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): July 22, 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 July 22, 2010, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended June 30, 2010, and the availability of the Company’s second 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 July 22, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Second 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:    July 22, 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 July 22, 2010, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Second 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 Second Quarter 2010 Net Income per Diluted Share and Operating Income per Diluted Share of $1.35 and $1.39, Respectively, an Increase of 6% and 11%

Results Achieved in Spite of Record Second Quarter Weather-Related Catastrophes of $0.58 per Diluted Share

Underwriting Gain, Exclusive of Catastrophes, Up 25% Pre-Tax from Prior Year Quarter Due to Higher Net Favorable Prior Year Reserve Development and Solid Current Accident Year Results

Solid Investment Performance — Net Investment Income Up 16% Pre-Tax from Prior Year Quarter

·Net and operating income of $670 million and $690 million, respectively.

·Net written premiums up 1 percent from prior year quarter.

·Book value per share of $55.67, up 18 percent from prior year quarter and up 6 percent from year-end 2009.

·Repurchased 28.0 million common shares in the quarter for $1.4 billion.

NEW YORK, July 22, 2010 — The Travelers Companies, Inc. (“Travelers,” NYSE: TRV) today reported net income of $670 million, or $1.35 per diluted share, for the quarter ended June 30, 2010, compared to $740 million, or $1.27 per diluted share, for the quarter ended June  30, 2009.  Operating income in the current quarter was $690 million, or $1.39 per diluted share, compared to $732 million, or $1.25 per diluted share, in the prior year quarter.

“In light of the record second quarter weather losses, we are pleased to report net income per diluted share of $1.35, a 6% increase from the prior year quarter, and return on equity of 10.1%,” commented Jay Fishman, Chairman and Chief Executive Officer.  “Book value per share increased 18% to $55.67 since June 30, 2009, after repurchasing 106 million common shares for $5.4 billion and paying $682 million in common stock dividends over the last 12 months. Our strategy of returning excess capital to shareholders continues to have a significant positive impact on both earnings per share as well as return on equity.  Since the initial authorization in 2006, we have returned more than $15 billion in capital through common share repurchases and common dividends and we intend to continue this successful strategy.

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“We are encouraged by the operating environment we experienced in our personal insurance segment in the second quarter.  Renewal premium changes continued to be strong and we were pleased with the improving rate of change of policies in force across both our Auto and Homeowners book of business.  Across our diversified commercial insurance businesses, the operating environment was broadly similar to the first quarter.  Retention remained strong and renewal rate changes, while still positive, were somewhat lower than in the first quarter.  Finally, the negative impact of the economy on net written premiums has moderated somewhat from recent quarters.”

“We continue to anticipate some accident year loss ratio deterioration on a consolidated basis for 2010, exclusive of catastrophes, as we expect loss cost increases to modestly outpace projected earned rate increases in our commercial businesses. However, primarily as a result of commercial renewal premium increases in 2010 not meeting our original expectations, which we believe is attributable to the impact of the continuing difficult economic environment, we are modestly lowering the upper end of our full year 2010 fully diluted operating income per share guidance by ten cents, resulting in a range of $5.20 to $5.45,” concluded Mr. Fishman.

Consolidated Highlights

($ in millions, except for per share amounts,	Three Months Ended June 30,								Six Months Ended June 30,
and after-tax, except for premiums)	2010			2009			Change		2010			2009			Change
Net written premiums	$	5,688		$	5,605		1	%	$	10,939		$	10,808		1	%
Operating income	$	690		$	732		(6	)	$	1,321		$	1,531		(14	)
per diluted share	$	1.39		$	1.25		11		$	2.61		$	2.60		—
Net income	$	670		$	740		(9	)	$	1,317		$	1,402		(6	)
per diluted share	$	1.35		$	1.27		6		$	2.60		$	2.38		9
Book value per share	$	55.67		$	47.29		18		$	55.67		$	47.29		18
Adjusted book value per share	$	50.62		$	45.76		11		$	50.62		$	45.76		11
GAAP combined ratio	95.2		%	93.2		%	2.0	pts	95.8		%	91.9		%	3.9	pts
Operating return on equity	11.4		%	11.3		%	0.1	pts	10.7		%	11.9		%	(1.2	)pts
Return on equity	10.1		%	11.1		%	(1.0	)pts	9.9		%	10.7		%	(0.8	)pts

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

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Second Quarter 2010 Consolidated Results

The current and prior year quarters included the following:

	Three Months Ended June 30,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	220		$	329		$	119		$	206
Underwriting gain includes:
Net favorable prior year reserve development	384			261			251			170
Catastrophes, net of reinsurance	(439		)	(200		)	(285		)	(130		)
Resolution of prior year tax matters										5
Net investment income	762			658			617			547
Other, including interest expense	(70		)	(59		)	(46		)	(21		)
Other also includes:
Resolution of prior year tax matters										14
Operating Income	912			928			690			732
Net realized investment gains (losses)	(31		)	13			(20		)	8
Income before income taxes	$	881		$	941
Net Income							$	670		$	740
GAAP combined ratio	95.2		%	93.2		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	94.6		%	92.6		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(7.2		)pts	(4.9		)pts
Catastrophes, net of reinsurance	8.2		pts	3.7		pts

Operating income of $690 million after-tax in the current quarter decreased $42 million from the prior year quarter primarily due to an $87 million after-tax decrease in the underwriting gain, partially offset by a $70 million after-tax increase in net investment income.  The prior year quarter also benefited from the resolution of prior year tax matters.

The decrease in the underwriting gain in the current quarter reflected a GAAP combined ratio of 95.2 percent, as compared to 93.2 percent in the prior year quarter.  This 2.0 point increase in the combined ratio was driven by a $239 million pre-tax increase in catastrophe losses (increase of 4.5 points), partially offset by a $123 million pre-tax increase in net favorable prior year reserve development (reduction of 2.3 points).  Catastrophe losses in the current quarter were primarily due to several severe wind and hail storms as well as flooding. 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 94.2 percent, as compared to 94.4 percent in the prior year quarter.  The prior year quarter combined ratio also included a 0.5 point benefit resulting from a $26 million pre-tax reduction in the estimate for Texas Windstorm Insurance Association (TWIA) assessments related to Hurricane Ike.

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After-tax net investment income increased 13 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 losses compared to net realized investment gains in the prior year quarter.  Included in current quarter net realized investment gains (losses) were other-than-temporary impairments of only $3 million after-tax ($4 million pre-tax) compared to $19 million after-tax ($30 million pre-tax) in the prior year quarter.

Net written premiums of $5.688 billion in the current quarter increased 1 percent from the prior year quarter.  This increase was driven by Personal Insurance, partially offset by a decrease in net written premiums in Business Insurance and Financial, Professional & International Insurance. Retention rates remained high across each of the segments. The impact of renewal rate changes on premiums remained positive across Personal Insurance and Financial, Professional and International Insurance, but was flat in Business Insurance.  New business volumes declined from the prior year quarter in Business Insurance and Financial, Professional & International Insurance, partially offset by an increase in Personal Insurance.

Capital Management

“We remain very pleased with our balance sheet and our continued ability to generate excess capital,” said Jay S. Benet, Vice Chairman and Chief Financial Officer. “All of our financial strength indicators remained at or better than target, after returning over $3 billion of capital to shareholders during the first six months of 2010. Further, we successfully renewed our catastrophe reinsurance program on July 1 with essentially the same structure and coverage but at a modestly lower cost.”

During the second quarter 2010, the company repurchased 28.0 million of its common shares under its existing Board of Directors’ share repurchase authorization at a total cost of $1.4 billion, leaving $3.7 billion of capacity under approval for future share repurchases, and paid $173 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 248.2 million common shares or 36 percent of the then outstanding number at a total cost of $12.3 billion.

Shareholders’ equity ended the current quarter at $26.3 billion, a decrease of 2 percent from the prior year quarter due to the common share repurchases.  Included in shareholders’ equity at the end of the current quarter were after-tax net unrealized investment gains of $2.4 billion, compared to $0.9 billion at the end of the prior year quarter.  Statutory surplus was $21.1 billion, the company’s debt-to-capital ratio (excluding net unrealized investment gains) was 20.8 percent and holding company liquidity was $2.4 billion, over two times its target level.

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Business Insurance Segment Financial Results

“Business Insurance results were significantly impacted by higher than expected catastrophe losses in the current quarter.  Excluding these losses, the underwriting results were up due to net favorable prior year reserve development. On a current accident year basis loss costs continued to modestly outpace earned rate increases,” commented Brian MacLean, President and Chief Operating Officer. “Retention rates remained at high levels and increased from recent quarters.  Overall renewal premium changes improved, but were still slightly negative, as renewal rate changes on premium trended slightly downwards and the negative impact on exposures from lower levels of economic activity moderated.”

The current and prior year quarters included the following:

	Three Months Ended June 30,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	210		$	273		$	127		$	172
Underwriting gain includes:
Net favorable prior year reserve development	303			216			196			141
Catastrophes, net of reinsurance	(179		)	(59		)	(116		)	(38		)
Net investment income	537			451			435			379
Other	7			11			5			9
Operating Income	$	754		$	735		$	567		$	560
GAAP combined ratio	91.8		%	89.8		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(11.3		)pts	(7.8		)pts
Catastrophes, net of reinsurance	6.7		pts	2.1		pts

Operating income in the current quarter of $567 million after-tax increased $7 million from the prior year quarter primarily due to a $56 million after-tax increase in net investment income, partially offset by a $45 million after-tax decrease in the underwriting gain.

The decrease in the underwriting gain in the current quarter reflected a GAAP combined ratio of 91.8 percent, as compared to 89.8 percent in the prior year quarter.  This 2.0 point increase in the combined ratio was primarily driven by a $120 million pre-tax increase in catastrophe losses (increase of 4.6 points), partially offset by an $87 million pre-tax increase in net favorable prior year reserve development (reduction of 3.5 points).  Catastrophe losses in the current quarter were primarily due to several severe wind and hail storms as well as flooding. The net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the property, workers’ compensation and commercial automobile product lines.  The net favorable prior year reserve development in the current quarter also included an increase of $23 million after-tax ($35 million pre-tax) to environmental reserves, compared to an increase of $46 million after-tax ($70 million pre-tax) in the prior year quarter.

The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 96.4 percent, as

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compared to 95.5 percent in the prior year quarter, as the current quarter was unfavorably impacted by loss costs trends modestly outpacing earned rate increases. The prior year quarter combined ratio also included a 0.4 point benefit resulting from a $12 million pre-tax reduction in the estimate for TWIA assessments related to Hurricane Ike. In addition, the combined ratio reported for the second quarter 2009 did not reflect the favorable re-estimation that occurred in the second half of 2009.

Business Insurance net written premiums of $2.795 billion in the current quarter decreased 1 percent from the prior year quarter. While 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, the impact was less than in recent quarters.  Retention rates remained strong and were higher than recent quarters. The impact of renewal rate changes on premiums was flat, while new business volumes decreased modestly from the prior year quarter.

Select Accounts

·Net written premiums of $716 million decreased 2 percent from the prior year quarter.

·Retention rates remained generally consistent with recent quarters.

·Renewal premium changes remained positive.

·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 $581 million increased 3 percent from the prior year quarter.

·Retention rates remained very strong and increased from recent quarters.

·Renewal premium changes were slightly positive as renewal rate changes on premiums remained positive and insured exposure changes were flat compared to negative in recent quarters.

·New business volumes decreased from the prior year quarter.

National Accounts

·Net written premiums of $194 million decreased 15 percent from the prior year quarter due to reduced insurance exposures driven by lower levels of economic activity, lower new business volumes and less prior year retrospective premium adjustments.

Industry-Focused Underwriting

·Net written premiums of $584 million increased slightly from the prior year quarter primarily due to Construction, mostly offset by Technology and Public Sector.

Target Risk Underwriting

·Net written premiums of $469 million increased 2 percent from the prior year quarter primarily due to Excess Casualty.

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Specialized Distribution

·Net written premiums of $247 million were consistent with the prior year quarter.

Financial, Professional & International Insurance Segment Financial Results

“Financial, Professional & International Insurance underwriting results were strong in the current quarter.  The segment benefited from stable underlying margins and net favorable prior year reserve development,” commented Mr. MacLean.  “Net written premiums for the quarter were down approximately 3% compared to the prior year quarter due to pricing and other underwriting actions designed to enhance profitability that we have taken in certain lines of business. A decrease in written premium in our Construction Surety business due to the continued slowdown in construction spending was more than offset by a reduction in surety reinsurance costs associated with prior year reinsurance treaties.”

The current and prior year quarters included the following:

	Three Months Ended June 30,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	140		$	71		$	79		$	44
Underwriting gain includes:
Net favorable prior year reserve development	72			11			49			8
Catastrophes, net of reinsurance	(3		)	(2		)	(2		)	(1		)
Net investment income	110			107			89			84
Other	7			7			4			5
Operating Income	$	257		$	185		$	172		$	133
GAAP combined ratio	83.3		%	90.9		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(8.4		)pts	(1.4		)pts
Catastrophes, net of reinsurance	0.4		pts	0.2		pts

Operating income in the current quarter of $172 million after-tax increased $39 million from the prior year quarter primarily due to a $35 million after-tax increase in the underwriting gain.

The increase in underwriting results in the current quarter reflected a GAAP combined ratio of 83.3 percent, as compared to 90.9 percent in the prior year quarter.  This 7.6 point decrease in the combined ratio was driven by a $61 million pre-tax increase in net favorable prior year reserve development (reduction of 7.0 points).  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 United Kingdom operations within International.

The current quarter underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 91.3 percent, as compared to 92.1 percent in the prior year quarter, as the current quarter benefited from a reduction in surety reinsurance costs associated with prior year reinsurance treaties.

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Financial, Professional & International Insurance net written premiums of $889 million decreased 3 percent from the prior year quarter driven by the International operation.

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 $559 million were consistent with the prior year quarter due to a reduction in surety reinsurance costs associated with prior year reinsurance treaties, offset by decreases primarily in the Public Company Liability and Professional Liability units of the company’s Management Liability business.

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

·Renewal premium changes were slightly negative primarily due to the impact of reduced insured exposures as a result of the company’s underwriting actions and the impact of continued low levels of economic activity on exposures.

·New business volumes decreased from the prior year quarter across all units of the company’s Management Liability business.

International

·Net written premiums of $330 million decreased 7 percent from the prior year quarter. Adjusting for the impact of changes in foreign exchange rates, net written premiums decreased 9 percent primarily due to lower new business volumes across the company’s Lloyd’s, United Kingdom and Ireland operations.

·Retention rates were consistent with recent quarters.

·Renewal premium changes were slightly negative as the impact of positive renewal rate changes on premiums was more than offset by reduced insured exposures.

·New business volumes decreased from the prior year quarter primarily as a result of underwriting actions taken at the company’s Lloyd’s and United Kingdom operations to enhance profitability.

Personal Insurance Segment Financial Results

“Similar to first quarter 2010, Personal Insurance results were impacted by multiple severe storms affecting the industry in the current quarter. However, looking beyond such highly unpredictable events, the underlying profitability of the segment continued to improve,” commented Mr. MacLean.  “We were pleased with production results in the quarter as retentions continued at high levels and policies in force increased in the quarter for both our Homeowners and Automobile lines of business.  We feel good about the operating conditions and our position in the marketplace.”

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The current and prior year quarters included the following:

	Three Months Ended June 30,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting loss	$	(130	)	$	(15	)	$	(87	)	$	(10	)
Underwriting loss includes:
Net favorable prior year reserve development	9			34			6			21
Catastrophes, net of reinsurance	(257		)	(139		)	(167		)	(91		)
Net investment income	115			100			93			84
Other	18			21			13			14
Operating Income	$	3		$	106		$	19		$	88
GAAP combined ratio	105.9		%	99.6		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	104.0		%	97.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(0.5		)pts	(1.9		)pts
Catastrophes, net of reinsurance	14.0		pts	7.9		pts

Operating income in the current quarter of $19 million after-tax decreased $69 million from the prior year quarter primarily due to a $77 million after-tax decrease in underwriting results, partially offset by a $9 million after-tax increase in net investment income.

The decrease in underwriting results in the current quarter reflected a GAAP combined ratio of 105.9 percent, as compared to 99.6 percent in the prior year quarter.  This 6.3 point increase in the combined ratio was driven by a $118 million pre-tax increase in catastrophe losses (increase of 6.1 points) and a $25 million pre-tax decrease in net favorable prior year reserve development (increase of 1.4 points).  Catastrophe losses in the current quarter were primarily due to several severe wind and hail storms. The net favorable prior year reserve development in the current quarter resulted from better than expected loss experience in Homeowners and Other.

The current quarter underwriting results excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 92.4 percent, as compared to 93.6 percent in the prior year quarter, as the current quarter benefited from the favorable impact of earned rate increases modestly outpacing loss cost trends and lower non-catastrophe weather-related losses. The prior year quarter combined ratio also included a 0.8 point benefit resulting from a $14 million pre-tax reduction in the estimate for TWIA assessments related to Hurricane Ike.

Personal Insurance net written premiums of $2.004 billion increased 7 percent from the prior year quarter including the company’s direct to consumer initiative.  Adjusting for the introduction of twelve-month policy terms in certain markets within Automobile and the timing of reinsurance, net written premiums increased 4 percent due to continued positive renewal premium changes, strong retention rates and new business growth.

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Agency-Only Automobile and 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 $945 million increased 3 percent from the prior year quarter. Adjusting for the introduction of twelve-month policy terms in certain markets, net written premiums approximated the prior year quarter.

·Policies in force increased slightly from the prior year quarter, in contrast to declines in the previous six quarters.

·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 $1.035 billion increased 9 percent from the prior year quarter. Adjusting for the timing of reinsurance, net written premiums increased 7 percent from the prior year quarter.

·Policies in force increased 4 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.

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Year-to-Date 2010 Consolidated Results

The current and prior year periods included the following:

	Six Months Ended June 30,
	2010			2009			2010			2009
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	375		$	794		$	199		$	559
Underwriting gain includes:
Net favorable prior year reserve development	678			519			443			338
Catastrophes, net of reinsurance	(910		)	(283		)	(597		)	(184		)
Resolution of prior year tax matters										60
Net investment income	1,515			1,200			1,227			1,021
Other, including interest expense	(146		)	(125		)	(105		)	(49		)
Other also includes:
Resolution of prior year tax matters										28
Operating Income	1,744			1,869			1,321			1,531
Net realized investment losses	(6		)	(201		)	(4		)	(129		)
Income before income taxes	$	1,738		$	1,668
Net Income							$	1,317		$	1,402
GAAP combined ratio	95.8		%	91.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	95.2		%	91.3		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(6.4		)pts	(4.9		)pts
Catastrophes, net of reinsurance	8.6		pts	2.7		pts

Operating income of $1.321 billion after-tax in the current period decreased $210 million from the prior year period primarily due to a $360 million after-tax decrease in the underwriting gain, partially offset by a $206 million after-tax increase in net investment income.

The decrease in the underwriting gain in the current period reflected a GAAP combined ratio of 95.8 percent, as compared to 91.9 percent in the prior year period.  This 3.9 point increase in the combined ratio was driven by a $627 million pre-tax increase in catastrophe losses (increase of 5.9 points), partially offset by a $159 million pre-tax increase in net favorable prior year reserve development (reduction of 1.5 points).

The current period underwriting gain excluding net favorable prior year reserve development and catastrophe losses reflected a GAAP combined ratio of 93.6 percent, as compared to 94.1 percent in the prior year period. The improvement was concentrated in Personal Insurance and reflected earned rate increases modestly outpacing loss cost trends as well as lower non-catastrophe weather-related losses.  The prior year period combined ratio also included a 0.8 point benefit resulting from an $87 million pre-tax reduction in the estimate for TWIA assessments related to Hurricane Ike. In addition, the combined ratio reported for the first six months of 2009 did not reflect the favorable re-estimation that occurred in the second half of 2009.

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2010 Annual Guidance

The upper end of the company’s full year 2010 operating income per diluted share guidance is being lowered by $0.10, resulting in a range of $5.20 to $5.45, compared to the previously announced range of $5.20 to $5.55. This guidance includes the reported results for the first six months of 2010 and estimates for the remainder of 2010 based on a number of assumptions, including:

·Catastrophe losses of $1.274 billion pre-tax and $835 million after-tax, or $1.71 per diluted share, for the full year which incorporates actual experience for the first six months of 2010 of $910 million pre-tax and $597 million after-tax and projects $364 million pre-tax and $238 million after-tax, or $0.51 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 $4.0 billion for the full year; and

·Weighted average diluted shares of approximately 487 million.

As noted above, the company’s earnings guidance for the full year 2010 reflects actual prior year reserve development through the second 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 website 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 Thursday, July 22, 2010.  Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the company’s website.  Following the live event, an audio playback of the webcast and the slide presentation will be available on the company’s website.

To view the slides or to listen to the webcast or the playback, visit the “Webcasts & Presentations” section of the Travelers investor relations website 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.

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From time to time, Travelers may use its website 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. Adjusted operating income (loss) is operating income (loss) excluding preferred dividends.

Average equity is (a) the sum of total shareholders’ equity excluding preferred stock at the beginning and end of all the quarters for the period presented divided by (b) the number of quarters in the period presented times two.  Adjusted average equity is average equity excluding unrealized investment gains (losses), net of tax, for all quarters included in the calculation and, for each quarterly period included in the calculation, that quarter’s realized investment gains (losses).

Return on equity is the ratio of annualized net income (loss) to average equity for the periods presented.  Operating return on equity is the ratio of annualized adjusted operating income (loss) to adjusted average equity for the periods presented.

Average annual operating return on equity over a period is the ratio of:

a) the sum of adjusted operating income (loss) for the periods presented to

b) the sum of: 1) the sum of the adjusted average equity for all full years in the period presented, and 2) for partial years in the period presented, the number of quarters in that partial year divided by four, times the adjusted average equity of the partial year.

In the opinion of the company’s management, operating income (loss), operating income (loss) per share, adjusted operating income (loss), average equity, adjusted average equity, return on equity, operating return on equity, and average annual operating return on equity are meaningful indicators of underwriting and operating results.  These measures exclude net realized investment gains or losses, net of taxes, and in the case of operating return on equity and average annual operating return on equity, unrealized investment gains or losses, net of taxes, 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 these measures 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.  Underwriting gain (loss), exclusive of catastrophes, is the underwriting gain (loss) adjusted to exclude claims, claim adjustment expenses, and reinstatement premiums and assessments related to catastrophes.  In the opinion of the company’s management, this measure is meaningful to investors to understand the company’s periodic earnings and the variability of earnings caused by the unpredictable nature (i.e., the timing and amount) of catastrophes.

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.

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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.

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. 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 (excluding net unrealized investment gains) 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.

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Financial, Professional & International Insurance: The Financial, Professional & International Insurance segment includes surety and management 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 the Company’s share repurchase plans (which repurchase plans depend on a variety of factors, including the Company’s financial position, earnings, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, catastrophe losses, 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 the Company’s investment portfolio and underwriting results, among others, are forward looking, and the Company may make forward-looking statements about, among other things, its 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 the Company’s asbestos and other reserves (including, among others, asbestos claim payment patterns); the impact of emerging claims issues; the cost and availability of reinsurance coverage; catastrophe losses; the impact of investment, economic and underwriting market conditions; and strategic initiatives.  The Company cautions investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the Company’s 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 the Company’s results of operations, its financial position and/or liquidity, and could adversely impact the Company’s ratings, the Company’s ability to raise capital and the availability and cost of reinsurance; during or following a period of financial market disruption or prolonged economic downturn, the Company’s business could be materially and adversely affected; the Company’s investment portfolio may suffer reduced returns or material losses,  including as a result of a challenging economic environment that impacts the credit of municipal or other issuers in our portfolio; if actual claims exceed the Company’s loss reserves, or if changes in the estimated level of loss reserves are necessary, the Company’s financial results could be materially and adversely affected; the Company’s business could be harmed because of its potential exposure to asbestos and environmental claims and related litigation; the Company is 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 the Company’s business are uncertain; the intense competition that the Company faces could harm its ability to maintain or increase its business volumes and profitability; the Company may not be able to collect all amounts due to it from reinsurers, and reinsurance coverage may not be available to the Company in the future at commercially reasonable rates or at all; the Company is exposed to credit risk in certain of its business operations; the Company’s businesses are heavily regulated and changes in regulation (including as a result of the adoption of financial services reform legislation) may reduce the Company’s profitability and limit its growth; a downgrade in the Company’s claims-paying and financial strength ratings could adversely impact the Company’s business volumes, adversely impact the Company’s ability to access the capital markets and increase the Company’s borrowing costs; the inability of the Company’s insurance subsidiaries to pay dividends to the Company’s holding company in sufficient amounts would harm the Company’s ability to meet its obligations and to pay future shareholder dividends; disruptions to the Company’s relationships with its independent agents and brokers could adversely

15

affect the Company; the Company’s efforts to develop new products (including its direct to consumer initiative in Personal Insurance) or expand in targeted markets may not be successful, may create enhanced risks and may adversely impact results; the Company’s business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology; if the Company experiences difficulties with technology, data security and/or outsourcing relationships the Company’s ability to conduct its business could be negatively impacted; acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences; the Company is subject to a number of risks associated with its business outside the United States; the Company could be adversely affected if its controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective; the Company’s businesses may be adversely affected if it is 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 the Company’s 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.

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions, except per share amounts, and after-tax)	2010			2009			2010			2009
Operating income	$	690		$	732		$	1,321		$	1,531
Net realized investment gains (losses)	(20		)	8			(4		)	(129		)
Net income	$	670		$	740		$	1,317		$	1,402
Basic earnings per share
Operating income	$	1.41		$	1.26		$	2.64		$	2.62
Net realized investment gains (losses)	(0.04		)	0.01			(0.01		)	(0.22		)
Net income	$	1.37		$	1.27		$	2.63		$	2.40
Diluted earnings per share
Operating income	$	1.39		$	1.25		$	2.61		$	2.60
Net realized investment gains (losses)	(0.04		)	0.02			(0.01		)	(0.22		)
Net income	$	1.35		$	1.27		$	2.60		$	2.38
Weighted average number of common shares outstanding (basic)	484.5			575.8			496.3			580.1
Weighted average number of common shares outstanding and common stock equivalents (diluted)	490.8			579.8			502.6			584.9
Common shares outstanding at period end	470.8			567.5			470.8			567.5
Common stock dividends declared	$	173		$	172		$	341		$	349
Operating income by segment
Business Insurance	$	567		$	560		$	1,134		$	1,107
Financial, Professional & International Insurance	172			133			258			281
Personal Insurance	19			88			78			242
Total segment operating income	758			781			1,470			1,630
Interest Expense and Other	(68		)	(49		)	(149		)	(99		)
	$	690		$	732		$	1,321		$	1,531
Operating return on equity	11.4		%	11.3		%	10.7		%	11.9		%
Return on equity	10.1		%	11.1		%	9.9		%	10.7		%

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

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions, pre-tax)	2010			2009			2010			2009
Revenues
Premiums	$	5,340		$	5,353		$	10,570		$	10,654
Net investment income	762			658			1,515			1,200
Fee income	76			89			155			162
Net realized investment gains (losses)	(31		)	13			(6		)	(201		)
Other revenues	32			49			64			82
	$	6,179		$	6,162		$	12,298		$	11,897
Revenues
Business Insurance	$	3,283		$	3,322		$	6,524		$	6,513
Financial, Professional & International Insurance	972			924			1,913			1,835
Personal Insurance	1,955			1,894			3,867			3,741
Total segment revenues	6,210			6,140			12,304			12,089
Interest Expense and Other	—			9			—			9
	6,210			6,149			12,304			12,098
Net realized investment gains (losses)	(31		)	13			(6		)	(201		)
	$	6,179		$	6,162		$	12,298		$	11,897
Gross written premiums
Business Insurance	$	2,996		$	3,046		$	6,114		$	6,340
Financial, Professional & International Insurance	915			975			1,813			1,817
Personal Insurance	2,063			1,948			3,850			3,675
	$	5,974		$	5,969		$	11,777		$	11,832
Net written premiums
Business Insurance	$	2,795		$	2,813		$	5,629		$	5,776
Financial, Professional & International Insurance	889			914			1,570			1,477
Personal Insurance	2,004			1,878			3,740			3,555
	$	5,688		$	5,605		$	10,939		$	10,808
GAAP combined ratios: (1)
Business Insurance (2)
Loss and loss adjustment expense ratio	59.5		%	57.6		%	59.1		%	57.7		%
Underwriting expense ratio	32.3			32.2			32.5			31.7
Combined ratio	91.8		%	89.8		%	91.6		%	89.4		%
Financial, Professional & International Insurance (2)
Loss and loss adjustment expense ratio	48.1		%	54.4		%	55.1		%	54.5		%
Underwriting expense ratio	35.2			36.5			35.9			36.0
Combined ratio	83.3		%	90.9		%	91.0		%	90.5		%
Personal Insurance
Loss and loss adjustment expense ratio	76.0		%	70.5		%	74.3		%	67.6		%
Underwriting expense ratio	29.9			29.1			30.0			28.8
Combined ratio	105.9		%	99.6		%	104.3		%	96.4		%
Total Company (2)
Loss and loss adjustment expense ratio	63.3		%	61.4		%	63.6		%	60.5		%
Underwriting expense ratio	31.9			31.8			32.2			31.4
Combined ratio	95.2		%	93.2		%	95.8		%	91.9		%

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

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

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions; after-tax except as noted)	2010			2009			2010			2009
Reconciliation of pre-tax underwriting gain excluding the impact of catastrophes to net income
Pre-tax underwriting gain excluding the impact of catastrophes	$	659		$	529		$	1,285		$	1,077
Pre-tax impact of catastrophes	(439		)	(200		)	(910		)	(283		)
Pre-tax underwriting gain	220			329			375			794
Tax expense on underwriting results	(101		)	(123		)	(176		)	(235		)
Underwriting gain	119			206			199			559
Net investment income	617			547			1,227			1,021
Other, including interest expense	(46		)	(21		)	(105		)	(49		)
Consolidated operating income	690			732			1,321			1,531
Net realized investment gains (losses)	(20		)	8			(4		)	(129		)
Net income	$	670		$	740		$	1,317		$	1,402

	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions)	2010		2009		Change		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	$	883	$	914	(3	)%	$	1,542	$	1,477	4	%
Impact of changes in foreign exchange rates	6						28
Net written premium - as reported	$	889	$	914	(3	)%	$	1,570	$	1,477	6	%

	As of
	June 30,		December 31,		June 30,
($ in millions; except per share amounts)	2010		2009		2009
Reconciliation of tangible and adjusted book value per share to book value per share
Tangible common shareholders’ equity	$	19,983	$	21,587	$	22,044
Goodwill and other intangibles, net of tax	3,850		3,888		3,928
Adjusted common shareholders’ equity	23,833		25,475		25,972
Net unrealized investment gains, net of tax	2,381		1,861		865
Common shareholders’ equity	$	26,214	$	27,336	$	26,837
Common shares outstanding	470.8		520.3		567.5
Tangible book value per share	$	42.44	$	41.49	$	38.84
Adjusted book value per share	50.62		48.96		45.76
Book value per share	55.67		52.54		47.29

	As of
	June 30,			December 31,			June 30,
($ in millions)	2010			2009			2009
Reconciliation of total capitalization excluding net unrealized gain on investments to total capitalization
Total capitalization excluding net unrealized gain on investments	$	30,181		$	32,081		$	32,587
Net unrealized gain on investments, net of taxes	2,381			1,861			865
Total capitalization	$	32,562		$	33,942		$	33,452
Debt-to-capital ratio	19.3		%	19.2		%	19.5		%
Debt-to-capital ratio excluding net unrealized gain on investments	20.8		%	20.3		%	20.0		%

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

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	Twelve Months Ended December 31,
($ in millions; after-tax)	2009		2008			2007		2006		2005			2004
Reconciliation of adjusted operating income and operating income to net income
Adjusted operating income	$	3,597	$	3,191		$	4,496	$	4,195	$	2,020		$	889
Preferred dividends	3		4			4		5		6			6
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 shareholders’ equity to shareholders’ equity
Adjusted shareholders’ equity	$	25,453		$	25,645		$	25,783		$	24,545		$	21,788		$	20,175
Net unrealized investment gains (losses), net of tax	1,861			(144		)	620			453			327			866
Net realized investment gains (losses), net of tax	22			(271		)	101			8			35			(28		)
Preferred stock	79			89			112			129			153			188
Shareholders’ equity	$	27,415		$	25,319		$	26,616		$	25,135		$	22,303		$	21,201
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		%

	Three Months Ended						Six Months Ended
	June 30,						June 30,
($ in millions; after-tax)	2010			2009			2010			2009
Reconciliation of adjusted operating income and operating income to net income
Adjusted operating income	$	690		$	731		$	1,320		$	1,529
Preferred dividends	—			1			1			2
Operating income	690			732			1,321			1,531
Net realized investment gains (losses)	(20		)	8			(4		)	(129		)
Net income	$	670		$	740		$	1,317		$	1,402
							As of June 30,
($ in millions)							2010			2009
Reconciliation of adjusted shareholders’ equity to shareholders’ equity
Adjusted shareholders’ equity							$	23,837		$	26,101
Net unrealized investment gains, net of tax							2,381			865
Net realized investment losses, net of tax							(4		)	(129		)
Preferred stock							72			83
Shareholders’ equity							$	26,286		$	26,920
Return on equity	10.1		%	11.1		%	9.9		%	10.7		%
Operating return on equity	11.4		%	11.3		%	10.7		%	11.9		%

			Six Months Ended
			June 30,						Twelve Months Ended December 31,
($ in millions)			2010			2009			2009			2008			2007			2006			2005
Average annual operating return on equity from January 1, 2005 through June 30, 2010
Adjusted operating income			$	1,320		$	1,529		$	3,597		$	3,191		$	4,496		$	4,195		$	2,020
Adjusted operating income - annualized			2,640			3,058
Adjusted average equity			24,656			25,802			25,774			25,668			25,350			23,381			21,118
Operating return on equity			10.7		%	11.9		%	14.0		%	12.4		%	17.7		%	17.9		%	9.6		%
Average annual operating return on equity for the period January 1, 2005 through June 30, 2010	14.1	%

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

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EX-99.2

Exhibit 99.2

The Travelers Companies, Inc. Financial Supplement - Second 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 the Securities and Exchange Commission.

Index

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Net income	$	662		$	740		$	935		$	1,285		$	647		$	670		$	1,402		$	1,317
Net income per share:
Basic	$	1.12		$	1.27		$	1.66		$	2.39		$	1.26		$	1.37		$	2.40		$	2.63
Diluted	$	1.11		$	1.27		$	1.65		$	2.36		$	1.25		$	1.35		$	2.38		$	2.60
Operating income	$	799		$	732		$	914		$	1,155		$	631		$	690		$	1,531		$	1,321
Operating income per share:
Basic	$	1.36		$	1.26		$	1.62		$	2.15		$	1.23		$	1.41		$	2.62		$	2.64
Diluted	$	1.34		$	1.25		$	1.61		$	2.12		$	1.22		$	1.39		$	2.60		$	2.61
Return on equity	10.2		%	11.1		%	13.6		%	18.5		%	9.6		%	10.1		%	10.7		%	9.9		%
Operating return on equity	12.4		%	11.3		%	14.1		%	18.0		%	10.1		%	11.4		%	11.9		%	10.7		%
Total assets, at period end	$	110,313		$	111,135		$	112,407		$	109,560		$	108,696		$	107,023		$	111,135		$	107,023
Total equity, at period end	$	26,497		$	26,920		$	28,160		$	27,415		$	26,671		$	26,286		$	26,920		$	26,286
Book value per share, at period end	$	45.12		$	47.29		$	51.24		$	52.54		$	53.50		$	55.67		$	47.29		$	55.67
Less: Net unrealized investment gains, net of tax	0.93			1.53			4.08			3.58			3.90			5.05			1.53			5.05
Adjusted book value per share, at period end	$	44.19		$	45.76		$	47.16		$	48.96		$	49.60		$	50.62		$	45.76		$	50.62
Weighted average number of common shares outstanding (basic)	584.6			575.8			558.4			532.8			508.4			484.5			580.1			496.3
Weighted average number of common shares outstanding and common stock equivalents (diluted)	590.4			579.8			564.1			540.1			515.1			490.8			584.9			502.6
Common shares outstanding at period end	585.3			567.5			547.9			520.3			497.0			470.8			567.5			470.8
Common stock dividends declared	$	177		$	172		$	166		$	175		$	168		$	173		$	349		$	341
Common stock repurchased:
Under repurchase authorization (1)
Shares	—			18.5			20.8			30.1			27.0			28.0			18.5			55.0
Cost	$	—		$	750		$	1,000		$	1,550		$	1,400		$	1,400		$	750		$	2,800
Other
Shares	0.7			0.3			—			0.4			0.8			0.2			1.0			1.0
Cost	$	27		$	13		$	3		$	22		$	40		$	14		$	40		$	54

(1)  Repurchased under Board of Director authorization.

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

1

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

															YTD			YTD
	1Q			2Q		3Q		4Q		1Q		2Q			2Q			2Q
	2009			2009		2009		2009		2010		2010			2009			2010
Net income
Operating income	$	799		$	732	$	914	$	1,155	$	631	$	690		$	1,531		$	1,321
Net realized investment gains (losses)	(137		)	8		21		130		16		(20		)	(129		)	(4		)
Net income	$	662		$	740	$	935	$	1,285	$	647	$	670		$	1,402		$	1,317
Basic earnings per share
Operating income	$	1.36		$	1.26	$	1.62	$	2.15	$	1.23	$	1.41		$	2.62		$	2.64
Net realized investment gains (losses)	(0.24		)	0.01		0.04		0.24		0.03		(0.04		)	(0.22		)	(0.01		)
Net income	$	1.12		$	1.27	$	1.66	$	2.39	$	1.26	$	1.37		$	2.40		$	2.63
Diluted earnings per share
Operating income	$	1.34		$	1.25	$	1.61	$	2.12	$	1.22	$	1.39		$	2.60		$	2.61
Net realized investment gains (losses)	(0.23		)	0.02		0.04		0.24		0.03		(0.04		)	(0.22		)	(0.01		)
Net income	$	1.11		$	1.27	$	1.65	$	2.36	$	1.25	$	1.35		$	2.38		$	2.60

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Basic
Net income, as reported	$	662		$	740		$	935		$	1,285		$	647		$	670		$	1,402		$	1,317
Preferred stock dividends	(1		)	(1		)	(1		)	—			(1		)	—			(2		)	(1		)
Participating share-based awards - allocated income	(5		)	(5		)	(6		)	(10		)	(5		)	(5		)	(10		)	(10		)
Net income available to common shareholders - basic	$	656		$	734		$	928		$	1,275		$	641		$	665		$	1,390		$	1,306
Diluted
Net income available to common shareholders - basic	$	656		$	734		$	928		$	1,275		$	641		$	665		$	1,390		$	1,306
Effect of dilutive securities:
Convertible preferred stock	1			1			1			—			1			—			2			1
Performance shares	—			—			1			1			—			—			—			—
Zero coupon convertible notes	1			—			—			—			—			—			1			—
Net income available to common shareholders - diluted	$	658		$	735		$	930		$	1,276		$	642		$	665		$	1,393		$	1,307
Common Shares
Basic
Weighted average shares outstanding	584.6			575.8			558.4			532.8			508.4			484.5			580.1			496.3
Diluted
Weighted average shares outstanding	584.6			575.8			558.4			532.8			508.4			484.5			580.1			496.3
Weighted average effects of dilutive securities:
Convertible preferred stock	2.2			2.1			2.0			1.9			1.9			1.8			2.1			1.8
Stock options and performance shares	2.0			1.9			3.7			5.4			4.8			4.5			1.9			4.5
Zero coupon convertible notes	1.6			—			—			—			—			—			0.8			—
Diluted weighted average shares outstanding	590.4			579.8			564.1			540.1			515.1			490.8			584.9			502.6

(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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Premiums	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230		$	5,340		$	10,654		$	10,570
Net investment income	542			658			763			813			753			762			1,200			1,515
Fee income	73			89			72			72			79			76			162			155
Net realized investment gains (losses)	(214		)	13			29			189			25			(31		)	(201		)	(6		)
Other revenues	33			49			42			39			32			32			82			64
Total revenues	5,735			6,162			6,327			6,456			6,119			6,179			11,897			12,298
Claims and expenses
Claims and claim adjustment expenses	3,190			3,335			3,123			2,760			3,388			3,419			6,525			6,807
Amortization of deferred acquisition costs	944			953			967			949			929			950			1,897			1,879
General and administrative expenses (1)	782			839			889			856			847			832			1,621			1,679
Interest expense	92			94			98			98			98			97			186			195
Total claims and expenses	5,008			5,221			5,077			4,663			5,262			5,298			10,229			10,560
Income before income taxes	727			941			1,250			1,793			857			881			1,668			1,738
Income tax expense	65			201			315			508			210			211			266			421
Net income	$	662		$	740		$	935		$	1,285		$	647		$	670		$	1,402		$	1,317
Net realized investment gains (losses)
Other-than-temporary impairment losses:
Total losses	$	(184	)	$	(75	)	$	(43	)	$	(21	)	$	(1	)	$	2		$	(259	)	$	1
Portion of losses recognized in accumulated other changes in equity from nonowner sources	—			45			24			(4		)	(9		)	(6		)	45			(15		)
Other-than-temporary impairment losses	(184		)	(30		)	(19		)	(25		)	(10		)	(4		)	(214		)	(14		)
Other net realized investment gains (losses)	(30		)	43			48			214			35			(27		)	13			8
Net realized investment gains (losses)	$	(214	)	$	13		$	29		$	189		$	25		$	(31	)	$	(201	)	$	(6	)
Other statistics
Effective tax rate on net investment income	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%	19.1		%	14.9		%	19.0		%
Net investment income (after-tax)	$	474		$	547		$	616		$	653		$	610		$	617		$	1,021		$	1,227
Catastrophes, net of reinsurance:
Pre-tax	$	83		$	200		$	158		$	16		$	471		$	439		$	283		$	910
After-tax	$	54		$	130		$	103		$	10		$	312		$	285		$	184		$	597

(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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Underwriting gain	$	353		$	206		$	338		$	540		$	80		$	119		$	559		$	199
Net investment income	474			547			616			653			610			617			1,021			1,227
Other, including interest expense	(28		)	(21		)	(40		)	(38		)	(59		)	(46		)	(49		)	(105		)
Operating income	799			732			914			1,155			631			690			1,531			1,321
Net realized investment gains (losses)	(137		)	8			21			130			16			(20		)	(129		)	(4		)
Net income	$	662		$	740		$	935		$	1,285		$	647		$	670		$	1,402		$	1,317
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	59.7		%	61.4		%	57.0		%	51.1		%	64.0		%	63.3		%	60.5		%	63.6		%
Underwriting expense ratio (3)	30.9		%	31.8		%	32.7		%	32.3		%	32.4		%	31.9		%	31.4		%	32.2		%
Combined ratio	90.6		%	93.2		%	89.7		%	83.4		%	96.4		%	95.2		%	91.9		%	95.8		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	90.1		%	92.6		%	89.1		%	82.9		%	95.8		%	94.6		%	91.3		%	95.2		%
Impact of catastrophes on combined ratio	1.6		%	3.7		%	2.9		%	0.3		%	9.0		%	8.2		%	2.7		%	8.6		%
Impact of prior year reserve development on combined ratio	-4.9		%	-4.9		%	-5.7		%	-9.4		%	-5.6		%	-7.2		%	-4.9		%	-6.4		%

(1)  Before policyholder dividends.

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Billing and policy fees	$	27	$	27	$	26	$	27	$	27	$	25	$	54	$	52
Fee income:
Loss and loss adjustment expenses	$	20	$	42	$	24	$	28	$	36	$	31	$	62	$	67
Underwriting expenses	53		47		48		44		43		45		100		88
Total fee income	$	73	$	89	$	72	$	72	$	79	$	76	$	162	$	155

(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), (0.5), and (0.8) points for 1Q 2009, 2Q 2009, and YTD 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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Premiums	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230		$	5,340		$	10,654		$	10,570
Net investment income	542			658			763			813			753			762			1,200			1,515
Fee income	73			89			72			72			79			76			162			155
Other revenues	33			49			42			39			32			32			82			64
Total revenues	5,949			6,149			6,298			6,267			6,094			6,210			12,098			12,304
Claims and expenses
Claims and claim adjustment expenses	3,190			3,335			3,123			2,760			3,388			3,419			6,525			6,807
Amortization of deferred acquisition costs	944			953			967			949			929			950			1,897			1,879
General and administrative expenses	782			839			889			856			847			832			1,621			1,679
Interest expense	92			94			98			98			98			97			186			195
Total claims and expenses	5,008			5,221			5,077			4,663			5,262			5,298			10,229			10,560
Operating income before income taxes	941			928			1,221			1,604			832			912			1,869			1,744
Income tax expense	142			196			307			449			201			222			338			423
Operating income	$	799		$	732		$	914		$	1,155		$	631		$	690		$	1,531		$	1,321
Other statistics
Effective tax rate on net investment income	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%	19.1		%	14.9		%	19.0		%
Net investment income (after-tax)	$	474		$	547		$	616		$	653		$	610		$	617		$	1,021		$	1,227
Catastrophes, net of reinsurance:
Pre-tax	$	83		$	200		$	158		$	16		$	471		$	439		$	283		$	910
After-tax	$	54		$	130		$	103		$	10		$	312		$	285		$	184		$	597

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

5

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

																		YTD		YTD
	1Q			2Q		3Q			4Q			1Q			2Q			2Q		2Q
	2009			2009		2009			2009			2010			2010			2009		2010
Statutory underwriting
Gross written premiums	$	5,863		$	5,969	$	5,935		$	5,518		$	5,803		$	5,974		$	11,832	$	11,777
Net written premiums	$	5,203		$	5,605	$	5,340		$	5,188		$	5,251		$	5,688		$	10,808	$	10,939
Net earned premiums	$	5,301		$	5,353	$	5,421		$	5,343		$	5,230		$	5,340		$	10,654	$	10,570
Losses and loss adjustment expenses	3,159			3,300		3,090			2,736			3,349			3,382			6,459		6,731
Underwriting expenses	1,710			1,724		1,770			1,658			1,708			1,757			3,434		3,465
Statutory underwriting gain	432			329		561			949			173			201			761		374
Policyholder dividends	8			6		7			4			8			7			14		15
Statutory underwriting gain after policyholder dividends	$	424		$	323	$	554		$	945		$	165		$	194		$	747	$	359
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	41,156		$	41,495	$	41,357		$	40,923		$	40,849		$	40,766		$	41,495	$	40,766
Increase (decrease) in reserves	$	(151	)	$	339	$	(138	)	$	(434	)	$	(74	)	$	(83	)	$	188	$	(157	)
Statutory surplus	$	21,561		$	21,267	$	22,050		$	23,195		$	21,607		$	21,077		$	21,267	$	21,077
Net written premiums/surplus (1)	1.01:1			1.02:1		0.98:1			0.92:1			0.99:1			1.02:1			1.02:1		1.02:1

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

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

6

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Written premiums
Gross	$	5,863		$	5,969		$	5,935		$	5,518		$	5,803		$	5,974		$	11,832		$	11,777
Ceded	(660		)	(364		)	(595		)	(330		)	(552		)	(286		)	(1,024		)	(838		)
Net	$	5,203		$	5,605		$	5,340		$	5,188		$	5,251		$	5,688		$	10,808		$	10,939
Earned premiums
Gross	$	5,808		$	5,862		$	5,915		$	5,835		$	5,697		$	5,770		$	11,670		$	11,467
Ceded	(507		)	(509		)	(494		)	(492		)	(467		)	(430		)	(1,016		)	(897		)
Net	$	5,301		$	5,353		$	5,421		$	5,343		$	5,230		$	5,340		$	10,654		$	10,570

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

7

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Premiums	$	2,757		$	2,770		$	2,768		$	2,673		$	2,628		$	2,663		$	5,527		$	5,291
Net investment income	355			451			529			567			528			537			806			1,065
Fee income	73			89			72			72			79			76			162			155
Other revenues	6			12			14			10			6			7			18			13
Total revenues	3,191			3,322			3,383			3,322			3,241			3,283			6,513			6,524
Claims and expenses
Claims and claim adjustment expenses	1,618			1,644			1,508			1,267			1,583			1,621			3,262			3,204
Amortization of deferred acquisition costs	449			450			448			428			425			439			899			864
General and administrative expenses (1)	467			493			517			489			481			469			960			950
Total claims and expenses	2,534			2,587			2,473			2,184			2,489			2,529			5,121			5,018
Operating income before federal income taxes	657			735			910			1,138			752			754			1,392			1,506
Income taxes	110			175			242			323			185			187			285			372
Operating income	$	547		$	560		$	668		$	815		$	567		$	567		$	1,107		$	1,134
Other statistics
Effective tax rate on net investment income	10.8		%	15.9		%	18.8		%	19.7		%	18.6		%	18.8		%	13.6		%	18.7		%
Net investment income (after-tax)	$	317		$	379		$	429		$	456		$	430		$	435		$	696		$	865
Catastrophes, net of reinsurance:
Pre-tax	$	12		$	59		$	86		$	19		$	135		$	179		$	71		$	314
After-tax	$	8		$	38		$	56		$	12		$	88		$	116		$	46		$	204

(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)  

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Underwriting gain	$	226		$	172		$	228		$	351		$	132		$	127		$	398		$	259
Net investment income	317			379			429			456			430			435			696			865
Other	4			9			11			8			5			5			13			10
Operating income	$	547		$	560		$	668		$	815		$	567		$	567		$	1,107		$	1,134
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	57.8		%	57.6		%	53.5		%	46.3		%	58.7		%	59.5		%	57.7		%	59.1		%
Underwriting expense ratio (3)	31.2		%	32.2		%	33.0		%	32.5		%	32.7		%	32.3		%	31.7		%	32.5		%
Combined ratio	89.0		%	89.8		%	86.5		%	78.8		%	91.4		%	91.8		%	89.4		%	91.6		%
Impact of catastrophes on combined ratio	0.4		%	2.1		%	3.1		%	0.7		%	5.1		%	6.7		%	1.3		%	6.0		%
Impact of prior year reserve development on combined ratio	-6.6		%	-7.8		%	-9.5		%	-13.6		%	-9.2		%	-11.3		%	-7.2		%	-10.3		%

(1)  Before policyholder dividends.

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Billing and policy fees	$	4	$	4	$	4	$	4	$	4	$	4	$	8	$	8
Fee income:
Loss and loss adjustment expenses	$	20	$	42	$	24	$	28	$	36	$	31	$	62	$	67
Underwriting expenses	53		47		48		44		43		45		100		88
Total fee income	$	73	$	89	$	72	$	72	$	79	$	76	$	162	$	155

(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), (0.4), and (0.7) points for 1Q 2009, 2Q 2009, and YTD 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)

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Statutory underwriting
Gross written premiums	$	3,294	$	3,046	$	3,029	$	2,729	$	3,118	$	2,996	$	6,340	$	6,114
Net written premiums	$	2,963	$	2,813	$	2,611	$	2,515	$	2,834	$	2,795	$	5,776	$	5,629
Net earned premiums	$	2,757	$	2,770	$	2,768	$	2,673	$	2,628	$	2,663	$	5,527	$	5,291
Losses and loss adjustment expenses	1,592		1,603		1,479		1,240		1,547		1,586		3,195		3,133
Underwriting expenses	903		877		892		820		866		869		1,780		1,735
Statutory underwriting gain	262		290		397		613		215		208		552		423
Policyholder dividends	4		4		4		3		4		6		8		10
Statutory underwriting gain after policyholder dividends	$	258	$	286	$	393	$	610	$	211	$	202	$	544	$	413

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

10

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

														YTD			YTD
	1Q			2Q		3Q		4Q		1Q		2Q		2Q			2Q
	2009			2009		2009		2009		2010		2010		2009			2010
Net written premiums by market
Select Accounts	$	731		$	732	$	655	$	638	$	702	$	716	$	1,463		$	1,418
Commercial Accounts	710			564		609		610		706		581		1,274			1,287
National Accounts	259			227		197		219		226		194		486			420
Industry-Focused Underwriting	617			581		564		517		569		584		1,198			1,153
Target Risk Underwriting	422			458		360		328		412		469		880			881
Specialized Distribution	222			247		221		199		215		247		469			462
Total core	2,961			2,809		2,606		2,511		2,830		2,791		5,770			5,621
Business Insurance other	2			4		5		4		4		4		6			8
Total	$	2,963		$	2,813	$	2,611	$	2,515	$	2,834	$	2,795	$	5,776		$	5,629
Net written premiums by product line
Commercial multi-peril	$	789		$	730	$	682	$	732	$	784	$	752	$	1,519		$	1,536
Workers’ compensation	748			593		587		558		725		600		1,341			1,325
Commercial automobile	485			497		498		447		483		492		982			975
Property	463			507		401		356		430		493		970			923
General liability	479			486		443		421		412		458		965			870
Other	(1		)	—		—		1		—		—		(1		)	—
Total	$	2,963		$	2,813	$	2,611	$	2,515	$	2,834	$	2,795	$	5,776		$	5,629
National accounts
Additions to claim volume under administration (1)	$	594		$	452	$	403	$	454	$	536	$	399	$	1,046		$	935
Written fees	$	85		$	70	$	65	$	63	$	74	$	64	$	155		$	138

(1)  Includes new and renewal business.

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

11

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Premiums	$	801		$	810		$	861		$	861		$	824		$	855		$	1,611		$	1,679
Net investment income	104			107			118			123			111			110			211			221
Other revenues	6			7			7			7			6			7			13			13
Total revenues	911			924			986			991			941			972			1,835			1,913
Claims and expenses
Claims and claim adjustment expenses	442			442			463			400			516			414			884			930
Amortization of deferred acquisition costs	146			151			162			163			153			153			297			306
General and administrative expenses (1)	138			146			141			154			149			148			284			297
Total claims and expenses	726			739			766			717			818			715			1,465			1,533
Operating income before federal income taxes	185			185			220			274			123			257			370			380
Income taxes	37			52			53			80			37			85			89			122
Operating income	$	148		$	133		$	167		$	194		$	86		$	172		$	281		$	258
Other statistics
Effective tax rate on net investment income	19.4		%	20.9		%	21.7		%	20.8		%	21.0		%	20.7		%	20.2		%	20.9		%
Net investment income (after-tax)	$	84		$	84		$	93		$	97		$	87		$	89		$	168		$	176
Catastrophes, net of reinsurance (2):
Pre-tax	$	—		$	2		$	4		$	(3	)	$	86		$	3		$	2		$	89
After-tax	$	—		$	1		$	3		$	(2	)	$	62		$	2		$	1		$	64

(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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Underwriting gain (loss)	$	60		$	44		$	69		$	93		$	(5	)	$	79		$	104		$	74
Net investment income	84			84			93			97			87			89			168			176
Other	4			5			5			4			4			4			9			8
Operating income	$	148		$	133		$	167		$	194		$	86		$	172		$	281		$	258
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	54.7		%	54.4		%	53.3		%	46.3		%	62.3		%	48.1		%	54.5		%	55.1		%
Underwriting expense ratio (2)	35.5		%	36.5		%	35.4		%	36.8		%	36.6		%	35.2		%	36.0		%	35.9		%
Combined ratio	90.2		%	90.9		%	88.7		%	83.1		%	98.9		%	83.3		%	90.5		%	91.0		%
Impact of catastrophes on combined ratio	0.0		%	0.2		%	0.5		%	-0.3		%	10.4		%	0.4		%	0.1		%	5.3		%
Impact of prior year reserve development on combined ratio	-1.4		%	-1.4		%	-2.9		%	-13.9		%	-4.2		%	-8.4		%	-1.5		%	-6.3		%

(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) and (0.1) for 1Q 2009 and YTD 2Q 2009, respectively.

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

13

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

														YTD		YTD
	1Q		2Q		3Q		4Q		1Q			2Q		2Q		2Q
	2009		2009		2009		2009		2010			2010		2009		2010
Statutory underwriting
Gross written premiums	$	842	$	975	$	918	$	978	$	898		$	915	$	1,817	$	1,813
Net written premiums	$	563	$	914	$	870	$	938	$	681		$	889	$	1,477	$	1,570
Net earned premiums	$	801	$	810	$	861	$	861	$	824		$	855	$	1,611	$	1,679
Losses and loss adjustment expenses	437		448		459		403		513			412		885		925
Underwriting expenses	286		298		288		301		308			303		584		611
Statutory underwriting gain	78		64		114		157		3			140		142		143
Policyholder dividends	4		2		3		1		4			1		6		5
Statutory underwriting gain (loss) after policyholder dividends	$	74	$	62	$	111	$	156	$	(1	)	$	139	$	136	$	138

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

14

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Net written premiums by market
Bond & Financial Products	$	334	$	558	$	574	$	574	$	362	$	559	$	892	$	921
International	229		356		296		364		319		330		585		649
Total	$	563	$	914	$	870	$	938	$	681	$	889	$	1,477	$	1,570
Net written premiums by product line
General liability	$	129	$	256	$	252	$	269	$	132	$	232	$	385	$	364
Fidelity & surety	170		265		291		274		194		292		435		486
International	229		356		296		364		319		330		585		649
Other	35		37		31		31		36		35		72		71
Total	$	563	$	914	$	870	$	938	$	681	$	889	$	1,477	$	1,570

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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Premiums	$	1,743		$	1,773		$	1,792		$	1,809		$	1,778		$	1,822		$	3,516		$	3,600
Net investment income	83			100			116			123			114			115			183			229
Other revenues	21			21			20			22			20			18			42			38
Total revenues	1,847			1,894			1,928			1,954			1,912			1,955			3,741			3,867
Claims and expenses
Claims and claim adjustment expenses	1,130			1,249			1,152			1,093			1,289			1,384			2,379			2,673
Amortization of deferred acquisition costs	349			352			357			358			351			358			701			709
General and administrative expenses (1)	170			187			220			207			207			210			357			417
Total claims and expenses	1,649			1,788			1,729			1,658			1,847			1,952			3,437			3,799
Operating income before federal income taxes	198			106			199			296			65			3			304			68
Income taxes	44			18			50			86			6			(16		)	62			(10		)
Operating income	$	154		$	88		$	149		$	210		$	59		$	19		$	242		$	78
Other statistics
Effective tax rate on net investment income	12.0		%	16.1		%	18.7		%	19.5		%	18.6		%	18.7		%	14.2		%	18.6		%
Net investment income (after-tax)	$	73		$	84		$	94		$	100		$	93		$	93		$	157		$	186
Catastrophes, net of reinsurance:
Pre-tax	$	71		$	139		$	68		$	—		$	250		$	257		$	210		$	507
After-tax	$	46		$	91		$	44		$	—		$	162		$	167		$	137		$	329

(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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Underwriting gain (loss)	$	67		$	(10	)	$	41		$	96		$	(47	)	$	(87	)	$	57		$	(134	)
Net investment income	73			84			94			100			93			93			157			186
Other	14			14			14			14			13			13			28			26
Operating income	$	154		$	88		$	149		$	210		$	59		$	19		$	242		$	78
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	64.9		%	70.5		%	64.3		%	60.4		%	72.5		%	76.0		%	67.6		%	74.3		%
Underwriting expense ratio (2)	28.4		%	29.1		%	30.9		%	30.0		%	30.1		%	29.9		%	28.8		%	30.0		%
Combined ratio	93.3		%	99.6		%	95.2		%	90.4		%	102.6		%	105.9		%	96.4		%	104.3		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.7		%	97.7		%	93.3		%	89.0		%	100.9		%	104.0		%	94.7		%	102.5		%
Impact of catastrophes on combined ratio	4.1		%	7.9		%	3.8		%	0.0		%	14.0		%	14.0		%	6.0		%	14.1		%
Impact of prior year reserve development on combined ratio	-3.7		%	-1.9		%	-1.3		%	-0.8		%	-1.0		%	-0.5		%	-2.8		%	-0.8		%

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Billing and policy fees	$	23	$	23	$	22	$	23	$	23	$	21	$	46	$	44

(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), (0.8), and (1.4) points for 1Q 2009, 2Q 2009, and YTD 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)

																YTD		YTD
	1Q		2Q			3Q		4Q		1Q			2Q			2Q		2Q
	2009		2009			2009		2009		2010			2010			2009		2010
Statutory underwriting
Gross written premiums	$	1,727	$	1,948		$	1,988	$	1,811	$	1,787		$	2,063		$	3,675	$	3,850
Net written premiums	$	1,677	$	1,878		$	1,859	$	1,735	$	1,736		$	2,004		$	3,555	$	3,740
Net earned premiums	$	1,743	$	1,773		$	1,792	$	1,809	$	1,778		$	1,822		$	3,516	$	3,600
Losses and loss adjustment expenses	1,130		1,249			1,152		1,093		1,289			1,384			2,379		2,673
Underwriting expenses	521		549			590		537		534			585			1,070		1,119
Statutory underwriting gain (loss)	$	92	$	(25	)	$	50	$	179	$	(45	)	$	(147	)	$	67	$	(192	)
Policies in force (in thousands)
Automobile	2,509		2,491			2,482		2,480		2,489			2,516			2,491		2,516
Homeowners and other	4,861		4,901			4,944		4,985		5,030			5,100			4,901		5,100

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

18

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Statutory underwriting
Gross written premiums	$	924		$	919		$	905		$	862		$	917		$	951		$	1,843		$	1,868
Net written premiums	$	917		$	914		$	898		$	857		$	913		$	945		$	1,831		$	1,858
Net earned premiums	$	913		$	917		$	915		$	916		$	892		$	905		$	1,830		$	1,797
Losses and loss adjustment expenses	668			639			643			682			613			638			1,307			1,251
Underwriting expenses	254			249			247			237			249			254			503			503
Statutory underwriting gain (loss)	$	(9	)	$	29		$	25		$	(3	)	$	30		$	13		$	20		$	43
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	73.2		%	69.7		%	70.2		%	74.5		%	68.7		%	70.5		%	71.4		%	69.6		%
Underwriting expense ratio	27.0		%	26.7		%	27.1		%	26.4		%	26.7		%	26.9		%	26.8		%	26.8		%
Combined ratio	100.2		%	96.4		%	97.3		%	100.9		%	95.4		%	97.4		%	98.2		%	96.4		%
Impact of catastrophes on combined ratio	0.9		%	1.0		%	0.8		%	0.0		%	0.8		%	1.6		%	0.9		%	1.2		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	8		$	9		$	7		$	—		$	7		$	14		$	17		$	21
After-tax	$	5		$	6		$	5		$	—		$	4		$	10		$	11		$	14
Policies in force (in thousands)	2,489			2,466			2,451			2,443			2,447			2,468
Change from prior year quarter	-0.2		%	-2.3		%	-3.0		%	-2.7		%	-1.7		%	0.1		%
Change from prior quarter	-0.9		%	-0.9		%	-0.6		%	-0.3		%	0.2		%	0.9		%

(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:

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Billing and policy fees	$	13	$	14	$	12	$	13	$	13	$	11	$	27	$	24

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

19

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Statutory underwriting
Gross written premiums	$	792		$	1,018		$	1,067		$	932		$	849		$	1,089		$	1,810		$	1,938
Net written premiums	$	749		$	952		$	946		$	861		$	803		$	1,035		$	1,701		$	1,838
Net earned premiums	$	824		$	846		$	865		$	879		$	870		$	897		$	1,670		$	1,767
Losses and loss adjustment expenses	458			599			499			399			662			729			1,057			1,391
Underwriting expenses	239			268			306			275			252			292			507			544
Statutory underwriting gain (loss)	$	127		$	(21	)	$	60		$	205		$	(44	)	$	(124	)	$	106		$	(168	)
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	55.6		%	70.8		%	57.7		%	45.4		%	76.1		%	81.3		%	63.3		%	78.7		%
Underwriting expense ratio	26.8		%	28.4		%	31.3		%	31.2		%	30.6		%	29.4		%	27.6		%	30.0		%
Combined ratio	82.4		%	99.2		%	89.0		%	76.6		%	106.7		%	110.7		%	90.9		%	108.7		%
Impact of catastrophes on combined ratio	7.6		%	15.3		%	7.0		%	0.0		%	27.9		%	26.8		%	11.5		%	27.3		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	63		$	130		$	61		$	—		$	242		$	241		$	193		$	483
After-tax	$	41		$	85		$	39		$	—		$	158		$	156		$	126		$	314
Policies in force (in thousands)	4,850			4,886			4,923			4,959			5,000			5,064
Change from prior year quarter	3.1		%	2.8		%	2.5		%	2.8		%	3.1		%	3.6		%
Change from prior quarter	0.5		%	0.7		%	0.8		%	0.7		%	0.8		%	1.3		%

(1)	Represents Homeowners and Other Lines sold through agents, brokers and other intermediaries, and excludes direct to consumer.
(2)	Billing and policy fees, which are a component of other revenues, are allocated as a reduction of underwriting expenses. Billing and policy fees are as follows:

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2009		2009		2009		2009		2010		2010		2009		2010
Billing and policy fees	$	10	$	9	$	10	$	10	$	10	$	9	$	19	$	19

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

20

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Revenues
Net investment income	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Other revenues	—			9			1			—			—			—			9			—
Total revenues	—			9			1			—			—			—			9			—
Claims and expenses
Interest expense	92			94			98			98			98			97			186			195
General and administrative expenses	7			13			11			6			10			5			20			15
Total claims and expenses	99			107			109			104			108			102			206			210
Operating loss before federal income tax benefit	(99		)	(98		)	(108		)	(104		)	(108		)	(102		)	(197		)	(210		)
Income taxes	(49		)	(49		)	(38		)	(40		)	(27		)	(34		)	(98		)	(61		)
Operating loss	$	(50	)	$	(49	)	$	(70	)	$	(64	)	$	(81	)	$	(68	)	$	(99	)	$	(149	)

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

21

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

	June 30,		December 31,
	2010 (1)		2009
Assets
Fixed maturities, available for sale, at fair value (including $146 and $90 subject to securities lending) (amortized cost $61,561 and $63,311)	$	64,891	$	65,847
Equity securities, available for sale, at fair value (cost $389 and $373)	585		451
Real estate	846		865
Short-term securities	3,859		4,852
Other investments	2,948		2,950
Total investments	73,129		74,965
Cash	266		255
Investment income accrued	799		825
Premiums receivable	5,840		5,471
Reinsurance recoverables	12,273		12,816
Ceded unearned premiums	848		916
Deferred acquisition costs	1,804		1,758
Deferred tax asset	368		672
Contractholder receivables	5,595		5,797
Goodwill	3,365		3,365
Other intangible assets	543		588
Other assets	2,193		2,132
Total assets	$	107,023	$	109,560

	June 30,			December 31,
	2010 (1)			2009
Liabilities
Claims and claim adjustment expense reserves	$	52,271		$	53,127
Unearned premium reserves	11,092			10,861
Contractholder payables	5,595			5,797
Payables for reinsurance premiums	467			546
Debt	6,276			6,527
Other liabilities	5,036			5,287
Total liabilities	80,737			82,145
Shareholders’ equity
Preferred Stock Savings Plan - convertible preferred stock (0.2 shares issued and outstanding at both dates)	72			79
Common stock (1,748.6 shares authorized; 470.8 and 520.3 shares issued and outstanding)	19,884			19,593
Retained earnings	17,285			16,315
Accumulated other changes in equity from nonowner sources	1,690			1,219
Treasury stock, at cost (255.6 and 199.6 shares)	(12,645		)	(9,791		)
Total shareholders’ equity	26,286			27,415
Total liabilities and shareholders’ equity	$	107,023		$	109,560

(1) Preliminary.

22

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

	June 30,		Pre-tax Book		December 31,		Pre-tax Book
	2010		Yield (1)		2009		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	24,152	4.95	%	$	25,006	4.91	%
Tax-exempt fixed maturities	40,739		4.09	%	40,841		4.08	%
Total fixed maturities	64,891		4.41	%	65,847		4.40	%
Non-redeemable preferred stocks	232		6.60	%	232		6.60	%
Common stocks	353				219
Total equity securities	585				451
Real estate	846				865
Short-term securities	3,859		0.21	%	4,852		0.19	%
Private equities	1,652				1,557
Hedge funds	493				472
Real estate partnerships	518				508
Mortgage loans	38		6.28	%	40		6.56	%
Trading securities	20				24
Other investments	227				349
Total other investments	2,948				2,950
Total investments	$	73,129			$	74,965
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	2,381			$	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)

	June 30,		December 31,
	2010		2009
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,164	$	2,574
Obligations of states and political subdivisions	41,222		41,333
Debt securities issued by foreign governments	1,802		1,957
Mortgage-backed securities - principally obligations of U.S. Government agencies	4,810		5,207
Corporates (including redeemable preferreds)	14,893		14,776
Total fixed maturities	$	64,891	$	65,847
Fixed Maturities
Quality Characteristics (1)
	June 30, 2010
	Amount		% of Total
Quality Ratings
Aaa	$	31,845	49.1		%
Aa	20,443		31.5
A	6,413		9.9
Baa	4,306		6.6
Total investment grade	63,007		97.1
Ba	818		1.3
B	658		1.0
Caa and lower	408		0.6
Total below investment grade	1,884		2.9
Total fixed maturities	$	64,891	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	3.8

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

24

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Gross investment income
Fixed maturities	$	713		$	691		$	703		$	715		$	691		$	678		$	1,404		$	1,369
Short-term securities	10			7			5			5			3			3			17			6
Other	(175		)	(33		)	63			105			66			89			(208		)	155
	548			665			771			825			760			770			1,213			1,530
Investment expenses	6			7			8			12			7			8			13			15
Net investment income, pre-tax	542			658			763			813			753			762			1,200			1,515
Income taxes	68			111			147			160			143			145			179			288
Net investment income, after-tax	$	474		$	547		$	616		$	653		$	610		$	617		$	1,021		$	1,227
Effective tax rate	12.6		%	16.7		%	19.2		%	19.8		%	18.9		%	19.1		%	14.9		%	19.0		%
Average invested assets (1)	$	72,720		$	72,589		$	73,515		$	73,573		$	72,659		$	71,294		$	72,713		$	71,987
Average yield pre-tax (1)	3.0		%	3.6		%	4.2		%	4.4		%	4.1		%	4.3		%	3.3		%	4.2		%
Average yield after-tax	2.6		%	3.0		%	3.4		%	3.5		%	3.4		%	3.5		%	2.8		%	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)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Net realized investment gains (losses)
Fixed maturities	$	(100	)	$	(2	)	$	19		$	14		$	22		$	17		$	(102	)	$	39
Equity securities	(74		)	1			2			3			8			3			(73		)	11
Other (1) (2)	(40		)	14			8			172			(5		)	(51		)	(26		)	(56		)
Realized investment gains (losses) before tax	(214		)	13			29			189			25			(31		)	(201		)	(6		)
Related taxes	(77		)	5			8			59			9			(11		)	(72		)	(2		)
Net realized investment gains (losses)	$	(137	)	$	8		$	21		$	130		$	16		$	(20	)	$	(129	)	$	(4	)
Gross investment gains (1)	$	105		$	116		$	132		$	310		$	89		$	75		$	221		$	164
Gross investment losses before impairments (1)	(135		)	(73		)	(84		)	(96		)	(54		)	(102		)	(208		)	(156		)
Net investment gains (losses) before impairments	(30		)	43			48			214			35			(27		)	13			8
Other-than-temporary impairment losses:
Total losses	(184		)	(75		)	(43		)	(21		)	(1		)	2			(259		)	1
Portion of losses recognized in accumulated other changes in equity from nonowner sources	—			45			24			(4		)	(9		)	(6		)	45			(15		)
Other-than-temporary impairment losses	(184		)	(30		)	(19		)	(25		)	(10		)	(4		)	(214		)	(14		)
Net realized investment gains (losses) before tax	(214		)	13			29			189			25			(31		)	(201		)	(6		)
Related taxes	(77		)	5			8			59			9			(11		)	(72		)	(2		)
Net realized investment gains (losses)	$	(137	)	$	8		$	21		$	130		$	16		$	(20	)	$	(129	)	$	(4	)

	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
	2009		2009		2009		2009		2010		2010
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	732	$	1,139	$	3,142	$	2,536	$	2,653	$	3,330
Equity securities & other	71		157		262		294		296		296
Unrealized investment gains before tax	803		1,296		3,404		2,830		2,949		3,626
Related taxes	260		431		1,168		969		1,011		1,245
Balance, end of period	$	543	$	865	$	2,236	$	1,861	$	1,938	$	2,381

(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	$	37	$	147	$	63
Gross investment Treasury future losses	$	76	$	46	$	50	$	47	$	33	$	63	$	122	$	96

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)

	June 30,			December 31,
	2010			2009
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	7,585		$	8,138
Allowance for uncollectible reinsurance	(464		)	(523		)
Net reinsurance recoverables	7,121			7,615
Mandatory pools and associations	1,727			1,745
Structured settlements	3,425			3,456
Total reinsurance recoverables	$	12,273		$	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	June 30,		December 31,
Reinsurer	Predominant Reinsurer	2010		2009
Swiss Re Group	A third highest of 16 ratings	$	772	$	895
Munich Re Group	A+ second highest of 16 ratings	741		779
Transatlantic Holdings, Inc.	A third highest of 16 ratings	420		485
XL Capital Group	A third highest of 16 ratings	375		398
Berkshire Hathaway Group	A++ highest of 16 ratings	365		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 June 30, 2010, after deducting mandatory pools and associations and structured settlement balances, $5.6 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 June 30, 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	June 30,		December 31,
Group	Predominant Insurer	2010		2009
Old Mutual	A- fourth highest of 16 ratings	$	1,042	$	1,050
Metlife	A+ second highest of 16 ratings	520		529
Genworth	A third highest of 16 ratings	465		472
Symetra	A third highest of 16 ratings	282		286
ING Group	A third highest of 16 ratings	232		235

27

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Business Insurance
Beginning of period	$	32,270		$	32,043		$	31,986		$	31,750		$	31,289		$	31,079		$	32,270		$	31,289
Incurred	1,592			1,603			1,479			1,240			1,547			1,586			3,195			3,133
Paid	(1,816		)	(1,688		)	(1,726		)	(1,704		)	(1,747		)	(1,751		)	(3,504		)	(3,498		)
Foreign exchange and other	(3		)	28			11			3			(10		)	(14		)	25			(24		)
End of period	$	32,043		$	31,986		$	31,750		$	31,289		$	31,079		$	30,900		$	31,986		$	30,900
Financial, Professional & International Insurance
Beginning of period	$	5,397		$	5,503		$	5,821		$	5,970		$	6,003		$	6,022		$	5,397		$	6,003
Incurred	437			448			459			403			513			412			885			925
Paid	(309		)	(338		)	(354		)	(386		)	(443		)	(363		)	(647		)	(806		)
Foreign exchange and other	(22		)	208			44			16			(51		)	(76		)	186			(127		)
End of period	$	5,503		$	5,821		$	5,970		$	6,003		$	6,022		$	5,995		$	5,821		$	5,995
Personal Insurance
Beginning of period	$	3,640		$	3,610		$	3,688		$	3,637		$	3,631		$	3,748		$	3,640		$	3,631
Incurred	1,130			1,249			1,152			1,093			1,289			1,384			2,379			2,673
Paid	(1,160		)	(1,171		)	(1,203		)	(1,099		)	(1,172		)	(1,261		)	(2,331		)	(2,433		)
End of period	$	3,610		$	3,688		$	3,637		$	3,631		$	3,748		$	3,871		$	3,688		$	3,871
Total
Beginning of period	$	41,307		$	41,156		$	41,495		$	41,357		$	40,923		$	40,849		$	41,307		$	40,923
Incurred	3,159			3,300			3,090			2,736			3,349			3,382			6,459			6,731
Paid	(3,285		)	(3,197		)	(3,283		)	(3,189		)	(3,362		)	(3,375		)	(6,482		)	(6,737		)
Foreign exchange and other	(25		)	236			55			19			(61		)	(90		)	211			(151		)
End of period	$	41,156		$	41,495		$	41,357		$	40,923		$	40,849		$	40,766		$	41,495		$	40,766
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	185		$	—		$	—		$	—		$	—		$	—
Environmental	—			70			—			—			—			35			70			35
All other	(182		)	(286		)	(447		)	(366		)	(242		)	(338		)	(468		)	(580		)
Prior year development excluding accretion of discount	(182		)	(216		)	(262		)	(366		)	(242		)	(303		)	(398		)	(545		)
Accretion of discount	14			14			14			12			11			12			28			23
Total Business Insurance	(168		)	(202		)	(248		)	(354		)	(231		)	(291		)	(370		)	(522		)
Financial, Professional & International Insurance	(12		)	(11		)	(25		)	(120		)	(34		)	(72		)	(23		)	(106		)
Personal Insurance	(64		)	(34		)	(22		)	(15		)	(18		)	(9		)	(98		)	(27		)
Total	$	(244	)	$	(247	)	$	(295	)	$	(489	)	$	(283	)	$	(372	)	$	(491	)	$	(655	)

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

28

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Asbestos reserves
Beginning reserves:
Direct	$	3,299		$	3,216		$	3,136		$	3,251		$	3,097		$	3,004		$	3,299		$	3,097
Ceded	(385		)	(363		)	(345		)	(336		)	(339		)	(320		)	(385		)	(339		)
Net	2,914			2,853			2,791			2,915			2,758			2,684			2,914			2,758
Incurred losses and loss expenses:
Direct	—			—			185			—			—			—			—			—
Ceded	—			—			—			—			—			—			—			—
Losses paid:
Direct	83			80			70			154			93			137			163			230
Ceded	(22		)	(18		)	(9		)	3			(19		)	(46		)	(40		)	(65		)
Ending reserves:
Direct	3,216			3,136			3,251			3,097			3,004			2,867			3,136			2,867
Ceded	(363		)	(345		)	(336		)	(339		)	(320		)	(274		)	(345		)	(274		)
Net	$	2,853		$	2,791		$	2,915		$	2,758		$	2,684		$	2,593		$	2,791		$	2,593
Environmental reserves
Beginning reserves:
Direct	$	400		$	378		$	425		$	411		$	389		$	373		$	400		$	389
Ceded	14			14			3			3			4			4			14			4
Net	414			392			428			414			393			377			414			393
Incurred losses and loss expenses:
Direct	—			85			—			—			—			45			85			45
Ceded	—			(15		)	—			—			—			(10		)	(15		)	(10		)
Losses paid:
Direct	22			38			14			22			16			19			60			35
Ceded	—			(4		)	—			(1		)	—			—			(4		)	—
Ending reserves:
Direct	378			425			411			389			373			399			425			399
Ceded	14			3			3			4			4			(6		)	3			(6		)
Net	$	392		$	428		$	414		$	393		$	377		$	393		$	428		$	393

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

29

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

	June 30,			December 31,
	2010			2009
Debt
Short-term debt
Commercial paper	$	100		$	100
7.415% Medium-term notes due August 23, 2010	21			21
7.81% Private placement note due September 16, 2010 (1)	2			2
8.125% Senior notes due April 15, 2010	—			250
Total short-term debt	123			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 (1)	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 (1)	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	54			58
Unamortized debt issuance costs	(66		)	(69		)
	6,153			6,154
Total debt	6,276			6,527
Preferred equity	72			79
Common equity (excluding net unrealized investment gains, net of tax)	23,833			25,475
Total capital (excluding net unrealized investment gains, net of tax)	$	30,181		$	32,081
Total debt to capital (excluding net unrealized investment gains, net of tax)	20.8		%	20.3		%

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

30

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

	June 30,			December 31,
	2010 (1)			2009
Statutory capital and surplus	$	21,077		$	23,195
GAAP adjustments
Goodwill and intangible assets	3,714			3,752
Investments	3,793			2,999
Noninsurance companies	(3,758		)	(4,166		)
Deferred acquisition costs	1,804			1,758
Deferred federal income tax	(1,332		)	(1,038		)
Current federal income tax	(91		)	(90		)
Reinsurance recoverables	255			255
Furniture, equipment & software	669			640
Employee benefits	(3		)	(12		)
Agents balances	110			110
Other	48			12
Total GAAP adjustments	5,209			4,220
GAAP shareholders’ equity	$	26,286		$	27,415

(1) Estimated and Preliminary

31

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Cash flows from operating activities
Net income	$	662		$	740		$	935		$	1,285		$	647		$	670		$	1,402		$	1,317
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	214			(13		)	(29		)	(189		)	(25		)	31			201			6
Depreciation and amortization	206			209			187			195			216			195			415			411
Deferred federal income tax expense (benefit)	22			(53		)	77			167			76			(25		)	(31		)	51
Amortization of deferred acquisition costs	944			953			967			949			929			950			1,897			1,879
Equity in (income) loss from other investments	194			58			(41		)	(85		)	(45		)	(71		)	252			(116		)
Premiums receivable	(44		)	(150		)	282			276			(97		)	(285		)	(194		)	(382		)
Reinsurance recoverables	167			371			355			523			86			442			538			528
Deferred acquisition costs	(948		)	(997		)	(970		)	(882		)	(939		)	(991		)	(1,945		)	(1,930		)
Claims and claim adjustment expense reserves	(373		)	22			(448		)	(797		)	(224		)	(468		)	(351		)	(692		)
Unearned premium reserves	64			163			25			(348		)	86			184			227			270
Other	(295		)	(327		)	75			(67		)	(179		)	(112		)	(622		)	(291		)
Net cash provided by operating activities	813			976			1,415			1,027			531			520			1,789			1,051
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,210			1,179			1,380			1,547			1,229			1,249			2,389			2,478
Proceeds from sales of investments:
Fixed maturities	630			1,234			342			599			1,646			1,135			1,864			2,781
Equity securities	16			15			6			28			19			8			31			27
Real estate	—			—			—			—			9			1			—			10
Other investments	92			48			77			294			114			75			140			189
Purchases of investments:
Fixed maturities	(2,265		)	(2,006		)	(2,079		)	(3,297		)	(2,175		)	(1,765		)	(4,271		)	(3,940		)
Equity securities	(12		)	(6		)	(4		)	(2		)	(5		)	(14		)	(18		)	(19		)
Real estate	(5		)	(4		)	(3		)	(3		)	(3		)	(5		)	(9		)	(8		)
Other investments	(112		)	(74		)	(76		)	(87		)	(104		)	(123		)	(186		)	(227		)
Net (purchases) sales of short-term securities	(451		)	(772		)	(122		)	1,715			202			848			(1,223		)	1,050
Securities transactions in course of settlement	398			(32		)	222			(193		)	95			(93		)	366			2
Other	(84		)	(121		)	(66		)	(55		)	(75		)	(70		)	(205		)	(145		)
Net cash provided by (used in) investing activities	(583		)	(539		)	(323		)	546			952			1,246			(1,122		)	2,198

32

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2009			2009			2009			2009			2010			2010			2009			2010
Cash flows from financing activities
Payment of debt	(141		)	—			(2		)	—			—			(250		)	(141		)	(250		)
Issuance of debt	—			494			—			—			—			—			494			—
Dividends paid to shareholders	(178		)	(172		)	(168		)	(175		)	(168		)	(175		)	(350		)	(343		)
Issuance of common stock - employee share options	10			18			48			104			123			76			28			199
Treasury stock acquired - share repurchase authorization	—			(750		)	(970		)	(1,539		)	(1,407		)	(1,397		)	(750		)	(2,804		)
Treasury stock acquired - net employee share-based compensation	(27		)	(1		)	(1		)	—			(38		)	(2		)	(28		)	(40		)
Excess tax benefits from share-based payment arrangements	1			1			2			4			4			1			2			5
Net cash used in financing activities	(335		)	(410		)	(1,091		)	(1,606		)	(1,486		)	(1,747		)	(745		)	(3,233		)
Effect of exchange rate changes on cash	—			10			3			2			(1		)	(4		)	10			(5		)
Net increase (decrease) in cash	(105		)	37			4			(31		)	(4		)	15			(68		)	11
Cash at beginning of period	350			245			282			286			255			251			350			255
Cash at end of period	$	245		$	282		$	286		$	255		$	251		$	266		$	282		$	266
Income taxes paid	$	34		$	329		$	210		$	303		$	44		$	265		$	363		$	309
Interest paid	$	63		$	122		$	63		$	137		$	63		$	137		$	185		$	200

33

The Travelers Companies, Inc. Financial Supplement - Second 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.  Adjusted operating income (loss) is operating income (loss) excluding preferred dividends.

Average equity is (a) the sum of total shareholders’ equity excluding preferred stock at the beginning and end of all the quarters for the period presented divided by (b) the number of quarters in the period presented times two.  Adjusted average equity is average equity excluding unrealized investment gains (losses), net of tax, for all quarters included in the calculation and, for each quarterly period included in the calculation, that quarter’s realized investment gains (losses).

Return on equity is the ratio of annualized net income (loss) to average equity for the periods presented.  Operating return on equity is the ratio of annualized adjusted operating income (loss) to adjusted average equity for the periods presented.

In the opinion of the Company’s management, operating income (loss), operating income (loss) per share, adjusted operating income (loss), average equity, adjusted average equity, return on equity and operating return on equity are meaningful indicators of underwriting and operating results.  These measures exclude net realized investment gains or losses, net of taxes, and in the case of operating return on equity, unrealized investment gains or losses, net of taxes, 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 these measures 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 management 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.

34