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 26, 2010

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)
485 Lexington Avenue
New York, New York		10017
(Address of principal executive offices)		(Zip Code)

(917) 778-6000

(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):

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

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

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

oPre-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 26, 2010, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended December 31, 2009, 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 26, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth Quarter 2009 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 26, 2010	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 26, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth Quarter 2009 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.
	485 Lexington Avenue
	New York, NY 10017-2630
	www.travelers.com

NEWS RELEASE

Travelers Reports Record Fourth Quarter 2009 Net Income of $1.285 Billion and Record Net and Operating Income per Diluted Share of $2.36 and $2.12, Respectively

Book Value per Share of $52.54 Up 22% in 2009

Fourth Quarter Return on Equity of 18.5% and Full Year Return on Equity of 13.5%

·Fourth quarter 2009 net and operating income of $1.285 billion and $1.155 billion. Full year 2009 net and operating income of $3.622 billion and $3.600 billion.

·Fourth quarter 2009 net and operating income per diluted share increased 75 percent and 34 percent, respectively, from prior year quarter.

·Fourth quarter 2009 total revenues of $6.456 billion increased 11 percent from the prior year quarter.

·Impact of renewal rate changes on premiums remained positive across all three business segments.

·Four percent decline in net written premiums from prior year quarter attributable to reduced insured exposures due to lower levels of economic activity.

·Repurchased 30.1 million common shares for $1.55 billion in fourth quarter and 69.4 million common shares for $3.30 billion in full year 2009.

NEW YORK, January 26, 2010 — The Travelers Companies, Inc. (“Travelers,” NYSE: TRV) today reported net income of $1.285 billion, or $2.36 per diluted share, for the quarter ended December 31, 2009, compared to $801 million, or $1.35 per diluted share, for the quarter ended December 31, 2008.  Operating income in the current quarter was $1.155 billion, or $2.12 per diluted share, compared to $939 million, or $1.58 per diluted share, in the prior year quarter.

“We are very pleased to report our best quarter for net income as well as net and operating income per diluted share since Travelers’ initial public offering in 2002,” commented Jay Fishman, Chairman and Chief Executive Officer. “Our operating return on equity was 18.0% for the quarter and 14.0% for the year, keeping us on track to continue to meet our long-term return target.  Throughout the year our underwriting results were strong and our high quality investment portfolio continued to perform well.  Finally, we continued to return capital aggressively in the quarter bringing our total repurchases to $9.5 billion and 193.2 million shares since we commenced our repurchase program in the

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second quarter of 2006. Including common stock dividends, total capital returned to shareholders since 2005 now stands at $13.0 billion.

“Our retention rates remained high and the impact of renewal rate changes on premiums remained positive across all three of our business segments.  This pricing dynamic is generally better than recent industry surveys and reflects our targeted pricing actions, the property and casualty market segments in which we compete, our strong underwriting capabilities and our success in differentiating Travelers to our independent agents, brokers and customers by the value we provide through our products and services.

“We have now completed our fifth full year since the merger of Travelers and St. Paul.  During this period we have achieved a cumulative average annualized operating return on equity of 14.4%, consistent with our long-term financial goal. Also during this period we produced a total return to shareholders in excess of 50%, as defined by share price appreciation and the reinvestment of dividends, positioning us as one of the top financial services companies for return to shareholders.

“We believe our outlook for return on equity as reflected in our 2010 guidance is consistent with our target of a mid-teens return on equity over time.   In light of the continued historically low returns we anticipate will be available in the investment marketplace and modest premium growth opportunities given the economy, we expect to continue to return capital aggressively.  In addition, our strategy will be to continue to seek premium rate gains where needed,” concluded Mr. Fishman.

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)	2009			2008			Change		2009			2008			Change
Net written premiums	$	5,188		$	5,385		(4	)%	$	21,336		$	21,683		(2	)%
Operating income	$	1,155		$	939		23		$	3,600		$	3,195		13
per diluted share	$	2.12		$	1.58		34		$	6.29		$	5.26		20
Net income	$	1,285		$	801		60		$	3,622		$	2,924		24
per diluted share	$	2.36		$	1.35		75		$	6.33		$	4.81		32
Book value per share	$	52.54		$	43.12		22		$	52.54		$	43.12		22
Adjusted book value per share	$	48.96		$	43.37		13		$	48.96		$	43.37		13
GAAP combined ratio	83.4		%	85.9		%	(2.5	)pts	89.2		%	91.9		%	(2.7	)pts
Operating return on equity	18.0		%	14.7		%	3.3	pts	14.0		%	12.4		%	1.6	pts
Return on equity	18.5		%	12.8		%	5.7	pts	13.5		%	11.4		%	2.1	pts

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

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Fourth Quarter 2009 Consolidated Results

The current and prior year quarters included the following:

	Three Months Ended December 31,
	2009			2008			2009			2008
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	856		$	729		$	540		$	545
Underwriting gain includes:
Net favorable prior year reserve development	501			278			328			189
Catastrophe (losses) / reduction of loss, net of reinsurance	(16		)	85			(10		)	56
Re-estimation of the current year loss ratios for the first three quarters of the year	81			(42		)	52			(27		)
Tax benefit related to sale of subsidiary							—			89
Net investment income	813			483			653			438
Other, including interest expense	(65		)	(66		)	(38		)	(44		)
Operating Income	1,604			1,146			1,155			939
Net realized investment gains (losses)	189			(219		)	130			(138		)
Income before income taxes	$	1,793		$	927
Net Income							$	1,285		$	801
GAAP combined ratio	83.4		%	85.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	82.9		%	85.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(9.4		)pts	(5.1		)pts
Catastrophes, net of reinsurance	0.3		pts	(1.6		)pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(1.5		)pts	0.8		pts

Fourth quarter operating income of $1.155 billion after-tax increased $216 million primarily due to an increase in net investment income of $215 million after-tax. While the underwriting gain of $540 million after-tax approximated the prior year quarter, it reflected an increase of $139 million after-tax in net favorable prior year reserve development as compared to the prior year quarter and included catastrophe losses of $10 million after-tax as compared to a benefit from the reduction in catastrophe losses of ($56) million after-tax in the prior year quarter.

The current quarter underwriting gain reflects a GAAP combined ratio, 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, of 94.0 percent, as compared to 91.8 percent in the prior year quarter.  This increase of 2.2 points primarily resulted from reduced underwriting margins related to pricing and loss cost trends in Business Insurance, higher weather-related personal automobile losses in the current year quarter and losses related to a non-renewed professional liability program in Ireland.

Net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in each segment, particularly in Business Insurance.  While there were no catastrophes in the current quarter, there was a modest upward adjustment in current year catastrophe loss estimates within Business Insurance.  In contrast, the prior year quarter benefited from a downward adjustment in the then current year catastrophe loss estimates related to Hurricanes Ike and Gustav.  The current quarter re-estimation of the current year loss ratios primarily reflects better than expected frequency trends in Business Insurance for the first three quarters of the year.  Finally, the prior year quarter benefited from a tax benefit related to the sale of Unionamerica, the company’s United Kingdom-based runoff insurance and reinsurance business.

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After-tax net investment income increased 49 percent from the prior year quarter to its highest level since fourth quarter 2007.  This increase was driven by positive returns in the non-fixed income portfolio in the current quarter, compared to negative returns in the prior year quarter, and is primarily due to private equity and hedge fund performance.  Net investment income in the fixed income portfolio declined slightly from the prior year quarter mostly due to lower short-term interest rates.  The current quarter results also included net realized investment gains compared to net realized investment losses in the prior year quarter.  The realized investment gains in the current quarter were primarily a result of the sale of 50 percent of the company’s Verisk Analytics, Inc. holdings in connection with its initial public offering, which contributed $103 million after-tax ($159 million pre-tax).  The current quarter included other-than-temporary impairments of only $16 million after-tax ($25 million pre-tax), compared to $129 million after-tax ($198 million pre-tax) in the prior year quarter.

Net written premiums of $5.188 billion in the current quarter declined 4 percent from the prior year quarter, attributable to reduced insured exposures due to lower levels of economic activity.  Retention rates remained high and the impact of renewal rate changes on premiums remained positive across all three business segments.  New business volumes declined slightly from the prior year quarter as modest growth in Business Insurance and Personal Insurance was offset by lower volumes in Financial, Professional & International Insurance.

Capital Management

“Our strong profitability resulted in an improvement in our capital position from an already strong position at the beginning of the year, even after common share repurchases of $3.3 billion and common stock dividends of $690 million for full year 2009,” said Jay S. Benet, Vice Chairman and Chief Financial Officer.  “We are extremely well positioned to increase our common share repurchases to between $3.5 billion and $4.0 billion in 2010, subject to market conditions and other factors.  We estimate that these repurchases, combined with the common share repurchases completed in 2009, will reduce our full year 2010 weighted average diluted share count to between 485 million and 490 million.”

During the fourth quarter 2009, the company repurchased 30.1 million of its common shares under its share repurchase authorization for a total cost of $1.55 billion and paid $175 million in common stock dividends.  At the end of 2009, the company had $6.5 billion of capacity remaining under its share repurchase authorization.  Since the initial share repurchase authorization granted by the Board in the second quarter of 2006, the company has repurchased 193.2 million common shares for a total cost of $9.5 billion.

At the end of 2009, all of the company’s financial strength indicators were at or better than target levels.  Shareholders’ equity ended 2009 at $27.4 billion, an increase of 8 percent from year-end 2008.  Included in shareholders’ equity at the end of the current year were after-tax net unrealized investment gains of $1.9 billion as compared to after-tax net unrealized investment losses of $144 million at year-end 2008.  Statutory surplus was $23.2 billion, the company’s debt to capital ratio of 20.3 percent (excluding net unrealized investment gains and losses) approximated its target level and holding company liquidity of $2.1 billion was almost twice its target level.

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Business Insurance Segment Financial Results

“Business Insurance achieved strong underwriting results in the quarter as evidenced by its 78.8% combined ratio.  Although the impact on net written premiums from the economic downturn remained evident during the quarter, we once again produced positive renewal rate changes, strong retentions and stable new business levels,” commented Brian MacLean, President and Chief Operating Officer.  “These results demonstrate how we have successfully capitalized on the many competitive advantages we have built over the years.  We continue to differentiate ourselves in the marketplace through our industry leading analytics, point of sale capabilities and new product development, including our new IndustryEdge® product for Healthcare Organizations introduced during the quarter.  Overall, we are pleased with both our results this quarter and our strong position in the marketplace.”

The current and prior year quarters included the following:

	Three Months Ended December 31,
	2009			2008			2009			2008
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	561		$	390		$	351		$	325
Underwriting gain includes:
Net favorable prior year reserve development	366			205			238			140
Catastrophe (losses) / reduction of loss, net of reinsurance	(19		)	24			(12		)	16
Re-estimation of the current year loss ratios for the first three quarters of the year	87			(16		)	57			(10		)
Tax benefit related to sale of subsidiary							—			89
Net investment income	567			310			456			291
Other	10			9			8			3
Operating Income	$	1,138		$	709		$	815		$	619
GAAP combined ratio	78.8		%	85.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(13.6		)pts	(7.3		)pts
Catastrophes, net of reinsurance	0.7		pts	(0.8		)pts
Re-estimation of the current year loss ratios for the first three quarters of the year	(3.3		)pts	0.6		pts

Fourth quarter operating income of $815 million after-tax increased $196 million primarily due to an increase in net investment income of $165 million after-tax. While the underwriting gain of $351 million after-tax was $26 million higher than the prior year quarter, it reflected an increase of $98 million after-tax in net favorable prior year reserve development as compared to the prior year quarter and included catastrophe losses of $12 million after-tax as compared to a benefit from the reduction in catastrophe losses of ($16) million after-tax in the prior year quarter.

The current quarter underwriting gain reflects a GAAP combined ratio, 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, of 95.0 percent, as compared to 93.2 percent in the prior year quarter.  This increase of 1.8 points primarily resulted from reduced underwriting margins related to pricing and loss cost trends consistent with recent quarters.

Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the workers’ compensation, general liability, commercial multi-peril and property product lines.  Catastrophe losses in the current quarter resulted from a slight upward adjustment in current year catastrophe loss

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estimates for multiple events that occurred during the first three quarters of the year.  The current quarter re-estimation of the current year loss ratios reflects better than expected frequency trends in multiple product lines as well as better than expected loss experience in commercial automobile for the first three quarters of the year.

Business Insurance net written premiums of $2.515 billion in the current quarter declined 9 percent from the prior year quarter.  This decline was driven by lower levels of economic activity in recent quarters that impacted exposure changes at renewal, audit premium adjustments, policy endorsements and mid-term cancellations across all business units within Business Insurance.  Retention rates remained strong and the impact of renewal rate changes on premiums remained positive.  New business volumes increased slightly from the prior year quarter.

Select Accounts

·Net written premiums of $638 million declined 4 percent from the prior year quarter.

·Retention rates were consistent with recent quarters.

·Renewal premium changes remained positive and were higher than recent quarters as a result of a continued improving renewal rate trend.

·New business volumes declined from the prior year quarter as continued strong growth from TravelersExpressSM, the company’s enhanced quote-to-issue agency platform and multivariate pricing program for smaller businesses, was offset by lower new business volumes in larger risks served by Select.

Commercial Accounts

·Net written premiums of $610 million declined 8 percent from the prior year quarter.

·Retention rates remained strong, although slightly lower than recent quarters.

·Renewal premium changes were slightly negative as the impact of positive renewal rate changes on premiums was offset by reduced insured exposures due to lower levels of economic activity.

·New business volumes increased from the prior year quarter due to various product and customer initiatives.

National Accounts

·Net written premiums of $219 million declined 19 percent from the prior year quarter due to reduced insured exposures driven by lower levels of economic activity, the loss of one large account and lower new business volumes.

Industry-Focused Underwriting

·Net written premiums of $517 million declined 12 percent from the prior year quarter primarily due to market conditions that impacted the company’s Oil & Gas and Construction business units.

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Target Risk Underwriting

·Net written premiums of $328 million declined 9 percent from the prior year quarter primarily due to market conditions that impacted the company’s Ocean Marine, Inland Marine and National Property business units.

Specialized Distribution

·Net written premiums of $199 million declined 4 percent from the prior year quarter primarily due to market conditions in the commercial trucking industry and in excess and surplus markets.

Financial, Professional & International Insurance Segment Financial Results

“Financial, Professional & International Insurance continued to produce strong underwriting results this quarter,” commented Mr. MacLean.  “Our production results reflect our underwriting actions in response to economic and market conditions.  In addition, the segment continues to benefit from our ability to successfully leverage our strengths across the entire Travelers franchise by utilizing the underwriting and claim handling expertise of our domestic operations to support and enhance the capabilities within our International businesses.”

The current and prior year quarters included the following:

	Three Months Ended December 31,
	2009			2008			2009			2008
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	144		$	106		$	93		$	72
Underwriting gain includes:
Net favorable prior year reserve development	120			36			80			25
Reduction of catastrophe losses, net of reinsurance	3			13			2			10
Re-estimation of the current year loss ratios for the first three quarters of the year	(6		)	(5		)	(5		)	(3		)
Net investment income	123			98			97			78
Other	7			6			4			4
Operating Income	$	274		$	210		$	194		$	154
GAAP combined ratio	83.1		%	87.2		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(13.9		)pts	(4.2		)pts
Reduction of catastrophe losses, net of reinsurance	(0.3		)pts	(1.6		)pts
Re-estimation of the current year loss ratios for the first three quarters of the year	0.7		pts	0.6		pts

Fourth quarter operating income of $194 million after-tax increased $40 million due to an increase in underwriting gain of $21 million after-tax, primarily due to an increase of $55 million in net favorable prior year reserve development, along with an increase in net investment income of $19 million after-tax.

The current quarter underwriting gain reflects a GAAP combined ratio, 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, of 96.6 percent, as compared to 92.4 percent in the prior year quarter.  This increase of 4.2 points primarily resulted from losses on a non-renewed professional liability program in Ireland.

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The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in various lines of business within Bond & Financial Products and International.

Financial, Professional & International Insurance net written premiums of $938 million were consistent with the prior year quarter.  Adjusting for the impact of changes in foreign exchange rates, net written premiums declined 1 percent due to slightly lower results in International, partially offset by growth in Bond & Financial Products.

Retention rates, renewal premium changes and new business volumes, as discussed below, exclude the surety line of business as surety products are sold on a non-recurring, project specific basis.

Bond & Financial Products

·Net written premiums of $574 million increased 1 percent from the prior year quarter primarily due to growth in Construction Surety.  This growth in Construction Surety, in light of the overall slowdown in construction spending, reflects the company’s strong franchise and long standing relationships with high quality contractors. These results were partially offset by lower business volumes in the Public Company Liability and Professional Liability lines of business.

·Retention rates remained strong, although down slightly from recent quarters primarily due to underwriting actions in Professional Liability.

·Renewal premium changes were slightly negative, compared to slightly positive in the prior year quarter, as the impact of positive renewal rate changes on premiums was offset by reduced insured exposures due to underwriting actions and lower levels of economic activity.

·New business volumes declined from the prior year quarter due to strong new business volumes in the Public Company Liability business unit in the prior year quarter and underwriting initiatives in the Financial Institutions business unit.

International

·Net written premiums of $364 million declined 1 percent from the prior year quarter.  After adjusting for the impact of changes in foreign exchange rates, net written premiums declined 3 percent primarily due to results in the United Kingdom, partially offset by results at the company’s operations at Lloyd’s and in Ireland.

·Retention rates were slightly lower than the prior year quarter primarily due to underwriting actions taken in the United Kingdom and Ireland.

·Renewal premium changes remained positive as the impact of positive renewal rate changes on premiums was partially offset by reduced insured exposures due to lower levels of economic activity.

·New business volumes declined modestly from the prior year quarter.

Personal Insurance Segment Financial Results

“Our Personal Insurance segment continues to deliver strong profits as demonstrated by its 90.4% combined ratio in the quarter.  Although we experienced a seasonality impact within our automobile business, we are pleased with our rate levels and new business

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quality,” commented Mr. MacLean.  “The continued strength of our homeowners franchise was evident in its new business, retention and underwriting results this quarter, and we will continue to leverage this strength across the segment to differentiate ourselves in the marketplace.”

The current and prior year quarters included the following:

	Three Months Ended December 31,
	2009			2008			2009		2008
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	151		$	233		$	96	$	148
Underwriting gain includes:
Net favorable prior year reserve development	15			37			10		24
Reduction of catastrophe losses, net of reinsurance	—			48			—		30
Re-estimation of the current year loss ratios for the first three quarters of the year	—			(21		)	—		(14		)
Net investment income	123			75			100		69
Other	22			17			14		9
Operating Income	$	296		$	325		$	210	$	226
GAAP combined ratio	90.4		%	85.6		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	89.0		%	84.9		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(0.8		)pts	(2.1		)pts
Catastrophes, net of reinsurance	—		pts	(2.7		)pts
Re-estimation of the current year loss ratios for the first three quarters of the year	—		pts	1.2		pts

Fourth quarter operating income of $210 million after-tax decreased $16 million primarily due to a reduced underwriting gain of $52 million after-tax, partially offset by an increase in net investment income of $31 million after-tax. The underwriting gain of $96 million after-tax reflected a decrease of $14 million after-tax in net favorable prior year reserve development as compared to the prior year quarter and included no catastrophe losses as compared to a benefit from the reduction in catastrophe losses of ($30) million after-tax in the prior year quarter.

The current quarter underwriting gain reflects a GAAP combined ratio, 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, of 91.2 percent, as compared to 89.2 percent in the prior year quarter.  This increase of 2.0 points primarily resulted from higher weather-related automobile losses in the current year quarter, as well as the impact of the company’s recently announced direct to consumer initiative.

Net favorable prior year reserve development in the current quarter was primarily driven by better than expected loss experience within Homeowners and Other.

Personal Insurance net written premiums of $1.735 billion increased 3 percent from the prior year quarter.  This increase was primarily due to continued positive renewal premium changes and strong retention rates.

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Agency Automobile and Agency Homeowners and Other, as discussed below, represent business sold through agents, brokers and other intermediaries and exclude direct to consumer.

Agency Automobile

·Net written premiums of $857 million declined 1 percent from the prior year quarter.

·Policies in force declined 3 percent from the prior year quarter, although the decline between sequential quarters has slowed.

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

·New business declined from the prior year quarter, largely attributable to pricing actions taken in recent quarters.

Agency Homeowners and Other

·Net written premiums of $861 million increased 6 percent and policies in force increased 3 percent from the prior year quarter.

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

·New business volume increased from the prior year quarter primarily driven by distribution and geographic expansion.

Full Year 2009 Consolidated Results

The current and prior years included the following:

	Twelve Months Ended December 31,
	2009			2008			2009			2008
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	2,174		$	1,606		$	1,437		$	1,076
Underwriting gain includes:
Net favorable prior year reserve development	1,329			1,538			868			1,000
Catastrophes, net of reinsurance	(457		)	(1,408		)	(297		)	(919		)
Resolution of prior year tax matters							61			—
Tax benefit related to sale of subsidiary							—			89
Net investment income	2,776			2,792			2,290			2,299
Other, including interest expense	(256		)	(267		)	(127		)	(180		)
Other also includes:
Resolution of prior year tax matters							28			—
Operating Income	4,694			4,131			3,600			3,195
Net realized investment gains (losses)	17			(415		)	22			(271		)
Income before income taxes	4,711			3,716
Net Income							$	3,622		$	2,924
GAAP combined ratio	89.2		%	91.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	88.7		%	91.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(6.2		)pts	(7.1		)pts
Catastrophes, net of reinsurance	2.1		pts	6.5		pts

The current year operating income of $3.600 billion after-tax increased $405 million as compared to the prior year primarily due to an increase in underwriting gain of $361 million after-tax,  reflecting a decrease of $622 million after-tax in catastrophe losses, partially offset by a $132 million after-tax reduction in net favorable prior year reserve development.

The current year underwriting gain reflects a GAAP combined ratio, excluding net favorable prior year reserve development and catastrophes, of 93.3 percent, as compared to 92.5 percent in the prior year.  This increase of 0.8 points primarily resulted from reduced underwriting margins related to pricing and loss cost trends.

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2010 Annual Guidance

Travelers expects 2010 operating income per diluted share in the range of $5.20 to $5.55.  This guidance is based on a number of assumptions, including:

·Catastrophe losses of $600 million pre-tax and $390 million after-tax, or $0.80 per diluted share;

·No prior year reserve development, favorable or unfavorable;

·Low single digit percentage change in average invested assets (excluding net unrealized investment gains and losses), after taking into account dividends and share repurchases;

·Common share repurchases of $3.5 billion to $4.0 billion for the full year; and

·Weighted average diluted shares of 485 million to 490 million.

As noted above, the company’s earnings guidance for 2010 does not assume any prior year reserve development, favorable or unfavorable.  The company understands that the earnings estimates published by third parties may include assumed amounts of prior year reserve development for future periods. As a result, third party earnings estimates for the company may not be expressed on a basis comparable to the earnings guidance provided by the company.

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.  Travelers management 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 26, 2010.  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.

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.  A Fortune 100 company, Travelers has more than 30,000 employees and 2009 revenues of approximately $25 billion. Travelers stock is traded on the New York Stock Exchange (NYSE: TRV) and is a component of the Dow Jones Industrial Average.  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

11

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. Average operating return on equity over the last five years is the ratio of the average operating income for the last five years to the average equity excluding net unrealized investment gains and losses, net of tax, for the last five years.

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 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, and 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.

GAAP combined ratio excluding incremental impact of direct to consumer initiative is the GAAP combined ratio adjusted to exclude the direct, variable impact of the company’s direct-to-consumer initiative

12

in Personal Insurance.  In the opinion of the company’s management, this is useful in an analysis of the profitability of the company’s ongoing agency business.

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.

Adjusting for the impact of changes in foreign exchange rates allows the effect of foreign exchange rate differences to be isolated in the analysis of changes in various financial statement line items that are translated from a local currency to the company’s reporting currency, U.S. dollars. The impact is determined by assuming constant foreign exchange rates between periods as illustrated in the reconciliation below. In the opinion of the company’s management, this is useful in an analysis of the results of the FP&II segment.

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 net unrealized investment gains and losses), 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.

Debt to capital is the ratio of debt to the sum of shareholders’ equity and debt excluding the after-tax impact of net unrealized investment gains and losses.  In the opinion of the company’s management, the debt to capital ratio is useful in an analysis of the company’s leverage.

Total return to shareholders is a concept used to compare the performance of a company’s stock over time and is the ratio of the net stock price change plus the cumulative amount of dividends over the specified time period, assuming dividend reinvestment, to the stock price at the beginning of the time period. Total return to shareholders is not included as an indication of future performance.

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 the assumed reinsurance and certain international 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 coverages, which require a primarily credit-based underwriting process, 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 automobile and homeowners insurance sold to individuals.

* * * * *

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 (which repurchase plans depend on a variety of factors, including our financial position, earnings, capital requirements of our operating subsidiaries, legal requirements, regulatory constraints and other factors), statements about the potential impact of recent or future disruption in the investment markets and other economic conditions on our investment portfolio and underwriting results are

13

forward looking, and we may make forward-looking statements about our results of operations (including, among others, premium volume, premium rates (either for new or renewal business), 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 business; financial disruption or a prolonged economic downturn may materially and adversely affect our business; our investment portfolio may suffer reduced returns or material losses; 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; we are exposed to credit risk in certain of our business operations; 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; the intense competition that we face could harm our ability to maintain or increase our business volumes and our profitability; increased competition based on price (resulting, for example, from increased price sensitivity of customers due to the economic downturn or from increased use of price comparison rating technologies by personal auto agents) could lead to reduced revenues and reduced margins; 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 the impact on our business practices 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; 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; loss of or significant restriction on the use of credit scoring in the pricing and underwriting of Personal Insurance products could reduce our future profitability; we are subject to a number of risks associated with our business outside the United States; we could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective; our business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology; some strategic initiatives, including our direct to consumer initiative in Personal Insurance, are long-term in nature and may negatively impact our loss and loss adjustment expense ratios and underwriting expense ratios as we invest, and these initiatives may not be successful; our efforts to develop new markets or expand targeted markets may not be successful; if we experience difficulties with technology, data security and/or outsourcing relationships, our ability to conduct our business could be negatively impacted; and acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences.

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 filed with the Securities and Exchange Commission and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent annual report on Form 10-K and our 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)	2009			2008			2009			2008
Operating income	$	1,155		$	939		$	3,600		$	3,195
Net realized investment gains (losses)	130			(138		)	22			(271		)
Net income	$	1,285		$	801		$	3,622		$	2,924
Basic earnings per share(1)
Operating income	$	2.15		$	1.60		$	6.34		$	5.32
Net realized investment gains (losses)	0.24			(0.24		)	0.04			(0.45		)
Net income	$	2.39		$	1.36		$	6.38		$	4.87
Diluted earnings per share(1)
Operating income	$	2.12		$	1.58		$	6.29		$	5.26
Net realized investment gains (losses)	0.24			(0.23		)	0.04			(0.45		)
Net income	$	2.36		$	1.35		$	6.33		$	4.81
Weighted average number of common shares outstanding (basic)(1)	532.8			583.6			563.2			595.9
Weighted average number of common shares outstanding and common stock equivalents (diluted)(1)	540.1			590.3			568.6			604.3
Common shares outstanding at period end	520.3			585.1			520.3			585.1
Common stock dividends declared	$	175		$	177		$	690		$	712
Operating income by segment
Business Insurance	$	815		$	619		$	2,590		$	2,338
Financial, Professional & International Insurance	194			154			642			649
Personal Insurance	210			226			601			465
Total segment operating income	1,219			999			3,833			3,452
Interest Expense and Other	(64		)	(60		)	(233		)	(257		)
	$	1,155		$	939		$	3,600		$	3,195
Operating return on equity	18.0		%	14.7		%	14.0		%	12.4		%
Return on equity	18.5		%	12.8		%	13.5		%	11.4		%

(1) In accordance with new guidance on determining whether instruments granted in share-based payment transactions are participating securities, which was effective January 1, 2009, all prior-period basic and diluted EPS data has been restated to reflect the retrospective application of this guidance.

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)	2009			2008			2009			2008
Revenues
Premiums	$	5,343		$	5,434		$	21,418		$	21,579
Net investment income	813			483			2,776			2,792
Fee income	72			75			306			390
Net realized investment gains (losses)	189			(219		)	17			(415		)
Other revenues	39			32			163			131
	$	6,456		$	5,805		$	24,680		$	24,477
Revenues
Business Insurance	$	3,322		$	3,184		$	13,218		$	13,517
Financial, Professional & International Insurance	991			971			3,812			3,907
Personal Insurance	1,954			1,869			7,623			7,466
Total segment revenues	6,267			6,024			24,653			24,890
Interest Expense and Other	—			—			10			2
	6,267			6,024			24,663			24,892
Net realized investment gains (losses)	189			(219		)	17			(415		)
	$	6,456		$	5,805		$	24,680		$	24,477
Gross written premiums
Business Insurance	$	2,729		$	2,970		$	12,098		$	12,580
Financial, Professional & International Insurance	978			990			3,713			3,966
Personal Insurance	1,811			1,749			7,474			7,291
	$	5,518		$	5,709		$	23,285		$	23,837
Net written premiums
Business Insurance	$	2,515		$	2,756		$	10,902		$	11,220
Financial, Professional & International Insurance	938			938			3,285			3,468
Personal Insurance	1,735			1,691			7,149			6,995
	$	5,188		$	5,385		$	21,336		$	21,683
GAAP combined ratios: (1)
Business Insurance (2)
Loss and loss adjustment expense ratio	46.3		%	54.6		%	53.9		%	57.7		%
Underwriting expense ratio	32.5			31.1			32.2			32.5
Combined ratio	78.8		%	85.7		%	86.1		%	90.2		%
Financial, Professional & International Insurance (2)
Loss and loss adjustment expense ratio	46.3		%	52.3		%	52.1		%	51.2		%
Underwriting expense ratio	36.8			34.9			36.0			36.0
Combined ratio	83.1		%	87.2		%	88.1		%	87.2		%
Personal Insurance
Loss and loss adjustment expense ratio	60.4		%	56.8		%	65.0		%	66.2		%
Underwriting expense ratio	30.0			28.8			29.6			30.8
Combined ratio	90.4		%	85.6		%	94.6		%	97.0		%
Total Company (2)
Loss and loss adjustment expense ratio	51.1		%	54.9		%	57.3		%	59.4		%
Underwriting expense ratio	32.3			31.0			31.9			32.5
Combined ratio	83.4		%	85.9		%	89.2		%	91.9		%

(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)	2009			2008			2009			2008
Reconciliation of underwriting gain to net income
Pre-tax underwriting gain	$	856		$	729		$	2,174		$	1,606
Tax expense on underwriting results	(316		)	(184		)	(737		)	(530		)
Underwriting gain	540			545			1,437			1,076
Net investment income	653			438			2,290			2,299
Other, including interest expense	(38		)	(44		)	(127		)	(180		)
Consolidated operating income	1,155			939			3,600			3,195
Net realized investment gains (losses)	130			(138		)	22			(271		)
Net income	$	1,285		$	801		$	3,622		$	2,924

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions)	2009		2008		Change		2009			2008		Change
The impact of changes in foreign exchange rates on FP&II net written premiums
Net written premiums - holding foreign exchange rates constant	$	930	$	938	(1	)%	$	3,396		$	3,468	(2	)%
Impact of changes in foreign exchange rates	8						(111		)
Net written premiums - as reported	$	938	$	938	0	%	$	3,285		$	3,468	(5	)%

	As of
	December 31,		September 30,		December 31,
($ in millions; except per share amounts)	2009		2009		2008
Reconciliation of tangible and adjusted common shareholders’ equity to common shareholders’ equity
Tangible common shareholders’ equity	$	21,587	$	21,935	$	21,402
Goodwill and other intangibles, net of tax	3,888		3,908		3,972
Adjusted common shareholders’ equity	25,475		25,843		25,374
Net unrealized investment gains (losses), net of tax	1,861		2,236		(144		)
Common shareholders’ equity	$	27,336	$	28,079	$	25,230
Common shares outstanding	520.3		547.9		585.1
Tangible book value per share	$	41.49	$	40.03	$	36.58
Adjusted book value per share	48.96		47.16		43.37
Book value per share	52.54		51.24		43.12

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

17

	Twelve Months Ended December 31,
($ in millions; after-tax)	2008			2007		2006		2005			2004
Reconciliation of operating income to net income
Operating income	$	3,195		$	4,500	$	4,200	$	2,026		$	895
Net realized investment gains (losses)	(271		)	101		8		35			(28		)
Income from continuing operations	2,924			4,601		4,208		2,061			867
Discontinued operations	—			—		—		(439		)	88
Net income	$	2,924		$	4,601	$	4,208	$	1,622		$	955

	As of December 31,
($ in millions)	2008			2007			2006			2005			2004
Reconciliation of adjusted common shareholders’equity to common shareholders’ equity
Adjusted common shareholders’ equity	$	25,374		$	25,884		$	24,553		$	21,823		$	20,147
Net unrealized investment gains (losses), net of tax	(144		)	620			453			327			866
Common shareholders’ equity	$	25,230		$	26,504		$	25,006		$	22,150		$	21,013
Return on equity	11.4		%	18.0		%	17.9		%	7.5		%	5.1		%
Operating return on equity	12.4		%	17.7		%	17.9		%	9.6		%	5.0		%

###

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

18

EX-99.2

Exhibit 99.2

The Travelers Companies, Inc.
Financial Supplement - Fourth Quarter 2009

	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 - Agency Automobile	19
Selected Statistics - Agency 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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Net income	$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
Net income per share: (1)
Basic	$	1.56		$	1.56		$	0.36		$	1.36		$	1.12		$	1.27		$	1.66		$	2.39		$	4.87		$	6.38
Diluted	$	1.54		$	1.54		$	0.36		$	1.35		$	1.11		$	1.27		$	1.65		$	2.36		$	4.81		$	6.33
Operating income	$	1,008		$	918		$	330		$	939		$	799		$	732		$	914		$	1,155		$	3,195		$	3,600
Operating income per share: (1)
Basic	$	1.63		$	1.52		$	0.56		$	1.60		$	1.36		$	1.26		$	1.62		$	2.15		$	5.32		$	6.34
Diluted	$	1.60		$	1.50		$	0.55		$	1.58		$	1.34		$	1.25		$	1.61		$	2.12		$	5.26		$	6.29
Return on equity	14.6		%	14.4		%	3.4		%	12.8		%	10.2		%	11.1		%	13.6		%	18.5		%	11.4		%	13.5		%
Operating return on equity	15.6		%	14.3		%	5.1		%	14.7		%	12.4		%	11.3		%	14.1		%	18.0		%	12.4		%	14.0		%
Total assets, at period end	$	114,144		$	113,625		$	112,695		$	109,751		$	110,467		$	111,326		$	112,617		$	109,824		$	109,751		$	109,824
Total equity, at period end	$	26,388		$	25,923		$	24,721		$	25,319		$	26,497		$	26,920		$	28,160		$	27,415		$	25,319		$	27,415
Book value per share, at period end	$	43.31		$	43.56		$	41.94		$	43.12		$	45.12		$	47.29		$	51.24		$	52.54		$	43.12		$	52.54
Less: Net unrealized investment gains (losses), net of tax	0.95			0.11			(1.40		)	(0.25		)	0.93			1.53			4.08			3.58			(0.25		)	3.58
Adjusted book value per share, at period end	$	42.36		$	43.45		$	43.34		$	43.37		$	44.19		$	45.76		$	47.16		$	48.96		$	43.37		$	48.96
Weighted average number of common shares outstanding (basic) (1)	615.4			598.2			586.7			583.6			584.6			575.8			558.4			532.8			595.9			563.2
Weighted average number of common shares outstanding and common stock equivalents (diluted) (1)	624.8			607.9			594.7			590.3			590.4			579.8			564.1			540.1			604.3			568.6
Common shares outstanding at period end	606.9			592.8			587.2			585.1			585.3			567.5			547.9			520.3			585.1			520.3
Common stock dividends declared	$	178		$	180		$	177		$	177		$	177		$	172		$	166		$	175		$	712		$	690
Common stock repurchased:
Under repurchase authorization (2)
Shares	20.8			15.3			6.2			2.7			—			18.5			20.8			30.1			45.0			69.4
Cost	$	1,000		$	750		$	272		$	100		$	—		$	750		$	1,000		$	1,550		$	2,122		$	3,300
Other
Shares	0.6			0.1			0.1			—			0.7			0.3			—			0.4			0.8			1.4
Cost	$	28		$	7		$	2		$	1		$	27		$	13		$	3		$	22		$	38		$	65

(1)  In accordance with new guidance on determining whether instruments granted in share-based payment transactions are participating securities, which was effective January 1, 2009, all prior-period basic and diluted EPS data has been restated to reflect the retrospective application of this guidance.

(2)  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 (1) ($ and shares in millions, except earnings per share)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Net income
Operating income	$	1,008		$	918		$	330		$	939		$	799		$	732		$	914		$	1,155		$	3,195		$	3,600
Net realized investment gains (losses)	(41		)	24			(116		)	(138		)	(137		)	8			21			130			(271		)	22
Net income	$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
Basic earnings per share
Operating income	$	1.63		$	1.52		$	0.56		$	1.60		$	1.36		$	1.26		$	1.62		$	2.15		$	5.32		$	6.34
Net realized investment gains (losses)	(0.07		)	0.04			(0.20		)	(0.24		)	(0.24		)	0.01			0.04			0.24			(0.45		)	0.04
Net income	$	1.56		$	1.56		$	0.36		$	1.36		$	1.12		$	1.27		$	1.66		$	2.39		$	4.87		$	6.38
Diluted earnings per share
Operating income	$	1.60		$	1.50		$	0.55		$	1.58		$	1.34		$	1.25		$	1.61		$	2.12		$	5.26		$	6.29
Net realized investment gains (losses)	(0.06		)	0.04			(0.19		)	(0.23		)	(0.23		)	0.02			0.04			0.24			(0.45		)	0.04
Net income	$	1.54		$	1.54		$	0.36		$	1.35		$	1.11		$	1.27		$	1.65		$	2.36		$	4.81		$	6.33
Adjustments to net income and weighted average shares for net income EPS calculations: (2)
																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Basic
Net income, as reported	$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
Preferred stock dividends, net of taxes	(1		)	(1		)	(1		)	(1		)	(1		)	(1		)	(1		)	—			(4		)	(3		)
Participating share-based awards - allocated income	(6		)	(7		)	(1		)	(5		)	(5		)	(5		)	(6		)	(10		)	(19		)	(26		)
Net income available to common shareholders - basic	$	960		$	934		$	212		$	795		$	656		$	734		$	928		$	1,275		$	2,901		$	3,593
Diluted
Net income available to common shareholders - basic	$	960		$	934		$	212		$	795		$	656		$	734		$	928		$	1,275		$	2,901		$	3,593
Effect of dilutive securities:
Convertible preferred stock	1			1			1			1			1			1			1			—			4			3
Performance shares	—			—			—			—			—			—			1			1			—			2
Zero coupon convertible notes	1			1			1			1			1			—			—			—			4			1
Net income available to common shareholders - diluted	$	962		$	936		$	214		$	797		$	658		$	735		$	930		$	1,276		$	2,909		$	3,599
Common Shares
Basic
Weighted average shares outstanding	615.4			598.2			586.7			583.6			584.6			575.8			558.4			532.8			595.9			563.2
Diluted
Weighted average shares outstanding	615.4			598.2			586.7			583.6			584.6			575.8			558.4			532.8			595.9			563.2
Weighted average effects of dilutive securities:
Convertible preferred stock	2.6			2.5			2.3			2.2			2.2			2.1			2.0			1.9			2.4			2.0
Stock options and performance shares	4.4			4.8			3.3			2.1			2.0			1.9			3.7			5.4			3.6			3.0
Zero coupon convertible notes	2.4			2.4			2.4			2.4			1.6			—			—			—			2.4			0.4
Diluted weighted average shares outstanding	624.8			607.9			594.7			590.3			590.4			579.8			564.1			540.1			604.3			568.6

(1)  In accordance with new guidance on determining whether instruments granted in share-based payment transactions are participating securities, which was effective January 1, 2009, all prior-period basic and diluted EPS data has been restated to reflect the retrospective application of this guidance.

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

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Premiums	$	5,340		$	5,357		$	5,448		$	5,434		$	5,301		$	5,353		$	5,421		$	5,343		$	21,579		$	21,418
Net investment income	815			778			716			483			542			658			763			813			2,792			2,776
Fee income	105			90			120			75			73			89			72			72			390			306
Net realized investment gains (losses)	(62		)	36			(170		)	(219		)	(214		)	13			29			189			(415		)	17
Other revenues	34			34			31			32			33			49			42			39			131			163
Total revenues	6,232			6,295			6,145			5,805			5,735			6,162			6,327			6,456			24,477			24,680
Claims and expenses
Claims and claim adjustment expenses	3,021			3,092			3,871			3,009			3,190			3,335			3,123			2,760			12,993			12,408
Amortization of deferred acquisition costs	954			961			990			975			944			953			967			949			3,880			3,813
General and administrative expenses (1)	853			864			1,001			800			782			839			889			856			3,518			3,366
Interest expense	90			91			95			94			92			94			98			98			370			382
Total claims and expenses	4,918			5,008			5,957			4,878			5,008			5,221			5,077			4,663			20,761			19,969
Income before income taxes	1,314			1,287			188			927			727			941			1,250			1,793			3,716			4,711
Income tax expense (benefit)	347			345			(26		)	126			65			201			315			508			792			1,089
Net income	$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
Net realized investment gains (losses)
Other-than-temporary impairment losses:
Total losses	$	(38	)	$	(28	)	$	(156	)	$	(198	)	$	(184	)	$	(75	)	$	(43	)	$	(21	)	$	(420	)	$	(323	)
Portion of losses recognized in accumulated other changes in equity from nonowner sources	—			—			—			—			—			45			24			(4		)	—			65
Other-than-temporary impairment losses	(38		)	(28		)	(156		)	(198		)	(184		)	(30		)	(19		)	(25		)	(420		)	(258		)
Other net realized investment gains (losses)	(24		)	64			(14		)	(21		)	(30		)	43			48			214			5			275
Net realized investment gains (losses)	$	(62	)	$	36		$	(170	)	$	(219	)	$	(214	)	$	13		$	29		$	189		$	(415	)	$	17
Other statistics
Effective tax rate on net investment income	20.2		%	19.8		%	18.1		%	9.5		%	12.6		%	16.7		%	19.2		%	19.8		%	17.7		%	17.5		%
Net investment income (after-tax)	$	650		$	624		$	587		$	438		$	474		$	547		$	616		$	653		$	2,299		$	2,290
Catastrophes, net of reinsurance (2):
Pre-tax	$	95		$	356		$	1,042		$	(85	)	$	83		$	200		$	158		$	16		$	1,408		$	457
After-tax	$	62		$	231		$	682		$	(56	)	$	54		$	130		$	103		$	10		$	919		$	297

(1)  In 3Q 2008, 4Q 2008, 1Q 2009 and 2Q 2009 “General and administrative expenses” includes $176 million, $(35) million, $(61) million, and $(26) million respectively, of estimated hurricane-related assessments from state-created insurance and windstorm insurance entities.

(2)  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.

3

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

																										YTD			YTD
		1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Underwriting gain (loss)		$	401		$	338		$	(208	)	$	545		$	353		$	206		$	338		$	540		$	1,076		$	1,437
Net investment income		650			624			587			438			474			547			616			653			2,299			2,290
Other, including interest expense		(43		)	(44		)	(49		)	(44		)	(28		)	(21		)	(40		)	(38		)	(180		)	(127		)
Operating income		1,008			918			330			939			799			732			914			1,155			3,195			3,600
Net realized investment gains (losses)		(41		)	24			(116		)	(138		)	(137		)	8			21			130			(271		)	22
Net income		$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio		55.7		%	57.0		%	69.9		%	54.9		%	59.7		%	61.4		%	57.0		%	51.1		%	59.4		%	57.3		%
Underwriting expense ratio (3)		31.9		%	32.3		%	34.8		%	31.0		%	30.9		%	31.8		%	32.7		%	32.3		%	32.5		%	31.9		%
Combined ratio		87.6		%	89.3		%	104.7		%	85.9		%	90.6		%	93.2		%	89.7		%	83.4		%	91.9		%	89.2		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative		87.5		%	89.2		%	104.5		%	85.7		%	90.1		%	92.6		%	89.1		%	82.9		%	91.7		%	88.7		%
Impact of catastrophes on combined ratio (4)		1.8		%	6.6		%	19.1		%	-1.6		%	1.6		%	3.7		%	2.9		%	0.3		%	6.5		%	2.1		%
Impact of prior year reserve development on combined ratio		-7.5		%	-9.8		%	-6.2		%	-5.1		%	-4.9		%	-4.9		%	-5.7		%	-9.4		%	-7.1		%	-6.2		%
(1)  Before policyholder dividends.
(2)  Billing and policy fees, which are a component of other revenues, are allocated as a reduction of 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
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
	Billing and policy fees	$	27		$	26		$	27		$	26		$	27		$	27		$	26		$	27		$	106		$	107
	Fee income:
	Loss and loss adjustment expenses	$	43		$	30		$	58		$	13		$	20		$	42		$	24		$	28		$	144		$	114
	Underwriting expenses	62			60			62			62			53			47			48			44			246			192
	Total fee income	$	105		$	90		$	120		$	75		$	73		$	89		$	72		$	72		$	390		$	306

(3)  The impact of changes in prior year estimates of hurricane-related assessments, which is not included in the impact of catastrophes or prior year reserve development on the combined ratio, is (1.2), (0.5), and (0.4) points for 1Q 2009, 2Q 2009, and YTD 4Q 2009, respectively.

(4)  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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Premiums	$	5,340		$	5,357		$	5,448		$	5,434		$	5,301		$	5,353		$	5,421		$	5,343		$	21,579		$	21,418
Net investment income	815			778			716			483			542			658			763			813			2,792			2,776
Fee income	105			90			120			75			73			89			72			72			390			306
Other revenues	34			34			31			32			33			49			42			39			131			163
Total revenues	6,294			6,259			6,315			6,024			5,949			6,149			6,298			6,267			24,892			24,663
Claims and expenses
Claims and claim adjustment expenses	3,021			3,092			3,871			3,009			3,190			3,335			3,123			2,760			12,993			12,408
Amortization of deferred acquisition costs	954			961			990			975			944			953			967			949			3,880			3,813
General and administrative expenses	853			864			1,001			800			782			839			889			856			3,518			3,366
Interest expense	90			91			95			94			92			94			98			98			370			382
Total claims and expenses	4,918			5,008			5,957			4,878			5,008			5,221			5,077			4,663			20,761			19,969
Operating income before income taxes	1,376			1,251			358			1,146			941			928			1,221			1,604			4,131			4,694
Income tax expense	368			333			28			207			142			196			307			449			936			1,094
Operating income	$	1,008		$	918		$	330		$	939		$	799		$	732		$	914		$	1,155		$	3,195		$	3,600
Other statistics
Effective tax rate on net investment income	20.2		%	19.8		%	18.1		%	9.5		%	12.6		%	16.7		%	19.2		%	19.8		%	17.7		%	17.5		%
Net investment income (after-tax)	$	650		$	624		$	587		$	438		$	474		$	547		$	616		$	653		$	2,299		$	2,290
Catastrophes, net of reinsurance (1):
Pre-tax	$	95		$	356		$	1,042		$	(85	)	$	83		$	200		$	158		$	16		$	1,408		$	457
After-tax	$	62		$	231		$	682		$	(56	)	$	54		$	130		$	103		$	10		$	919		$	297

(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
	2008			2008		2008			2008			2009			2009		2009			2009			2008			2009
Statutory underwriting
Gross written premiums	$	5,933		$	6,061	$	6,134		$	5,709		$	5,863		$	5,969	$	5,935		$	5,518		$	23,837		$	23,285
Net written premiums	$	5,188		$	5,629	$	5,481		$	5,385		$	5,203		$	5,605	$	5,340		$	5,188		$	21,683		$	21,336
Net earned premiums	$	5,340		$	5,357	$	5,448		$	5,434		$	5,301		$	5,353	$	5,421		$	5,343		$	21,579		$	21,418
Losses and loss adjustment expenses	2,978			3,118		3,781			2,974			3,159			3,300		3,090			2,736			12,851			12,285
Underwriting expenses	1,706			1,766		1,811			1,643			1,710			1,724		1,770			1,658			6,926			6,862
Statutory underwriting gain (loss)	656			473		(144		)	817			432			329		561			949			1,802			2,271
Policyholder dividends	7			9		4			11			8			6		7			4			31			25
Statutory underwriting gain (loss) after policyholder dividends	$	649		$	464	$	(148	)	$	806		$	424		$	323	$	554		$	945		$	1,771		$	2,246
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	42,840		$	42,885	$	42,848		$	41,307		$	41,156		$	41,495	$	41,357		$	40,923		$	41,307		$	40,923
Increase (decrease) in reserves	$	(228	)	$	45	$	(37	)	$	(1,541	)	$	(151	)	$	339	$	(138	)	$	(434	)	$	(1,761	)	$	(384	)
Statutory surplus	$	22,353		$	22,288	$	21,929		$	21,491		$	21,561		$	21,267	$	22,050		$	23,195		$	21,491		$	23,195
Net written premiums/surplus (1)	0.97:1			0.97:1		0.99:1			1.01:1			1.01:1			1.02:1		0.98:1			0.92:1			1.01:1			0.92:1

(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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Written premiums
Gross	$	5,933		$	6,061		$	6,134		$	5,709		$	5,863		$	5,969		$	5,935		$	5,518		$	23,837		$	23,285
Ceded	(745		)	(432		)	(653		)	(324		)	(660		)	(364		)	(595		)	(330		)	(2,154		)	(1,949		)
Net	$	5,188		$	5,629		$	5,481		$	5,385		$	5,203		$	5,605		$	5,340		$	5,188		$	21,683		$	21,336
Earned premiums
Gross	$	5,932		$	5,957		$	6,035		$	5,978		$	5,808		$	5,862		$	5,915		$	5,835		$	23,902		$	23,420
Ceded	(592		)	(600		)	(587		)	(544		)	(507		)	(509		)	(494		)	(492		)	(2,323		)	(2,002		)
Net	$	5,340		$	5,357		$	5,448		$	5,434		$	5,301		$	5,353		$	5,421		$	5,343		$	21,579		$	21,418

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Premiums	$	2,786		$	2,781		$	2,823		$	2,790		$	2,757		$	2,770		$	2,768		$	2,673		$	11,180		$	10,968
Net investment income	573			540			494			310			355			451			529			567			1,917			1,902
Fee income	105			90			120			75			73			89			72			72			390			306
Other revenues	6			7			8			9			6			12			14			10			30			42
Total revenues	3,470			3,418			3,445			3,184			3,191			3,322			3,383			3,322			13,517			13,218
Claims and expenses
Claims and claim adjustment expenses	1,558			1,556			1,952			1,542			1,618			1,644			1,508			1,267			6,608			6,037
Amortization of deferred acquisition costs	451			451			466			450			449			450			448			428			1,818			1,775
General and administrative expenses (1)	516			516			565			482			467			493			517			489			2,079			1,966
Interest expense	—			—			—			1			—			—			—			—			1			—
Total claims and expenses	2,525			2,523			2,983			2,475			2,534			2,587			2,473			2,184			10,506			9,778
Operating income before federal income taxes	945			895			462			709			657			735			910			1,138			3,011			3,440
Income taxes	262			237			84			90			110			175			242			323			673			850
Operating income	$	683		$	658		$	378		$	619		$	547		$	560		$	668		$	815		$	2,338		$	2,590
Other statistics
Effective tax rate on net investment income	19.7		%	19.2		%	17.4		%	6.3		%	10.8		%	15.9		%	18.8		%	19.7		%	16.8		%	16.9		%
Net investment income (after-tax)	$	460		$	436		$	409		$	291		$	317		$	379		$	429		$	456		$	1,596		$	1,581
Catastrophes, net of reinsurance (2):
Pre-tax	$	57		$	185		$	488		$	(24	)	$	12		$	59		$	86		$	19		$	706		$	176
After-tax	$	37		$	120		$	318		$	(16	)	$	8		$	38		$	56		$	12		$	459		$	114

(1)  In 3Q 2008, 4Q 2008, 1Q 2009, and 2Q 2009 “General and administrative expenses” includes $76 million, $(14) million, $(26) million, and $(12) million, respectively, of estimated hurricane-related assessments from state-created insurance and windstorm insurance entities.

(2)  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
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Underwriting gain (loss)		$	219		$	217		$	(35	)	$	325		$	226		$	172		$	228		$	351		$	726		$	977
Net investment income		460			436			409			291			317			379			429			456			1,596			1,581
Other		4			5			4			3			4			9			11			8			16			32
Operating income		$	683		$	658		$	378		$	619		$	547		$	560		$	668		$	815		$	2,338		$	2,590
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio		54.2		%	54.7		%	67.1		%	54.6		%	57.8		%	57.6		%	53.5		%	46.3		%	57.7		%	53.9		%
Underwriting expense ratio (3)		32.4		%	32.4		%	34.2		%	31.1		%	31.2		%	32.2		%	33.0		%	32.5		%	32.5		%	32.2		%
Combined ratio		86.6		%	87.1		%	101.3		%	85.7		%	89.0		%	89.8		%	86.5		%	78.8		%	90.2		%	86.1		%
Impact of catastrophes on combined ratio (4)		2.1		%	6.6		%	17.3		%	-0.8		%	0.4		%	2.1		%	3.1		%	0.7		%	6.3		%	1.6		%
Impact of prior year reserve development on combined ratio		-11.2		%	-12.8		%	-8.7		%	-7.3		%	-6.6		%	-7.8		%	-9.5		%	-13.6		%	-10.0		%	-9.3		%
(1)  Before policyholder dividends.
(2)  Billing and policy fees, which are a component of other revenues, are allocated as a reduction of 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
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
	Billing and policy fees	$	3		$	4		$	3		$	4		$	4		$	4		$	4		$	4		$	14		$	16
	Fee income:
	Loss and loss adjustment expenses	$	43		$	30		$	58		$	13		$	20		$	42		$	24		$	28		$	144		$	114
	Underwriting expenses	62			60			62			62			53			47			48			44			246			192
	Total fee income	$	105		$	90		$	120		$	75		$	73		$	89		$	72		$	72		$	390		$	306

(3)  The impact of changes in prior year estimates of hurricane-related assessments, which is not included in the impact of catastrophes or prior year reserve development on the combined ratio, is (0.9), (0.4), and (0.3) points for 1Q 2009, 2Q 2009, and YTD 4Q 2009, respectively.

(4)  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
	2008		2008		2008		2008		2009		2009		2009		2009		2008		2009
Statutory underwriting
Gross written premiums	$	3,308	$	3,087	$	3,215	$	2,970	$	3,294	$	3,046	$	3,029	$	2,729	$	12,580	$	12,098
Net written premiums	$	2,911	$	2,805	$	2,748	$	2,756	$	2,963	$	2,813	$	2,611	$	2,515	$	11,220	$	10,902
Net earned premiums	$	2,786	$	2,781	$	2,823	$	2,790	$	2,757	$	2,770	$	2,768	$	2,673	$	11,180	$	10,968
Losses and loss adjustment expenses	1,517		1,576		1,868		1,509		1,592		1,603		1,479		1,240		6,470		5,914
Underwriting expenses	903		897		922		842		903		877		892		820		3,564		3,492
Statutory underwriting gain	366		308		33		439		262		290		397		613		1,146		1,562
Policyholder dividends	4		6		2		6		4		4		4		3		18		15
Statutory underwriting gain after policyholder dividends	$	362	$	302	$	31	$	433	$	258	$	286	$	393	$	610	$	1,128	$	1,547

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
	2008		2008		2008		2008		2009			2009		2009		2009		2008		2009
Net written premiums by market
Select Accounts	$	708	$	724	$	662	$	662	$	731		$	732	$	655	$	638	$	2,756	$	2,756
Commercial Accounts	673		550		635		666		710			564		609		610		2,524		2,493
National Accounts	246		241		240		269		259			227		197		219		996		902
Industry-Focused Underwriting	613		584		613		586		617			581		564		517		2,396		2,279
Target Risk Underwriting	423		445		366		359		422			458		360		328		1,593		1,568
Specialized Distribution	244		259		228		208		222			247		221		199		939		889
Total core	2,907		2,803		2,744		2,750		2,961			2,809		2,606		2,511		11,204		10,887
Business Insurance other	4		2		4		6		2			4		5		4		16		15
Total	$	2,911	$	2,805	$	2,748	$	2,756	$	2,963		$	2,813	$	2,611	$	2,515	$	11,220	$	10,902
Net written premiums by product line
Commercial multi-peril	$	791	$	726	$	693	$	728	$	789		$	730	$	682	$	732	$	2,938	$	2,933
Workers’ compensation	674		566		598		614		748			593		587		558		2,452		2,486
Commercial automobile	500		476		511		465		485			497		498		447		1,952		1,927
Property	482		515		433		430		463			507		401		356		1,860		1,727
General liability	462		520		510		519		479			486		443		421		2,011		1,829
Other	2		2		3		—		(1		)	—		—		1		7		—
Total	$	2,911	$	2,805	$	2,748	$	2,756	$	2,963		$	2,813	$	2,611	$	2,515	$	11,220	$	10,902
National accounts
Additions to claim volume under administration (1)	$	712	$	522	$	482	$	566	$	594		$	452	$	403	$	454	$	2,282	$	1,903
Written fees	$	103	$	80	$	85	$	77	$	85		$	70	$	65	$	63	$	345	$	283

(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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Premiums	$	847		$	852		$	863		$	867		$	801		$	810		$	861		$	861		$	3,429		$	3,333
Net investment income	122			120			114			98			104			107			118			123			454			452
Other revenues	5			8			5			6			6			7			7			7			24			27
Total revenues	974			980			982			971			911			924			986			991			3,907			3,812
Claims and expenses
Claims and claim adjustment expenses	390			376			545			458			442			442			463			400			1,769			1,747
Amortization of deferred acquisition costs	159			163			166			164			146			151			162			163			652			622
General and administrative expenses (1)	144			149			149			139			138			146			141			154			581			579
Interest expense	—			1			1			—			—			—			—			—			2			—
Total claims and expenses	693			689			861			761			726			739			766			717			3,004			2,948
Operating income before federal income taxes	281			291			121			210			185			185			220			274			903			864
Income taxes	73			87			38			56			37			52			53			80			254			222
Operating income	$	208		$	204		$	83		$	154		$	148		$	133		$	167		$	194		$	649		$	642
Other statistics
Effective tax rate on net investment income	23.5		%	23.5		%	22.0		%	20.6		%	19.4		%	20.9		%	21.7		%	20.8		%	22.5		%	20.7		%
Net investment income (after-tax)	$	93		$	92		$	89		$	78		$	84		$	84		$	93		$	97		$	352		$	358
Catastrophes, net of reinsurance (2):
Pre-tax	$	—		$	6		$	91		$	(13	)	$	—		$	2		$	4		$	(3	)	$	84		$	3
After-tax	$	—		$	4		$	64		$	(10	)	$	—		$	1		$	3		$	(2	)	$	58		$	2

(1)  In 3Q 2008, 4Q 2008, and 1Q 2009 “General and administrative expenses” includes $4 million, $(2) million, and $(1) million respectively, of estimated hurricane-related assessments from state-created insurance and windstorm insurance entities.

(2)  In 4Q 2008 and 4Q 2009, “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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Underwriting gain (loss)	$	112		$	107		$	(8	)	$	72		$	60		$	44		$	69		$	93		$	283		$	266
Net investment income	93			92			89			78			84			84			93			97			352			358
Other	3			5			2			4			4			5			5			4			14			18
Operating income	$	208		$	204		$	83		$	154		$	148		$	133		$	167		$	194		$	649		$	642
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	45.7		%	43.7		%	62.9		%	52.3		%	54.7		%	54.4		%	53.3		%	46.3		%	51.2		%	52.1		%
Underwriting expense ratio (2)	35.7		%	36.7		%	36.5		%	34.9		%	35.5		%	36.5		%	35.4		%	36.8		%	36.0		%	36.0		%
Combined ratio	81.4		%	80.4		%	99.4		%	87.2		%	90.2		%	90.9		%	88.7		%	83.1		%	87.2		%	88.1		%
Impact of catastrophes on combined ratio (3)	0.0		%	0.6		%	10.5		%	-1.6		%	0.0		%	0.2		%	0.5		%	-0.3		%	2.5		%	0.1		%
Impact of prior year reserve development on combined ratio	-7.4		%	-15.5		%	-4.9		%	-4.2		%	-1.4		%	-1.4		%	-2.9		%	-13.9		%	-8.0		%	-5.1		%

(1)  Before policyholder dividends.

(2)  The impact of changes in prior year estimates of hurricane-related assessments, which is not included in the impact of catastrophes or prior year reserve development on the combined ratio, is (0.1) and (0.0) points for 1Q 2009 and YTD 4Q 2009, respectively.

(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 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
	2008		2008		2008		2008		2009		2009		2009		2009		2008		2009
Statutory underwriting
Gross written premiums	$	946	$	1,065	$	965	$	990	$	842	$	975	$	918	$	978	$	3,966	$	3,713
Net written premiums	$	644	$	985	$	901	$	938	$	563	$	914	$	870	$	938	$	3,468	$	3,285
Net earned premiums	$	847	$	852	$	863	$	867	$	801	$	810	$	861	$	861	$	3,429	$	3,333
Losses and loss adjustment expenses	387		383		539		456		437		448		459		403		1,765		1,747
Underwriting expenses	311		317		299		286		286		298		288		301		1,213		1,173
Statutory underwriting gain	149		152		25		125		78		64		114		157		451		413
Policyholder dividends	3		3		2		5		4		2		3		1		13		10
Statutory underwriting gain after policyholder dividends	$	146	$	149	$	23	$	120	$	74	$	62	$	111	$	156	$	438	$	403

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
	2008		2008		2008		2008		2009		2009		2009		2009		2008		2009
Net written premiums by market
Bond & Financial Products	$	355	$	592	$	609	$	570	$	334	$	558	$	574	$	574	$	2,126	$	2,040
International	289		393		292		368		229		356		296		364		1,342		1,245
Total	$	644	$	985	$	901	$	938	$	563	$	914	$	870	$	938	$	3,468	$	3,285
Net written premiums by product line
General liability	$	101	$	259	$	271	$	290	$	129	$	256	$	252	$	269	$	921	$	906
Fidelity & surety	216		299		307		248		170		265		291		274		1,070		1,000
International	289		393		292		368		229		356		296		364		1,342		1,245
Other	38		34		31		32		35		37		31		31		135		134
Total	$	644	$	985	$	901	$	938	$	563	$	914	$	870	$	938	$	3,468	$	3,285

In 2Q 2009, results from the surety bond operation in Canada were reclassified from the “Bond and Financial Products” market to the “International” market, and from the “Fidelity & surety” product line to the “International” product line.  All prior period amounts have been restated to reflect this reclassification.

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Premiums	$	1,707		$	1,724		$	1,762		$	1,777		$	1,743		$	1,773		$	1,792		$	1,809		$	6,970		$	7,117
Net investment income	120			118			108			75			83			100			116			123			421			422
Other revenues	21			19			18			17			21			21			20			22			75			84
Total revenues	1,848			1,861			1,888			1,869			1,847			1,894			1,928			1,954			7,466			7,623
Claims and expenses
Claims and claim adjustment expenses	1,073			1,160			1,374			1,009			1,130			1,249			1,152			1,093			4,616			4,624
Amortization of deferred acquisition costs	344			347			358			361			349			352			357			358			1,410			1,416
General and administrative expenses (1)	181			193			281			174			170			187			220			207			829			784
Total claims and expenses	1,598			1,700			2,013			1,544			1,649			1,788			1,729			1,658			6,855			6,824
Operating income (loss) before federal income taxes	250			161			(125		)	325			198			106			199			296			611			799
Income taxes	69			39			(61		)	99			44			18			50			86			146			198
Operating income (loss)	$	181		$	122		$	(64	)	$	226		$	154		$	88		$	149		$	210		$	465		$	601
Other statistics
Effective tax rate on net investment income	19.1		%	18.9		%	17.2		%	8.2		%	12.0		%	16.1		%	18.7		%	19.5		%	16.6		%	17.0		%
Net investment income (after-tax)	$	97		$	96		$	89		$	69		$	73		$	84		$	94		$	100		$	351		$	351
Catastrophes, net of reinsurance (2):
Pre-tax	$	38		$	165		$	463		$	(48	)	$	71		$	139		$	68		$	—		$	618		$	278
After-tax	$	25		$	107		$	300		$	(30	)	$	46		$	91		$	44		$	—		$	402		$	181

(1)  In 3Q 2008, 4Q 2008, 1Q 2009, and 2Q 2009 “General and administrative expenses” includes $96 million, $(19) million, $(34) million, and $(14) million respectively, of estimated hurricane-related assessments from state-created insurance and windstorm insurance entities.

(2)  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
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Underwriting gain (loss)		$	70		$	14		$	(165	)	$	148		$	67		$	(10	)	$	41		$	96		$	67		$	194
Net investment income		97			96			89			69			73			84			94			100			351			351
Other		14			12			12			9			14			14			14			14			47			56
Operating income (loss)		$	181		$	122		$	(64	)	$	226		$	154		$	88		$	149		$	210		$	465		$	601
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio		62.9		%	67.3		%	77.9		%	56.8		%	64.9		%	70.5		%	64.3		%	60.4		%	66.2		%	65.0		%
Underwriting expense ratio (2)		29.3		%	30.0		%	35.0		%	28.8		%	28.4		%	29.1		%	30.9		%	30.0		%	30.8		%	29.6		%
Combined ratio		92.2		%	97.3		%	112.9		%	85.6		%	93.3		%	99.6		%	95.2		%	90.4		%	97.0		%	94.6		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative		92.0		%	96.7		%	112.3		%	84.9		%	91.7		%	97.7		%	93.3		%	89.0		%	96.5		%	92.9		%
Impact of catastrophes on combined ratio (3)		2.2		%	9.6		%	26.2		%	-2.7		%	4.1		%	7.9		%	3.8		%	0.0		%	8.9		%	3.9		%
Impact of prior year reserve development on combined ratio		-1.5		%	-2.2		%	-2.5		%	-2.1		%	-3.7		%	-1.9		%	-1.3		%	-0.8		%	-2.1		%	-1.9		%
(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
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
	Billing and policy fees	$	24		$	22		$	24		$	22		$	23		$	23		$	22		$	23		$	92		$	91

(2)  The impact of changes in prior year estimates of hurricane-related assessments, which is not included in the impact of catastrophes or prior year reserve development on the combined ratio, is (2.0), (0.8), and (0.7) points for 1Q 2009, 2Q 2009, and YTD 4Q 2009, respectively.

(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 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
	2008		2008		2008			2008		2009		2009			2009		2009		2008		2009
Statutory underwriting
Gross written premiums	$	1,679	$	1,909	$	1,954		$	1,749	$	1,727	$	1,948		$	1,988	$	1,811	$	7,291	$	7,474
Net written premiums	$	1,633	$	1,839	$	1,832		$	1,691	$	1,677	$	1,878		$	1,859	$	1,735	$	6,995	$	7,149
Net earned premiums	$	1,707	$	1,724	$	1,762		$	1,777	$	1,743	$	1,773		$	1,792	$	1,809	$	6,970	$	7,117
Losses and loss adjustment expenses	1,074		1,159		1,374			1,009		1,130		1,249			1,152		1,093		4,616		4,624
Underwriting expenses	492		552		590			515		521		549			590		537		2,149		2,197
Statutory underwriting gain (loss)	$	141	$	13	$	(202	)	$	253	$	92	$	(25	)	$	50	$	179	$	205	$	296
Policies in force (in thousands)
Automobile	2,495		2,526		2,538			2,526		2,509		2,491			2,482		2,480		2,526		2,480
Homeowners and other	4,702		4,755		4,808			4,831		4,861		4,901			4,944		4,985		4,831		4,985

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

18

The Travelers Companies, Inc.
Selected Statistics - Personal Insurance (Agency Automobile) (1)
($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Statutory underwriting
Gross written premiums	$	930		$	939		$	934		$	877		$	924		$	919		$	905		$	862		$	3,680		$	3,610
Net written premiums	$	922		$	933		$	926		$	870		$	917		$	914		$	898		$	857		$	3,651		$	3,586
Net earned premiums	$	911		$	919		$	936		$	939		$	913		$	917		$	915		$	916		$	3,705		$	3,661
Losses and loss adjustment expenses	649			637			655			672			668			639			643			682			2,613			2,632
Underwriting expenses	259			263			260			247			254			249			247			237			1,029			987
Statutory underwriting gain (loss)	$	3		$	19		$	21		$	20		$	(9	)	$	29		$	25		$	(3	)	$	63		$	42
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	71.3		%	69.3		%	69.9		%	71.6		%	73.2		%	69.7		%	70.2		%	74.5		%	70.5		%	71.9		%
Underwriting expense ratio	27.4		%	27.8		%	27.5		%	27.5		%	27.0		%	26.7		%	27.1		%	26.4		%	27.5		%	26.8		%
Combined ratio	98.7		%	97.1		%	97.4		%	99.1		%	100.2		%	96.4		%	97.3		%	100.9		%	98.0		%	98.7		%
Impact of catastrophes on combined ratio	0.0		%	1.5		%	0.7		%	0.0		%	0.9		%	1.0		%	0.8		%	0.0		%	0.5		%	0.7		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	—		$	14		$	6		$	—		$	8		$	9		$	7		$	—		$	20		$	24
After-tax	$	—		$	9		$	4		$	—		$	5		$	6		$	5		$	—		$	13		$	16
Policies in force (in thousands)	2,495			2,522			2,528			2,512			2,489			2,466			2,451			2,443
Change from prior year quarter	1.6		%	2.4		%	2.4		%	1.3		%	-0.2		%	-2.3		%	-3.0		%	-2.7		%
Change from prior quarter	0.6		%	1.1		%	0.2		%	-0.6		%	-0.9		%	-0.9		%	-0.6		%	-0.3		%

(1)  Represents Automobile sold through agents, brokers and other intermediaries, and excludes direct to consumer.

(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
	2008		2008		2008		2008		2009		2009		2009		2009		2008		2009
Billing and policy fees	$	14	$	13	$	14	$	13	$	13	$	14	$	12	$	13	$	54	$	52

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

19

The Travelers Companies, Inc. Selected Statistics - Personal Insurance (Agency Homeowners and Other) (1) ($ in millions)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Statutory underwriting
Gross written premiums	$	749		$	970		$	1,015		$	865		$	792		$	1,018		$	1,067		$	932		$	3,599		$	3,809
Net written premiums	$	711		$	906		$	902		$	814		$	749		$	952		$	946		$	861		$	3,333		$	3,508
Net earned premiums	$	796		$	805		$	825		$	835		$	824		$	846		$	865		$	879		$	3,261		$	3,414
Losses and loss adjustment expenses	425			522			719			335			458			599			499			399			2,001			1,955
Underwriting expenses	229			279			317			255			239			268			306			275			1,080			1,088
Statutory underwriting gain (loss)	$	142		$	4		$	(211	)	$	245		$	127		$	(21	)	$	60		$	205		$	180		$	371
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	53.3		%	64.9		%	87.1		%	40.2		%	55.6		%	70.8		%	57.7		%	45.4		%	61.4		%	57.3		%
Underwriting expense ratio	31.2		%	31.4		%	42.1		%	28.8		%	26.8		%	28.4		%	31.3		%	31.2		%	33.3		%	29.5		%
Combined ratio	84.5		%	96.3		%	129.2		%	69.0		%	82.4		%	99.2		%	89.0		%	76.6		%	94.7		%	86.8		%
Impact of catastrophes on combined ratio	4.8		%	18.8		%	55.3		%	-5.6		%	7.6		%	15.3		%	7.0		%	0.0		%	18.4		%	7.4		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	38		$	151		$	457		$	(48	)	$	63		$	130		$	61		$	—		$	598		$	254
After-tax	$	25		$	98		$	296		$	(30	)	$	41		$	85		$	39		$	—		$	389		$	165
Policies in force (in thousands)	4,702			4,753			4,804			4,824			4,850			4,886			4,923			4,959
Change from prior year quarter	2.7		%	2.6		%	3.0		%	3.0		%	3.1		%	2.8		%	2.5		%	2.8		%
Change from prior quarter	0.4		%	1.1		%	1.1		%	0.4		%	0.5		%	0.7		%	0.8		%	0.7		%

(1)  Represents Homeowners and Other Lines sold through agents, brokers and other intermediaries, and excludes direct to consumer.

(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
	2008		2008		2008		2008		2009		2009		2009		2009		2008		2009
Billing and policy fees	$	10	$	9	$	10	$	9	$	10	$	9	$	10	$	10	$	38	$	39

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Revenues
Net investment income	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Other revenues	2			—			—			—			—			9			1			—			2			10
Total revenues	2			—			—			—			—			9			1			—			2			10
Claims and expenses
Interest expense	90			90			94			93			92			94			98			98			367			382
General and administrative expenses	12			6			6			5			7			13			11			6			29			37
Total claims and expenses	102			96			100			98			99			107			109			104			396			419
Operating loss before federal income tax benefit	(100		)	(96		)	(100		)	(98		)	(99		)	(98		)	(108		)	(104		)	(394		)	(409		)
Income taxes	(36		)	(30		)	(33		)	(38		)	(49		)	(49		)	(38		)	(40		)	(137		)	(176		)
Operating loss	$	(64	)	$	(66	)	$	(67	)	$	(60	)	$	(50	)	$	(49	)	$	(70	)	$	(64	)	$	(257	)	$	(233	)

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,
	2009 (1)		2008
Assets
Fixed maturities, available for sale at fair value (including $90 and $8 subject to securities lending) (amortized cost $63,311 and $61,569)	$	65,847	$	61,275
Equity securities, at fair value (cost $373 and $461)	451		379
Real estate	865		827
Short-term securities	4,852		5,222
Other investments	2,950		3,035
Total investments	74,965		70,738
Cash	255		350
Investment income accrued	825		823
Premiums receivable	5,735		5,954
Reinsurance recoverables	12,816		14,232
Ceded unearned premiums	916		941
Deferred acquisition costs	1,758		1,774
Deferred tax asset	672		1,965
Contractholder receivables	5,797		6,350
Goodwill	3,365		3,366
Other intangible assets	588		688
Other assets	2,132		2,570
Total assets	$	109,824	$	109,751

	December 31,			December 31,
	2009 (1)			2008
Liabilities
Claims and claim adjustment expense reserves	$	53,127		$	54,723
Unearned premium reserves	10,861			10,957
Contractholder payables	5,797			6,350
Payables for reinsurance premiums	546			528
Debt	6,527			6,181
Other liabilities	5,551			5,693
Total liabilities	82,409			84,432
Shareholders’ equity
Preferred Stock Savings Plan - convertible preferred stock (0.2 and 0.3 shares issued and outstanding)	79			89
Common stock (1,750.0 shares authorized; 520.3 and 585.1 shares issued and outstanding)	19,593			19,242
Retained earnings	16,315			13,314
Accumulated other changes in equity from nonowner sources	1,219			(900		)
Treasury stock, at cost (199.6 and 128.8 shares)	(9,791		)	(6,426		)
Total shareholders’ equity	27,415			25,319
Total liabilities and shareholders’ equity	$	109,824		$	109,751

(1) Preliminary.

22

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

	December 31,		Pre-tax Book		December 31,			Pre-tax Book
	2009		Yield (1)		2008			Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	25,006	4.91	%	$	22,481		5.32	%
Tax-exempt fixed maturities	40,841		4.08	%	38,794			4.14	%
Total fixed maturities	65,847		4.40	%	61,275			4.59	%
Non-redeemable preferred stocks	232		6.60	%	219			6.35	%
Common stocks	219				160
Total equity securities	451				379
Real estate	865				827
Short-term securities	4,852		0.19	%	5,222			1.20	%
Private equities	1,557				1,505
Hedge funds	472				531
Real estate partnerships	508				587
Mortgage loans	40		6.56	%	94			8.06	%
Trading securities	24				19
Other investments	349				299
Total other investments	2,950				3,035
Total investments	$	74,965			$	70,738
Net unrealized investment gains (losses), net of tax, included in shareholders’ equity	$	1,861			$	(144	)

(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,
	2009		2008
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,574	$	1,841
Obligations of states and political subdivisions	41,333		39,062
Debt securities issued by foreign governments	1,957		1,519
Mortgage-backed securities - principally obligations of U.S. Government agencies	5,207		6,059
Corporates (including redeemable preferreds)	14,776		12,794
Total fixed maturities	$	65,847	$	61,275

Fixed Maturities

Quality Characteristics (1)

	December 31, 2009
	Amount		% of Total
Quality Ratings
Aaa	$	28,093	42.7	%
Aa	24,861		37.8
A	7,000		10.6
Baa	4,091		6.2
Total investment grade	64,045		97.3
Ba	862		1.3
B	580		0.9
Caa and lower	360		0.5
Total below investment grade	1,802		2.7
Total fixed maturities	$	65,847	100.0	%
Average weighted quality	Aa2, 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	3.9

(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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Gross investment income
Fixed maturities	$	736		$	726		$	727		$	726		$	713		$	691		$	703		$	715		$	2,915		$	2,822
Short-term securities	52			32			36			23			10			7			5			5			143			27
Other	39			32			(37		)	(256		)	(175		)	(33		)	63			105			(222		)	(40		)
	827			790			726			493			548			665			771			825			2,836			2,809
Investment expenses	12			12			10			10			6			7			8			12			44			33
Net investment income, pre-tax	815			778			716			483			542			658			763			813			2,792			2,776
Income taxes	165			154			129			45			68			111			147			160			493			486
Net investment income, after-tax	$	650		$	624		$	587		$	438		$	474		$	547		$	616		$	653		$	2,299		$	2,290
Effective tax rate	20.2		%	19.8		%	18.1		%	9.5		%	12.6		%	16.7		%	19.2		%	19.8		%	17.7		%	17.5		%
Average invested assets (1)	$	74,733		$	74,156		$	74,256		$	73,588		$	72,720		$	72,589		$	73,515		$	73,573		$	74,197		$	73,130
Average yield pre-tax (1)	4.4		%	4.2		%	3.9		%	2.6		%	3.0		%	3.6		%	4.2		%	4.4		%	3.8		%	3.8		%
Average yield after-tax	3.5		%	3.4		%	3.2		%	2.4		%	2.6		%	3.0		%	3.4		%	3.5		%	3.1		%	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)

																										YTD			YTD
		1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
		2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Net realized investment gains (losses)
Fixed maturities		$	(32	)	$	6		$	(153	)	$	(192	)	$	(100	)	$	(2	)	$	19		$	14		$	(371	)	$	(69	)
Equity securities		(1		)	(14		)	(28		)	(29		)	(74		)	1			2			3			(72		)	(68		)
Other (1) (2)		(29		)	44			11			2			(40		)	14			8			172			28			154
Realized investment gains (losses) before tax		(62		)	36			(170		)	(219		)	(214		)	13			29			189			(415		)	17
Related taxes		(21		)	12			(54		)	(81		)	(77		)	5			8			59			(144		)	(5		)
Net realized investment gains (losses)		$	(41	)	$	24		$	(116	)	$	(138	)	$	(137	)	$	8		$	21		$	130		$	(271	)	$	22
Gross investment gains (1)		$	89		$	138		$	91		$	160		$	105		$	116		$	132		$	310		$	478		$	663
Gross investment losses before impairments (1)		(113		)	(74		)	(105		)	(181		)	(135		)	(73		)	(84		)	(96		)	(473		)	(388		)
Net investment gains (losses) before impairments		(24		)	64			(14		)	(21		)	(30		)	43			48			214			5			275
Other-than-temporary impairment losses:
Total losses		(38		)	(28		)	(156		)	(198		)	(184		)	(75		)	(43		)	(21		)	(420		)	(323		)
Portion of losses recognized in accumulated other changes in equity from nonowner sources		—			—			—			—			—			45			24			(4		)	—			65
Other-than-temporary impairment losses		(38		)	(28		)	(156		)	(198		)	(184		)	(30		)	(19		)	(25		)	(420		)	(258		)
Net realized investment gains (losses) before tax		(62		)	36			(170		)	(219		)	(214		)	13			29			189			(415		)	17
Related taxes		(21		)	12			(54		)	(81		)	(77		)	5			8			59			(144		)	(5		)
Net realized investment gains (losses)		$	(41	)	$	24		$	(116	)	$	(138	)	$	(137	)	$	8		$	21		$	130		$	(271	)	$	22
		March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,			December 31,
		2008			2008			2008			2008			2009			2009			2009			2009
Net unrealized investment gains (losses), net of tax, by asset type
Fixed maturities		$	695		$	(73	)	$	(1,406	)	$	(294	)	$	732		$	1,139		$	3,142		$	2,536
Equity securities & other		168			159			115			41			71			157			262			294
Unrealized investment gains (losses) before tax		863			86			(1,291		)	(253		)	803			1,296			3,404			2,830
Related taxes		287			23			(473		)	(109		)	260			431			1,168			969
Balance, end of period		$	576		$	63		$	(818	)	$	(144	)	$	543		$	865		$	2,236		$	1,861
(1)  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	$	42		$	49		$	48		$	51		$	76		$	71		$	39		$	56		$	190		$	242
	Gross investment Treasury future losses	$	56		$	39		$	52		$	96		$	76		$	46		$	50		$	47		$	243		$	219

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.

(2)  In 4Q 2009, the Company sold a portion of its common stock holdings in Verisk Analytics, Inc. (Verisk) for total proceeds of approximately $184 million as part of the initial public offering of Verisk.  The Company recorded a pretax realized investment gain of $159 million on this sale in 4Q 2009.

26

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

	December 31,			December 31,
	2009			2008
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	8,138		$	9,376
Allowance for uncollectible reinsurance	(523		)	(618		)
Net reinsurance recoverables	7,615			8,758
Mandatory pools and associations	1,745			1,957
Structured settlements	3,456			3,517
Total reinsurance recoverables	$	12,816		$	14,232

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	2009		2008
Swiss Re Group	A third highest of 16 ratings	$	895	$	1,009
Munich Re Group	A+ second highest of 16 ratings	779		831
Transatlantic Holdings, Inc.	A third highest of 16 ratings	485		495
XL Capital Group	A third highest of 16 ratings	398		465
Berkshire Hathaway Group	A++ highest of 16 ratings	386		495

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, 2009, after deducting mandatory pools and associations and structured settlement balances, $6.1 billion, or 79%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 98% 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, 10% related to recoverables from captive insurance companies and 4% were balances from other companies not rated by A.M. Best Company.  In addition, $2.4 billion of the net recoverables were collateralized by letters of credit, funds held and trust agreements at December 31, 2009.

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	2009		2008
Old Mutual	A- fourth highest of 16 ratings	$	1,050	$	1,075
Metlife	A+ second highest of 16 ratings	529		554
Genworth	A third highest of 16 ratings	472		485
Symetra	A third highest of 16 ratings	286		296
ING Group	A third highest of 16 ratings	235		242

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Business Insurance
Beginning of period	$	34,021		$	33,718		$	33,649		$	33,310		$	32,270		$	32,043		$	31,986		$	31,750		$	34,021		$	32,270
Incurred	1,517			1,576			1,868			1,509			1,592			1,603			1,479			1,240			6,470			5,914
Paid	(1,736		)	(1,696		)	(2,148		)	(1,683		)	(1,816		)	(1,688		)	(1,726		)	(1,704		)	(7,263		)	(6,934		)
Acquired (sold) reserves, foreign exchange and other (1)	(84		)	51			(59		)	(866		)	(3		)	28			11			3			(958		)	39
End of period	$	33,718		$	33,649		$	33,310		$	32,270		$	32,043		$	31,986		$	31,750		$	31,289		$	32,270		$	31,289
Financial, Professional & International Insurance
Beginning of period	$	5,520		$	5,590		$	5,650		$	5,703		$	5,397		$	5,503		$	5,821		$	5,970		$	5,520		$	5,397
Incurred	387			383			539			456			437			448			459			403			1,765			1,747
Paid	(324		)	(294		)	(324		)	(468		)	(309		)	(338		)	(354		)	(386		)	(1,410		)	(1,387		)
Acquired (sold) reserves, foreign exchange and other	7			(29		)	(162		)	(294		)	(22		)	208			44			16			(478		)	246
End of period	$	5,590		$	5,650		$	5,703		$	5,397		$	5,503		$	5,821		$	5,970		$	6,003		$	5,397		$	6,003
Personal Insurance
Beginning of period	$	3,527		$	3,532		$	3,586		$	3,835		$	3,640		$	3,610		$	3,688		$	3,637		$	3,527		$	3,640
Incurred	1,074			1,159			1,374			1,009			1,130			1,249			1,152			1,093			4,616			4,624
Paid	(1,069		)	(1,105		)	(1,125		)	(1,204		)	(1,160		)	(1,171		)	(1,203		)	(1,099		)	(4,503		)	(4,633		)
End of period	$	3,532		$	3,586		$	3,835		$	3,640		$	3,610		$	3,688		$	3,637		$	3,631		$	3,640		$	3,631
Total
Beginning of period	$	43,068		$	42,840		$	42,885		$	42,848		$	41,307		$	41,156		$	41,495		$	41,357		$	43,068		$	41,307
Incurred	2,978			3,118			3,781			2,974			3,159			3,300			3,090			2,736			12,851			12,285
Paid	(3,129		)	(3,095		)	(3,597		)	(3,355		)	(3,285		)	(3,197		)	(3,283		)	(3,189		)	(13,176		)	(12,954		)
Acquired (sold) reserves, foreign exchange and other (1)	(77		)	22			(221		)	(1,160		)	(25		)	236			55			19			(1,436		)	285
End of period	$	42,840		$	42,885		$	42,848		$	41,307		$	41,156		$	41,495		$	41,357		$	40,923		$	41,307		$	40,923
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	70		$	—		$	—		$	—		$	185		$	—		$	70		$	185
Environmental	—			85			—			—			—			70			—			—			85			70
All other	(312		)	(442		)	(317		)	(205		)	(182		)	(286		)	(447		)	(366		)	(1,276		)	(1,281		)
Prior year development excluding accretion of discount	(312		)	(357		)	(247		)	(205		)	(182		)	(216		)	(262		)	(366		)	(1,121		)	(1,026		)
Accretion of discount	15			16			15			14			14			14			14			12			60			54
Total Business Insurance	(297		)	(341		)	(232		)	(191		)	(168		)	(202		)	(248		)	(354		)	(1,061		)	(972		)
Financial, Professional & International Insurance	(63		)	(132		)	(43		)	(36		)	(12		)	(11		)	(25		)	(120		)	(274		)	(168		)
Personal Insurance	(25		)	(37		)	(44		)	(37		)	(64		)	(34		)	(22		)	(15		)	(143		)	(135		)
Total	$	(385	)	$	(510	)	$	(319	)	$	(264	)	$	(244	)	$	(247	)	$	(295	)	$	(489	)	$	(1,478	)	$	(1,275	)

(1)  Reflects the sale of Unionamerica Holdings, Ltd. in 4Q 2008, decreasing net reserves by $790 million in Business 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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Asbestos reserves
Beginning reserves:
Direct	$	4,353		$	4,272		$	4,184		$	3,728		$	3,299		$	3,216		$	3,136		$	3,251		$	4,353		$	3,299
Ceded	(619		)	(600		)	(588		)	(501		)	(385		)	(363		)	(345		)	(336		)	(619		)	(385		)
Net	3,734			3,672			3,596			3,227			2,914			2,853			2,791			2,915			3,734			2,914
Incurred losses and loss expenses:
Direct	—			—			70			—			—			—			185			—			70			185
Ceded	—			—			—			—			—			—			—			—			—			—
Losses paid:
Direct (1)	81			88			526			99			83			80			70			154			794			387
Ceded	(19		)	(12		)	(87		)	(18		)	(22		)	(18		)	(9		)	3			(136		)	(46		)
Sale of subsidiary: (2)
Direct	—			—			—			330			—			—			—			—			330			—
Ceded	—			—			—			(98		)	—			—			—			—			(98		)	—
Ending reserves:
Direct	4,272			4,184			3,728			3,299			3,216			3,136			3,251			3,097			3,299			3,097
Ceded	(600		)	(588		)	(501		)	(385		)	(363		)	(345		)	(336		)	(339		)	(385		)	(339		)
Net	$	3,672		$	3,596		$	3,227		$	2,914		$	2,853		$	2,791		$	2,915		$	2,758		$	2,914		$	2,758
Environmental reserves
Beginning reserves:
Direct	$	478		$	450		$	499		$	472		$	400		$	378		$	425		$	411		$	478		$	400
Ceded	12			12			12			13			14			14			3			3			12			14
Net	490			462			511			485			414			392			428			414			490			414
Incurred losses and loss expenses:
Direct	—			85			—			—			—			85			—			—			85			85
Ceded	—			—			—			—			—			(15		)	—			—			—			(15		)
Losses paid:
Direct	28			36			27			32			22			38			14			22			123			96
Ceded	—			—			(1		)	6			—			(4		)	—			(1		)	5			(5		)
Sale of subsidiary: (2)
Direct	—			—			—			40			—			—			—			—			40			—
Ceded	—			—			—			(7		)	—			—			—			—			(7		)	—
Ending reserves:
Direct	450			499			472			400			378			425			411			389			400			389
Ceded	12			12			13			14			14			3			3			4			14			4
Net	$	462		$	511		$	485		$	414		$	392		$	428		$	414		$	393		$	414		$	393

(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,
	2009			2008
Debt
Short-term debt
Commercial paper	$	100		$	100
8.125% Senior notes due April 15, 2010 (1)	250			—
7.415% Medium-term notes due August 23, 2010	21			—
7.81% Private placement notes due September 16, 2010 and 2009	2			2
Zero coupon convertible notes due March 3, 2009, effective yield 4.17%	—			140
Total short-term debt	373			242
Long-term debt
8.125% Senior notes due April 15, 2010 (1)	—			250
7.415% Medium-term notes due August 23, 2010	—			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	2			4
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			500
5.90% Senior notes due June 2, 2019 (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	6,165			5,938
Unamortized fair value adjustment	58			68
Unamortized debt issuance costs	(69		)	(67		)
	6,154			5,939
Total debt	6,527			6,181
Preferred equity	79			89
Common equity (excluding net unrealized investment gains (losses), net of tax)	25,475			25,374
Total capital (excluding net unrealized investment gains (losses), net of tax)	$	32,081		$	31,644
Total debt to capital (excluding net unrealized investment gains (losses), net of tax)	20.3		%	19.5		%

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

30

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

	December 31,			December 31,
	2009 (1)			2008
Statutory capital and surplus	$	23,195		$	21,491
GAAP adjustments
Goodwill and intangible assets	3,752			3,841
Investments	2,999			342
Noninsurance companies	(4,166		)	(3,924		)
Deferred acquisition costs	1,758			1,774
Deferred federal income tax	(1,038		)	699
Current federal income tax	(90		)	(86		)
Reinsurance recoverables	255			295
Furniture, equipment & software	640			526
Employee benefits	(12		)	40
Agents balances	110			122
Other	12			199
Total GAAP adjustments	4,220			3,828
GAAP shareholders’ equity	$	27,415		$	25,319

(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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Cash flows from operating activities
Net income	$	967		$	942		$	214		$	801		$	662		$	740		$	935		$	1,285		$	2,924		$	3,622
Adjustments to reconcile net income to net cash
provided by operating activities:
Net realized investment (gains) losses	62			(36		)	170			219			214			(13		)	(29		)	(189		)	415			(17		)
Depreciation and amortization	213			201			213			194			206			209			187			195			821			797
Deferred federal income tax expense (benefit)	(8		)	34			23			(107		)	22			(53		)	77			167			(58		)	213
Amortization of deferred acquisition costs	954			961			990			975			944			953			967			949			3,880			3,813
Equity in (income) loss from other investments	(17		)	(16		)	67			278			194			58			(41		)	(85		)	312			126
Premiums receivable	(28		)	(177		)	158			213			(78		)	(188		)	263			222			166			219
Reinsurance recoverables	272			10			251			676			167			371			355			523			1,209			1,416
Deferred acquisition costs	(968		)	(991		)	(991		)	(895		)	(948		)	(997		)	(970		)	(882		)	(3,845		)	(3,797		)
Claims and claim adjustment expense reserves	(386		)	(38		)	(249		)	(1,360		)	(373		)	22			(448		)	(797		)	(2,033		)	(1,596		)
Unearned premium reserves	15			97			38			(420		)	64			163			25			(348		)	(270		)	(96		)
Other	(149		)	(283		)	58			(9		)	(261		)	(289		)	94			(13		)	(383		)	(469		)
Net cash provided by operating activities	927			704			942			565			813			976			1,415			1,027			3,138			4,231
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,604			1,084			982			1,199			1,210			1,179			1,380			1,547			4,869			5,316
Proceeds from sales of investments:
Fixed maturities	1,044			1,405			1,139			3,344			630			1,234			342			599			6,932			2,805
Equity securities	12			24			11			6			16			15			6			28			53			65
Real estate	—			25			—			—			—			—			—			—			25			—
Other investments	246			178			123			108			92			48			77			294			655			511
Purchases of investments:
Fixed maturities	(2,350		)	(2,063		)	(2,222		)	(4,492		)	(2,265		)	(2,006		)	(2,079		)	(3,297		)	(11,127		)	(9,647		)
Equity securities	(21		)	(25		)	(43		)	(6		)	(12		)	(6		)	(4		)	(2		)	(95		)	(24		)
Real estate	(9		)	(16		)	(6		)	(7		)	(5		)	(4		)	(3		)	(3		)	(38		)	(15		)
Other investments	(123		)	(162		)	(242		)	(140		)	(112		)	(74		)	(76		)	(87		)	(667		)	(349		)
Net (purchases) sales of short-term securities	320			(667		)	407			(466		)	(451		)	(772		)	(122		)	1,715			(406		)	370
Securities transactions in course of settlement	43			31			(461		)	69			398			(32		)	222			(193		)	(318		)	395
Other	(72		)	(91		)	(104		)	222			(84		)	(121		)	(66		)	(55		)	(45		)	(326		)
Net cash provided by (used in) investing activities	694			(277		)	(416		)	(163		)	(583		)	(539		)	(323		)	546			(162		)	(899		)

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
	2008			2008			2008			2008			2009			2009			2009			2009			2008			2009
Cash flows from financing activities
Payment of debt	(400		)	—			(3		)	(149		)	(141		)	—			(2		)	—			(552		)	(143		)
Issuance of debt	—			496			—			—			—			494			—			—			496			494
Dividends paid to shareholders	(179		)	(180		)	(177		)	(179		)	(178		)	(172		)	(168		)	(175		)	(715		)	(693		)
Issuance of common stock - employee share options	15			44			13			17			10			18			48			104			89			180
Treasury stock acquired - share repurchase authorization	(1,000		)	(765		)	(290		)	(112		)	—			(750		)	(970		)	(1,539		)	(2,167		)	(3,259		)
Treasury stock acquired - net employee share-based compensation	(26		)	(2		)	—			(1		)	(27		)	(1		)	(1		)	—			(29		)	(29		)
Excess tax benefits from share-based payment arrangements	4			3			1			2			1			1			2			4			10			8
Net cash used in financing activities	(1,586		)	(404		)	(456		)	(422		)	(335		)	(410		)	(1,091		)	(1,606		)	(2,868		)	(3,442		)
Effect of exchange rate changes on cash	2			(2		)	(12		)	(17		)	—			10			3			2			(29		)	15
Net increase (decrease) in cash	37			21			58			(37		)	(105		)	37			4			(31		)	79			(95		)
Cash at beginning of period	271			308			329			387			350			245			282			286			271			350
Cash at end of period	$	308		$	329		$	387		$	350		$	245		$	282		$	286		$	255		$	350		$	255
Income taxes paid	$	78		$	637		$	117		$	9		$	34		$	329		$	210		$	303		$	841		$	876
Interest paid	$	72		$	112		$	64		$	127		$	63		$	122		$	63		$	137		$	375		$	385

33

The Travelers Companies, Inc.
Financial Supplement - Fourth Quarter 2009
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 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 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, 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.

GAAP combined ratio excluding incremental impact of direct to consumer initiative is the GAAP combined ratio adjusted to exclude the direct, variable impact of the company’s direct-to-consumer initiative in Personal Insurance.  In the opinion of the company’s management, this is useful in an analysis of the profitability of the company’s ongoing agency business.

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, 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.

Debt to capital is the ratio of debt to the sum of shareholders’ equity and debt excluding the after-tax impact of net unrealized investment gains and losses.  In the opinion of the company’s management, the debt to capital ratio is useful in an analysis of the company’s leverage.

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 the assumed reinsurance, and certain international 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 coverages, which require a primarily credit-based underwriting process, 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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