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):  April 23, 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 April 23, 2010, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended March 31, 2010, and the availability of the Company’s first 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 April 23, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2010 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:       April 23, 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 April 23, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2010 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 First Quarter 2010 Net Income per Diluted Share and Operating Income per Diluted Share of $1.25 and $1.22, Respectively

Board of Directors Approves a 9% Increase in the Company’s Regular Quarterly Dividend per Share to $0.36

Company Affirms Previous Guidance for 2010 Operating Income per Diluted Share of $5.20 to $5.55

·Net income per diluted share up 13 percent from prior year quarter.

·Net and operating income of $647 million and $631 million, respectively.

·Catastrophe losses of $312 million after-tax ($471 million pre-tax), or $0.61 per diluted share, compared to $54 million after-tax ($83 million pre-tax), or $0.09 per diluted share in prior year quarter.

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

·Book value per share of $53.50, up 19 percent from prior year quarter and up 2 percent from year-end 2009.

·Repurchased 27.0 million common shares for $1.4 billion.

NEW YORK, April 23, 2010 — The Travelers Companies, Inc. (“Travelers,” NYSE: TRV) today reported net income of $647 million, or $1.25 per diluted share, for the quarter ended March 31, 2010, compared to $662 million, or $1.11 per diluted share, for the quarter ended March 31, 2009.  Operating income in the current quarter was $631 million, or $1.22 per diluted share, compared to $799 million, or $1.34 per diluted share, in the prior year quarter.

“In what was an unusually significant catastrophe quarter for Travelers as well as for the entire industry, we were pleased to report net income per diluted share of $1.25, return on equity of nearly 10% and growth in book value per share of 2% from year-end 2009,” commented Jay Fishman, Chairman and Chief Executive Officer.  “The impact of the catastrophes in the quarter was largely offset by favorable prior year reserve development and other favorable items, and as a consequence, our operating income of $1.22 per diluted share was consistent with our expectation going into the quarter as well as our full year guidance.  Our underwriting fundamentals were strong, as evidenced by retention rates continuing at high levels, positive renewal rate changes on premiums and non-weather-related loss trends remaining within expectations.  These results, in addition to solid net investment income and our strong capital position, enabled us to repurchase 27 million common shares in the quarter for $1.4 billion.

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“We are in the business of helping our customers recover financially from the impacts of catastrophes.  Our claim professionals responded to the needs of our customers both quickly and with a high quality of service, demonstrating the benefits of our continued investments in our claim organization. We thank them for their extraordinary work during this unprecedented first quarter. Our ability to respond promptly and to efficiently manage the claim process for our insureds is a key differentiator within our industry and one where we feel we have a competitive advantage.

“The insurance market remains broadly consistent with the expectations we had at the beginning of the year and available investment returns have remained at relatively low levels.  Consequently, our strategy continues to be to seek premium rate gains where needed and to aggressively return excess capital,” concluded Mr. Fishman.

Consolidated Highlights

($ in millions, except for per share amounts,	Three Months Ended March 31,
and after-tax, except for premiums)	2010			2009			Change
Net written premiums	$	5,251		$	5,203		1	%
Operating income	$	631		$	799		(21	)
per diluted share	$	1.22		$	1.34		(9	)
Net income	$	647		$	662		(2	)
per diluted share	$	1.25		$	1.11		13
Book value per share	$	53.50		$	45.12		19
Adjusted book value per share	$	49.60		$	44.19		12
GAAP combined ratio	96.4		%	90.6		%	5.8	pts
Operating return on equity	10.1		%	12.4		%	(2.3	)pts
Return on equity	9.6		%	10.2		%	(0.6	)pts

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

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First Quarter 2010 Consolidated Results

The current and prior year quarters included the following:

	Three Months Ended March 31,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	155		$	465		$	80		$	353
Underwriting gain includes:
Net favorable prior year reserve development	294			258			192			168
Catastrophes, net of reinsurance	(471		)	(83		)	(312		)	(54		)
Resolution of prior year tax matters							—			55
Net investment income	753			542			610			474
Other, including interest expense	(76		)	(66		)	(59		)	(28		)
Other includes:
Resolution of prior year tax matters							—			14
Operating Income	832			941			631			799
Net realized investment gains (losses)	25			(214		)	16			(137		)
Income before income taxes	$	857		$	727
Net Income							$	647		$	662
GAAP combined ratio	96.4		%	90.6		%
GAAP combined ratio excluding incremental impactof direct to consumer initiative	95.8		%	90.1		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(5.6		)pts	(4.9		)pts
Catastrophes, net of reinsurance	9.0		pts	1.6		pts

Operating income of $631 million after-tax in the current quarter decreased $168 million from the prior year quarter primarily due to a $273 million after-tax decrease in the underwriting gain, partially offset by a $136 million after-tax increase in net investment income.

The decrease in the underwriting gain in the current quarter reflected a GAAP combined ratio of 96.4 percent, as compared to 90.6 percent in the prior year quarter.  This 5.8 point increase in the combined ratio was driven by a $388 million pre-tax increase in catastrophe losses (increase of 7.4 points), slightly offset by a $36 million pre-tax increase in net favorable prior year reserve development (reduction of 0.7 points).  Catastrophe losses in the current quarter were primarily due to several severe winter, wind and hail storms in the eastern United States as well as the Chilean earthquake. The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in each segment, particularly in Business Insurance.

The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 93.0 percent, as compared to 93.9 percent in the prior year quarter, as the current quarter benefited from lower non-catastrophe weather-related losses.  The prior year quarter combined ratio also

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included a 1.2 point benefit resulting from a $61 million pre-tax reduction in the estimate for Texas Windstorm Insurance Association (TWIA) assessments related to Hurricane Ike. The underwriting gain in the prior year quarter also reflected a $55 million benefit from the resolution of prior year tax matters.

After-tax net investment income increased 29 percent from the prior year quarter.  This increase was driven by positive returns in the non-fixed income portfolio, compared to negative returns in the prior year quarter, primarily due to private equity performance.  Net investment income in the fixed income portfolio decreased slightly from the prior year quarter mostly due to lower reinvestment rates.  Current quarter results also included net realized investment gains of $25 million pre-tax compared to net realized investment losses of $214 million pre-tax in the prior year quarter.  Included in net realized investment gains (losses) were other-than-temporary impairments of $6 million after-tax ($10 million pre-tax) in the current quarter compared to $120 million after-tax ($184 million pre-tax) in the prior year quarter.

Net written premiums of $5.251 billion in the current quarter increased 1 percent from the prior year quarter.  This increase was driven by Personal Insurance and Financial, Professional & International Insurance, partially offset by a decrease in net written premiums in Business Insurance attributable to lower levels of economic activity in recent quarters that impacted exposure changes at renewal, audit premium adjustments, policy endorsements and mid-term cancellations.  Retention rates remained high and the impact of renewal rate changes on premiums remained positive across all three business segments.  New business volumes increased slightly from the prior year quarter due to Personal Insurance and Financial, Professional & International Insurance, partially offset by a slight decrease in Business Insurance.

Capital Management

“We remain extremely pleased with our capital structure, our balance sheet strength and our ability to generate excess capital,” said Jay S. Benet, Vice Chairman and Chief Financial Officer. “Our ongoing commitment to returning excess capital to our shareholders is clearly evidenced by the size of our share repurchases during the first quarter and the 9% increase in our quarterly dividend that we announced today.”

During the first quarter 2010, the company repurchased 27.0 million of its common shares under its share repurchase authorization for a total cost of $1.4 billion, leaving $5.1 billion of capacity under existing Board of Directors approval remaining for future share repurchases, and paid $168 million in common stock dividends.  Since the initial share repurchase authorization granted by the company’s Board of Directors in the second quarter 2006, the company has repurchased 220.2 million common shares for a total cost of $10.9 billion.

All of the company’s financial strength indicators remained at or better than target levels.  Shareholders’ equity ended the current quarter at $26.7 billion, an increase of 1 percent from the prior year quarter.  Included in shareholders’ equity at the end of the current quarter were after-tax net unrealized investment gains of $1.9 billion, compared to $0.5 billion at the end of the prior year quarter.  Statutory surplus was $21.6 billion, the company’s debt to capital ratio (excluding net unrealized investment gains and losses) was 20.9 percent and holding company liquidity was $3.0 billion, almost three times its

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target level due to the timing of dividends from the operating companies to the parent company.

The Board of Directors declared a regular quarterly dividend of $0.36 per common share. This dividend, which is $0.03 higher than the last regular quarterly dividend, is payable June 30, 2010, to shareholders of record as of the close of business June 10, 2010.

Business Insurance Segment Financial Results

“Business Insurance results in the quarter reflected an operating environment that was fairly similar to fourth quarter 2009,” commented Brian MacLean, President and Chief Operating Officer.  “Renewal rate gains were fairly similar to last quarter, retention rates remained at high levels and the flow of new business opportunities increased, all speaking positively to the value we provide to the market.  Loss cost trends remained within our expectations and continued to modestly outpace earned rate increases, consistent with our view for full year 2010.”

The current and prior year quarters included the following:

	Three Months Ended March 31,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	218		$	296		$	132		$	226
Underwriting gain includes:
Net favorable prior year reserve development	242			182			158			118
Catastrophes, net of reinsurance	(135		)	(12		)	(88		)	(8		)
Resolution of prior year tax matters							—			38
Net investment income	528			355			430			317
Other	6			6			5			4
Operating Income	$	752		$	657		$	567		$	547
GAAP combined ratio	91.4		%	89.0		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(9.2		)pts	(6.6		)pts
Catastrophes, net of reinsurance	5.1		pts	0.4		pts

Operating income in the current quarter of $567 million after-tax increased $20 million from the prior year quarter primarily due to a $113 million after-tax increase in net investment income, partially offset by a $94 million after-tax decrease in the underwriting gain.

The decrease in the underwriting gain in the current quarter reflected a GAAP combined ratio of 91.4 percent, as compared to 89.0 percent in the prior year quarter.  This 2.4 point increase in the combined ratio was driven by a $123 million pre-tax increase in catastrophe losses (increase of 4.7 points), partially offset by a $60 million pre-tax increase in net favorable prior year reserve development (reduction of 2.6 points).  Catastrophe losses in the current quarter were primarily due to several severe winter, wind and hail storms in the eastern United States. The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in general liability, property and commercial multi-peril product lines.

The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 95.5 percent, as compared to 95.2 percent in the prior year quarter.  The prior year quarter combined ratio

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included a 0.9 point benefit resulting from a $26 million pre-tax reduction in the estimate for TWIA assessments related to Hurricane Ike.  The combined ratio reported for the first quarter 2009 did not reflect the favorable re-estimation that occurred in the second half of 2009. The underwriting gain in the prior year quarter also reflected a $38 million benefit from the resolution of prior year tax matters.

Business Insurance net written premiums of $2.834 billion in the current quarter decreased 4 percent from the prior year quarter.  This decrease 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 were higher than recent quarters. The impact of renewal rate changes on premiums remained positive, while new business volumes decreased slightly from the prior year quarter.

Select Accounts

·Net written premiums of $702 million decreased 4 percent from the prior year quarter primarily due to reduced insured exposures driven by lower levels of economic activity.

·Retention rates remained generally consistent with recent quarters.

·Renewal premium changes remained positive and were higher than recent quarters as renewal rates continued to improve.

·New business volumes decreased from the prior year quarter mostly due to lower volumes from larger risks served by Select Accounts. New business volumes remained strong from TravelersExpressSM, the company’s enhanced quote-to-issue agency platform and multivariate pricing program for smaller businesses.

Commercial Accounts

·Net written premiums of $706 million decreased 1 percent from the prior year quarter primarily due to reduced insured exposures driven by lower levels of economic activity.

·Retention rates remained strong and increased from the most recent quarter.

·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 were strong and increased from the prior year quarter due to various product and customer initiatives.

National Accounts

·Net written premiums of $226 million decreased 13 percent from the prior year quarter due to reduced insured exposures driven by lower levels of economic activity and lower new business volumes.

Industry-Focused Underwriting

·Net written premiums of $569 million decreased 8 percent from the prior year quarter primarily due to market conditions that impacted the company’s Construction and Oil & Gas business units.

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Target Risk Underwriting

·Net written premiums of $412 million decreased 2 percent from the prior year quarter primarily due to market conditions that impacted the company’s Ocean Marine and Inland Marine business units.

Specialized Distribution

·Net written premiums of $215 million decreased 3 percent from the prior year quarter primarily due to reduced insured exposures resulting from lower levels of economic activity.

Financial, Professional & International Insurance Segment Financial Results

“Financial, Professional & International Insurance results, excluding the impact of the earthquake in Chile, were generally consistent with our expectations,” commented Mr. MacLean.  “Production was strong across the segment primarily due to changes in the structure of our reinsurance that directionally aligned retentions in our International business with our U.S. practices and, to a lesser extent, lower reinsurance costs. Strong contributions from our Construction Surety business within Bond & Financial Products and our Lloyd’s operations within International also contributed to production.”

The current and prior year quarters included the following:

	Three Months Ended March 31,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	6		$	75		$	(5	)	$	60
Underwriting gain (loss) includes:
Net favorable prior year reserve development	34			12			22			8
Catastrophes, net of reinsurance	(86		)	—			(62		)	—
Resolution of prior year tax matters							—			8
Net investment income	111			104			87			84
Other	6			6			4			4
Operating Income	$	123		$	185		$	86		$	148
GAAP combined ratio	98.9		%	90.2		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(4.2		)pts	(1.4		)pts
Catastrophes, net of reinsurance	10.4		pts	—		pts

Operating income in the current quarter of $86 million after-tax decreased $62 million from the prior year quarter primarily due to a $65 million after-tax decrease in underwriting results.

The decrease in underwriting results in the current quarter reflected a GAAP combined ratio of 98.9 percent, as compared to 90.2 percent in the prior year quarter.  This 8.7 point increase in the combined ratio was driven by an $86 million pre-tax increase in catastrophe losses (increase of 10.4 points), partially offset by a $22 million pre-tax increase in net favorable prior year reserve development (reduction of 2.8 points).  Catastrophe losses in the current quarter were concentrated in the company’s Lloyd’s

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operations and related to the Chilean earthquake.  The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in both the management liability and surety lines of business within Bond & Financial Products, as well as in the company’s operations at Lloyd’s.

The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 92.7 percent, as compared to 91.6 percent in the prior year quarter.  The prior year quarter combined ratio benefited by 0.7 points due to lower profit-sharing commission expense.

Financial, Professional & International Insurance net written premiums of $681 million increased 21 percent from the prior year quarter.  Adjusting for the impact of changes in foreign exchange rates, net written premiums increased 17 percent primarily due to changes in the structure of the segment’s reinsurance that directionally aligned retentions in the International business with the company’s U.S. retention practices and, to a lesser extent, lower reinsurance costs. Premium growth in both Bond & Financial Products and International also contributed to production.

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 $362 million increased 8 percent from the prior year quarter primarily due to lower reinsurance costs and strong Construction Surety results, partially offset by a decrease in the Professional Liability portion of the company’s Management Liability business.

·Retention rates were strong and remained generally consistent with recent quarters.

·Renewal premium changes were slightly positive as the impact of positive renewal rate changes on premiums was partially offset by reduced insured exposures due to underwriting actions and continued low levels of economic activity.

·New business volumes decreased from the prior year quarter primarily due to market conditions that impacted the Public Company Liability business unit in the prior year quarter.

International

·Net written premiums of $319 million increased 39 percent from the prior year quarter. After adjusting for the impact of changes in foreign exchange rates, net written premiums increased 30 percent primarily due to changes in the structure of the segment’s reinsurance that directionally aligned retentions in the International business with the company’s U.S. retention practices and, to a lesser extent, lower reinsurance costs. Premium growth in the company’s Lloyd’s operations also contributed to production, partially offset by a decrease in the business insurance line of business in Canada.

·Retention rates were consistent with the most recent quarter.

·Renewal premium changes were positive and improved from recent quarters.

·New business volumes increased from the prior year quarter primarily due to the personal lines business in Ireland.

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Personal Insurance Segment Financial Results

“Personal Insurance results were impacted by the multiple severe storms in the eastern half of the United States,” commented Mr. MacLean.  “Despite the high volume of claims, our strategy of cross training our claim staff enabled us to close a significant percentage of the claims received to date without relying on independent adjusters.  This strategy allows us to address claims quickly, with consistent, high quality service, a significant competitive advantage.  We are also very pleased that policies in force in our automobile business grew quarter to quarter for the first time in five quarters, a result of actions taken during the past year.  We believe these actions will continue to provide benefits throughout 2010.”

The current and prior year quarters included the following:

	Three Months Ended March 31,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	(69	)	$	94		$	(47	)	$	67
Underwriting gain (loss) includes:
Net favorable prior year reserve development	18			64			12			42
Catastrophes, net of reinsurance	(250		)	(71		)	(162		)	(46		)
Resolution of prior year tax matters							—			9
Net investment income	114			83			93			73
Other	20			21			13			14
Operating Income	$	65		$	198		$	59		$	154
GAAP combined ratio	102.6		%	93.3		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	100.9		%	91.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(1.0		)pts	(3.7		)pts
Catastrophes, net of reinsurance	14.0		pts	4.1		pts

Operating income in the current quarter of $59 million after-tax decreased $95 million from the prior year quarter primarily due to a $114 million after-tax decrease in underwriting results, partially offset by a $20 million after-tax increase in net investment income.

The decrease in underwriting results in the current quarter reflected a GAAP combined ratio of 102.6 percent, as compared to 93.3 percent in the prior year quarter.  This 9.3 point increase in the combined ratio was driven by a $179 million pre-tax increase in catastrophe losses (increase of 9.9 points) and a $46 million pre-tax decrease in net favorable prior year reserve development (increase of 2.7 points).  Catastrophe losses in the current quarter were primarily due to several severe winter, wind and hail storms in the eastern United States. The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in Homeowners and Other.

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The current quarter underwriting results excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 89.6 percent, as compared to 92.9 percent in the prior year quarter.  The current quarter combined ratio benefited from lower non-catastrophe weather-related losses, while the prior year quarter combined ratio included a 2.0 point benefit resulting from a $34 million pre-tax reduction in the estimate for TWIA assessments related to Hurricane Ike.

Personal Insurance net written premiums of $1.736 billion increased 4 percent from the prior year quarter.  This increase was primarily due to continued positive renewal premium changes, strong retention rates and new business growth.

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 $913 million approximated the prior year quarter.

·Policies in force, which decreased 2 percent from the prior year quarter, increased quarter to quarter.

·Retention rates were strong and renewal premium changes remained positive.

·New business volumes increased from the prior year quarter.

Agency Homeowners and Other

·Net written premiums of $803 million increased 7 percent.

·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 volumes increased from the prior year quarter primarily driven by distribution and geographic expansion.

2010 Annual Guidance

Travelers continues to expect that its full year 2010 operating income per diluted share will be in the range of $5.20 to $5.55, unchanged from the previously announced guidance range.  This guidance includes the reported results for the first quarter 2010 and estimates for the remainder of 2010 based on a number of assumptions, including:

·Catastrophe losses of $975 million pre-tax and $640 million after-tax, or $1.30 per diluted share, for the full year which incorporates actual experience for the first quarter 2010 and projects $504 million pre-tax and $328 million after-tax, or $0.67 per diluted share, for the remainder of the year;

·No additional prior year reserve development, favorable or unfavorable;

·Low single digit percentage decrease 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

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·Weighted average diluted shares of 490 million to 495 million.

As noted above, the company’s earnings guidance for the full year 2010 reflects actual prior year reserve development through the first quarter, but does not assume any additional 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 Friday, April 23, 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

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and generated revenues of approximately $25 billion in 2009. For more information, visit www.travelers.com.

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

Glossary of Financial Measures

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

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

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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 realized and 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 and in the case of operating return on equity, unrealized 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.

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.

12

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.

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, other investment opportunities (including mergers and acquisitions), market conditions and other factors) and 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, among others, are forward looking, and we may make forward-looking statements about, among other things, our results of operations (including, among others, premium volume, premium rates (either for new or renewal business), net and operating income, investment income and performance, return on equity, expected current returns and combined ratio) and financial condition; the sufficiency of our asbestos and other reserves (including, among others, asbestos claim payment patterns); the impact of emerging claims issues (including, among others, Chinese-made drywall); the cost and availability of reinsurance coverage; catastrophe losses; the impact of investment, economic and underwriting market conditions; and strategic initiatives. We caution investors that such statements are subject to risks and uncertainties, many of which are difficult to

13

predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Some of the factors that could cause actual results to differ include, but are not limited to, the following: catastrophe losses could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance; during or following a period of financial market disruption or prolonged economic downturn, our business could be materially and adversely affected; our investment portfolio may suffer reduced returns or material losses; 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; 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; our businesses are heavily regulated and changes in regulation may reduce our profitability and limit our growth; a downgrade in our claims-paying and financial strength 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; our efforts to develop new products or expand in targeted markets may not be successful and may create enhanced risks; our business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology; if we experience difficulties with technology, data security and/or outsourcing relationships our ability to conduct our business could be negatively impacted; acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences; 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 businesses may be adversely affected if we are unable to hire and retain qualified employees; and 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.

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 March 31,
($ in millions, except per share amounts, and after-tax)	2010			2009
Operating income	$	631		$	799
Net realized investment gains (losses)	16			(137		)
Net income	$	647		$	662
Basic earnings per share
Operating income	$	1.23		$	1.36
Net realized investment gains (losses)	0.03			(0.24		)
Net income	$	1.26		$	1.12
Diluted earnings per share
Operating income	$	1.22		$	1.34
Net realized investment gains (losses)	0.03			(0.23		)
Net income	$	1.25		$	1.11
Weighted average number of common shares outstanding (basic)	508.4			584.6
Weighted average number of common shares outstanding and common stock equivalents (diluted)	515.1			590.4
Common shares outstanding at period end	497.0			585.3
Common stock dividends declared	$	168		$	177
Operating income by segment
Business Insurance	$	567		$	547
Financial, Professional & International Insurance	86			148
Personal Insurance	59			154
Total segment operating income	712			849
Interest Expense and Other	(81		)	(50		)
	$	631		$	799
Operating return on equity	10.1		%	12.4		%
Return on equity	9.6		%	10.2		%

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

15

	Three Months Ended March 31,
($ in millions, pre-tax)	2010			2009
Revenues
Premiums	$	5,230		$	5,301
Net investment income	753			542
Fee income	79			73
Net realized investment gains (losses)	25			(214		)
Other revenues	32			33
	$	6,119		$	5,735
Revenues
Business Insurance	$	3,241		$	3,191
Financial, Professional & International Insurance	941			911
Personal Insurance	1,912			1,847
Total segment revenues	6,094			5,949
Interest Expense and Other	—			—
	6,094			5,949
Net realized investment gains (losses)	25			(214		)
	$	6,119		$	5,735
Gross written premiums
Business Insurance	$	3,118		$	3,294
Financial, Professional & International Insurance	898			842
Personal Insurance	1,787			1,727
	$	5,803		$	5,863
Net written premiums
Business Insurance	$	2,834		$	2,963
Financial, Professional & International Insurance	681			563
Personal Insurance	1,736			1,677
	$	5,251		$	5,203
GAAP combined ratios: (1)
Business Insurance (2)
Loss and loss adjustment expense ratio	58.7		%	57.8		%
Underwriting expense ratio	32.7			31.2
Combined ratio	91.4		%	89.0		%
Financial, Professional & International Insurance (2)
Loss and loss adjustment expense ratio	62.3		%	54.7		%
Underwriting expense ratio	36.6			35.5
Combined ratio	98.9		%	90.2		%
Personal Insurance
Loss and loss adjustment expense ratio	72.5		%	64.9		%
Underwriting expense ratio	30.1			28.4
Combined ratio	102.6		%	93.3		%
Total Company (2)
Loss and loss adjustment expense ratio	64.0		%	59.7		%
Underwriting expense ratio	32.4			30.9
Combined ratio	96.4		%	90.6		%

(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 March 31,
($ in millions; after-tax except as noted)	2010			2009
Reconciliation of underwriting gain to net income
Pre-tax underwriting gain	$	155		$	465
Tax expense on underwriting results	(75		)	(112		)
Underwriting gain	80			353
Net investment income	610			474
Other, including interest expense	(59		)	(28		)
Consolidated operating income	631			799
Net realized investment gains (losses)	16			(137		)
Net income	$	647		$	662

	Three Months Ended March 31,
($ in millions)	2010		2009		Change
The impact of changes in foreign exchange rates on FP&II net written premiums
Net written premiums - holding foreign exchange rates constant	$	659	$	563	17	%
Impact of changes in foreign exchange rates	22
Net written premium - as reported	$	681	$	563	21	%

	As of
($ in millions; except per share amounts)	March 31, 2010		December 31, 2009		March 31, 2009
Reconciliation of tangible and adjusted common shareholders’ equity to common shareholders’ equity
Tangible common shareholders’ equity	$	20,788	$	21,587	$	21,919
Goodwill and other intangibles, net of tax	3,868		3,888		3,948
Adjusted common shareholders’ equity	24,656		25,475		25,867
Net unrealized investment gains, net of tax	1,938		1,861		543
Common shareholders’ equity	$	26,594	$	27,336	$	26,410
Common shares outstanding	497.0		520.3		585.3
Tangible book value per share	$	41.82	$	41.49	$	37.45
Adjusted book value per share	49.60		48.96		44.19
Book value per share	53.50		52.54		45.12

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

17

	Twelve Months Ended December 31,
($ in millions; after-tax)	2009		2008			2007		2006		2005			2004
Reconciliation of operating income to net income
Operating income	$	3,600	$	3,195		$	4,500	$	4,200	$	2,026		$	895
Net realized investment gains (losses)	22		(271		)	101		8		35			(28		)
Income from continuing operations	3,622		2,924			4,601		4,208		2,061			867
Discontinued operations	—		—			—		—		(439		)	88
Net income	$	3,622	$	2,924		$	4,601	$	4,208	$	1,622		$	955

	As of December 31,
($ in millions)	2009			2008			2007			2006			2005			2004
Reconciliation of adjusted common shareholders’ equity to common shareholders’ equity
Adjusted common shareholders’ equity	$	25,475		$	25,374		$	25,884		$	24,553		$	21,823		$	20,147
Net unrealized investment gains (losses), net of tax	1,861			(144		)	620			453			327			866
Common shareholders’ equity	$	27,336		$	25,230		$	26,504		$	25,006		$	22,150		$	21,013
Return on equity	13.5		%	11.4		%	18.0		%	17.9		%	7.5		%	5.1		%
Operating return on equity	14.0		%	12.4		%	17.7		%	17.9		%	9.6		%	5.0		%

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

###

Contacts
Media:	Institutional Investors:	Individual Investors:
Shane Boyd	Gabriella Nawi	Marc Parr
917.778.6267, 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 - First Quarter 2010

	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	16
Operating Income 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-Q which will be filed with theSecurities and Exchange Commission.

Index

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Net income	$	662		$	740		$	935		$	1,285		$	647
Net income per share:
Basic	$	1.12		$	1.27		$	1.66		$	2.39		$	1.26
Diluted	$	1.11		$	1.27		$	1.65		$	2.36		$	1.25
Operating income	$	799		$	732		$	914		$	1,155		$	631
Operating income per share:
Basic	$	1.36		$	1.26		$	1.62		$	2.15		$	1.23
Diluted	$	1.34		$	1.25		$	1.61		$	2.12		$	1.22
Return on equity	10.2		%	11.1		%	13.6		%	18.5		%	9.6		%
Operating return on equity	12.4		%	11.3		%	14.1		%	18.0		%	10.1		%
Total assets, at period end	$	110,313		$	111,135		$	112,407		$	109,560		$	108,696
Total equity, at period end	$	26,497		$	26,920		$	28,160		$	27,415		$	26,671
Book value per share, at period end	$	45.12		$	47.29		$	51.24		$	52.54		$	53.50
Less: Net unrealized investment gains, net of tax	0.93			1.53			4.08			3.58			3.90
Adjusted book value per share, at period end	$	44.19		$	45.76		$	47.16		$	48.96		$	49.60
Weighted average number of common shares outstanding (basic)	584.6			575.8			558.4			532.8			508.4
Weighted average number of common shares outstanding and common stock equivalents (diluted)	590.4			579.8			564.1			540.1			515.1
Common shares outstanding at period end	585.3			567.5			547.9			520.3			497.0
Common stock dividends declared	$	177		$	172		$	166		$	175		$	168
Common stock repurchased:
Under repurchase authorization (1)
Shares	—			18.5			20.8			30.1			27.0
Cost	$	—		$	750		$	1,000		$	1,550		$	1,400
Other
Shares	0.7			0.3			—			0.4			0.8
Cost	$	27		$	13		$	3		$	22		$	40

(1)  Repurchased under Board of Director authorization.

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

1

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

	1Q			2Q		3Q		4Q		1Q
	2009			2009		2009		2009		2010
Net income
Operating income	$	799		$	732	$	914	$	1,155	$	631
Net realized investment gains (losses)	(137		)	8		21		130		16
Net income	$	662		$	740	$	935	$	1,285	$	647
Basic earnings per share
Operating income	$	1.36		$	1.26	$	1.62	$	2.15	$	1.23
Net realized investment gains (losses)	(0.24		)	0.01		0.04		0.24		0.03
Net income	$	1.12		$	1.27	$	1.66	$	2.39	$	1.26
Diluted earnings per share
Operating income	$	1.34		$	1.25	$	1.61	$	2.12	$	1.22
Net realized investment gains (losses)	(0.23		)	0.02		0.04		0.24		0.03
Net income	$	1.11		$	1.27	$	1.65	$	2.36	$	1.25

Adjustments to net income and weighted average shares for net income EPS calculations: (1)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Basic
Net income, as reported	$	662		$	740		$	935		$	1,285		$	647
Preferred stock dividends, net of taxes	(1		)	(1		)	(1		)	—			(1		)
Participating share-based awards - allocated income	(5		)	(5		)	(6		)	(10		)	(5		)
Net income available to common shareholders - basic	$	656		$	734		$	928		$	1,275		$	641
Diluted
Net income available to common shareholders - basic	$	656		$	734		$	928		$	1,275		$	641
Effect of dilutive securities:
Convertible preferred stock	1			1			1			—			1
Performance shares	—			—			1			1			—
Zero coupon convertible notes	1			—			—			—			—
Net income available to common shareholders - diluted	$	658		$	735		$	930		$	1,276		$	642
Common Shares
Basic
Weighted average shares outstanding	584.6			575.8			558.4			532.8			508.4
Diluted
Weighted average shares outstanding	584.6			575.8			558.4			532.8			508.4
Weighted average effects of dilutive securities:
Convertible preferred stock	2.2			2.1			2.0			1.9			1.9
Stock options and performance shares	2.0			1.9			3.7			5.4			4.8
Zero coupon convertible notes	1.6			—			—			—			—
Diluted weighted average shares outstanding	590.4			579.8			564.1			540.1			515.1

(1)  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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Premiums	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230
Net investment income	542			658			763			813			753
Fee income	73			89			72			72			79
Net realized investment gains (losses)	(214		)	13			29			189			25
Other revenues	33			49			42			39			32
Total revenues	5,735			6,162			6,327			6,456			6,119
Claims and expenses
Claims and claim adjustment expenses	3,190			3,335			3,123			2,760			3,388
Amortization of deferred acquisition costs	944			953			967			949			929
General and administrative expenses (1)	782			839			889			856			847
Interest expense	92			94			98			98			98
Total claims and expenses	5,008			5,221			5,077			4,663			5,262
Income before income taxes	727			941			1,250			1,793			857
Income tax expense	65			201			315			508			210
Net income	$	662		$	740		$	935		$	1,285		$	647
Net realized investment gains (losses)
Other-than-temporary impairment losses:
Total losses	$	(184	)	$	(75	)	$	(43	)	$	(21	)	$	(1	)
Portion of losses recognized in accumulated other changes in equity from nonowner sources	—			45			24			(4		)	(9		)
Other-than-temporary impairment losses	(184		)	(30		)	(19		)	(25		)	(10		)
Other net realized investment gains (losses)	(30		)	43			48			214			35
Net realized investment gains (losses)	$	(214	)	$	13		$	29		$	189		$	25
Other statistics
Effective tax rate on net investment income	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%
Net investment income (after-tax)	$	474		$	547		$	616		$	653		$	610
Catastrophes, net of reinsurance:
Pre-tax	$	83		$	200		$	158		$	16		$	471
After-tax	$	54		$	130		$	103		$	10		$	312

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

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

3

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Underwriting gain	$	353		$	206		$	338		$	540		$	80
Net investment income	474			547			616			653			610
Other, including interest expense	(28		)	(21		)	(40		)	(38		)	(59		)
Operating income	799			732			914			1,155			631
Net realized investment gains (losses)	(137		)	8			21			130			16
Net income	$	662		$	740		$	935		$	1,285		$	647
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	59.7		%	61.4		%	57.0		%	51.1		%	64.0		%
Underwriting expense ratio (3)	30.9		%	31.8		%	32.7		%	32.3		%	32.4		%
Combined ratio	90.6		%	93.2		%	89.7		%	83.4		%	96.4		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	90.1		%	92.6		%	89.1		%	82.9		%	95.8		%
Impact of catastrophes on combined ratio	1.6		%	3.7		%	2.9		%	0.3		%	9.0		%
Impact of prior year reserve development on combined ratio	-4.9		%	-4.9		%	-5.7		%	-9.4		%	-5.6		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Billing and policy fees	$	27	$	27	$	26	$	27	$	27
Fee income:
Loss and loss adjustment expenses	$	20	$	42	$	24	$	28	$	36
Underwriting expenses	53		47		48		44		43
Total fee income	$	73	$	89	$	72	$	72	$	79

(3)  The impact of reductions 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), and (0.5) points for 1Q 2009, and 2Q 2009 respectively.

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

4

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Premiums	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230
Net investment income	542			658			763			813			753
Fee income	73			89			72			72			79
Other revenues	33			49			42			39			32
Total revenues	5,949			6,149			6,298			6,267			6,094
Claims and expenses
Claims and claim adjustment expenses	3,190			3,335			3,123			2,760			3,388
Amortization of deferred acquisition costs	944			953			967			949			929
General and administrative expenses	782			839			889			856			847
Interest expense	92			94			98			98			98
Total claims and expenses	5,008			5,221			5,077			4,663			5,262
Operating income before income taxes	941			928			1,221			1,604			832
Income tax expense	142			196			307			449			201
Operating income	$	799		$	732		$	914		$	1,155		$	631
Other statistics
Effective tax rate on net investment income	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%
Net investment income (after-tax)	$	474		$	547		$	616		$	653		$	610
Catastrophes, net of reinsurance:
Pre-tax	$	83		$	200		$	158		$	16		$	471
After-tax	$	54		$	130		$	103		$	10		$	312

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)

	1Q			2Q		3Q			4Q			1Q
	2009			2009		2009			2009			2010
Statutory underwriting
Gross written premiums	$	5,863		$	5,969	$	5,935		$	5,518		$	5,803
Net written premiums	$	5,203		$	5,605	$	5,340		$	5,188		$	5,251
Net earned premiums	$	5,301		$	5,353	$	5,421		$	5,343		$	5,230
Losses and loss adjustment expenses	3,159			3,300		3,090			2,736			3,349
Underwriting expenses	1,710			1,724		1,770			1,658			1,708
Statutory underwriting gain	432			329		561			949			173
Policyholder dividends	8			6		7			4			8
Statutory underwriting gain after policyholder dividends	$	424		$	323	$	554		$	945		$	165
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	41,156		$	41,495	$	41,357		$	40,923		$	40,849
Increase (decrease) in reserves	$	(151	)	$	339	$	(138	)	$	(434	)	$	(74	)
Statutory surplus	$	21,561		$	21,267	$	22,050		$	23,195		$	21,607
Net written premiums/surplus (1)	1.01:1			1.02:1		0.98:1			0.92:1			0.99:1

(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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Written premiums
Gross	$	5,863		$	5,969		$	5,935		$	5,518		$	5,803
Ceded	(660		)	(364		)	(595		)	(330		)	(552		)
Net	$	5,203		$	5,605		$	5,340		$	5,188		$	5,251
Earned premiums
Gross	$	5,808		$	5,862		$	5,915		$	5,835		$	5,697
Ceded	(507		)	(509		)	(494		)	(492		)	(467		)
Net	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Premiums	$	2,757		$	2,770		$	2,768		$	2,673		$	2,628
Net investment income	355			451			529			567			528
Fee income	73			89			72			72			79
Other revenues	6			12			14			10			6
Total revenues	3,191			3,322			3,383			3,322			3,241
Claims and expenses
Claims and claim adjustment expenses	1,618			1,644			1,508			1,267			1,583
Amortization of deferred acquisition costs	449			450			448			428			425
General and administrative expenses (1)	467			493			517			489			481
Total claims and expenses	2,534			2,587			2,473			2,184			2,489
Operating income before federal income taxes	657			735			910			1,138			752
Income taxes	110			175			242			323			185
Operating income	$	547		$	560		$	668		$	815		$	567
Other statistics
Effective tax rate on net investment income	10.8		%	15.9		%	18.8		%	19.7		%	18.6		%
Net investment income (after-tax)	$	317		$	379		$	429		$	456		$	430
Catastrophes, net of reinsurance:
Pre-tax	$	12		$	59		$	86		$	19		$	135
After-tax	$	8		$	38		$	56		$	12		$	88

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

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Underwriting gain	$	226		$	172		$	228		$	351		$	132
Net investment income	317			379			429			456			430
Other	4			9			11			8			5
Operating income	$	547		$	560		$	668		$	815		$	567
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	57.8		%	57.6		%	53.5		%	46.3		%	58.7		%
Underwriting expense ratio (3)	31.2		%	32.2		%	33.0		%	32.5		%	32.7		%
Combined ratio	89.0		%	89.8		%	86.5		%	78.8		%	91.4		%
Impact of catastrophes on combined ratio	0.4		%	2.1		%	3.1		%	0.7		%	5.1		%
Impact of prior year reserve development on combined ratio	-6.6		%	-7.8		%	-9.5		%	-13.6		%	-9.2		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Billing and policy fees	$	4	$	4	$	4	$	4	$	4
Fee income:
Loss and loss adjustment expenses	$	20	$	42	$	24	$	28	$	36
Underwriting expenses	53		47		48		44		43
Total fee income	$	73	$	89	$	72	$	72	$	79

(3)  The impact of reductions 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), and (0.4) points for 1Q 2009, and 2Q 2009, respectively.

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)

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Statutory underwriting
Gross written premiums	$	3,294	$	3,046	$	3,029	$	2,729	$	3,118
Net written premiums	$	2,963	$	2,813	$	2,611	$	2,515	$	2,834
Net earned premiums	$	2,757	$	2,770	$	2,768	$	2,673	$	2,628
Losses and loss adjustment expenses	1,592		1,603		1,479		1,240		1,547
Underwriting expenses	903		877		892		820		866
Statutory underwriting gain	262		290		397		613		215
Policyholder dividends	4		4		4		3		4
Statutory underwriting gain after policyholder dividends	$	258	$	286	$	393	$	610	$	211

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)

	1Q			2Q		3Q		4Q		1Q
	2009			2009		2009		2009		2010
Net written premiums by market
Select Accounts	$	731		$	732	$	655	$	638	$	702
Commercial Accounts	710			564		609		610		706
National Accounts	259			227		197		219		226
Industry-Focused Underwriting	617			581		564		517		569
Target Risk Underwriting	422			458		360		328		412
Specialized Distribution	222			247		221		199		215
Total core	2,961			2,809		2,606		2,511		2,830
Business Insurance other	2			4		5		4		4
Total	$	2,963		$	2,813	$	2,611	$	2,515	$	2,834
Net written premiums by product line
Commercial multi-peril	$	789		$	730	$	682	$	732	$	784
Workers’ compensation	748			593		587		558		725
Commercial automobile	485			497		498		447		483
Property	463			507		401		356		430
General liability	479			486		443		421		412
Other	(1		)	—		—		1		—
Total	$	2,963		$	2,813	$	2,611	$	2,515	$	2,834
National accounts
Additions to claim volume under administration (1)	$	594		$	452	$	403	$	454	$	536
Written fees	$	85		$	70	$	65	$	63	$	74

(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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Premiums	$	801		$	810		$	861		$	861		$	824
Net investment income	104			107			118			123			111
Other revenues	6			7			7			7			6
Total revenues	911			924			986			991			941
Claims and expenses
Claims and claim adjustment expenses	442			442			463			400			516
Amortization of deferred acquisition costs	146			151			162			163			153
General and administrative expenses (1)	138			146			141			154			149
Total claims and expenses	726			739			766			717			818
Operating income before federal income taxes	185			185			220			274			123
Income taxes	37			52			53			80			37
Operating income	$	148		$	133		$	167		$	194		$	86
Other statistics
Effective tax rate on net investment income	19.4		%	20.9		%	21.7		%	20.8		%	21.0		%
Net investment income (after-tax)	$	84		$	84		$	93		$	97		$	87
Catastrophes, net of reinsurance (2):
Pre-tax	$	—		$	2		$	4		$	(3	)	$	86
After-tax	$	—		$	1		$	3		$	(2	)	$	62

(1)  In 1Q 2009 “General and administrative expenses” includes $(1) million of reductions in estimated hurricane-related assessments from state-created insurance and windstorm insurance entities.

(2)  In 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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Underwriting gain (loss)	$	60		$	44		$	69		$	93		$	(5	)
Net investment income	84			84			93			97			87
Other	4			5			5			4			4
Operating income	$	148		$	133		$	167		$	194		$	86
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	54.7		%	54.4		%	53.3		%	46.3		%	62.3		%
Underwriting expense ratio (2)	35.5		%	36.5		%	35.4		%	36.8		%	36.6		%
Combined ratio	90.2		%	90.9		%	88.7		%	83.1		%	98.9		%
Impact of catastrophes on combined ratio	0.0		%	0.2		%	0.5		%	-0.3		%	10.4		%
Impact of prior year reserve development on combined ratio	-1.4		%	-1.4		%	-2.9		%	-13.9		%	-4.2		%

(1)  Before policyholder dividends.

(2)  The impact of reductions 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) for 1Q 2009.

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)

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Statutory underwriting
Gross written premiums	$	842	$	975	$	918	$	978	$	898
Net written premiums	$	563	$	914	$	870	$	938	$	681
Net earned premiums	$	801	$	810	$	861	$	861	$	824
Losses and loss adjustment expenses	437		448		459		403		513
Underwriting expenses	286		298		288		301		308
Statutory underwriting gain	78		64		114		157		3
Policyholder dividends	4		2		3		1		4
Statutory underwriting gain (loss) after policyholder dividends	$	74	$	62	$	111	$	156	$	(1	)

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)

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Net written premiums by market
Bond & Financial Products	$	334	$	558	$	574	$	574	$	362
International	229		356		296		364		319
Total	$	563	$	914	$	870	$	938	$	681
Net written premiums by product line
General liability	$	129	$	256	$	252	$	269	$	132
Fidelity & surety	170		265		291		274		194
International	229		356		296		364		319
Other	35		37		31		31		36
Total	$	563	$	914	$	870	$	938	$	681

In 2Q 2009, results from the surety bond operation in Canada were reclassified from the “Bond & 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 - Personal Insurance
($ in millions)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Premiums	$	1,743		$	1,773		$	1,792		$	1,809		$	1,778
Net investment income	83			100			116			123			114
Other revenues	21			21			20			22			20
Total revenues	1,847			1,894			1,928			1,954			1,912
Claims and expenses
Claims and claim adjustment expenses	1,130			1,249			1,152			1,093			1,289
Amortization of deferred acquisition costs	349			352			357			358			351
General and administrative expenses (1)	170			187			220			207			207
Total claims and expenses	1,649			1,788			1,729			1,658			1,847
Operating income before federal income taxes	198			106			199			296			65
Income taxes	44			18			50			86			6
Operating income	$	154		$	88		$	149		$	210		$	59
Other statistics
Effective tax rate on net investment income	12.0		%	16.1		%	18.7		%	19.5		%	18.6		%
Net investment income (after-tax)	$	73		$	84		$	94		$	100		$	93
Catastrophes, net of reinsurance:
Pre-tax	$	71		$	139		$	68		$	—		$	250
After-tax	$	46		$	91		$	44		$	—		$	162

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

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

16

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Underwriting gain (loss)	$	67		$	(10	)	$	41		$	96		$	(47	)
Net investment income	73			84			94			100			93
Other	14			14			14			14			13
Operating income	$	154		$	88		$	149		$	210		$	59
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	64.9		%	70.5		%	64.3		%	60.4		%	72.5		%
Underwriting expense ratio (2)	28.4		%	29.1		%	30.9		%	30.0		%	30.1		%
Combined ratio	93.3		%	99.6		%	95.2		%	90.4		%	102.6		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.7		%	97.7		%	93.3		%	89.0		%	100.9		%
Impact of catastrophes on combined ratio	4.1		%	7.9		%	3.8		%	0.0		%	14.0		%
Impact of prior year reserve development on combined ratio	-3.7		%	-1.9		%	-1.3		%	-0.8		%	-1.0		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Billing and policy fees	$	23	$	23	$	22	$	23	$	23

(2)  The impact of reductions 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), and (0.8) points for 1Q 2009, and 2Q 2009, respectively.

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)

	1Q		2Q			3Q		4Q		1Q
	2009		2009			2009		2009		2010
Statutory underwriting
Gross written premiums	$	1,727	$	1,948		$	1,988	$	1,811	$	1,787
Net written premiums	$	1,677	$	1,878		$	1,859	$	1,735	$	1,736
Net earned premiums	$	1,743	$	1,773		$	1,792	$	1,809	$	1,778
Losses and loss adjustment expenses	1,130		1,249			1,152		1,093		1,289
Underwriting expenses	521		549			590		537		534
Statutory underwriting gain (loss)	$	92	$	(25	)	$	50	$	179	$	(45	)
Policies in force (in thousands)
Automobile	2,509		2,491			2,482		2,480		2,489
Homeowners and other	4,861		4,901			4,944		4,985		5,030

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Statutory underwriting
Gross written premiums	$	924		$	919		$	905		$	862		$	917
Net written premiums	$	917		$	914		$	898		$	857		$	913
Net earned premiums	$	913		$	917		$	915		$	916		$	892
Losses and loss adjustment expenses	668			639			643			682			613
Underwriting expenses	254			249			247			237			249
Statutory underwriting gain (loss)	$	(9	)	$	29		$	25		$	(3	)	$	30
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	73.2		%	69.7		%	70.2		%	74.5		%	68.7		%
Underwriting expense ratio	27.0		%	26.7		%	27.1		%	26.4		%	26.7		%
Combined ratio	100.2		%	96.4		%	97.3		%	100.9		%	95.4		%
Impact of catastrophes on combined ratio	0.9		%	1.0		%	0.8		%	0.0		%	0.8		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	8		$	9		$	7		$	—		$	7
After-tax	$	5		$	6		$	5		$	—		$	4
Policies in force (in thousands)	2,489			2,466			2,451			2,443			2,447
Change from prior year quarter	-0.2		%	-2.3		%	-3.0		%	-2.7		%	-1.7		%
Change from prior quarter	-0.9		%	-0.9		%	-0.6		%	-0.3		%	0.2		%

(1)  Represents Automobile policies 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:

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Billing and policy fees	$	13	$	14	$	12	$	13	$	13

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Statutory underwriting
Gross written premiums	$	792		$	1,018		$	1,067		$	932		$	849
Net written premiums	$	749		$	952		$	946		$	861		$	803
Net earned premiums	$	824		$	846		$	865		$	879		$	870
Losses and loss adjustment expenses	458			599			499			399			662
Underwriting expenses	239			268			306			275			252
Statutory underwriting gain (loss)	$	127		$	(21	)	$	60		$	205		$	(44	)
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	55.6		%	70.8		%	57.7		%	45.4		%	76.1		%
Underwriting expense ratio	26.8		%	28.4		%	31.3		%	31.2		%	30.6		%
Combined ratio	82.4		%	99.2		%	89.0		%	76.6		%	106.7		%
Impact of catastrophes on combined ratio	7.6		%	15.3		%	7.0		%	0.0		%	27.9		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	63		$	130		$	61		$	—		$	242
After-tax	$	41		$	85		$	39		$	—		$	158
Policies in force (in thousands)	4,850			4,886			4,923			4,959			5,000
Change from prior year quarter	3.1		%	2.8		%	2.5		%	2.8		%	3.1		%
Change from prior quarter	0.5		%	0.7		%	0.8		%	0.7		%	0.8		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2009		2009		2009		2009		2010
Billing and policy fees	$	10	$	9	$	10	$	10	$	10

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Revenues
Net investment income	$	—		$	—		$	—		$	—		$	—
Other revenues	—			9			1			—			—
Total revenues	—			9			1			—			—
Claims and expenses
Interest expense	92			94			98			98			98
General and administrative expenses	7			13			11			6			10
Total claims and expenses	99			107			109			104			108
Operating loss before federal income tax benefit	(99		)	(98		)	(108		)	(104		)	(108		)
Income taxes	(49		)	(49		)	(38		)	(40		)	(27		)
Operating loss	$	(50	)	$	(49	)	$	(70	)	$	(64	)	$	(81	)

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

21

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

	March 31,		December 31,
	2010 (1)		2009
Assets
Fixed maturities, available for sale, at fair value (including $83 and $90 subject to securities lending) (amortized cost $62,463 and $63,311)	$	65,116	$	65,847
Equity securities, available for sale, at fair value (cost $367 and $373)	463		451
Real estate	851		865
Short-term securities	4,648		4,852
Other investments	2,963		2,950
Total investments	74,041		74,965
Cash	251		255
Investment income accrued	777		825
Premiums receivable	5,564		5,471
Reinsurance recoverables	12,727		12,816
Ceded unearned premiums	997		916
Deferred acquisition costs	1,767		1,758
Deferred tax asset	560		672
Contractholder receivables	5,840		5,797
Goodwill	3,365		3,365
Other intangible assets	564		588
Other assets	2,243		2,132
Total assets	$	108,696	$	109,560

	March 31,			December 31,
	2010 (1)			2009
Liabilities
Claims and claim adjustment expense reserves	$	52,841		$	53,127
Unearned premium reserves	10,935			10,861
Contractholder payables	5,840			5,797
Payables for reinsurance premiums	638			546
Debt	6,525			6,527
Other liabilities	5,246			5,287
Total liabilities	82,025			82,145
Shareholders’ equity
Preferred Stock Savings Plan - convertible preferred stock (0.2 shares issued and outstanding at both dates)	77			79
Common stock (1,748.6 shares authorized; 497.0 and 520.3 shares issued and outstanding)	19,762			19,593
Retained earnings	16,792			16,315
Accumulated other changes in equity from nonowner sources	1,271			1,219
Treasury stock, at cost (227.4 and 199.6 shares)	(11,231		)	(9,791		)
Total shareholders’ equity	26,671			27,415
Total liabilities and shareholders’ equity	$	108,696		$	109,560

(1) Preliminary.

22

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

	March 31,		Pre-tax Book		December 31,		Pre-tax Book
	2010		Yield (1)		2009		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	24,178	4.95	%	$	25,006	4.91	%
Tax-exempt fixed maturities	40,938		4.07	%	40,841		4.08	%
Total fixed maturities	65,116		4.41	%	65,847		4.40	%
Non-redeemable preferred stocks	236		6.61	%	232		6.60	%
Common stocks	227				219
Total equity securities	463				451
Real estate	851				865
Short-term securities	4,648		0.16	%	4,852		0.19	%
Private equities	1,588				1,557
Hedge funds	476				472
Real estate partnerships	500				508
Mortgage loans	39		6.16	%	40		6.56	%
Trading securities	24				24
Other investments	336				349
Total other investments	2,963				2,950
Total investments	$	74,041			$	74,965
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	1,938			$	1,861

(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)

	March 31,		December 31,
	2010		2009
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,104	$	2,574
Obligations of states and political subdivisions	41,406		41,333
Debt securities issued by foreign governments	1,922		1,957
Mortgage-backed securities - principally obligations of U.S. Government agencies	5,010		5,207
Corporates (including redeemable preferreds)	14,674		14,776
Total fixed maturities	$	65,116	$	65,847

Fixed Maturities

Quality Characteristics (1)

	March 31, 2010
	Amount		% of Total
Quality Ratings
Aaa	$	27,700	42.6	%
Aa	24,561		37.7
A	6,862		10.5
Baa	4,151		6.4
Total investment grade	63,274		97.2
Ba	831		1.3
B	656		1.0
Caa and lower	355		0.5
Total below investment grade	1,842		2.8
Total fixed maturities	$	65,116	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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Gross investment income
Fixed maturities	$	713		$	691		$	703		$	715		$	691
Short-term securities	10			7			5			5			3
Other	(175		)	(33		)	63			105			66
	548			665			771			825			760
Investment expenses	6			7			8			12			7
Net investment income, pre-tax	542			658			763			813			753
Income taxes	68			111			147			160			143
Net investment income, after-tax	$	474		$	547		$	616		$	653		$	610
Effective tax rate	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%
Average invested assets (1)	$	72,720		$	72,589		$	73,515		$	73,573		$	72,659
Average yield pre-tax (1)	3.0		%	3.6		%	4.2		%	4.4		%	4.1		%
Average yield after-tax	2.6		%	3.0		%	3.4		%	3.5		%	3.4		%

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

25

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Net realized investment gains (losses)
Fixed maturities	$	(100	)	$	(2	)	$	19		$	14		$	22
Equity securities	(74		)	1			2			3			8
Other (1) (2)	(40		)	14			8			172			(5		)
Realized investment gains (losses) before tax	(214		)	13			29			189			25
Related taxes	(77		)	5			8			59			9
Net realized investment gains (losses)	$	(137	)	$	8		$	21		$	130		$	16
Gross investment gains (1)	$	105		$	116		$	132		$	310		$	89
Gross investment losses before impairments (1)	(135		)	(73		)	(84		)	(96		)	(54		)
Net investment gains (losses) before impairments	(30		)	43			48			214			35
Other-than-temporary impairment losses:
Total losses	(184		)	(75		)	(43		)	(21		)	(1		)
Portion of losses recognized in accumulated other changes in equity from nonowner sources	—			45			24			(4		)	(9		)
Other-than-temporary impairment losses	(184		)	(30		)	(19		)	(25		)	(10		)
Net realized investment gains (losses) before tax	(214		)	13			29			189			25
Related taxes	(77		)	5			8			59			9
Net realized investment gains (losses)	$	(137	)	$	8		$	21		$	130		$	16

	March 31,		June 30,		September 30,		December 31,		March 31,
	2009		2009		2009		2009		2010
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	732	$	1,139	$	3,142	$	2,536	$	2,653
Equity securities & other	71		157		262		294		296
Unrealized investment gains before tax	803		1,296		3,404		2,830		2,949
Related taxes	260		431		1,168		969		1,011
Balance, end of period	$	543	$	865	$	2,236	$	1,861	$	1,938

(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	$	76	$	71	$	39	$	56	$	26
Gross investment Treasury future losses	$	76	$	46	$	50	$	47	$	33

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)

	March 31,			December 31,
	2010			2009
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	8,035		$	8,138
Allowance for uncollectible reinsurance	(482		)	(523		)
Net reinsurance recoverables	7,553			7,615
Mandatory pools and associations	1,742			1,745
Structured settlements	3,432			3,456
Total reinsurance recoverables	$	12,727		$	12,816

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

	A.M. Best Rating of Group’s	March 31,		December 31,
Reinsurer	Predominant Reinsurer	2010		2009
Swiss Re Group	A third highest of 16 ratings	$	857	$	895
Munich Re Group	A+ second highest of 16 ratings	791		779
Transatlantic Holdings, Inc.	A third highest of 16 ratings	452		485
XL Capital Group	A third highest of 16 ratings	392		398
Berkshire Hathaway Group	A++ highest of 16 ratings	384		386

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 March 31, 2010, after deducting mandatory pools and associations and structured settlement balances, $5.9 billion, or 78%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 99% were rated A- or better.  The remaining 22% net recoverables from reinsurers were comprised of the following:  6% related to the Company’s participation in voluntary pools, 10% related to recoverables from captive insurance companies and 6% were balances from other companies not rated by A.M. Best Company.  In addition, $2.3 billion of the net recoverables were collateralized by letters of credit, funds held and trust agreements at March 31, 2010.

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	March 31,		December 31,
Group	Predominant Insurer	2010		2009
Old Mutual	A- fourth highest of 16 ratings	$	1,043	$	1,050
Metlife	A+ second highest of 16 ratings	526		529
Genworth	A third highest of 16 ratings	470		472
Symetra	A third highest of 16 ratings	285		286
ING Group	A third highest of 16 ratings	233		235

27

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Business Insurance
Beginning of period	$	32,270		$	32,043		$	31,986		$	31,750		$	31,289
Incurred	1,592			1,603			1,479			1,240			1,547
Paid	(1,816		)	(1,688		)	(1,726		)	(1,704		)	(1,747		)
Foreign exchange and other	(3		)	28			11			3			(10		)
End of period	$	32,043		$	31,986		$	31,750		$	31,289		$	31,079
Financial, Professional & International Insurance
Beginning of period	$	5,397		$	5,503		$	5,821		$	5,970		$	6,003
Incurred	437			448			459			403			513
Paid	(309		)	(338		)	(354		)	(386		)	(443		)
Foreign exchange and other	(22		)	208			44			16			(51		)
End of period	$	5,503		$	5,821		$	5,970		$	6,003		$	6,022
Personal Insurance
Beginning of period	$	3,640		$	3,610		$	3,688		$	3,637		$	3,631
Incurred	1,130			1,249			1,152			1,093			1,289
Paid	(1,160		)	(1,171		)	(1,203		)	(1,099		)	(1,172		)
End of period	$	3,610		$	3,688		$	3,637		$	3,631		$	3,748
Total
Beginning of period	$	41,307		$	41,156		$	41,495		$	41,357		$	40,923
Incurred	3,159			3,300			3,090			2,736			3,349
Paid	(3,285		)	(3,197		)	(3,283		)	(3,189		)	(3,362		)
Foreign exchange and other	(25		)	236			55			19			(61		)
End of period	$	41,156		$	41,495		$	41,357		$	40,923		$	40,849
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	185		$	—		$	—
Environmental	—			70			—			—			—
All other	(182		)	(286		)	(447		)	(366		)	(242		)
Prior year development excluding accretion of discount	(182		)	(216		)	(262		)	(366		)	(242		)
Accretion of discount	14			14			14			12			11
Total Business Insurance	(168		)	(202		)	(248		)	(354		)	(231		)
Financial, Professional & International Insurance	(12		)	(11		)	(25		)	(120		)	(34		)
Personal Insurance	(64		)	(34		)	(22		)	(15		)	(18		)
Total	$	(244	)	$	(247	)	$	(295	)	$	(489	)	$	(283	)

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)

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Asbestos reserves
Beginning reserves:
Direct	$	3,299		$	3,216		$	3,136		$	3,251		$	3,097
Ceded	(385		)	(363		)	(345		)	(336		)	(339		)
Net	2,914			2,853			2,791			2,915			2,758
Incurred losses and loss expenses:
Direct	—			—			185			—			—
Ceded	—			—			—			—			—
Losses paid:
Direct	83			80			70			154			93
Ceded	(22		)	(18		)	(9		)	3			(19		)
Ending reserves:
Direct	3,216			3,136			3,251			3,097			3,004
Ceded	(363		)	(345		)	(336		)	(339		)	(320		)
Net	$	2,853		$	2,791		$	2,915		$	2,758		$	2,684
Environmental reserves
Beginning reserves:
Direct	$	400		$	378		$	425		$	411		$	389
Ceded	14			14			3			3			4
Net	414			392			428			414			393
Incurred losses and loss expenses:
Direct	—			85			—			—			—
Ceded	—			(15		)	—			—			—
Losses paid:
Direct	22			38			14			22			16
Ceded	—			(4		)	—			(1		)	—
Ending reserves:
Direct	378			425			411			389			373
Ceded	14			3			3			4			4
Net	$	392		$	428		$	414		$	393		$	377

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

29

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

	March 31,			December 31,
	2010			2009
Debt
Short-term debt
Commercial paper	$	100		$	100
8.125% Senior notes due April 15, 2010 (1)	250			250
7.415% Medium-term notes due August 23, 2010	21			21
7.81% Private placement note due September 16, 2010	2			2
Total short-term debt	373			373
Long-term debt
7.22% Real estate non-recourse debt due September 1, 2011	9			9
7.81% Private placement note due September 16, 2011	2			2
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			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			6,165
Unamortized fair value adjustment	55			58
Unamortized debt issuance costs	(68		)	(69		)
	6,152			6,154
Total debt	6,525			6,527
Preferred equity	77			79
Common equity (excluding net unrealized investment gains, net of tax)	24,656			25,475
Total capital (excluding net unrealized investment gains, net of tax)	$	31,258		$	32,081
Total debt to capital (excluding net unrealized investment gains, net of tax)	20.9		%	20.3		%

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

30

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

	March 31,			December 31,
	2010 (1)			2009
Statutory capital and surplus	$	21,607		$	23,195
GAAP adjustments
Goodwill and intangible assets	3,732			3,752
Investments	3,188			2,999
Noninsurance companies	(3,430		)	(4,166		)
Deferred acquisition costs	1,766			1,758
Deferred federal income tax	(1,115		)	(1,038		)
Current federal income tax	(86		)	(90		)
Reinsurance recoverables	255			255
Furniture, equipment & software	658			640
Employee benefits	(16		)	(12		)
Agents balances	118			110
Other	(6		)	12
Total GAAP adjustments	5,064			4,220
GAAP shareholders’ equity	$	26,671		$	27,415

(1) Estimated and Preliminary

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Cash flows from operating activities
Net income	$	662		$	740		$	935		$	1,285		$	647
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	214			(13		)	(29		)	(189		)	(25		)
Depreciation and amortization	206			209			187			195			216
Deferred federal income tax expense (benefit)	22			(53		)	77			167			76
Amortization of deferred acquisition costs	944			953			967			949			929
Equity in (income) loss from other investments	194			58			(41		)	(85		)	(45		)
Premiums receivable	(44		)	(150		)	282			276			(97		)
Reinsurance recoverables	167			371			355			523			86
Deferred acquisition costs	(948		)	(997		)	(970		)	(882		)	(939		)
Claims and claim adjustment expense reserves	(373		)	22			(448		)	(797		)	(224		)
Unearned premium reserves	64			163			25			(348		)	86
Other	(295		)	(327		)	75			(67		)	(179		)
Net cash provided by operating activities	813			976			1,415			1,027			531
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,210			1,179			1,380			1,547			1,229
Proceeds from sales of investments:
Fixed maturities	630			1,234			342			599			1,646
Equity securities	16			15			6			28			19
Real estate	—			—			—			—			9
Other investments	92			48			77			294			114
Purchases of investments:
Fixed maturities	(2,265		)	(2,006		)	(2,079		)	(3,297		)	(2,175		)
Equity securities	(12		)	(6		)	(4		)	(2		)	(5		)
Real estate	(5		)	(4		)	(3		)	(3		)	(3		)
Other investments	(112		)	(74		)	(76		)	(87		)	(104		)
Net (purchases) sales of short-term securities	(451		)	(772		)	(122		)	1,715			202
Securities transactions in course of settlement	398			(32		)	222			(193		)	95
Other	(84		)	(121		)	(66		)	(55		)	(75		)
Net cash provided by (used in) investing activities	(583		)	(539		)	(323		)	546			952

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

	1Q			2Q			3Q			4Q			1Q
	2009			2009			2009			2009			2010
Cash flows from financing activities
Payment of debt	(141		)	—			(2		)	—			—
Issuance of debt	—			494			—			—			—
Dividends paid to shareholders	(178		)	(172		)	(168		)	(175		)	(168		)
Issuance of common stock - employee share options	10			18			48			104			123
Treasury stock acquired - share repurchase authorization	—			(750		)	(970		)	(1,539		)	(1,407		)
Treasury stock acquired - net employee share-based compensation	(27		)	(1		)	(1		)	—			(38		)
Excess tax benefits from share-based payment arrangements	1			1			2			4			4
Net cash used in financing activities	(335		)	(410		)	(1,091		)	(1,606		)	(1,486		)
Effect of exchange rate changes on cash	—			10			3			2			(1		)
Net increase (decrease) in cash	(105		)	37			4			(31		)	(4		)
Cash at beginning of period	350			245			282			286			255
Cash at end of period	$	245		$	282		$	286		$	255		$	251
Income taxes paid	$	34		$	329		$	210		$	303		$	44
Interest paid	$	63		$	122		$	63		$	137		$	63

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The Travelers Companies, Inc. Financial Supplement - First Quarter 2010 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 realized and 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 and, in the case of operating return on equity, unrealized 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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