)	154
	$	5,805		$	6,491		$	24,477		$	26,017
Gross written premiums
Business Insurance	$	2,970		$	3,066		$	12,580		$	13,017
Financial, Professional & International Insurance	990			1,021			3,966			4,037
Personal Insurance	1,749			1,681			7,291			7,144
	$	5,709		$	5,768		$	23,837		$	24,198
Net written premiums
Business Insurance	$	2,756		$	2,777		$	11,220		$	11,318
Financial, Professional & International Insurance	938			963			3,468			3,465
Personal Insurance	1,691			1,626			6,995			6,835
	$	5,385		$	5,366		$	21,683		$	21,618
GAAP combined ratios: (1)
Business Insurance (2)
Loss and loss adjustment expense ratio	54.6		%	56.6		%	57.7		%	57.1		%
Underwriting expense ratio	31.1			31.2			32.5			30.7
Combined ratio	85.7		%	87.8		%	90.2		%	87.8		%
Financial, Professional & International Insurance (2)
Loss and loss adjustment expense ratio	52.3		%	47.4		%	51.2		%	50.8		%
Underwriting expense ratio	34.9			37.9			36.0			36.8
Combined ratio	87.2		%	85.3		%	87.2		%	87.6		%
Personal Insurance
Loss and loss adjustment expense ratio	56.8		%	61.0		%	66.2		%	58.6		%
Underwriting expense ratio	28.8			29.8			30.8			28.2
Combined ratio	85.6		%	90.8		%	97.0		%	86.8		%
Total Company (2)
Loss and loss adjustment expense ratio	54.9		%	56.6		%	59.4		%	56.6		%
Underwriting expense ratio	31.0			31.8			32.5			30.8
Combined ratio	85.9		%	88.4		%	91.9		%	87.4		%

(1)For purposes of computing GAAP ratios, billing and policy fees (which are a component of other revenues) are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expense and other underwriting expenses.

(2)Before policyholder dividends.

See Glossary of Financial Measures and the statistical supplement for additional financial data.

16

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions; after-tax except as noted)	2008			2007			2008			2007
Reconciliation of underwriting gain to net income
Pre-tax underwriting gain	$	729		$	596		$	1,606		$	2,558
Tax expense on underwriting results	(184		)	(207		)	(530		)	(859		)
Underwriting gain	545			389			1,076			1,699
Net investment income	438			696			2,299			2,915
Other, including interest expense	(44		)	(28		)	(180		)	(114		)
Consolidated operating income	939			1,057			3,195			4,500
Net realized investment gains (losses)	(138		)	6			(271		)	101
Net income	$	801		$	1,063		$	2,924		$	4,601

	As of
	December 31,			December 31,
($ in millions; except per share data)	2008			2007
Reconciliation of tangible and adjusted common shareholders’ equity to common shareholders’ equity
Tangible common shareholders’ equity	$	21,402		$	21,811
Goodwill and other intangibles, net of tax	3,972			4,073
Adjusted common shareholders’ equity	25,374			25,884
Net unrealized investment gains (losses), net of tax	(144		)	620
Common shareholders’ equity	$	25,230		$	26,504
Common shares outstanding	585.1			627.8
Tangible book value per share	$	36.58		$	34.74
Adjusted book value per share	43.37			41.23
Book value per share	$	43.12		$	42.22

	Twelve Months Ended
	December 31,
($ in millions; after-tax)	2006		2005
Reconciliation of operating income to net income
Operating income	$	4,200	$	2,026
Net realized investment gains	8		35
Income from continuing operations	4,208		2,061
Discontinued operations	—		(439		)
Net income	$	4,208	$	1,622

	As of
	December 31,			December 31,
($ in millions)	2006			2005
Reconciliation of adjusted common shareholders’ equity to common shareholders’ equity
Adjusted common shareholders’ equity	$	24,553		$	21,823
Net unrealized investment gains, net of tax	453			327
Common shareholders’ equity	$	25,006		$	22,150
Return on equity		17.9	%		7.5	%
Operating return on equity		17.9	%		9.6	%

See Glossary of Financial Measures and the statistical supplement for additional financial data.

###

Contacts
Media:	Institutional Investors:	Individual Investors:
Shane Boyd	Gabriella Nawi	Marc Parr
651.310.3846, or	917.778.6844, or	860.277.0779
Jennifer Wislocki	Andrew Hersom
860.277.7458	860.277.0902

17

EX-99.2

Exhibit 99.2

The Travelers Companies, Inc.
Financial Supplement - Fourth Quarter 2008

		Page Number
Consolidated Results
	Financial Highlights	1
	Reconciliation to Net Income and Earnings Per Share	2
	Statement of Income	3
	Net Income by Major Component and Combined Ratio	4
	Operating Income	5
	Selected Statistics - Property and Casualty Operations	6
	Written and Earned Premiums - Property and Casualty Operations	7
Business Insurance
	Operating Income	8
	Operating Income by Major Component and Combined Ratio	9
	Selected Statistics	10
	Net Written Premiums	11
Financial, Professional & International Insurance
	Operating Income	12
	Operating Income by Major Component and Combined Ratio	13
	Selected Statistics	14
	Net Written Premiums	15
Personal Insurance
	Operating Income (Loss)	16
	Operating Income (Loss) by Major Component and Combined Ratio	17
	Selected Statistics	18
	Selected Statistics - Automobile	19
	Selected Statistics - Homeowners and Other	20
Supplemental Detail
	Interest Expense and Other	21
	Consolidated Balance Sheet	22
	Investment Portfolio	23
	Investment Portfolio - Fixed Maturities Data	24
	Investment Income	25
	Net Realized and Unrealized Investment Gains (Losses)	26
	Reinsurance Recoverables	27
	Net Reserves for Losses and Loss Adjustment Expense	28
	Asbestos and Environmental Reserves	29
	Capitalization	30
	Statutory to GAAP Shareholders’ Equity Reconciliation	31
	Statement of Cash Flows	32
	Statement of Cash Flows (continued)	33
Glossary of Financial Measures and Description of Reportable Business Segments		34

The information included in the Financial Supplement is unaudited. This document should be read in conjunction with the Company’s Form 10-K which will be filed with the Securities and Exchange Commission.

Index

The Travelers Companies, Inc.
Financial Highlights
($ and shares in millions, except per share data)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Net income	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
Net income per share:
Basic	$	1.62		$	1.90		$	1.85		$	1.67		$	1.57		$	1.57		$	0.36		$	1.37		$	7.04		$	4.90
Diluted	$	1.56		$	1.86		$	1.81		$	1.64		$	1.54		$	1.54		$	0.36		$	1.35		$	6.86		$	4.82
Operating income	$	1,078		$	1,167		$	1,198		$	1,057		$	1,008		$	918		$	330		$	939		$	4,500		$	3,195
Operating income per share:
Basic	$	1.61		$	1.77		$	1.85		$	1.66		$	1.63		$	1.53		$	0.56		$	1.61		$	6.89		$	5.35
Diluted	$	1.55		$	1.73		$	1.81		$	1.63		$	1.61		$	1.50		$	0.55		$	1.58		$	6.71		$	5.27
Return on equity	17.3		%	19.9		%	18.6		%	16.1		%	14.6		%	14.4		%	3.4		%	12.8		%	18.0		%	11.4		%
Operating return on equity	17.5		%	18.6		%	18.6		%	16.3		%	15.6		%	14.3		%	5.1		%	14.7		%	17.7		%	12.4		%
Total assets, at period end	$	115,688		$	115,361		$	115,644		$	115,224		$	114,144		$	113,625		$	112,695		$	109,751		$	115,224		$	109,751
Total equity, at period end	$	25,357		$	25,322		$	26,307		$	26,616		$	26,388		$	25,923		$	24,721		$	25,319		$	26,616		$	25,319
Book value per share, at period end	$	37.93		$	38.36		$	40.54		$	42.22		$	43.31		$	43.56		$	41.94		$	43.12		$	42.22		$	43.12
Less: Net unrealized investment gains (losses), net of tax	0.67			(0.40		)	0.34			0.99			0.95			0.11			(1.40		)	(0.25		)	0.99			(0.25		)
Adjusted book value per share, at period end	$	37.26		$	38.76		$	40.20		$	41.23		$	42.36		$	43.45		$	43.34		$	43.37		$	41.23		$	43.37
Weighted average number of common shares outstanding (basic)	669.9			658.6			648.4			634.5			616.2			598.7			587.5			583.6			652.7			596.4
Weighted average number of common shares outstanding and common stock equivalents (diluted)	701.2			676.0			661.9			648.7			628.1			610.8			598.0			593.0			672.3			607.3
Common shares outstanding at period end	665.3			657.0			646.1			627.8			606.9			592.8			587.2			585.1			627.8			585.1
Common stock dividends declared	$	174		$	192		$	188		$	184		$	178		$	180		$	177		$	177		$	738		$	712
Common stock repurchased:
Under repurchase authorization (1)
Shares	13.9			11.4			11.7			19.0			20.8			15.3			6.2			2.7			56.0			45.0
Cost	$	725		$	622		$	600		$	1,000		$	1,000		$	750		$	272		$	100		$	2,947		$	2,122
Other
Shares	0.6			0.7			0.2			0.2			0.6			0.1			0.1			—			1.7			0.8
Cost	$	31		$	36		$	10		$	12		$	28		$	7		$	2		$	1		$	89		$	38

(1)  Repurchased under Board of Director authorization.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

1

The Travelers Companies,Inc.
Reconciliation to Net Income and Earnings Per Share
($ and shares in millions, except earnings per share)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Net income
Operating income	$	1,078		$	1,167		$	1,198		$	1,057		$	1,008		$	918		$	330		$	939		$	4,500		$	3,195
Net realized investment gains (losses)	8			87			—			6			(41		)	24			(116		)	(138		)	101			(271		)
Net income	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
Basic earnings per share
Operating income	$	1.61		$	1.77		$	1.85		$	1.66		$	1.63		$	1.53		$	0.56		$	1.61		$	6.89		$	5.35
Net realized investment gains (losses)	0.01			0.13			—			0.01			(0.06		)	0.04			(0.20		)	(0.24		)	0.15			(0.45		)
Net income	$	1.62		$	1.90		$	1.85		$	1.67		$	1.57		$	1.57		$	0.36		$	1.37		$	7.04		$	4.90
Diluted earnings per share
Operating income	$	1.55		$	1.73		$	1.81		$	1.63		$	1.61		$	1.50		$	0.55		$	1.58		$	6.71		$	5.27
Net realized investment gains (losses)	0.01			0.13			—			0.01			(0.07		)	0.04			(0.19		)	(0.23		)	0.15			(0.45		)
Net income	$	1.56		$	1.86		$	1.81		$	1.64		$	1.54		$	1.54		$	0.36		$	1.35		$	6.86		$	4.82
Adjustments to net income and weighted average shares for net income EPS calculations: (1)
																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Basic
Net income, as reported	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
Preferred stock dividends, net of taxes	(1		)	(1		)	(1		)	(1		)	(1		)	(1		)	(1		)	(1		)	(4		)	(4		)
Net income available to common shareholders - basic	$	1,085		$	1,253		$	1,197		$	1,062		$	966		$	941		$	213		$	800		$	4,597		$	2,920
Diluted
Net income available to common shareholders - basic	$	1,085		$	1,253		$	1,197		$	1,062		$	966		$	941		$	213		$	800		$	4,597		$	2,920
Effect of dilutive securities:
Convertible preferred stock	1			1			1			1			1			1			1			1			4			4
Zero coupon convertible notes	1			1			1			1			1			1			1			1			4			4
Convertible junior subordinated notes (2)	7			1			—			—			—			—			—			—			8			—
Net income available to common shareholders - diluted	$	1,094		$	1,256		$	1,199		$	1,064		$	968		$	943		$	215		$	802		$	4,613		$	2,928
Common Shares
Basic
Weighted average shares outstanding	669.9			658.6			648.4			634.5			616.2			598.7			587.5			583.6			652.7			596.4
Diluted
Weighted average shares outstanding	669.9			658.6			648.4			634.5			616.2			598.7			587.5			583.6			652.7			596.4
Weighted average effects of dilutive securities:
Stock options and other incentive plans	9.1			8.9			8.3			9.0			6.9			7.1			5.8			4.8			9.4			6.1
Convertible preferred stock	3.1			3.0			2.8			2.8			2.6			2.6			2.3			2.2			2.9			2.4
Zero coupon convertible notes	2.4			2.4			2.4			2.4			2.4			2.4			2.4			2.4			2.4			2.4
Convertible junior subordinated notes (2)	16.7			3.1			—			—			—			—			—			—			4.9			—
Diluted weighted average shares outstanding	701.2			676.0			661.9			648.7			628.1			610.8			598.0			593.0			672.3			607.3

(1) Adjustments to net income and weighted average shares for net income EPS calculations can also be used for the operating income EPS calculations.

(2) Redeemed in April 2007.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

2

The Travelers Companies,Inc.
Statement of Income - Consolidated
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Revenues
Premiums	$	5,295		$	5,327		$	5,416		$	5,432		$	5,340		$	5,357		$	5,448		$	5,434		$	21,470		$	21,579
Net investment income	960			990			929			882			815			778			716			483			3,761			2,792
Fee income	120			127			148			113			105			90			120			75			508			390
Net realized investment gains (losses)	14			128			—			12			(62		)	36			(170		)	(219		)	154			(415		)
Other revenues	38			1			33			52			34			34			31			32			124			131
Total revenues	6,427			6,573			6,526			6,491			6,232			6,295			6,145			5,805			26,017			24,477
Claims and expenses
Claims and claim adjustment expenses	3,189			3,096			2,985			3,127			3,021			3,092			3,871			3,009			12,397			12,993
Amortization of deferred acquisition costs	869			915			956			966			954			961			990			975			3,706			3,880
General and administrative expenses	833			836			817			866			853			864			1,001			800			3,352			3,518
Interest expense	76			85			94			91			90			91			95			94			346			370
Total claims and expenses	4,967			4,932			4,852			5,050			4,918			5,008			5,957			4,878			19,801			20,761
Income before income taxes	1,460			1,641			1,674			1,441			1,314			1,287			188			927			6,216			3,716
Income tax expense (benefit)	374			387			476			378			347			345			(26		)	126			1,615			792
Net income	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
Other statistics
Effective tax rate on net investment income	23.2		%	23.4		%	22.2		%	21.1		%	20.2		%	19.8		%	18.1		%	9.5		%	22.5		%	17.7		%
Net investment income (after-tax)	$	737		$	758		$	724		$	696		$	650		$	624		$	587		$	438		$	2,915		$	2,299
Catastrophes, net of reinsurance:
Pre-tax	$	45		$	40		$	14		$	68		$	95		$	356		$	1,042		$	(85	)	$	167		$	1,408
After-tax	$	29		$	26		$	9		$	45		$	62		$	231		$	682		$	(56	)	$	109		$	919

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

3

The Travelers Companies, Inc.
Net Income by Major Component and Combined Ratio - Consolidated
($ in millions, net of tax)

	1Q 2007			2Q 2007			3Q 2007			4Q 2007			1Q 2008			2Q 2008			3Q 2008			4Q 2008			YTD 4Q 2007			YTD 4Q 2008
Underwriting gain (loss)	$	341		$	449		$	520		$	389		$	401		$	338		$	(208	)	$	545		$	1,699		$	1,076
Net investment income	737			758			724			696			650			624			587			438			2,915			2,299
Other, including interest expense	—			(40		)	(46		)	(28		)	(43		)	(44		)	(49		)	(44		)	(114		)	(180		)
Operating income	1,078			1,167			1,198			1,057			1,008			918			330			939			4,500			3,195
Net realized investment gains (losses)	8			87			—			6			(41		)	24			(116		)	(138		)	101			(271		)
Net income	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	59.2		%	57.1		%	53.6		%	56.6		%	55.7		%	57.0		%	69.9		%	54.9		%	56.6		%	59.4		%
Underwriting expense ratio	30.0		%	30.7		%	30.8		%	31.8		%	31.9		%	32.3		%	34.8		%	31.0		%	30.8		%	32.5		%
Combined ratio	89.2		%	87.8		%	84.4		%	88.4		%	87.6		%	89.3		%	104.7		%	85.9		%	87.4		%	91.9		%
Impact of catastrophes on combined ratio (3)	0.9		%	0.8		%	0.3		%	1.3		%	1.8		%	6.6		%	19.1		%	-1.6		%	0.7		%	6.5		%
Impact of prior year reserve development on combined ratio	-1.2		%	-2.4		%	-4.3		%	-2.4		%	-7.5		%	-9.8		%	-6.2		%	-5.1		%	-2.5		%	-7.1		%

(1) Before policyholder dividends.

(2) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses as follows:

	1Q 2007		2Q 2007		3Q 2007		4Q 2007		1Q 2008		2Q 2008		3Q 2008		4Q 2008		YTD 4Q 2007		YTD 4Q 2008
Billing and policy fees	$	29	$	25	$	26	$	27	$	27	$	26	$	27	$	26	$	107	$	106
Fee income:
Loss and loss adjustment expenses	$	47	$	48	$	71	$	47	$	43	$	30	$	58	$	13	$	213	$	144
Underwriting expenses	73		79		77		66		62		60		62		62		295		246
Total fee income	$	120	$	127	$	148	$	113	$	105	$	90	$	120	$	75	$	508	$	390

(3) The impact of catastrophes on the combined ratios for the three months ended September 30, 2008, and the three and twelve months ended December 31, 2008 included 15.8, (1.0) and 5.8 point impacts, respectively, on the loss and loss adjustment expense ratio, and 3.3, (0.6) and 0.7 point impacts, respectively, on the underwriting expense ratio.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

4

The Travelers Companies, Inc.
Operating Income - Consolidated
($ in millions)

	1Q 2007			2Q 2007			3Q 2007			4Q 2007			1Q 2008			2Q 2008			3Q 2008			4Q 2008			YTD 4Q 2007			YTD 4Q 2008
Revenues
Premiums	$	5,295		$	5,327		$	5,416		$	5,432		$	5,340		$	5,357		$	5,448		$	5,434		$	21,470		$	21,579
Net investment income	960			990			929			882			815			778			716			483			3,761			2,792
Fee income	120			127			148			113			105			90			120			75			508			390
Other revenues	38			1			33			52			34			34			31			32			124			131
Total revenues	6,413			6,445			6,526			6,479			6,294			6,259			6,315			6,024			25,863			24,892
Claims and expenses
Claims and claim adjustment expenses	3,189			3,096			2,985			3,127			3,021			3,092			3,871			3,009			12,397			12,993
Amortization of deferred acquisition costs	869			915			956			966			954			961			990			975			3,706			3,880
General and administrative expenses	833			836			817			866			853			864			1,001			800			3,352			3,518
Interest expense	76			85			94			91			90			91			95			94			346			370
Total claims and expenses	4,967			4,932			4,852			5,050			4,918			5,008			5,957			4,878			19,801			20,761
Operating income before income taxes	1,446			1,513			1,674			1,429			1,376			1,251			358			1,146			6,062			4,131
Income tax expense	368			346			476			372			368			333			28			207			1,562			936
Operating income	$	1,078		$	1,167		$	1,198		$	1,057		$	1,008		$	918		$	330		$	939		$	4,500		$	3,195
Other statistics
Effective tax rate on net investment income	23.2		%	23.4		%	22.2		%	21.1		%	20.2		%	19.8		%	18.1		%	9.5		%	22.5		%	17.7		%
Net investment income (after-tax)	$	737		$	758		$	724		$	696		$	650		$	624		$	587		$	438		$	2,915		$	2,299
Catastrophes, net of reinsurance (1):
Pre-tax	$	45		$	40		$	14		$	68		$	95		$	356		$	1,042		$	(85	)	$	167		$	1,408
After-tax	$	29		$	26		$	9		$	45		$	62		$	231		$	682		$	(56	)	$	109		$	919

(1) In 4Q 2008, “Catastrophes, net of reinsurance” includes a net benefit from re-estimation of current year catastrophe losses.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

5

The Travelers Companies, Inc.
Selected Statistics - Property and Casualty Operations
($ in millions)

																						YTD		YTD
	1Q			2Q		3Q			4Q		1Q			2Q		3Q			4Q			4Q		4Q
	2007			2007		2007			2007		2008			2008		2008			2008			2007		2008
Statutory underwriting
Gross written premiums	$	6,071		$	6,262	$	6,097		$	5,768	$	5,933		$	6,061	$	6,134		$	5,709		$	24,198	$	23,837
Net written premiums	$	5,144		$	5,714	$	5,394		$	5,366	$	5,188		$	5,629	$	5,481		$	5,385		$	21,618	$	21,683
Net earned premiums	$	5,295		$	5,327	$	5,416		$	5,432	$	5,340		$	5,357	$	5,448		$	5,434		$	21,470	$	21,579
Losses and loss adjustment expenses	3,128			3,059		2,921			3,067		2,978			3,118		3,781			2,974			12,175		12,851
Underwriting expenses	1,670			1,732		1,694			1,676		1,706			1,766		1,811			1,643			6,772		6,926
Statutory underwriting gain (loss)	497			536		801			689		656			473		(144		)	817			2,523		1,802
Policyholder dividends	7			6		11			8		7			9		4			11			32		31
Statutory underwriting gain (loss) after policyholder dividends	$	490		$	530	$	790		$	681	$	649		$	464	$	(148	)	$	806		$	2,491	$	1,771
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	42,942		$	43,029	$	43,000		$	43,068	$	42,840		$	42,885	$	42,848		$	41,307		$	43,068	$	41,307
Increase (decrease) in reserves	$	(6	)	$	87	$	(29	)	$	68	$	(228	)	$	45	$	(37	)	$	(1,541	)	$	120	$	(1,761	)
Statutory surplus	$	21,204		$	21,843	$	22,221		$	22,878	$	22,353		$	22,288	$	21,929		$	21,491		$	22,878	$	21,491
Net written premiums/surplus (1)	1.01:1			0.99:1		0.98:1			0.94:1		0.97:1			0.97:1		0.99:1			1.01:1			0.94:1		1.01:1

(1)  Based on 12 months of rolling net written premiums.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

6

The Travelers Companies, Inc.
Written and Earned Premiums - Property and Casualty Operations
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Written premiums
Gross	$	6,071		$	6,262		$	6,097		$	5,768		$	5,933		$	6,061		$	6,134		$	5,709		$	24,198		$	23,837
Ceded	(927		)	(548		)	(703		)	(402		)	(745		)	(432		)	(653		)	(324		)	(2,580		)	(2,154		)
Net	$	5,144		$	5,714		$	5,394		$	5,366		$	5,188		$	5,629		$	5,481		$	5,385		$	21,618		$	21,683
Earned premiums
Gross	$	6,001		$	6,031		$	6,073		$	6,075		$	5,932		$	5,957		$	6,035		$	5,978		$	24,180		$	23,902
Ceded	(706		)	(704		)	(657		)	(643		)	(592		)	(600		)	(587		)	(544		)	(2,710		)	(2,323		)
Net	$	5,295		$	5,327		$	5,416		$	5,432		$	5,340		$	5,357		$	5,448		$	5,434		$	21,470		$	21,579

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

7

The Travelers Companies, Inc.
Operating Income - Business Insurance
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Revenues
Premiums	$	2,763		$	2,802		$	2,850		$	2,868		$	2,786		$	2,781		$	2,823		$	2,790		$	11,283		$	11,180
Net investment income	694			717			664			633			573			540			494			310			2,708			1,917
Fee income	120			127			148			113			105			90			120			75			508			390
Other revenues	4			10			1			9			6			7			8			9			24			30
Total revenues	3,581			3,656			3,663			3,623			3,470			3,418			3,445			3,184			14,523			13,517
Claims and expenses
Claims and claim adjustment expenses	1,741			1,664			1,594			1,674			1,558			1,556			1,952			1,542			6,673			6,608
Amortization of deferred acquisition costs	403			435			451			453			451			451			466			450			1,742			1,818
General and administrative expenses	509			503			504			512			516			516			565			482			2,028			2,079
Interest expense	—			—			1			—			—			—			—			1			1			1
Total claims and expenses	2,653			2,602			2,550			2,639			2,525			2,523			2,983			2,475			10,444			10,506
Operating income before federal income taxes	928			1,054			1,113			984			945			895			462			709			4,079			3,011
Income taxes	250			249			310			255			262			237			84			90			1,064			673
Operating income	$	678		$	805		$	803		$	729		$	683		$	658		$	378		$	619		$	3,015		$	2,338
Other statistics
Effective tax rate on net investment income	23.1		%	23.3		%	22.0		%	20.8		%	19.7		%	19.2		%	17.4		%	6.3		%	22.3		%	16.8		%
Net investment income (after-tax)	$	534		$	550		$	518		$	502		$	460		$	436		$	409		$	291		$	2,104		$	1,596
Catastrophes, net of reinsurance (1):
Pre-tax	$	—		$	—		$	—		$	4		$	57		$	185		$	488		$	(24	)	$	4		$	706
After-tax	$	—		$	—		$	—		$	3		$	37		$	120		$	318		$	(16	)	$	3		$	459

(1)  In 4Q 2008, “Catastrophes, net of reinsurance” includes a net benefit from re-estimation of current year catastrophe losses.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

8

The Travelers Companies, Inc.
Operating Income by Major Component and Combined Ratio - Business Insurance
($ in millions, net of tax)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Underwriting gain (loss)	$	140		$	249		$	284		$	221		$	219		$	217		$	(35	)	$	325		$	894		$	726
Net investment income	534			550			518			502			460			436			409			291			2,104			1,596
Other	4			6			1			6			4			5			4			3			17			16
Operating income	$	678		$	805		$	803		$	729		$	683		$	658		$	378		$	619		$	3,015		$	2,338
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	61.2		%	57.6		%	53.3		%	56.6		%	54.2		%	54.7		%	67.1		%	54.6		%	57.1		%	57.7		%
Underwriting expense ratio	30.3		%	30.5		%	30.7		%	31.2		%	32.4		%	32.4		%	34.2		%	31.1		%	30.7		%	32.5		%
Combined ratio	91.5		%	88.1		%	84.0		%	87.8		%	86.6		%	87.1		%	101.3		%	85.7		%	87.8		%	90.2		%
Impact of catastrophes on combined ratio (3)	0.0		%	0.0		%	0.0		%	0.1		%	2.1		%	6.6		%	17.3		%	-0.8		%	0.0		%	6.3		%
Impact of prior year reserve development on combined ratio	-0.9		%	-2.1		%	-5.9		%	-1.7		%	-11.2		%	-12.8		%	-8.7		%	-7.3		%	-2.6		%	-10.0		%

(1)  Before policyholder dividends.

(2)  Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses as follows:

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Billing and policy fees	$	3	$	3	$	3	$	4	$	3	$	4	$	3	$	4	$	13	$	14
Fee income:
Loss and loss adjustment expenses	$	47	$	48	$	71	$	47	$	43	$	30	$	58	$	13	$	213	$	144
Underwriting expenses	73		79		77		66		62		60		62		62		295		246
Total fee income	$	120	$	127	$	148	$	113	$	105	$	90	$	120	$	75	$	508	$	390

(3)  The impact of catastrophes on the combined ratios for the three months ended September 30, 2008, and the three and twelve months ended December 31, 2008 included 14.6, (0.3) and 5.7 point impacts, respectively, on the loss and loss adjustment expense ratio, and 2.7, (0.5) and 0.6 point impacts, respectively, on the underwriting expense ratio.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

9

The Travelers Companies, Inc.
Selected Statistics - Business Insurance
($ in millions)

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Statutory underwriting
Gross written premiums	$	3,387	$	3,321	$	3,243	$	3,066	$	3,308	$	3,087	$	3,215	$	2,970	$	13,017	$	12,580
Net written premiums	$	2,880	$	2,935	$	2,726	$	2,777	$	2,911	$	2,805	$	2,748	$	2,756	$	11,318	$	11,220
Net earned premiums	$	2,763	$	2,802	$	2,850	$	2,868	$	2,786	$	2,781	$	2,823	$	2,790	$	11,283	$	11,180
Losses and loss adjustment expenses	1,684		1,628		1,530		1,616		1,517		1,576		1,868		1,509		6,458		6,470
Underwriting expenses	866		882		870		867		903		897		922		842		3,485		3,564
Statutory underwriting gain	213		292		450		385		366		308		33		439		1,340		1,146
Policyholder dividends	3		3		5		4		4		6		2		6		15		18
Statutory underwriting gain after policyholder dividends	$	210	$	289	$	445	$	381	$	362	$	302	$	31	$	433	$	1,325	$	1,128

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

10

The Travelers Companies, Inc.
Net Written Premiums - Business Insurance
($ in millions)

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Net written premiums by market
Select Accounts	$	701	$	731	$	637	$	642	$	708	$	724	$	662	$	662	$	2,711	$	2,756
Commercial Accounts	641		581		615		681		673		550		635		666		2,518		2,524
National Accounts	255		286		245		270		246		241		240		269		1,056		996
Industry-Focused Underwriting	582		580		584		555		613		584		613		586		2,301		2,396
Target Risk Underwriting	417		475		394		379		423		445		366		359		1,665		1,593
Specialized Distribution	252		276		243		244		244		259		228		208		1,015		939
Total core	2,848		2,929		2,718		2,771		2,907		2,803		2,744		2,750		11,266		11,204
Business Insurance other	32		6		8		6		4		2		4		6		52		16
Total	$	2,880	$	2,935	$	2,726	$	2,777	$	2,911	$	2,805	$	2,748	$	2,756	$	11,318	$	11,220
Net written premiums by product line
Commercial multi-peril	$	805	$	778	$	713	$	770	$	791	$	726	$	693	$	728	$	3,066	$	2,938
Workers’ compensation	614		553		538		562		674		566		598		614		2,267		2,452
Commercial automobile	506		526		493		486		500		476		511		465		2,011		1,952
Property	494		549		476		471		482		515		433		430		1,990		1,860
General liability	434		527		501		481		462		520		510		519		1,943		2,011
Other	27		2		5		7		2		2		3		—		41		7
Total	$	2,880	$	2,935	$	2,726	$	2,777	$	2,911	$	2,805	$	2,748	$	2,756	$	11,318	$	11,220
National accounts
Additions to claim volume under administration (1)	$	836	$	640	$	554	$	641	$	712	$	522	$	482	$	566	$	2,671	$	2,282
Written fees	$	123	$	104	$	100	$	93	$	103	$	80	$	85	$	77	$	420	$	345

(1)  Includes new and renewal business.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

11

The Travelers Companies, Inc.
Operating Income - Financial, Professional & International Insurance
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Revenues
Premiums	$	844		$	844		$	854		$	842		$	847		$	852		$	863		$	867		$	3,384		$	3,429
Net investment income	121			125			126			122			122			120			114			98			494			454
Other revenues	5			6			5			13			5			8			5			6			29			24
Total revenues	970			975			985			977			974			980			982			971			3,907			3,907
Claims and expenses
Claims and claim adjustment expenses	451			464			419			403			390			376			545			458			1,737			1,769
Amortization of deferred acquisition costs	163			160			166			165			159			163			166			164			654			652
General and administrative expenses	145			146			144			155			144			149			149			139			590			581
Interest expense	—			—			—			—			—			1			1			—			—			2
Total claims and expenses	759			770			729			723			693			689			861			761			2,981			3,004
Operating income before federal income taxes	211			205			256			254			281			291			121			210			926			903
Income taxes	55			53			73			70			73			87			38			56			251			254
Operating income	$	156		$	152		$	183		$	184		$	208		$	204		$	83		$	154		$	675		$	649
Other statistics
Effective tax rate on net investment income	24.6		%	24.5		%	24.0		%	23.6		%	23.5		%	23.5		%	22.0		%	20.6		%	24.2		%	22.5		%
Net investment income (after-tax)	$	91		$	95		$	95		$	94		$	93		$	92		$	89		$	78		$	375		$	352
Catastrophes, net of reinsurance (1):
Pre-tax	$	—		$	—		$	—		$	—		$	—		$	6		$	91		$	(13	)	$	—		$	84
After-tax	$	—		$	—		$	—		$	—		$	—		$	4		$	64		$	(10	)	$	—		$	58

(1)  In 4Q 2008, “Catastrophes, net of reinsurance” includes a net benefit from re-estimation of current year catastrophe losses.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

12

The Travelers Companies, Inc.
Operating Income by Major Component and Combined Ratio - Financial, Professional & International Insurance
($ in millions, net of tax)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Underwriting gain (loss)	$	62		$	53		$	84		$	83		$	112		$	107		$	(8	)	$	72		$	282		$	283
Net investment income	91			95			95			94			93			92			89			78			375			352
Other	3			4			4			7			3			5			2			4			18			14
Operating income	$	156		$	152		$	183		$	184		$	208		$	204		$	83		$	154		$	675		$	649
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	53.0		%	54.7		%	48.3		%	47.4		%	45.7		%	43.7		%	62.9		%	52.3		%	50.8		%	51.2		%
Underwriting expense ratio	36.4		%	36.3		%	36.3		%	37.9		%	35.7		%	36.7		%	36.5		%	34.9		%	36.8		%	36.0		%
Combined ratio	89.4		%	91.0		%	84.6		%	85.3		%	81.4		%	80.4		%	99.4		%	87.2		%	87.6		%	87.2		%
Impact of catastrophes on combined ratio (2)	0.0		%	0.0		%	0.0		%	0.0		%	0.0		%	0.6		%	10.5		%	-1.6		%	0.0		%	2.5		%
Impact of prior year reserve development on combined ratio	0.0		%	-1.7		%	-4.8		%	-4.3		%	-7.4		%	-15.5		%	-4.9		%	-4.2		%	-2.7		%	-8.0		%

(1)  Before policyholder dividends.

(2)  The impact of catastrophes on the combined ratios for the three months ended September 30, 2008, and the three and twelve months ended December 31, 2008 included 9.8, (1.5) and 2.3 point impacts, respectively, on the loss and loss adjustment expense ratio, and 0.7, (0.1) and 0.2 point impacts, respectively, on the underwriting expense ratio.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

13

The Travelers Companies, Inc.
Selected Statistics - Financial, Professional & International Insurance
($ in millions)

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Statutory underwriting
Gross written premiums	$	975	$	1,063	$	978	$	1,021	$	946	$	1,065	$	965	$	990	$	4,037	$	3,966
Net written premiums	$	600	$	984	$	918	$	963	$	644	$	985	$	901	$	938	$	3,465	$	3,468
Net earned premiums	$	844	$	844	$	854	$	842	$	847	$	852	$	863	$	867	$	3,384	$	3,429
Losses and loss adjustment expenses	447		463		419		401		387		383		539		456		1,730		1,765
Underwriting expenses	322		314		302		305		311		317		299		286		1,243		1,213
Statutory underwriting gain	75		67		133		136		149		152		25		125		411		451
Policyholder dividends	4		3		6		4		3		3		2		5		17		13
Statutory underwriting gain after policyholder dividends	$	71	$	64	$	127	$	132	$	146	$	149	$	23	$	120	$	394	$	438

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

14

The Travelers Companies, Inc.
Net Written Premiums - Financial, Professional & International Insurance
($ in millions)

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Net written premiums by market
Bond & Financial Products excluding Afianzadora Insurgentes	$	292	$	652	$	655	$	604	$	378	$	621	$	643	$	586	$	2,203	$	2,228
Afianzadora Insurgentes (1)	19		6		—		—		—		—		—		—		25		—
Total Bond & Financial Products	311		658		655		604		378		621		643		586		2,228		2,228
International	289		326		263		359		266		364		258		352		1,237		1,240
Total	$	600	$	984	$	918	$	963	$	644	$	985	$	901	$	938	$	3,465	$	3,468
Net written premiums by product line
General liability	$	96	$	275	$	284	$	287	$	101	$	259	$	271	$	290	$	942	$	921
Fidelity & surety	180		344		341		287		239		328		341		264		1,152		1,172
International	289		326		263		359		266		364		258		352		1,237		1,240
Other	35		39		30		30		38		34		31		32		134		135
Total	$	600	$	984	$	918	$	963	$	644	$	985	$	901	$	938	$	3,465	$	3,468

(1)  In March 2007, the Company completed the sale of its Mexican surety subsidiary, Afianzadora Insurgentes.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

15

The Travelers Companies, Inc.
Operating Income (Loss) - Personal Insurance
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Revenues
Premiums	$	1,688		$	1,681		$	1,712		$	1,722		$	1,707		$	1,724		$	1,762		$	1,777		$	6,803		$	6,970
Net investment income	145			148			139			127			120			118			108			75			559			421
Other revenues	24			21			23			22			21			19			18			17			90			75
Total revenues	1,857			1,850			1,874			1,871			1,848			1,861			1,888			1,869			7,452			7,466
Claims and expenses
Claims and claim adjustment expenses	997			968			972			1,050			1,073			1,160			1,374			1,009			3,987			4,616
Amortization of deferred acquisition costs	303			320			339			348			344			347			358			361			1,310			1,410
General and administrative expenses	170			177			162			190			181			193			281			174			699			829
Total claims and expenses	1,470			1,465			1,473			1,588			1,598			1,700			2,013			1,544			5,996			6,855
Operating income (loss) before federal income taxes	387			385			401			283			250			161			(125		)	325			1,456			611
Income taxes	121			109			125			82			69			39			(61		)	99			437			146
Operating income (loss)	$	266		$	276		$	276		$	201		$	181		$	122		$	(64	)	$	226		$	1,019		$	465
Other statistics
Effective tax rate on net investment income	22.8		%	22.8		%	21.6		%	20.1		%	19.1		%	18.9		%	17.2		%	8.2		%	21.9		%	16.6		%
Net investment income (after-tax)	$	112		$	113		$	111		$	100		$	97		$	96		$	89		$	69		$	436		$	351
Catastrophes, net of reinsurance (1):
Pre-tax	$	45		$	40		$	14		$	64		$	38		$	165		$	463		$	(48	)	$	163		$	618
After-tax	$	29		$	26		$	9		$	42		$	25		$	107		$	300		$	(30	)	$	106		$	402

(1)  In 4Q 2008, “Catastrophes, net of reinsurance” includes a net benefit from re-estimation of current year catastrophe losses.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

16

The Travelers Companies, Inc. Operating Income (Loss) by Major Component and Combined Ratio - Personal Insurance ($ in millions, net of tax)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Underwriting gain (loss)	$	139		$	147		$	152		$	85		$	70		$	14		$	(165	)	$	148		$	523		$	67
Net investment income	112			113			111			100			97			96			89			69			436			351
Other	15			16			13			16			14			12			12			9			60			47
Operating income (loss)	$	266		$	276		$	276		$	201		$	181		$	122		$	(64	)	$	226		$	1,019		$	465
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	59.0		%	57.6		%	56.8		%	61.0		%	62.9		%	67.3		%	77.9		%	56.8		%	58.6		%	66.2		%
Underwriting expense ratio	26.5		%	28.3		%	28.0		%	29.8		%	29.3		%	30.0		%	35.0		%	28.8		%	28.2		%	30.8		%
Combined ratio	85.5		%	85.9		%	84.8		%	90.8		%	92.2		%	97.3		%	112.9		%	85.6		%	86.8		%	97.0		%
Impact of catastrophes on combined ratio (2)	2.7		%	2.4		%	0.8		%	3.7		%	2.2		%	9.6		%	26.2		%	-2.7		%	2.4		%	8.9		%
Impact of prior year reserve development on combined ratio	-2.1		%	-3.0		%	-1.4		%	-2.5		%	-1.5		%	-2.2		%	-2.5		%	-2.1		%	-2.2		%	-2.1		%

(1) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of underwriting expenses.  Billing and policy fees are as follows:

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Billing and policy fees	$	26	$	22	$	23	$	23	$	24	$	22	$	24	$	22	$	94	$	92

(2)  The impact of catastrophes on the combined ratios for the three months ended September 30, 2008, and the three and twelve months ended December 31, 2008 included 20.8, (1.6) and 7.8 point impacts, respectively, on the loss and loss adjustment expense ratio, and 5.4, (1.1) and 1.1 point impacts, respectively, on the underwriting expense ratio.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

17

The Travelers Companies, Inc. Selected Statistics - Personal Insurance ($ in millions)

																		YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q			4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008			2008		2007		2008
Statutory underwriting
Gross written premiums	$	1,709	$	1,878	$	1,876	$	1,681	$	1,679	$	1,909	$	1,954		$	1,749	$	7,144	$	7,291
Net written premiums	$	1,664	$	1,795	$	1,750	$	1,626	$	1,633	$	1,839	$	1,832		$	1,691	$	6,835	$	6,995
Net earned premiums	$	1,688	$	1,681	$	1,712	$	1,722	$	1,707	$	1,724	$	1,762		$	1,777	$	6,803	$	6,970
Losses and loss adjustment expenses	997		968		972		1,050		1,074		1,159		1,374			1,009		3,987		4,616
Underwriting expenses	482		536		522		504		492		552		590			515		2,044		2,149
Statutory underwriting gain (loss)	$	209	$	177	$	218	$	168	$	141	$	13	$	(202	)	$	253	$	772	$	205
Policies in force (in thousands) (1)
Automobile	2,456		2,464		2,473		2,479		2,495		2,526		2,538			2,526		2,479		2,526
Homeowners and other	4,579		4,631		4,666		4,682		4,702		4,755		4,808			4,831		4,682		4,831

(1)  In April 2007, the Company completed the sale of its subsidiary, Mendota Insurance Company and its wholly-owned subsidiaries, Mendakota Insurance Company and Mendota Insurance Agency, Inc.

Policies in force have been restated to exclude sold entities.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

18

The Travelers Companies, Inc.
Selected Statistics - Personal Insurance (Automobile)
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Statutory underwriting
Gross written premiums	$	975		$	927		$	914		$	857		$	930		$	939		$	938		$	882		$	3,673		$	3,689
Net written premiums:
Excluding Mendota	$	916		$	915		$	901		$	847		$	922		$	933		$	929		$	876		$	3,579		$	3,660
Mendota (1)	49			—			—			—			—			—			—			—			49			—
Total	$	965		$	915		$	901		$	847		$	922		$	933		$	929		$	876		$	3,628		$	3,660
Net earned premiums	$	939		$	912		$	920		$	921		$	911		$	919		$	937		$	941		$	3,692		$	3,708
Losses and loss adjustment expenses	595			593			599			622			649			637			655			674			2,409			2,615
Underwriting expenses	254			262			253			243			262			271			270			257			1,012			1,060
Statutory underwriting gain	$	90		$	57		$	68		$	56		$	—		$	11		$	12		$	10		$	271		$	33
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	63.3		%	65.1		%	65.1		%	67.6		%	71.3		%	69.3		%	69.9		%	71.5		%	65.3		%	70.5		%
Underwriting expense ratio	24.1		%	26.6		%	26.3		%	27.2		%	27.7		%	28.6		%	28.5		%	28.6		%	26.1		%	28.4		%
Combined ratio	87.4		%	91.7		%	91.4		%	94.8		%	99.0		%	97.9		%	98.4		%	100.1		%	91.4		%	98.9		%
Impact of catastrophes on combined ratio	0.1		%	0.4		%	0.0		%	0.0		%	0.0		%	1.5		%	0.7		%	0.0		%	0.1		%	0.5		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	1		$	4		$	—		$	—		$	—		$	14		$	6		$	—		$	5		$	20
After-tax	$	1		$	2		$	—		$	—		$	—		$	9		$	4		$	—		$	3		$	13
Policies in force (in thousands) (3)	2,456			2,464			2,473			2,479			2,495			2,526			2,538			2,526
Change from prior year quarter (3)	6.3		%	3.6		%	1.7		%	1.2		%	1.6		%	2.5		%	2.6		%	1.9		%
Change from prior quarter (3)	0.2		%	0.3		%	0.4		%	0.2		%	0.6		%	1.2		%	0.5		%	-0.5		%

(1)  In April 2007, the Company completed the sale of its subsidiary, Mendota Insurance Company and its wholly-owned subsidiaries, Mendakota Insurance Company and Mendota Insurance Agency, Inc. (collectively, Mendota).

(2)  Billing and policy fees, which are a component of other revenues, are allocated as a reduction of underwriting expenses.

Billing and policy fees are as follows:

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Billing and policy fees	$	17	$	13	$	14	$	13	$	14	$	13	$	14	$	13	$	57	$	54

(3)  Policies in force have been restated to exclude sold entities.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

19

The Travelers Companies, Inc.
Selected Statistics - Personal Insurance (Homeowners and Other)
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Statutory underwriting
Gross written premiums	$	734		$	951		$	962		$	824		$	749		$	970		$	1,016		$	867		$	3,471		$	3,602
Net written premiums	$	699		$	880		$	849		$	779		$	711		$	906		$	903		$	815		$	3,207		$	3,335
Net earned premiums	$	749		$	769		$	792		$	801		$	796		$	805		$	825		$	836		$	3,111		$	3,262
Losses and loss adjustment expenses	402			375			373			428			425			522			719			335			1,578			2,001
Underwriting expenses	228			274			269			261			230			281			320			258			1,032			1,089
Statutory underwriting gain (loss)	$	119		$	120		$	150		$	112		$	141		$	2		$	(214	)	$	243		$	501		$	172
Other statistics
GAAP Combined ratio (1):
Loss and loss adjustment expense ratio	53.7		%	48.7		%	47.1		%	53.4		%	53.3		%	64.9		%	87.1		%	40.2		%	50.7		%	61.4		%
Underwriting expense ratio	29.4		%	30.2		%	30.0		%	32.9		%	31.3		%	31.6		%	42.4		%	29.1		%	30.7		%	33.6		%
Combined ratio	83.1		%	78.9		%	77.1		%	86.3		%	84.6		%	96.5		%	129.5		%	69.3		%	81.4		%	95.0		%
Impact of catastrophes on combined ratio	5.9		%	4.6		%	1.8		%	8.0		%	4.8		%	18.8		%	55.3		%	-5.6		%	5.1		%	18.4		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	44		$	36		$	14		$	64		$	38		$	151		$	457		$	(48	)	$	158		$	598
After-tax	$	28		$	24		$	9		$	42		$	25		$	98		$	296		$	(30	)	$	103		$	389
Policies in force (in thousands) (2)	4,579			4,631			4,666			4,682			4,702			4,755			4,808			4,831
Change from prior year quarter (2)	7.2		%	5.6		%	3.9		%	3.0		%	2.7		%	2.7		%	3.0		%	3.2		%
Change from prior quarter (2)	0.8		%	1.1		%	0.8		%	0.3		%	0.4		%	1.1		%	1.1		%	0.5		%

(1)  Billing and policy fees, which are a component of other revenues, are allocated as a reduction of underwriting expenses.

Billing and policy fees are as follows:

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2007		2007		2007		2007		2008		2008		2008		2008		2007		2008
Billing and policy fees	$	9	$	9	$	9	$	10	$	10	$	9	$	10	$	9	$	37	$	38

(2)  In April 2007, the Company completed the sale of its subsidiary, Mendota Insurance Company and its wholly-owned subsidiaries, Mendakota Insurance Company and Mendota Insurance Agency, Inc. Policies in force

have been restated to exclude sold entities.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

20

The Travelers Companies, Inc.
Interest Expense and Other
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Revenues
Net investment income	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Other revenues (1)	5			(36		)	4			8			2			—			—			—			(19		)	2
Total revenues	5			(36		)	4			8			2			—			—			—			(19		)	2
Claims and expenses
Interest expense	76			85			93			91			90			90			94			93			345			367
General and administrative expenses	9			10			7			9			12			6			6			5			35			29
Total claims and expenses	85			95			100			100			102			96			100			98			380			396
Operating loss before federal income tax benefit	(80		)	(131		)	(96		)	(92		)	(100		)	(96		)	(100		)	(98		)	(399		)	(394		)
Income taxes	(58		)	(65		)	(32		)	(35		)	(36		)	(30		)	(33		)	(38		)	(190		)	(137		)
Operating loss	$	(22	)	$	(66	)	$	(64	)	$	(57	)	$	(64	)	$	(66	)	$	(67	)	$	(60	)	$	(209	)	$	(257	)

(1)  In the second quarter of 2007, other revenues includes a $39 million loss on the Company’s redemption of its 4.50% convertible junior subordinated notes, representing the redemption premium paid and the write off of the remaining unamortized debt issuance costs.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

21

The Travelers Companies, Inc.
Consolidated Balance Sheet
(in millions)

	December 31,		December 31,
	2008 (1)		2007
Assets
Fixed maturities, available for sale at fair value (including $8 and $1,988 subject to securities lending) (amortized cost $61,569 and $64,152)	$	61,275	$	64,920
Equity securities, at fair value (cost $461 and $473)	379		488
Real estate	827		850
Short-term securities	5,222		5,186
Other investments	3,035		3,374
Total investments	70,738		74,818
Cash	350		271
Investment income accrued	823		861
Premiums receivable	5,954		6,142
Reinsurance recoverables	14,232		15,641
Ceded unearned premiums	941		1,123
Deferred acquisition costs	1,774		1,809
Deferred tax asset	1,965		1,207
Contractholder receivables	6,350		6,696
Goodwill	3,366		3,366
Other intangible assets	688		814
Other assets	2,570		2,476
Total assets	$	109,751	$	115,224

	December 31,			December 31,
	2008 (1)			2007
Liabilities
Claims and claim adjustment expense reserves	$	54,723		$	57,700
Unearned premium reserves	10,957			11,227
Contractholder payables	6,350			6,696
Payables for reinsurance premiums	528			618
Debt	6,181			6,242
Other liabilities	5,693			6,125
Total liabilities	84,432			88,608
Shareholders’ equity
Preferred Stock Savings Plan - convertible preferred stock (0.3 shares issued and outstanding)	89			112
Common stock (1,750.0 shares authorized; 585.1 and 627.8 shares issued and outstanding)	19,242			18,990
Retained earnings	13,314			11,110
Accumulated other changes in equity from nonowner sources	(900		)	670
Treasury stock, at cost (128.8 and 82.9 shares)	(6,426		)	(4,266		)
Total shareholders’ equity	25,319			26,616
Total liabilities and shareholders’ equity	$	109,751		$	115,224

(1) Preliminary.

22

The Travelers Companies, Inc.
Investment Portfolio
(at carrying value, $ in millions)

	December 31,			Pre-tax Book		December 31,		Pre-tax Book
	2008			Yield (1)		2007		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	22,481		5.32	%	$	26,369	5.21	%
Tax-exempt fixed maturities	38,794			4.14	%	38,551		4.16	%
Total fixed maturities	61,275			4.59	%	64,920		4.59	%
Non-redeemable preferred stocks	219			6.35	%	305		6.27	%
Common stocks	160					183
Total equity securities	379					488
Real estate	827					850
Short-term securities	5,222			1.20	%	5,186		4.95	%
Private equities	1,505					1,437
Hedge funds	531					914
Real estate joint ventures & other	886					948
Mortgage loans	94			8.06	%	45		7.31	%
Trading securities	19					30
Total other investments	3,035					3,374
Total investments	$	70,738				$	74,818
Net unrealized investment gains (losses), net of tax, included in shareholders’ equity	$	(144	)			$	620

(1)  Yields are provided for those investments with an embedded book yield.

23

The Travelers Companies, Inc.
Investment Portfolio - Fixed Maturities Data
(at carrying value, $ in millions)

	December 31,		December 31,
	2008		2007
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	1,841	$	2,150
Obligations of states and political subdivisions	39,062		38,822
Debt securities issued by foreign governments	1,519		1,635
Mortgage-backed securities - principally obligations of U.S. Government agencies	6,059		7,116
Corporates (including redeemable preferreds)	12,794		15,197
Total fixed maturities	$	61,275	$	64,920

Fixed Maturities

Quality Characteristics (1)

	December 31, 2008
	Amount		% of Total
Quality Ratings
Aaa	$	30,878	50.4	%
Aa	20,282		33.1
A	6,030		9.8
Baa	2,883		4.7
Total investment grade	60,073		98.0
Ba	642		1.1
B	382		0.6
Caa and lower	178		0.3
Total below investment grade	1,202		2.0
Total fixed maturities	$	61,275	100.0	%
Average weighted quality	Aa1, AA+
Average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases	4.2

(1)  Rated using external rating agencies or by Travelers when a public rating does not exist.  Below investment grade assets refer to securities rated “Ba” or below.

24

The Travelers Companies, Inc.
Investment Income
($ in millions)

	1Q 2007			2Q 2007			3Q 2007			4Q 2007			1Q 2008			2Q 2008			3Q 2008			4Q 2008			YTD 4Q 2007			YTD 4Q 2008
Gross investment income
Fixed maturities	$	709		$	712		$	731		$	741		$	736		$	726		$	727		$	726		$	2,893		$	2,915
Short-term securities	73			64			76			66			52			32			36			23			279			143
Other	193			229			137			89			39			32			(37		)	(256		)	648			(222		)
	975			1,005			944			896			827			790			726			493			3,820			2,836
Investment expenses	15			15			15			14			12			12			10			10			59			44
Net investment income, pre-tax	960			990			929			882			815			778			716			483			3,761			2,792
Income taxes	223			232			205			186			165			154			129			45			846			493
Net investment income, after-tax	$	737		$	758		$	724		$	696		$	650		$	624		$	587		$	438		$	2,915		$	2,299
Effective tax rate	23.2		%	23.4		%	22.2		%	21.1		%	20.2		%	19.8		%	18.1		%	9.5		%	22.5		%	17.7		%
Average invested assets (1)	$	72,737		$	73,063		$	74,451		$	75,215		$	74,733		$	74,156		$	74,256		$	73,588		$	73,872		$	74,197
Average yield pre-tax (1)	5.3		%	5.4		%	5.0		%	4.7		%	4.4		%	4.2		%	3.9		%	2.6		%	5.1		%	3.8		%
Average yield after-tax	4.1		%	4.2		%	3.9		%	3.7		%	3.5		%	3.4		%	3.2		%	2.4		%	3.9		%	3.1		%

(1) Excludes net unrealized investment gains (losses), net of tax, and is adjusted for cash, receivables for investment sales, payables on investment purchases and accrued investment income.

25

The Travelers Companies, Inc.
Net Realized and Unrealized Investment Gains (Losses)
($ in millions)

	1Q 2007			2Q 2007			3Q 2007			4Q 2007			1Q 2008			2Q 2008			3Q 2008			4Q 2008			YTD 4Q 2007			YTD 4Q 2008
Net realized investment gains (losses)
Fixed maturities	$	9		$	13		$	(7	)	$	(10	)	$	(32	)	$	6		$	(153	)	$	(192	)	$	5		$	(371	)
Equity securities	2			3			(1		)	(2		)	(1		)	(14		)	(28		)	(29		)	2			(72		)
Other (1) (2)	3			112			8			24			(29		)	44			11			2			147			28
Realized investment gains (losses) before tax	14			128			—			12			(62		)	36			(170		)	(219		)	154			(415		)
Related taxes	6			41			—			6			(21		)	12			(54		)	(81		)	53			(144		)
Net realized investment gains (losses)	$	8		$	87		$	—		$	6		$	(41	)	$	24		$	(116	)	$	(138	)	$	101		$	(271	)
Gross investment gains (2)	$	69		$	173		$	64		$	155		$	89		$	138		$	91		$	160		$	461		$	478
Gross investment losses before impairments (2)	(46		)	(36		)	(50		)	(105		)	(113		)	(74		)	(105		)	(181		)	(237		)	(473		)
Impairments	(9		)	(9		)	(14		)	(38		)	(38		)	(28		)	(156		)	(198		)	(70		)	(420		)
Realized investment gains (losses) before tax	14			128			—			12			(62		)	36			(170		)	(219		)	154			(415		)
Related taxes	6			41			—			6			(21		)	12			(54		)	(81		)	53			(144		)
Net realized investment gains (losses)	$	8		$	87		$	—		$	6		$	(41	)	$	24		$	(116	)	$	(138	)	$	101		$	(271	)
	March 31, 2007			June 30, 2007			September 30, 2007			December 31, 2007			March 31, 2008			June 30, 2008			September 30, 2008			December 31,2008
Net unrealized investment gains (losses), net of tax, by asset type
Fixed maturities	$	417		$	(591	)	$	155		$	768		$	695		$	(73	)	$	(1,406	)	$	(294	)
Equity securities & other	252			174			175			169			168			159			115			41
Unrealized investment gains (losses) before tax	669			(417		)	330			937			863			86			(1,291		)	(253		)
Related taxes	230			(154		)	109			317			287			23			(473		)	(109		)
Balance, end of period	$	439		$	(263	)	$	221		$	620		$	576		$	63		$	(818	)	$	(144	)

(1) In the second quarter of 2007, includes $81 million from the bundled sale of a substantial portion of the Company’s venture capital investment holdings.

(2) Includes the following gross investment gains and gross investment losses related to U.S. Treasury futures, which are settled daily:

Gross investment Treasury future gains	$	18	$	18	$	13	$	21	$	42	$	49	$	48	$	51	$	70	$	190
Gross investment Treasury future losses	$	19	$	11	$	18	$	30	$	56	$	39	$	52	$	96	$	78	$	243

The Company entered into these arrangements as part of its strategy to shorten the duration of the fixed maturity portfolio. In a changing interest rate environment, the change in the value of the futures contracts can be expected to partially offset changes in the value of the fixed maturity portfolio.

26

The Travelers Companies, Inc.
Reinsurance Recoverables
($ in millions)

	December 31,			December 31,
	2008			2007
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	9,376		$	10,731
Allowance for uncollectible reinsurance	(618		)	(688		)
Net reinsurance recoverables	8,758			10,043
Mandatory pools and associations	1,957			1,983
Structured settlements	3,517			3,615
Total reinsurance recoverables	$	14,232		$	15,641

The Company’s top five reinsurer groups, including retroactive reinsurance, by reinsurance recoverable is as follows:

	A.M. Best Rating of Group’s	December 31,		December 31,
Reinsurer	Predominant Reinsurer	2008		2007
Swiss Re Group	A+ second highest of 16 ratings	$	1,009	$	1,266
Munich Re Group	A+ second highest of 16 ratings	831		994
Berkshire Hathaway Group	A++ highest of 16 ratings	495		591
Transatlantic Holdings, Inc. (1)	A third highest of 16 ratings	495		475
XL Capital Group	A third highest of 16 ratings	465		511

The gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and unasserted claims.  The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves.  Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.

The net reinsurance recoverables reflect an allowance for uncollectible reinsurance that is based upon the Company’s ongoing review of amounts outstanding, reinsurer solvency, the Company’s experience, current economic conditions, and other relevant factors.  Of the total net recoverables due from reinsurers at December 31, 2008, after deducting mandatory pool and structured settlement balances, $6.9 billion, or 79%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 99% were rated A- or better.  The remaining 21% net recoverables from reinsurers were comprised of the following:  7% related to the Company’s participation in voluntary pools, 9% related to recoverables from captive insurance companies and 5% were balances from

other companies not rated by A.M. Best Company.  In addition, $2.6 billion of the net recoverables were collateralized by letters of credit, funds held and trust agreements at December 31, 2008.

The mandatory pools and associations represent various involuntary assigned risk pools that the Company is required to participate in.  These pools principally involve workers’ compensation and automobile insurance, which provide various insurance coverages to insureds that otherwise are unable to purchase coverage in the open market.  The costs of these mandatory pools in most states are usually charged back to the participating members in proportion to voluntary writings of related business in that state.  In the event that a member of the pool becomes insolvent, the remaining members assume an additional pro rata share of the pool’s liabilities.

The structured settlements represent recoverables from annuities that were purchased from life insurance companies to settle personal physical injury claims, with workers’ compensation claims comprising a significant proportion.  In cases where the Company did not receive a release from the claimant, the Company retains the liability to the claimant in the event that the life insurance company fails to pay; accordingly, the Company continues to report the amount due from the life insurance company as a liability and as a recoverable for GAAP purposes. The Company’s top five groups by structured settlement is as follows:

	A.M. Best Rating of Group’s	December 31,		December 31,
Group	Predominant Insurer	2008		2007
Old Mutual	A third highest of 16 ratings	$	1,075	$	1,087
Metlife	A+ second highest of 16 ratings	554		578
Genworth	A+ second highest of 16 ratings	485		496
Symetra	A third highest of 16 ratings	296		307
ING Group	A+ second highest of 16 ratings	242		248

(1)  As a result of the September 29, 2008 announcement that a Special Committee of Transatlantic Holdings, Inc.’s (TRH) independent directors is evaluating proposals received from AIG relating to the possible disposition of AIG’s 59% common stock interest in TRH, as well as possible business combination transactions involving TRH’s outstanding shares, the reinsurance recoverables from TRH are now being reported separately.  These amounts were previously reported combined with the reinsurance recoverables from AIG (totaling $71 million and $78 million at December 31, 2008 and 2007 exclusive of TRH, respectively).

27

The Travelers Companies, Inc.
Net Reserves for Losses and Loss Adjustment Expense
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Business Insurance
Beginning of period	$	34,444		$	34,456		$	34,295		$	34,131		$	34,021		$	33,718		$	33,649		$	33,310		$	34,444		$	34,021
Incurred	1,684			1,628			1,530			1,616			1,517			1,576			1,868			1,509			6,458			6,470
Paid	(1,661		)	(1,814		)	(1,708		)	(1,767		)	(1,736		)	(1,696		)	(2,148		)	(1,683		)	(6,950		)	(7,263		)
Acquired (sold) reserves, foreign exchange and other (1)	(11		)	25			14			41			(84		)	51			(59		)	(866		)	69			(958		)
End of period	$	34,456		$	34,295		$	34,131		$	34,021		$	33,718		$	33,649		$	33,310		$	32,270		$	34,021		$	32,270
Financial, Professional & International Insurance
Beginning of period	$	5,014		$	4,991		$	5,285		$	5,416		$	5,520		$	5,590		$	5,650		$	5,703		$	5,014		$	5,520
Incurred	447			463			419			401			387			383			539			456			1,730			1,765
Paid	(318		)	(256		)	(333		)	(339		)	(324		)	(294		)	(324		)	(468		)	(1,246		)	(1,410		)
Acquired (sold) reserves, foreign exchange and other (2)	(152		)	87			45			42			7			(29		)	(162		)	(294		)	22			(478		)
End of period	$	4,991		$	5,285		$	5,416		$	5,520		$	5,590		$	5,650		$	5,703		$	5,397		$	5,520		$	5,397
Personal Insurance
Beginning of period	$	3,490		$	3,495		$	3,449		$	3,453		$	3,527		$	3,532		$	3,586		$	3,835		$	3,490		$	3,527
Incurred	997			968			972			1,050			1,074			1,159			1,374			1,009			3,987			4,616
Paid	(992		)	(952		)	(968		)	(976		)	(1,069		)	(1,105		)	(1,125		)	(1,204		)	(3,888		)	(4,503		)
Sold reserves (3)	—			(62		)	—			—			—			—			—			—			(62		)	—
End of period	$	3,495		$	3,449		$	3,453		$	3,527		$	3,532		$	3,586		$	3,835		$	3,640		$	3,527		$	3,640
Total
Beginning of period	$	42,948		$	42,942		$	43,029		$	43,000		$	43,068		$	42,840		$	42,885		$	42,848		$	42,948		$	43,068
Incurred	3,128			3,059			2,921			3,067			2,978			3,118			3,781			2,974			12,175			12,851
Paid	(2,971		)	(3,022		)	(3,009		)	(3,082		)	(3,129		)	(3,095		)	(3,597		)	(3,355		)	(12,084		)	(13,176		)
Acquired (sold) reserves, foreign exchange and other (1) (2) (3)	(163		)	50			59			83			(77		)	22			(221		)	(1,160		)	29			(1,436		)
End of period	$	42,942		$	43,029		$	43,000		$	43,068		$	42,840		$	42,885		$	42,848		$	41,307		$	43,068		$	41,307
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	—		$	—		$	—		$	—		$	70		$	—		$	—		$	70
Environmental	—			185			—			—			—			85			—			—			185			85
All other	(27		)	(245		)	(165		)	(49		)	(312		)	(442		)	(317		)	(205		)	(486		)	(1,276		)
Prior year development excluding accretion of discount	(27		)	(60		)	(165		)	(49		)	(312		)	(357		)	(247		)	(205		)	(301		)	(1,121		)
Accretion of discount	15			15			15			15			15			16			15			14			60			60
Total Business Insurance	(12		)	(45		)	(150		)	(34		)	(297		)	(341		)	(232		)	(191		)	(241		)	(1,061		)
Financial, Professional & International Insurance	—			(15		)	(42		)	(36		)	(63		)	(132		)	(43		)	(36		)	(93		)	(274		)
Personal Insurance	(35		)	(50		)	(24		)	(43		)	(25		)	(37		)	(44		)	(37		)	(152		)	(143		)
Total	$	(47	)	$	(110	)	$	(216	)	$	(113	)	$	(385	)	$	(510	)	$	(319	)	$	(264	)	$	(486	)	$	(1,478	)

(1)  Reflects the sale of Unionamerica Holdings, Ltd. in 4Q 2008, decreasing net reserves by $790 million in Business Insurance.

(2)  Reflects the sale of Afianzadora Insurgentes in 1Q 2007, decreasing net reserves by $118 million in Financial, Professional & International Insurance.

(3)  Reflects the sale of Mendota and its subsidiaries in 2Q 2007, decreasing net reserves by $62 million in Personal Insurance.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

28

The Travelers Companies, Inc.
Asbestos and Environmental Reserves
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Asbestos reserves
Beginning reserves:
Direct	$	4,777		$	4,625		$	4,532		$	4,447		$	4,353		$	4,272		$	4,184		$	3,728		$	4,777		$	4,353
Ceded	(726		)	(699		)	(673		)	(662		)	(619		)	(600		)	(588		)	(501		)	(726		)	(619		)
Net	4,051			3,926			3,859			3,785			3,734			3,672			3,596			3,227			4,051			3,734
Incurred losses and loss expenses:
Direct	—			—			(1		)	—			—			—			70			—			(1		)	70
Ceded	—			—			1			—			—			—			—			—			1			—
Losses paid:
Direct (1)	152			93			84			94			81			88			526			99			423			794
Ceded	(27		)	(26		)	(10		)	(43		)	(19		)	(12		)	(87		)	(18		)	(106		)	(136		)
Sale of subsidiary: (2)
Direct	—			—			—			—			—			—			—			330			—			330
Ceded	—			—			—			—			—			—			—			(98		)	—			(98		)
Ending reserves:
Direct	4,625			4,532			4,447			4,353			4,272			4,184			3,728			3,299			4,353			3,299
Ceded	(699		)	(673		)	(662		)	(619		)	(600		)	(588		)	(501		)	(385		)	(619		)	(385		)
Net	$	3,926		$	3,859		$	3,785		$	3,734		$	3,672		$	3,596		$	3,227		$	2,914		$	3,734		$	2,914
Environmental reserves
Beginning reserves:
Direct	$	413		$	364		$	529		$	498		$	478		$	450		$	499		$	472		$	413		$	478
Ceded	5			8			8			14			12			12			12			13			5			12
Net	418			372			537			512			490			462			511			485			418			490
Incurred losses and loss expenses:
Direct	—			185			(3		)	—			—			85			—			—			182			85
Ceded	—			—			3			—			—			—			—			—			3			—
Losses paid:
Direct	49			20			28			20			28			36			27			32			117			123
Ceded	(3		)	—			(3		)	2			—			—			(1		)	6			(4		)	5
Sale of subsidiary: (2)
Direct	—			—			—			—			—			—			—			40			—			40
Ceded	—			—			—			—			—			—			—			(7		)	—			(7		)
Ending reserves:
Direct	364			529			498			478			450			499			472			400			478			400
Ceded	8			8			14			12			12			12			13			14			12			14
Net	$	372		$	537		$	512		$	490		$	462		$	511		$	485		$	414		$	490		$	414

(1)  Third quarter of 2008 includes the final payment in connection with the ACandS settlement.

(2)  In December 2008, the Company completed the sale of its subsidiary Unionamerica Holdings, Ltd.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 34.

29

The Travelers Companies, Inc.
Capitalization
($ in millions)

	December 31,			December 31,
	2008			2007
Debt
Short-term debt
Commercial paper	$	100		$	100
3.75% Senior notes due March 15, 2008	—			400
7.81% Private placement note due September 16, 2008	—			3
6.38% Medium-term note due December 15, 2008	—			149
Zero coupon convertible notes due March 3, 2009, effective yield 4.17%	140			—
7.81% Private placement note due September 16, 2009	2			—
Total short-term debt	242			652
Long-term debt
Zero coupon convertible notes due March 3, 2009, effective yield 4.17%	—			134
8.125% Senior notes due April 15, 2010 (1)	250			250
7.415% Medium-term notes due August 23, 2010	21			21
7.22% Real estate non-recourse debt due September 1, 2011	9			9
7.81% Private placement notes due on various dates through 2011	4			6
5.375% Senior notes due June 15, 2012 (1)	250			250
5.00% Senior notes due March 15, 2013 (1)	500			500
5.50% Senior notes due December 1, 2015	400			400
6.25% Senior notes due June 20, 2016 (1)	400			400
5.75% Senior notes due December 15, 2017 (1)	450			450
5.80% Senior notes due May 15, 2018 (1)	500			—
7.75% Senior notes due April 15, 2026	200			200
7.625% Junior subordinated debentures due December 15, 2027	125			125
6.375% Senior notes due March 15, 2033 (1)	500			500
6.75% Senior notes due June 20, 2036 (1)	400			400
6.25% Senior notes due June 15, 2037 (1)	800			800
8.50% Junior subordinated debentures due December 15, 2045	56			56
8.312% Junior subordinated debentures due July 1, 2046	73			73
6.25% Fixed-to-floating rate junior subordinated debentures due March 15, 2067	1,000			1,000
Total long-term debt	5,938			5,574
Unamortized fair value adjustment	68			83
Unamortized debt issuance costs	(67		)	(67		)
	5,939			5,590
Total debt	6,181			6,242
Preferred equity	89			112
Common equity (excluding net unrealized investment gains (losses), net of tax)	25,374			25,884
Total capital	$	31,644		$	32,238
Total debt to capital	19.5		%	19.4		%

(1)  Redeemable anytime with “make-whole” premium.

30

The Travelers Companies, Inc.
Statutory to GAAP Shareholders’ Equity Reconciliation
($ in millions)

	December 31,			December 31,
	2008 (1)			2007
Statutory capital and surplus	$	21,491		$	22,878
GAAP adjustments
Goodwill and intangible assets	3,841			3,958
Investments	342			1,407
Noninsurance companies	(3,924		)	(4,307		)
Deferred acquisition costs	1,774			1,809
Deferred federal income tax	699			(18		)
Current federal income tax	(86		)	(124		)
Reinsurance recoverables	295			370
Furniture, equipment & software	526			423
Employee benefits	40			68
Agents balances	122			130
Other	199			22
Total GAAP adjustments	3,828			3,738
GAAP shareholders’ equity	$	25,319		$	26,616

(1) Estimated and Preliminary

31

The Travelers Companies, Inc.
Statement of Cash Flows - Preliminary
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Cash flows from operating activities
Net income	$	1,086		$	1,254		$	1,198		$	1,063		$	967		$	942		$	214		$	801		$	4,601		$	2,924
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	(14		)	(128		)	—			(12		)	62			(36		)	170			219			(154		)	415
Depreciation and amortization	205			203			197			206			213			201			213			194			811			821
Deferred federal income tax expense (benefit)	(188		)	369			68			(19		)	(8		)	34			23			(107		)	230			(58		)
Amortization of deferred acquisition costs	869			915			956			966			954			961			990			975			3,706			3,880
Equity in (income) loss from other investments	(167		)	(205		)	(117		)	(81		)	(17		)	(16		)	67			278			(570		)	312
Premiums receivable	17			(368		)	216			131			(28		)	(177		)	158			213			(4		)	166
Reinsurance recoverables	548			531			615			478			272			10			251			676			2,172			1,209
Deferred acquisition costs	(967		)	(1,024		)	(997		)	(937		)	(968		)	(991		)	(991		)	(895		)	(3,925		)	(3,845		)
Claims and claim adjustment expense reserves	(350		)	(255		)	(469		)	(336		)	(386		)	(38		)	(249		)	(1,360		)	(1,410		)	(2,033		)
Unearned premium reserves	60			275			28			(260		)	15			97			38			(420		)	103			(270		)
Trading account activities	(1		)	(3		)	1			—			2			5			(2		)	6			(3		)	11
Loss (gain) on redemption of subordinated debentures	(7		)	39			—			—			—			—			—			—			32			—
Excess tax benefits from share-based payment arrangements	(9		)	(11		)	(3		)	(2		)	(4		)	(3		)	(1		)	(2		)	(25		)	(10		)
Other	(215		)	(535		)	322			150			(147		)	(285		)	61			(16		)	(278		)	(387		)
Net cash provided by operating activities	867			1,057			2,015			1,347			927			704			942			562			5,286			3,135
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,637			927			1,393			1,348			1,604			1,084			982			1,199			5,305			4,869
Proceeds from sales of investments:
Fixed maturities	729			809			2,143			3,642			1,044			1,405			1,139			3,344			7,323			6,932
Equity securities	25			31			21			29			12			24			11			6			106			53
Real estate	—			—			10			1			—			25			—			—			11			25
Other investments	325			606			222			307			246			178			123			108			1,460			655
Purchases of investments:
Fixed maturities	(3,006		)	(3,007		)	(3,673		)	(5,033		)	(2,350		)	(2,063		)	(2,222		)	(4,492		)	(14,719		)	(11,127		)
Equity securities	(29		)	(26		)	(8		)	(72		)	(21		)	(25		)	(43		)	(6		)	(135		)	(95		)
Real estate	(26		)	(27		)	(16		)	(5		)	(9		)	(16		)	(6		)	(7		)	(74		)	(38		)
Other investments	(139		)	(232		)	(191		)	(178		)	(123		)	(162		)	(242		)	(140		)	(740		)	(667		)
Net (purchases) sales of short-term securities	(103		)	407			(368		)	(498		)	320			(667		)	407			(466		)	(562		)	(406		)
Securities transactions in course of settlement	305			(251		)	(385		)	208			43			31			(461		)	69			(123		)	(318		)
Other	(203		)	(7		)	(82		)	(86		)	(72		)	(91		)	(104		)	222			(378		)	(45		)
Net cash provided by (used in) investing activities	(485		)	(770		)	(934		)	(337		)	694			(277		)	(416		)	(163		)	(2,526		)	(162		)

32

The Travelers Companies, Inc.
Statement of Cash Flows - Preliminary (Continued)
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2007			2007			2007			2007			2008			2008			2008			2008			2007			2008
Cash flows from financing activities
Issuance of debt	986			1,475			—			—			—			496			—			—			2,461			496
Payment of debt	(611		)	(857		)	(488		)	—			(400		)	—			(3		)	(149		)	(1,956		)	(552		)
Dividends paid to shareholders	(175		)	(193		)	(189		)	(185		)	(179		)	(180		)	(177		)	(176		)	(742		)	(712		)
Issuance of common stock - employee share options	54			106			32			26			15			44			13			17			218			89
Treasury stock acquired - share repurchase authorization	(698		)	(637		)	(612		)	(973		)	(1,000		)	(765		)	(290		)	(112		)	(2,920		)	(2,167		)
Treasury stock acquired - net employee share-based compensation	(26		)	(12		)	(1		)	—			(26		)	(2		)	—			(1		)	(39		)	(29		)
Excess tax benefits from share-based payment arrangements	9			11			3			2			4			3			1			2			25			10
Other	(1		)	1			1			(1		)	—			—			—			—			—			—
Net cash used in financing activities	(462		)	(106		)	(1,254		)	(1,131		)	(1,586		)	(404		)	(456		)	(419		)	(2,953		)	(2,865		)
Effect of exchange rate changes on cash	(1		)	3			2			1			2			(2		)	(12		)	(17		)	5			(29		)
Net increase (decrease) in cash	(81		)	184			(171		)	(120		)	37			21			58			(37		)	(188		)	79
Cash at beginning of period	459			378			562			391			271			308			329			387			459			271
Cash at end of period	$	378		$	562		$	391		$	271		$	308		$	329		$	387		$	350		$	271		$	350
Income taxes paid	$	88		$	698		$	149		$	411		$	78		$	637		$	117		$	9		$	1,346		$	841
Interest paid	$	75		$	86		$	79		$	117		$	72		$	112		$	64		$	127		$	357		$	375

33

The Travelers Companies, Inc.
Financial Supplement - Fourth Quarter 2008
Glossary of Financial Measures and Description of Reportable Business Segments

The following measures are used by the Company’s management to evaluate financial performance against historical results and establish targets on a consolidated basis.  In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated statement of income or required to be disclosed in the notes to financial statements, and in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure. In the opinion of the Company’s management, a discussion of these measures provides investors with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance.

Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses).  Operating income (loss) per share is operating income (loss) on a per share basis.

Return on equity is the ratio of net income to average equity.  Operating return on equity is the ratio of operating income to average equity excluding net unrealized investment gains and losses, net of tax.

In the opinion of the Company’s management, operating income, operating income per share and operating return on equity are meaningful indicators of underwriting and operating results.  These measures exclude net realized investment gains or losses which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.  Internally, the Company’s management uses operating income, operating income per share and operating return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis.

Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses.

A catastrophe is a severe loss, resulting from natural and man-made events, including risks such as fire, earthquake, windstorm, explosion, terrorism and other similar events.  Each catastrophe has unique characteristics, and catastrophes are not predictable as to timing or amount.  Their effects are included in net and operating income and claims and claim adjustment expense reserves upon occurrence.  A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools.  In the opinion of the Company’s management, a discussion of the impact of catastrophes is meaningful for investors to understand variability in periodic earnings.

Loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims.  Loss reserve development may be related to one or more prior years or the current year.  In the opinion of the Company’s management, discussion of loss reserve development is useful to investors as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and operating income, and changes in claims and claim adjustment expense reserve levels from period to period.

GAAP combined ratio is the sum of the loss and loss adjustment expense ratio (loss and LAE ratio), the underwriting expense ratio and, where applicable, the ratio of dividends to policyholders to net premiums earned.  For GAAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses reduced by an allocation of fee income to net earned premiums.  The underwriting expense ratio is the ratio of underwriting expenses incurred reduced by an allocation of fee income, and billing and policy fees to net earned premiums. A GAAP combined ratio under 100% generally indicates an underwriting profit. A GAAP combined ratio over 100% generally indicates an underwriting loss. The GAAP combined ratio is an operating statistic that includes GAAP measures in the numerator and the denominator.

Gross written premiums reflect the direct and assumed contractually determined amounts charged to the policyholders for the effective period of the contract based on the terms and conditions of the insurance contract.  Gross written premiums are a measure of overall business volume.  Net written premiums reflect gross written premiums less premiums ceded to reinsurers.

Book value per share is total common shareholders’ equity divided by the number of common shares outstanding.  Adjusted book value per share is total common shareholders’ equity excluding the after-tax impact of net unrealized investment gains and losses (i.e., excluding FAS 115), divided by the number of common shares outstanding. In the opinion of the Company’s management, adjusted book value is useful in an analysis of a property casualty company’s book value as it removes the effect of changing prices on invested assets, (i.e., net unrealized investment gains (losses), net of tax) which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves.

Travelers has organized its businesses into the following reportable business segments:

Business Insurance - The Business Insurance segment offers a broad array of property and casualty insurance and insurance-related services to its clients primarily in the United States.  Business Insurance is organized into the following six groups, which collectively comprise Business Insurance Core operations: Select Accounts; Commercial Accounts; National Accounts; Industry-Focused Underwriting including Construction, Technology, Public Sector Services, Oil & Gas, and Agribusiness; Target Risk Underwriting including National Property, Inland Marine, Ocean Marine, Excess Casualty, Boiler & Machinery, and Global Accounts; and Specialized Distribution including Northland and National Programs.  Business Insurance also includes the Special Liability Group (which manages the Company’s asbestos and environmental liabilities), and other runoff operations, which collectively are referred to as Business Insurance Other.

Financial, Professional & International Insurance - The Financial, Professional & International Insurance segment includes surety and financial liability businesses, which primarily use credit-based underwriting processes, as well as property and casualty products that are primarily marketed on a domestic basis in the United Kingdom, Ireland and Canada, and on an international basis through Lloyd’s.  The businesses in Financial, Professional & International Insurance are Bond & Financial Products and International.

Personal Insurance - The Personal Insurance segment writes virtually all types of property and casualty insurance covering personal risks.  The primary coverages in this segment are personal automobile and homeowners insurance sold to individuals.

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