Exhibit 99.2

The Travelers Companies, Inc. Financial Supplement - Second Quarter 2011

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

The information included in the Financial Supplement is unaudited.  This document should be read in conjunction with the Company’s Form 10-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
	2010			2010			2010			2010			2011			2011			2010			2011
Net income (loss)	$	647		$	670		$	1,005		$	894		$	839		$	(364	)	$	1,317		$	475
Net income (loss) per share:
Basic	$	1.26		$	1.37		$	2.14		$	1.98		$	1.94		$	(0.88	)	$	2.63		$	1.11
Diluted	$	1.25		$	1.35		$	2.11		$	1.95		$	1.92		$	(0.88	)	$	2.60		$	1.10
Operating income (loss)	$	631		$	690		$	858		$	864		$	826		$	(377	)	$	1,321		$	449
Operating income (loss) per share:
Basic	$	1.23		$	1.41		$	1.83		$	1.91		$	1.91		$	(0.91	)	$	2.64		$	1.05
Diluted	$	1.22		$	1.39		$	1.81		$	1.89		$	1.89		$	(0.91	)	$	2.61		$	1.04
Return on equity	9.6		%	10.1		%	15.0		%	13.6		%	13.3		%	(5.8		)%	9.9		%	3.8		%
Operating return on equity	10.1		%	11.4		%	14.3		%	14.5		%	14.1		%	(6.6		)%	10.7		%	3.9		%
Total assets, at period end (1)	$	109,171		$	107,498		$	108,629		$	105,656		$	105,252		$	106,468		$	107,498		$	106,468
Total equity, at period end	$	26,671		$	26,286		$	27,295		$	25,475		$	25,243		$	25,008		$	26,286		$	25,008
Book value per share, at period end	$	53.50		$	55.67		$	59.11		$	58.47		$	59.91		$	59.62		$	55.67		$	59.62
Less: Net unrealized investment gains, net of tax	3.90			5.05			6.49			4.28			4.32			5.34			5.05			5.34
Adjusted book value per share, at period end	$	49.60		$	50.62		$	52.62		$	54.19		$	55.59		$	54.28		$	50.62		$	54.28
Weighted average number of common shares outstanding (basic)	508.4			484.5			465.9			447.9			428.2			418.6			496.3			423.3
Weighted average number of common shares outstanding and common stock equivalents (diluted)	515.1			490.8			472.0			454.7			434.4			418.6			502.6			429.1
Common shares outstanding at period end	497.0			470.8			460.5			434.6			420.3			419.5			470.8			419.5
Common stock dividends declared	$	168		$	173		$	169		$	160		$	155		$	175		$	341		$	330
Common stock repurchased:
Under Board of Director authorization
Shares	27.0			28.0			11.8			28.9			18.9			3.9			55.0			22.8
Cost	$	1,400		$	1,400		$	600		$	1,600		$	1,100		$	237		$	2,800		$	1,337
Other
Shares	0.8			0.2			—			0.3			0.8			0.6			1.0			1.4
Cost	$	40		$	14		$	—		$	12		$	46		$	36		$	54		$	82

(1)  Includes impact from certain reclassifications made to 2010 amounts to conform to 2011 presentation.

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

1

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

															YTD			YTD
	1Q		2Q			3Q		4Q		1Q		2Q			2Q			2Q
	2010		2010			2010		2010		2011		2011			2010			2011
Net income (loss)
Operating income (loss)	$	631	$	690		$	858	$	864	$	826	$	(377	)	$	1,321		$	449
Net realized investment gains (losses)	16		(20		)	147		30		13		13			(4		)	26
Net income (loss)	$	647	$	670		$	1,005	$	894	$	839	$	(364	)	$	1,317		$	475
Basic earnings per share
Operating income (loss)	$	1.23	$	1.41		$	1.83	$	1.91	$	1.91	$	(0.91	)	$	2.64		$	1.05
Net realized investment gains (losses)	0.03		(0.04		)	0.31		0.07		0.03		0.03			(0.01		)	0.06
Net income (loss)	$	1.26	$	1.37		$	2.14	$	1.98	$	1.94	$	(0.88	)	$	2.63		$	1.11
Diluted earnings per share
Operating income (loss)	$	1.22	$	1.39		$	1.81	$	1.89	$	1.89	$	(0.91	)	$	2.61		$	1.04
Net realized investment gains (losses)	0.03		(0.04		)	0.30		0.06		0.03		0.03			(0.01		)	0.06
Net income (loss)	$	1.25	$	1.35		$	2.11	$	1.95	$	1.92	$	(0.88	)	$	2.60		$	1.10

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Basic
Net income (loss), as reported	$	647		$	670		$	1,005		$	894		$	839		$	(364	)	$	1,317		$	475
Preferred stock dividends	(1		)	—			(1		)	(1		)	(1		)	—			(1		)	(1		)
Participating share-based awards - allocated income	(5		)	(5		)	(8		)	(7		)	(7		)	(2		)	(10		)	(4		)
Net income (loss) available to common shareholders - basic	$	641		$	665		$	996		$	886		$	831		$	(366	)	$	1,306		$	470
Diluted
Net income (loss) available to common shareholders - basic	$	641		$	665		$	996		$	886		$	831		$	(366	)	$	1,306		$	470
Effect of dilutive securities:
Convertible preferred stock	1			—			1			1			1			—			1			1
Performance shares	—			—			1			1			—			—			—			—
Net income (loss) available to common shareholders - diluted	$	642		$	665		$	998		$	888		$	832		$	(366	)	$	1,307		$	471
Common Shares
Basic
Weighted average shares outstanding	508.4			484.5			465.9			447.9			428.2			418.6			496.3			423.3
Diluted
Weighted average shares outstanding	508.4			484.5			465.9			447.9			428.2			418.6			496.3			423.3
Weighted average effects of dilutive securities:
Convertible preferred stock	1.9			1.8			1.7			1.7			1.6			—			1.8			1.4
Stock options and performance shares	4.8			4.5			4.4			5.1			4.6			—			4.5			4.4
Diluted weighted average shares outstanding	515.1			490.8			472.0			454.7			434.4			418.6			502.6			429.1

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

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

2

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Premiums	$	5,230		$	5,340		$	5,422		$	5,440		$	5,371		$	5,503		$	10,570		$	10,874
Net investment income	753			762			735			809			779			758			1,515			1,537
Fee income	79			76			64			68			74			74			155			148
Net realized investment gains (losses)	25			(31		)	226			44			20			19			(6		)	39
Other revenues (1)	32			32			35			(29		)	34			34			64			68
Total revenues	6,119			6,179			6,482			6,332			6,278			6,388			12,298			12,666
Claims and expenses
Claims and claim adjustment expenses	3,388			3,419			3,213			3,190			3,382			5,141			6,807			8,523
Amortization of deferred acquisition costs	929			950			966			957			948			970			1,879			1,918
General and administrative expenses	847			832			837			890			883			907			1,679			1,790
Interest expense	98			97			95			98			96			97			195			193
Total claims and expenses	5,262			5,298			5,111			5,135			5,309			7,115			10,560			12,424
Income (loss) before income taxes	857			881			1,371			1,197			969			(727		)	1,738			242
Income tax expense (benefit)	210			211			366			303			130			(363		)	421			(233		)
Net income (loss)	$	647		$	670		$	1,005		$	894		$	839		$	(364	)	$	1,317		$	475
Net realized investment gains (losses)
Other-than-temporary impairment losses:
Total gains (losses)	$	(1	)	$	2		$	8		$	(2	)	$	2		$	5		$	1		$	7
Non-credit component of impairments recognized in accumulated other changes in equity from nonowner sources	(9		)	(6		)	(14		)	(4		)	(6		)	(9		)	(15		)	(15		)
Other-than-temporary impairment losses	(10		)	(4		)	(6		)	(6		)	(4		)	(4		)	(14		)	(8		)
Other net realized investment gains (losses)	35			(27		)	232			50			24			23			8			47
Net realized investment gains (losses)	$	25		$	(31	)	$	226		$	44		$	20		$	19		$	(6	)	$	39
Other statistics
Effective tax rate on net investment income	18.9		%	19.1		%	18.8		%	20.3		%	20.2		%	20.1		%	19.0		%	20.1		%
Net investment income (after-tax)	$	610		$	617		$	597		$	644		$	622		$	606		$	1,227		$	1,228
Catastrophes, net of reinsurance:
Pre-tax	$	471		$	439		$	117		$	86		$	186		$	1,668		$	910		$	1,854
After-tax	$	312		$	285		$	77		$	55		$	122		$	1,085		$	597		$	1,207

(1)  In 4Q 2010, “Other revenues” include $(60) million of expenses related to the Company’s purchase and retirement of $885 million of its $1 billion 6.25% fixed-to-floating rate junior subordinated debentures.

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

3

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Underwriting gain (loss)	$	80		$	119		$	302		$	303		$	249		$	(924	)	$	199		$	(675	)
Net investment income	610			617			597			644			622			606			1,227			1,228
Other, including interest expense (1)	(59		)	(46		)	(41		)	(83		)	(45		)	(59		)	(105		)	(104		)
Operating income (loss)	631			690			858			864			826			(377		)	1,321			449
Net realized investment gains (losses)	16			(20		)	147			30			13			13			(4		)	26
Net income (loss)	$	647		$	670		$	1,005		$	894		$	839		$	(364	)	$	1,317		$	475
GAAP Combined ratio (2) (3)
Loss and loss adjustment expense ratio	64.0		%	63.3		%	58.7		%	58.0		%	62.1		%	92.6		%	63.6		%	77.6		%
Underwriting expense ratio	32.4		%	31.9		%	31.9		%	32.6		%	32.6		%	32.4		%	32.2		%	32.5		%
Combined ratio	96.4		%	95.2		%	90.6		%	90.6		%	94.7		%	125.0		%	95.8		%	110.1		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	95.8		%	94.6		%	89.7		%	89.6		%	93.8		%	124.1		%	95.2		%	109.1		%
Impact of catastrophes on combined ratio	9.0		%	8.2		%	2.2		%	1.5		%	3.4		%	30.3		%	8.6		%	17.1		%
Impact of prior year reserve development on combined ratio	-5.6		%	-7.2		%	-4.1		%	-6.4		%	-4.4		%	-3.1		%	-6.4		%	-3.7		%

(1)  In 4Q 2010, “Other, including interest expense” includes $(39) million, net of tax, of expenses related to the Company’s purchase and retirement of $885 million of its $1 billion 6.25% fixed-to-floating rate junior subordinated debentures.

(2)  Before policyholder dividends.

(3)  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
	2010		2010		2010		2010		2011		2011		2010		2011
Billing and policy fees	$	27	$	25	$	27	$	25	$	26	$	25	$	52	$	51
Fee income:
Loss and loss adjustment expenses	$	36	$	31	$	23	$	30	$	33	$	34	$	67	$	67
Underwriting expenses	43		45		41		38		41		40		88		81
Total fee income	$	79	$	76	$	64	$	68	$	74	$	74	$	155	$	148

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

4

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Premiums	$	5,230		$	5,340		$	5,422		$	5,440		$	5,371		$	5,503		$	10,570		$	10,874
Net investment income	753			762			735			809			779			758			1,515			1,537
Fee income	79			76			64			68			74			74			155			148
Other revenues (1)	32			32			35			(29		)	34			34			64			68
Total revenues	6,094			6,210			6,256			6,288			6,258			6,369			12,304			12,627
Claims and expenses
Claims and claim adjustment expenses	3,388			3,419			3,213			3,190			3,382			5,141			6,807			8,523
Amortization of deferred acquisition costs	929			950			966			957			948			970			1,879			1,918
General and administrative expenses	847			832			837			890			883			907			1,679			1,790
Interest expense	98			97			95			98			96			97			195			193
Total claims and expenses	5,262			5,298			5,111			5,135			5,309			7,115			10,560			12,424
Operating income (loss) before income taxes	832			912			1,145			1,153			949			(746		)	1,744			203
Income tax expense (benefit)	201			222			287			289			123			(369		)	423			(246		)
Operating income (loss)	$	631		$	690		$	858		$	864		$	826		$	(377	)	$	1,321		$	449
Other statistics
Effective tax rate on net investment income	18.9		%	19.1		%	18.8		%	20.3		%	20.2		%	20.1		%	19.0		%	20.1		%
Net investment income (after-tax)	$	610		$	617		$	597		$	644		$	622		$	606		$	1,227		$	1,228
Catastrophes, net of reinsurance:
Pre-tax	$	471		$	439		$	117		$	86		$	186		$	1,668		$	910		$	1,854
After-tax	$	312		$	285		$	77		$	55		$	122		$	1,085		$	597		$	1,207

(1)  In 4Q 2010, “Other revenues” include $(60) million of expenses related to the Company’s purchase and retirement of $885 million of its $1 billion 6.25% fixed-to-floating rate junior subordinated debentures.

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
	2010			2010			2010			2010			2011		2011			2010			2011
Statutory underwriting
Gross written premiums	$	5,803		$	5,974		$	6,004		$	5,521		$	5,961	$	6,124		$	11,777		$	12,085
Net written premiums	$	5,251		$	5,688		$	5,462		$	5,234		$	5,437	$	5,817		$	10,939		$	11,254
Net earned premiums	$	5,230		$	5,340		$	5,422		$	5,440		$	5,371	$	5,503		$	10,570		$	10,874
Losses and loss adjustment expenses	3,349			3,382			3,185			3,156			3,342		5,100			6,731			8,442
Underwriting expenses	1,708			1,757			1,766			1,725			1,772		1,837			3,465			3,609
Statutory underwriting gain (loss)	173			201			471			559			257		(1,434		)	374			(1,177		)
Policyholder dividends	8			7			9			6			10		8			15			18
Statutory underwriting gain (loss) after policyholder dividends	$	165		$	194		$	462		$	553		$	247	$	(1,442	)	$	359		$	(1,195	)
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	40,849		$	40,766		$	40,640		$	40,235		$	40,301	$	41,482		$	40,766		$	41,482
Increase (decrease) in reserves	$	(74	)	$	(83	)	$	(126	)	$	(405	)	$	66	$	1,181		$	(157	)	$	1,247
Statutory surplus	$	21,607		$	21,077		$	20,868		$	20,066		$	20,588	$	20,224		$	21,077		$	20,224
Net written premiums/surplus (1)	0.99:1			1.02:1			1.03:1			1.08:1			1.06:1		1.09:1			1.02:1			1.09:1

(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
	2010			2010			2010			2010			2011			2011			2010			2011
Written premiums
Gross	$	5,803		$	5,974		$	6,004		$	5,521		$	5,961		$	6,124		$	11,777		$	12,085
Ceded	(552		)	(286		)	(542		)	(287		)	(524		)	(307		)	(838		)	(831		)
Net	$	5,251		$	5,688		$	5,462		$	5,234		$	5,437		$	5,817		$	10,939		$	11,254
Earned premiums
Gross	$	5,697		$	5,770		$	5,864		$	5,866		$	5,804		$	5,920		$	11,467		$	11,724
Ceded	(467		)	(430		)	(442		)	(426		)	(433		)	(417		)	(897		)	(850		)
Net	$	5,230		$	5,340		$	5,422		$	5,440		$	5,371		$	5,503		$	10,570		$	10,874

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
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Premiums	$	2,628		$	2,663		$	2,736		$	2,739		$	2,745		$	2,802		$	5,291		$	5,547
Net investment income	528			537			514			577			556			541			1,065			1,097
Fee income	79			76			64			66			74			74			155			148
Other revenues	6			7			10			5			9			10			13			19
Total revenues	3,241			3,283			3,324			3,387			3,384			3,427			6,524			6,811
Claims and expenses
Claims and claim adjustment expenses	1,583			1,621			1,683			1,617			1,773			2,579			3,204			4,352
Amortization of deferred acquisition costs	425			439			448			437			444			457			864			901
General and administrative expenses	481			469			463			491			473			492			950			965
Total claims and expenses	2,489			2,529			2,594			2,545			2,690			3,528			5,018			6,218
Operating income (loss) before federal income taxes	752			754			730			842			694			(101		)	1,506			593
Income tax expense (benefit)	185			187			187			218			90			(112		)	372			(22		)
Operating income	$	567		$	567		$	543		$	624		$	604		$	11		$	1,134		$	615
Other statistics
Effective tax rate on net investment income	18.6		%	18.8		%	18.5		%	20.3		%	20.0		%	19.9		%	18.7		%	20.0		%
Net investment income (after-tax)	$	430		$	435		$	420		$	459		$	445		$	433		$	865		$	878
Catastrophes, net of reinsurance:
Pre-tax	$	135		$	179		$	53		$	70		$	112		$	697		$	314		$	809
After-tax	$	88		$	116		$	35		$	45		$	73		$	453		$	204		$	526

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
	2010			2010			2010			2010			2011			2011			2010			2011
Underwriting gain (loss)	$	132		$	127		$	116		$	161		$	153		$	(429	)	$	259		$	(276	)
Net investment income	430			435			420			459			445			433			865			878
Other	5			5			7			4			6			7			10			13
Operating income	$	567		$	567		$	543		$	624		$	604		$	11		$	1,134		$	615
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	58.7		%	59.5		%	60.5		%	57.8		%	63.1		%	90.6		%	59.1		%	77.0		%
Underwriting expense ratio	32.7		%	32.3		%	31.6		%	32.3		%	31.8		%	32.3		%	32.5		%	32.0		%
Combined ratio	91.4		%	91.8		%	92.1		%	90.1		%	94.9		%	122.9		%	91.6		%	109.0		%
Impact of catastrophes on combined ratio	5.1		%	6.7		%	2.0		%	2.6		%	4.1		%	24.9		%	6.0		%	14.6		%
Impact of prior year reserve development on combined ratio	-9.2		%	-11.3		%	-3.8		%	-9.3		%	-5.2		%	-1.0		%	-10.3		%	-3.1		%

(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
	2010		2010		2010		2010		2011		2011		2010		2011
Billing and policy fees	$	4	$	4	$	5	$	4	$	5	$	4	$	8	$	9
Fee income:
Loss and loss adjustment expenses	$	36	$	31	$	23	$	28	$	33	$	34	$	67	$	67
Underwriting expenses	43		45		41		38		41		40		88		81
Total fee income	$	79	$	76	$	64	$	66	$	74	$	74	$	155	$	148

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
	2010		2010		2010		2010		2011		2011			2010		2011
Statutory underwriting
Gross written premiums	$	3,118	$	2,996	$	3,027	$	2,750	$	3,306	$	3,094		$	6,114	$	6,400
Net written premiums	$	2,834	$	2,795	$	2,651	$	2,577	$	3,020	$	2,879		$	5,629	$	5,899
Net earned premiums	$	2,628	$	2,663	$	2,736	$	2,739	$	2,745	$	2,802		$	5,291	$	5,547
Losses and loss adjustment expenses	1,547		1,586		1,659		1,583		1,736		2,540			3,133		4,276
Underwriting expenses	866		869		867		854		899		918			1,735		1,817
Statutory underwriting gain (loss)	215		208		210		302		110		(656		)	423		(546		)
Policyholder dividends	4		6		5		6		7		5			10		12
Statutory underwriting gain (loss) after policyholder dividends	$	211	$	202	$	205	$	296	$	103	$	(661	)	$	413	$	(558	)

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
	2010		2010		2010		2010			2011		2011		2010		2011
Net written premiums by market
Select Accounts	$	702	$	716	$	664	$	636		$	732	$	738	$	1,418	$	1,470
Commercial Accounts	706		581		655		634			822		659		1,287		1,481
National Accounts	226		194		173		213			211		188		420		399
Industry-Focused Underwriting	569		584		590		556			628		579		1,153		1,207
Target Risk Underwriting	412		469		342		350			413		468		881		881
Specialized Distribution	215		247		222		188			209		246		462		455
Total core	2,830		2,791		2,646		2,577			3,015		2,878		5,621		5,893
Business Insurance other	4		4		5		—			5		1		8		6
Total	$	2,834	$	2,795	$	2,651	$	2,577		$	3,020	$	2,879	$	5,629	$	5,899
Net written premiums by product line
Commercial multi-peril	$	784	$	752	$	728	$	731		$	841	$	780	$	1,536	$	1,621
Workers’ compensation	725		600		635		626			854		678		1,325		1,532
Commercial automobile	483		492		494		441			493		505		975		998
Property	430		493		360		358			414		468		923		882
General liability	412		458		434		422			415		442		870		857
Other	—		—		—		(1		)	3		6		—		9
Total	$	2,834	$	2,795	$	2,651	$	2,577		$	3,020	$	2,879	$	5,629	$	5,899
National accounts
Additions to claim volume under administration (1)	$	536	$	399	$	348	$	496		$	540	$	416	$	935	$	956
Written fees	$	74	$	64	$	57	$	62		$	73	$	63	$	138	$	136

(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
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Premiums	$	824		$	855		$	820		$	818		$	773		$	810		$	1,679		$	1,583
Net investment income	111			110			110			108			106			105			221			211
Fee income	—			—			—			2			—			—			—			—
Other revenues	6			7			7			7			7			6			13			13
Total revenues	941			972			937			935			886			921			1,913			1,807
Claims and expenses
Claims and claim adjustment expenses	516			414			350			420			433			378			930			811
Amortization of deferred acquisition costs	153			153			154			152			147			152			306			299
General and administrative expenses	149			148			153			158			160			160			297			320
Total claims and expenses	818			715			657			730			740			690			1,533			1,430
Operating income before federal income taxes	123			257			280			205			146			231			380			377
Income tax expense	37			85			68			55			26			67			122			93
Operating income	$	86		$	172		$	212		$	150		$	120		$	164		$	258		$	284
Other statistics
Effective tax rate on net investment income	21.0		%	20.7		%	20.6		%	20.5		%	21.2		%	21.2		%	20.9		%	21.2		%
Net investment income (after-tax)	$	87		$	89		$	86		$	86		$	84		$	82		$	176		$	166
Catastrophes, net of reinsurance (1):
Pre-tax	$	86		$	3		$	(2	)	$	(5	)	$	21		$	14		$	89		$	35
After-tax	$	62		$	2		$	(2	)	$	(3	)	$	15		$	10		$	64		$	25

(1)  In 3Q 2010 and 4Q 2010 “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
	2010			2010			2010			2010			2011			2011			2010			2011
Underwriting gain (loss)	$	(5	)	$	79		$	121		$	59		$	32		$	78		$	74		$	110
Net investment income	87			89			86			86			84			82			176			166
Other	4			4			5			5			4			4			8			8
Operating income	$	86		$	172		$	212		$	150		$	120		$	164		$	258		$	284
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	62.3		%	48.1		%	42.2		%	51.2		%	55.6		%	46.2		%	55.1		%	50.8		%
Underwriting expense ratio	36.6		%	35.2		%	37.4		%	38.0		%	39.7		%	38.6		%	35.9		%	39.1		%
Combined ratio	98.9		%	83.3		%	79.6		%	89.2		%	95.3		%	84.8		%	91.0		%	89.9		%
Impact of catastrophes on combined ratio	10.4		%	0.4		%	-0.3		%	-0.6		%	2.7		%	1.7		%	5.3		%	2.2		%
Impact of prior year reserve development on combined ratio	-4.2		%	-8.4		%	-11.8		%	-6.8		%	-5.1		%	-11.7		%	-6.3		%	-8.6		%

(1)  Before policyholder dividends.

(2)  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
	2010		2010		2010		2010		2011		2011		2010		2011
Fee income:
Loss and loss adjustment expenses	$	—	$	—	$	—	$	2	$	—	$	—	$	—	$	—
Underwriting expenses	—		—		—		—		—		—		—		—
Total fee income	$	—	$	—	$	—	$	2	$	—	$	—	$	—	$	—

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
	2010			2010		2010		2010		2011		2011		2010		2011
Statutory underwriting
Gross written premiums	$	898		$	915	$	852	$	869	$	810	$	910	$	1,813	$	1,720
Net written premiums	$	681		$	889	$	808	$	833	$	624	$	879	$	1,570	$	1,503
Net earned premiums	$	824		$	855	$	820	$	818	$	773	$	810	$	1,679	$	1,583
Losses and loss adjustment expenses	513			412		346		420		430		375		925		805
Underwriting expenses	308			303		291		290		309		312		611		621
Statutory underwriting gain	3			140		183		108		34		123		143		157
Policyholder dividends	4			1		4		—		3		3		5		6
Statutory underwriting gain (loss) after policyholder dividends	$	(1	)	$	139	$	179	$	108	$	31	$	120	$	138	$	151

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
	2010		2010		2010		2010		2011		2011		2010		2011
Net written premiums by market
Bond & Financial Products	$	362	$	559	$	547	$	513	$	369	$	533	$	921	$	902
International	319		330		261		320		255		346		649		601
Total	$	681	$	889	$	808	$	833	$	624	$	879	$	1,570	$	1,503
Net written premiums by product line
General liability	$	132	$	232	$	242	$	246	$	138	$	235	$	364	$	373
Fidelity & surety	194		292		273		236		196		265		486		461
International	319		330		261		320		255		346		649		601
Other	36		35		32		31		35		33		71		68
Total	$	681	$	889	$	808	$	833	$	624	$	879	$	1,570	$	1,503

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

15

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Premiums	$	1,778		$	1,822		$	1,866		$	1,883		$	1,853		$	1,891		$	3,600		$	3,744
Net investment income	114			115			111			124			117			112			229			229
Other revenues	20			18			18			19			18			18			38			36
Total revenues	1,912			1,955			1,995			2,026			1,988			2,021			3,867			4,009
Claims and expenses
Claims and claim adjustment expenses	1,289			1,384			1,180			1,153			1,176			2,184			2,673			3,360
Amortization of deferred acquisition costs	351			358			364			368			357			361			709			718
General and administrative expenses	207			210			215			235			235			225			417			460
Total claims and expenses	1,847			1,952			1,759			1,756			1,768			2,770			3,799			4,538
Operating income (loss) before federal income taxes	65			3			236			270			220			(749		)	68			(529		)
Income tax expense (benefit)	6			(16		)	68			76			50			(278		)	(10		)	(228		)
Operating income (loss)	$	59		$	19		$	168		$	194		$	170		$	(471	)	$	78		$	(301	)
Other statistics
Effective tax rate on net investment income	18.6		%	18.7		%	18.5		%	20.0		%	20.0		%	19.9		%	18.6		%	19.9		%
Net investment income (after-tax)	$	93		$	93		$	91		$	99		$	93		$	91		$	186		$	184
Catastrophes, net of reinsurance:
Pre-tax	$	250		$	257		$	66		$	21		$	53		$	957		$	507		$	1,010
After-tax	$	162		$	167		$	44		$	13		$	34		$	622		$	329		$	656

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

16

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Underwriting gain (loss)	$	(47	)	$	(87	)	$	65		$	83		$	64		$	(573	)	$	(134	)	$	(509	)
Net investment income	93			93			91			99			93			91			186			184
Other	13			13			12			12			13			11			26			24
Operating income (loss)	$	59		$	19		$	168		$	194		$	170		$	(471	)	$	78		$	(301	)
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	72.5		%	76.0		%	63.2		%	61.2		%	63.4		%	115.6		%	74.3		%	89.8		%
Underwriting expense ratio	30.1		%	29.9		%	29.9		%	30.9		%	30.8		%	29.9		%	30.0		%	30.3		%
Combined ratio	102.6		%	105.9		%	93.1		%	92.1		%	94.2		%	145.5		%	104.3		%	120.1		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	100.9		%	104.0		%	90.6		%	89.1		%	91.4		%	143.2		%	102.5		%	117.5		%
Impact of catastrophes on combined ratio	14.0		%	14.0		%	3.6		%	1.1		%	2.8		%	50.7		%	14.1		%	27.0		%
Impact of prior year reserve development on combined ratio	-1.0		%	-0.5		%	-1.2		%	-2.0		%	-3.0		%	-2.4		%	-0.8		%	-2.7		%

(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
	2010		2010		2010		2010		2011		2011		2010		2011
Billing and policy fees	$	23	$	21	$	22	$	21	$	21	$	21	$	44	$	42

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
	2010			2010			2010		2010		2011		2011			2010			2011
Statutory underwriting
Gross written premiums	$	1,787		$	2,063		$	2,125	$	1,902	$	1,845	$	2,120		$	3,850		$	3,965
Net written premiums	$	1,736		$	2,004		$	2,003	$	1,824	$	1,793	$	2,059		$	3,740		$	3,852
Net earned premiums	$	1,778		$	1,822		$	1,866	$	1,883	$	1,853	$	1,891		$	3,600		$	3,744
Losses and loss adjustment expenses	1,289			1,384			1,180		1,153		1,176		2,185			2,673			3,361
Underwriting expenses	534			585			608		581		564		607			1,119			1,171
Statutory underwriting gain (loss)	$	(45	)	$	(147	)	$	78	$	149	$	113	$	(901	)	$	(192	)	$	(788	)
Policies in force (in thousands)
Automobile	2,489			2,516			2,536		2,547		2,559		2,570			2,516			2,570
Homeowners and other	5,030			5,100			5,143		5,165		5,183		5,210			5,100			5,210

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
	2010			2010			2010			2010			2011			2011			2010			2011
Statutory underwriting
Gross written premiums	$	917		$	951		$	958		$	894		$	923		$	952		$	1,868		$	1,875
Net written premiums	$	913		$	945		$	952		$	888		$	918		$	948		$	1,858		$	1,866
Net earned premiums	$	892		$	905		$	914		$	918		$	896		$	908		$	1,797		$	1,804
Losses and loss adjustment expenses	613			638			628			674			620			722			1,251			1,342
Underwriting expenses	249			254			254			250			249			249			503			498
Statutory underwriting gain (loss)	$	30		$	13		$	32		$	(6	)	$	27		$	(63	)	$	43		$	(36	)
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	68.7		%	70.5		%	68.7		%	73.4		%	69.2		%	79.5		%	69.6		%	74.3		%
Underwriting expense ratio	26.7		%	26.9		%	26.2		%	26.9		%	26.6		%	26.2		%	26.8		%	26.4		%
Combined ratio	95.4		%	97.4		%	94.9		%	100.3		%	95.8		%	105.7		%	96.4		%	100.7		%
Impact of catastrophes on combined ratio	0.8		%	1.6		%	0.3		%	0.5		%	0.1		%	6.8		%	1.2		%	3.5		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	7		$	14		$	3		$	4		$	1		$	61		$	21		$	62
After-tax	$	4		$	10		$	2		$	2		$	—		$	41		$	14		$	41
Policies in force (in thousands)	2,447			2,468			2,482			2,490			2,497			2,502
Change from prior year quarter	-1.7		%	0.1		%	1.3		%	1.9		%	2.0		%	1.4		%
Change from prior quarter	0.2		%	0.9		%	0.6		%	0.3		%	0.3		%	0.2		%

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

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

Billing and policy fees are as follows:

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2010		2010		2010		2010		2011		2011		2010		2011
Billing and policy fees	$	13	$	11	$	12	$	12	$	12	$	11	$	24	$	23

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
	2010			2010			2010			2010			2011			2011			2010			2011
Statutory underwriting
Gross written premiums	$	849		$	1,089		$	1,140		$	982		$	891		$	1,136		$	1,938		$	2,027
Net written premiums	$	803		$	1,035		$	1,024		$	910		$	845		$	1,078		$	1,838		$	1,923
Net earned premiums	$	870		$	897		$	930		$	942		$	932		$	954		$	1,767		$	1,886
Losses and loss adjustment expenses	662			729			534			459			532			1,428			1,391			1,960
Underwriting expenses	252			292			305			276			263			308			544			571
Statutory underwriting gain (loss)	$	(44	)	$	(124	)	$	91		$	207		$	137		$	(782	)	$	(168	)	$	(645	)
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	76.1		%	81.3		%	57.4		%	48.7		%	57.1		%	149.7		%	78.7		%	104.0		%
Underwriting expense ratio	30.6		%	29.4		%	28.9		%	29.5		%	30.0		%	29.3		%	30.0		%	29.6		%
Combined ratio	106.7		%	110.7		%	86.3		%	78.2		%	87.1		%	179.0		%	108.7		%	133.6		%
Impact of catastrophes on combined ratio	27.9		%	26.8		%	6.9		%	1.6		%	5.6		%	92.9		%	27.3		%	49.8		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	242		$	241		$	64		$	15		$	52		$	887		$	483		$	939
After-tax	$	158		$	156		$	41		$	10		$	34		$	576		$	314		$	610
Policies in force (in thousands)	5,000			5,064			5,103			5,121			5,135			5,157
Change from prior year quarter	3.1		%	3.6		%	3.6		%	3.3		%	2.7		%	1.8		%
Change from prior quarter	0.8		%	1.3		%	0.8		%	0.4		%	0.3		%	0.4		%

(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
	2010		2010		2010		2010		2011		2011		2010		2011
Billing and policy fees	$	10	$	9	$	10	$	9	$	9	$	9	$	19	$	18

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
	2010			2010			2010			2010			2011			2011			2010			2011
Revenues
Other revenues (1)	$	—		$	—		$	—		$	(60	)	$	—		$	—		$	—		$	—
Claims and expenses
Interest expense	98			97			95			98			96			97			195			193
General and administrative expenses	10			5			6			6			15			30			15			45
Total claims and expenses	108			102			101			104			111			127			210			238
Operating loss before federal income tax benefit	(108		)	(102		)	(101		)	(164		)	(111		)	(127		)	(210		)	(238		)
Income taxes	(27		)	(34		)	(36		)	(60		)	(43		)	(46		)	(61		)	(89		)
Operating loss	$	(81	)	$	(68	)	$	(65	)	$	(104	)	$	(68	)	$	(81	)	$	(149	)	$	(149	)

(1)  In 4Q 2010, “Other revenues” include $(60) million of expenses related to the Company’s purchase and retirement of $885 million of its $1 billion 6.25% fixed-to-floating rate junior subordinated debentures.

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,
	2011 (1)			2010
Assets
Fixed maturities, available for sale, at fair value (including $94 and $186 subject to securities lending) (amortized cost $59,767 and $60,170)	$	62,976		$	62,820
Equity securities, available for sale, at fair value (cost $461 and $372)	600			519
Real estate	854			838
Short-term securities	5,024			5,616
Other investments	3,539			2,929
Total investments	72,993			72,722
Cash	273			200
Investment income accrued	768			791
Premiums receivable	6,043			5,497
Reinsurance recoverables	11,780			11,994
Ceded unearned premiums	802			813
Deferred acquisition costs	1,840			1,782
Deferred tax asset	128			493
Contractholder receivables	5,370			5,343
Goodwill	3,365			3,365
Other intangible assets	465			502
Other assets	2,641			2,154
Total assets	$	106,468		$	105,656
Liabilities
Claims and claim adjustment expense reserves	$	52,596		$	51,606
Unearned premium reserves	11,339			10,921
Contractholder payables	5,370			5,343
Payables for reinsurance premiums	409			407
Debt	6,604			6,611
Other liabilities	5,142			5,293
Total liabilities	81,460			80,181
Shareholders’ equity
Preferred Stock Savings Plan - convertible preferred stock (0.0 and 0.2 shares issued and outstanding)	—			68
Common stock (1,748.6 shares authorized; 419.5 and 434.6 shares issued and outstanding)	20,607			20,162
Retained earnings	18,966			18,847
Accumulated other changes in equity from nonowner sources	1,711			1,255
Treasury stock, at cost (320.8 and 296.6 shares)	(16,276		)	(14,857		)
Total shareholders’ equity	25,008			25,475
Total liabilities and shareholders’ equity	$	106,468		$	105,656

(1)  Preliminary.

Note:  Certain reclassifications have been made to the 2010 consolidated balance sheet to conform to the 2011 presentation.

22

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

	June 30,		Pre-tax Book		December 31,		Pre-tax Book
	2011		Yield (1)		2010		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	24,286	4.60	%	$	23,790	4.80	%
Tax-exempt fixed maturities	38,690		4.04	%	39,030		4.03	%
Total fixed maturities	62,976		4.26	%	62,820		4.32	%
Non-redeemable preferred stocks	202		6.36	%	215		6.47	%
Common stocks	398				304
Total equity securities	600				519
Real estate	854				838
Short-term securities	5,024		0.14	%	5,616		0.19	%
Private equities	1,859				1,725
Hedge funds	548				512
Real estate partnerships	596				580
Mortgage loans	36		6.23	%	34		6.28	%
Trading securities	24				23
Other investments	476				55
Total other investments	3,539				2,929
Total investments	$	72,993			$	72,722
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	2,239			$	1,858

(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,
	2011		2010
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,146	$	2,008
Obligations of states and political subdivisions:
Pre-refunded	7,119		7,291
All other	32,061		32,244
Total	39,180		39,535
Debt securities issued by foreign governments	2,031		2,202
Mortgage-backed securities - principally obligations of U.S. Government agencies	3,772		4,164
Corporates (including redeemable preferreds)	15,847		14,911
Total fixed maturities	$	62,976	$	62,820

Fixed Maturities

Quality Characteristics (1)

	June 30, 2011
	Amount		% of Total
Quality Ratings
Aaa	$	29,285	46.5	%
Aa	20,135		32.0
A	6,996		11.1
Baa	4,681		7.4
Total investment grade	61,097		97.0
Ba	872		1.4
B	579		0.9
Caa and lower	428		0.7
Total below investment grade	1,879		3.0
Total fixed maturities	$	62,976	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	3.6

(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
	2010			2010			2010			2010			2011			2011			2010			2011
Gross investment income
Fixed maturities	$	691		$	678		$	674		$	667		$	642		$	634		$	1,369		$	1,276
Short-term securities	3			3			3			4			4			3			6			7
Other	66			89			65			150			140			129			155			269
	760			770			742			821			786			766			1,530			1,552
Investment expenses	7			8			7			12			7			8			15			15
Net investment income, pre-tax	753			762			735			809			779			758			1,515			1,537
Income taxes	143			145			138			165			157			152			288			309
Net investment income, after-tax	$	610		$	617		$	597		$	644		$	622		$	606		$	1,227		$	1,228
Effective tax rate	18.9		%	19.1		%	18.8		%	20.3		%	20.2		%	20.1		%	19.0		%	20.1		%
Average invested assets (1)	$	72,659		$	71,294		$	70,929		$	71,359		$	70,771		$	70,476		$	71,987		$	70,659
Average yield pre-tax (1)	4.1		%	4.3		%	4.1		%	4.5		%	4.4		%	4.3		%	4.2		%	4.4		%
Average yield after-tax	3.4		%	3.5		%	3.4		%	3.6		%	3.5		%	3.4		%	3.4		%	3.5		%

(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
	2010			2010			2010			2010			2011			2011			2010			2011
Net realized investment gains (losses)
Fixed maturities	$	22		$	17		$	25		$	18		$	10		$	14		$	39		$	24
Equity securities (1)	8			3			104			10			1			26			11			27
Other (1) (2)	(5		)	(51		)	97			16			9			(21		)	(56		)	(12		)
Realized investment gains (losses) before tax	25			(31		)	226			44			20			19			(6		)	39
Related taxes	9			(11		)	79			14			7			6			(2		)	13
Net realized investment gains (losses)	$	16		$	(20	)	$	147		$	30		$	13		$	13		$	(4	)	$	26
Gross investment gains (2)	$	89		$	75		$	322		$	108		$	109		$	102		$	164		$	211
Gross investment losses before impairments (2)	(54		)	(102		)	(90		)	(58		)	(85		)	(79		)	(156		)	(164		)
Net investment gains (losses) before impairments	35			(27		)	232			50			24			23			8			47
Other-than-temporary impairment losses:
Total gains (losses)	(1		)	2			8			(2		)	2			5			1			7
Non-credit component of impairments recognized in accumulated other changes in equity from nonowner sources	(9		)	(6		)	(14		)	(4		)	(6		)	(9		)	(15		)	(15		)
Other-than-temporary impairment losses	(10		)	(4		)	(6		)	(6		)	(4		)	(4		)	(14		)	(8		)
Net realized investment gains (losses) before tax	25			(31		)	226			44			20			19			(6		)	39
Related taxes	9			(11		)	79			14			7			6			(2		)	13
Net realized investment gains (losses)	$	16		$	(20	)	$	147		$	30		$	13		$	13		$	(4	)	$	26
	March 31,			June 30,			September 30,			December 31,			March 31,			June 30,
	2010			2010			2010			2010			2011			2011
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	2,653		$	3,330		$	4,399		$	2,650		$	2,556		$	3,209
Equity securities & other	296			296			160			175			208			202
Unrealized investment gains before tax	2,949			3,626			4,559			2,825			2,764			3,411
Related taxes	1,011			1,245			1,569			967			948			1,172
Balance, end of period	$	1,938		$	2,381		$	2,990		$	1,858		$	1,816		$	2,239

(1)  In 3Q 2010, the Company sold most of its remaining common stock holdings in Verisk Analytics, Inc. (Verisk) for total proceeds of approximately $230 million as part of the secondary public offering of Verisk.  The Company recorded a pretax realized investment gain of $205 million on this sale in 3Q 2010 ($102 million included in the “Equity securities” and $103 million included in the “Other investments” categories above).

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

Gross investment Treasury future gains	$	26	$	37	$	52	$	73	$	47	$	32	$	63	$	79
Gross investment Treasury future losses	$	33	$	63	$	71	$	51	$	47	$	53	$	96	$	100

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

26

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

	June 30,			December 31,
	2011			2010
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	6,761		$	6,934
Allowance for uncollectible reinsurance	(359		)	(363		)
Net reinsurance recoverables	6,402			6,571
Mandatory pools and associations (1)	2,048			2,043
Structured settlements	3,330			3,380
Total reinsurance recoverables	$	11,780		$	11,994

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	2011		2010
Munich Re Group	A+ second highest of 16 ratings	$	767	$	744
Swiss Re Group	A third highest of 16 ratings	699		707
Transatlantic Holdings, Inc. (2)	A third highest of 16 ratings	380		385
XL Capital Group	A third highest of 16 ratings	322		320
Berkshire Hathaway Group	A++ highest of 16 ratings	309		319

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, 2011, after deducting mandatory pools and associations and structured settlement balances, $5.1 billion, or 80%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 99% were rated A- or better.  The remaining 20% net recoverables from reinsurers were comprised of the following:  5% related to the Company’s participation in voluntary pools, 10% related to recoverables from captive insurance companies and 5% were balances from other companies not rated by A.M. Best Company.  In addition, $1.9 billion of the net recoverables were collateralized by letters of credit, funds held and trust agreements at June 30, 2011.

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	2011		2010
Fidelity and Guaranty Life (3)	B++ fifth highest of 16 ratings	$	1,008	$	1,028
Metlife	A+ second highest of 16 ratings	499		508
Genworth	A third highest of 16 ratings	452		458
Symetra	A third highest of 16 ratings	269		272
ING Group	A third highest of 16 ratings	226		229

(1)  Includes impact from certain reclassifications made to 2010 amounts to conform to 2011 presentation.

(2)  Transatlantic Holdings, Inc. and Allied World Assurance Co. Holdings, AG recently signed a definitive merger agreement, expected to be finalized during the fourth quarter of 2011, which would create a combined entity called TransAllied Group Holdings, AG.  At June 30, 2011, the Company had gross reinsurance recoverables of $114 million from Allied World Assurance Co. Holdings, AG, which is rated ‘A’ by A.M. Best.

(3)  Sale of Old Mutual U.S. Life Holdings Inc. to Harbinger Capital Partners LLC was completed on April 7, 2011.  Harbinger Group has reverted the Old Mutual businesses to their former names, Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance Company of New York.

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
	2010			2010			2010			2010			2011			2011			2010			2011
Business Insurance
Beginning of period	$	31,289		$	31,079		$	30,900		$	30,752		$	30,505		$	30,489		$	31,289		$	30,505
Incurred	1,547			1,586			1,659			1,583			1,736			2,540			3,133			4,276
Paid	(1,747		)	(1,751		)	(1,822		)	(1,832		)	(1,759		)	(1,874		)	(3,498		)	(3,633		)
Foreign exchange and other	(10		)	(14		)	15			2			7			3			(24		)	10
End of period	$	31,079		$	30,900		$	30,752		$	30,505		$	30,489		$	31,158		$	30,900		$	31,158
Financial, Professional & International Insurance
Beginning of period	$	6,003		$	6,022		$	5,995		$	6,125		$	6,068		$	6,267		$	6,003		$	6,068
Incurred	513			412			346			420			430			375			925			805
Paid	(443		)	(363		)	(312		)	(478		)	(294		)	(357		)	(806		)	(651		)
Foreign exchange and other	(51		)	(76		)	96			1			63			12			(127		)	75
End of period	$	6,022		$	5,995		$	6,125		$	6,068		$	6,267		$	6,297		$	5,995		$	6,297
Personal Insurance
Beginning of period	$	3,631		$	3,748		$	3,871		$	3,763		$	3,662		$	3,545		$	3,631		$	3,662
Incurred	1,289			1,384			1,180			1,153			1,176			2,185			2,673			3,361
Paid	(1,172		)	(1,261		)	(1,288		)	(1,254		)	(1,293		)	(1,703		)	(2,433		)	(2,996		)
End of period	$	3,748		$	3,871		$	3,763		$	3,662		$	3,545		$	4,027		$	3,871		$	4,027
Total
Beginning of period	$	40,923		$	40,849		$	40,766		$	40,640		$	40,235		$	40,301		$	40,923		$	40,235
Incurred	3,349			3,382			3,185			3,156			3,342			5,100			6,731			8,442
Paid	(3,362		)	(3,375		)	(3,422		)	(3,564		)	(3,346		)	(3,934		)	(6,737		)	(7,280		)
Foreign exchange and other	(61		)	(90		)	111			3			70			15			(151		)	85
End of period	$	40,849		$	40,766		$	40,640		$	40,235		$	40,301		$	41,482		$	40,766		$	41,482
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	140		$	—		$	—		$	—		$	—		$	—
Environmental	—			35			—			—			—			76			35			76
All other	(242		)	(338		)	(242		)	(254		)	(143		)	(103		)	(580		)	(246		)
Prior year development excluding accretion of discount	(242		)	(303		)	(102		)	(254		)	(143		)	(27		)	(545		)	(170		)
Accretion of discount	11			12			11			11			11			12			23			23
Total Business Insurance	(231		)	(291		)	(91		)	(243		)	(132		)	(15		)	(522		)	(147		)
Financial, Professional & International Insurance	(34		)	(72		)	(97		)	(56		)	(39		)	(96		)	(106		)	(135		)
Personal Insurance	(18		)	(9		)	(23		)	(37		)	(55		)	(45		)	(27		)	(100		)
Total	$	(283	)	$	(372	)	$	(211	)	$	(336	)	$	(226	)	$	(156	)	$	(655	)	$	(382	)

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
	2010			2010			2010			2010			2011			2011			2010			2011
Asbestos reserves
Beginning reserves:
Direct	$	3,097		$	3,004		$	2,867		$	3,058		$	2,941		$	2,876		$	3,097		$	2,941
Ceded	(339		)	(320		)	(274		)	(400		)	(393		)	(374		)	(339		)	(393		)
Net	2,758			2,684			2,593			2,658			2,548			2,502			2,758			2,548
Incurred losses and loss expenses:
Direct	—			—			262			—			—			—			—			—
Ceded	—			—			(122		)	—			—			—			—			—
Losses paid:
Direct	93			137			71			117			65			68			230			133
Ceded	(19		)	(46		)	4			(7		)	(19		)	(4		)	(65		)	(23		)
Ending reserves:
Direct	3,004			2,867			3,058			2,941			2,876			2,808			2,867			2,808
Ceded	(320		)	(274		)	(400		)	(393		)	(374		)	(370		)	(274		)	(370		)
Net	$	2,684		$	2,593		$	2,658		$	2,548		$	2,502		$	2,438		$	2,593		$	2,438
Environmental reserves
Beginning reserves:
Direct	$	389		$	373		$	399		$	383		$	354		$	339		$	389		$	354
Ceded	4			4			(6		)	(6		)	(3		)	(3		)	4			(3		)
Net	393			377			393			377			351			336			393			351
Incurred losses and loss expenses:
Direct	—			45			—			—			—			80			45			80
Ceded	—			(10		)	—			—			—			(4		)	(10		)	(4		)
Losses paid:
Direct	16			19			16			29			15			25			35			40
Ceded	—			—			—			(3		)	—			(1		)	—			(1		)
Ending reserves:
Direct	373			399			383			354			339			394			399			394
Ceded	4			(6		)	(6		)	(3		)	(3		)	(6		)	(6		)	(6		)
Net	$	377		$	393		$	377		$	351		$	336		$	388		$	393		$	388

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,
Debt	2011			2010
Short-term debt
Commercial paper	$	100		$	100
5.375% Senior notes due June 15, 2012 (1)	250			—
7.22% Real estate non-recourse debt due September 1, 2011	—			9
Total short-term debt	350			109
Long-term debt
5.375% Senior notes due June 15, 2012 (1)	—			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
3.90% Senior notes due November 1, 2020 (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
5.35% Senior notes due November 1, 2040 (1)	750			750
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)	115			115
Total long-term debt	6,269			6,519
Unamortized fair value adjustment	54			54
Unamortized debt issuance costs	(69		)	(71		)
	6,254			6,502
Total debt	6,604			6,611
Preferred equity (2)	—			68
Common equity (excluding net unrealized investment gains, net of tax)	22,769			23,549
Total capital (excluding net unrealized investment gains, net of tax)	$	29,373		$	30,228
Total debt to capital (excluding net unrealized investment gains, net of tax)	22.5		%	21.9		%

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

(2)  In 2Q 2011, the Company’s board of directors authorized the redemption of the Company’s preferred stock held by The Travelers 401(k) Savings Plan Trust (the Trust) and gave notice of that redemption to the appropriate fiduciaries of the Trust.  The Trust, following a fiduciary review, exercised its right to convert each preferred share into eight common shares of the Company.

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

30

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

	June 30,			December 31,
	2011 (1)			2010
Statutory surplus	$	20,224		$	20,066
GAAP adjustments
Goodwill and intangible assets	3,649			3,679
Investments	3,835			3,179
Noninsurance companies	(4,072		)	(2,963		)
Deferred acquisition costs	1,840			1,782
Deferred federal income tax	(1,507		)	(1,238		)
Current federal income tax	(10		)	(100		)
Reinsurance recoverables	244			244
Furniture, equipment & software	696			690
Employee benefits	—			(11		)
Agents balances	122			110
Other	(13		)	37
Total GAAP adjustments	4,784			5,409
GAAP shareholders’ equity	$	25,008		$	25,475

(1) Estimated and Preliminary

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

31

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Cash flows from operating activities
Net income (loss)	$	647		$	670		$	1,005		$	894		$	839		$	(364	)	$	1,317		$	475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment (gains) losses	(25		)	31			(226		)	(44		)	(20		)	(19		)	6			(39		)
Depreciation and amortization	216			195			197			204			208			197			411			405
Deferred federal income tax expense (benefit)	76			(25		)	98			29			153			(16		)	51			137
Amortization of deferred acquisition costs	929			950			966			957			948			970			1,879			1,918
Equity in income from other investments	(45		)	(71		)	(45		)	(122		)	(122		)	(109		)	(116		)	(231		)
Premiums receivable	(97		)	(285		)	154			199			(167		)	(375		)	(382		)	(542		)
Reinsurance recoverables	86			442			226			546			218			7			528			225
Deferred acquisition costs	(939		)	(991		)	(998		)	(898		)	(964		)	(1,009		)	(1,930		)	(1,973		)
Claims and claim adjustment expense reserves	(224		)	(468		)	(420		)	(856		)	(251		)	1,140			(692		)	889
Unearned premium reserves	86			184			148			(355		)	175			220			270			395
Other	(179		)	(112		)	236			108			(384		)	(374		)	(291		)	(758		)
Net cash provided by operating activities	531			520			1,341			662			633			268			1,051			901
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,229			1,249			1,403			2,015			1,849			1,385			2,478			3,234
Proceeds from sales of investments:
Fixed maturities	1,646			1,135			500			432			490			246			2,781			736
Equity securities	19			8			130			44			8			39			27			47
Real estate	9			1			—			—			—			—			10			—
Other investments	114			75			237			291			161			124			189			285
Purchases of investments:
Fixed maturities	(2,175		)	(1,765		)	(1,227		)	(1,618		)	(1,824		)	(1,723		)	(3,940		)	(3,547		)
Equity securities	(5		)	(14		)	(10		)	(32		)	(51		)	(52		)	(19		)	(103		)
Real estate	(3		)	(5		)	(7		)	(6		)	(30		)	(5		)	(8		)	(35		)
Other investments	(104		)	(123		)	(146		)	(141		)	(107		)	(522		)	(227		)	(629		)
Net (purchases) sales of short-term securities	202			848			(1,116		)	(633		)	(31		)	628			1,050			597
Securities transactions in course of settlement	95			(93		)	(242		)	210			134			79			2			213
Other	(75		)	(70		)	(75		)	(98		)	(69		)	(74		)	(145		)	(143		)
Net cash provided by (used in) investing activities	952			1,246			(553		)	464			530			125			2,198			655

32

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2010			2010			2010			2010			2011			2011			2010			2011
Cash flows from financing activities
Payment of debt	—			(250		)	(25		)	(885		)	—			(8		)	(250		)	(8		)
Issuance of debt	—			—			—			1,234			—			—			—			—
Dividends paid to shareholders	(168		)	(175		)	(169		)	(161		)	(155		)	(174		)	(343		)	(329		)
Issuance of common stock - employee share options	123			76			68			141			168			77			199			245
Treasury stock acquired - share repurchase authorization	(1,407		)	(1,397		)	(637		)	(1,557		)	(1,104		)	(256		)	(2,804		)	(1,360		)
Treasury stock acquired - net employee share-based compensation	(38		)	(2		)	—			—			(44		)	(2		)	(40		)	(46		)
Excess tax benefits from share-based payment arrangements	4			1			1			2			7			4			5			11
Net cash used in financing activities	(1,486		)	(1,747		)	(762		)	(1,226		)	(1,128		)	(359		)	(3,233		)	(1,487		)
Effect of exchange rate changes on cash	(1		)	(4		)	6			2			4			—			(5		)	4
Net increase (decrease) in cash	(4		)	15			32			(98		)	39			34			11			73
Cash at beginning of period	255			251			266			298			200			239			255			200
Cash at end of period	$	251		$	266		$	298		$	200		$	239		$	273		$	266		$	273
Income taxes paid	$	44		$	265		$	202		$	273		$	112		$	179		$	309		$	291
Interest paid	$	63		$	137		$	63		$	134		$	35		$	156		$	200		$	191

33

The Travelers Companies, Inc. Financial Supplement - Second Quarter 2011 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 financial statements or are not required to be disclosed in the notes to financial statements or, 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, financial analysts, rating agencies and other financial statement users 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.  Internally, the Company’s management uses these measures to evaluate performance against historical results and establish financial targets on a consolidated basis.

Some of these measures exclude net realized gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.

Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.

Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses).  Management uses operating income to analyze each segment’s performance and as a tool in making business decisions.  Financial statement users also consider operating income when analyzing the results and trends of insurance companies.  Operating earnings (loss) per share is operating income (loss) on a per common share basis.

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

Return on equity is the ratio of annualized net income (loss) less preferred dividends to average shareholders’ equity for the periods presented.  Operating return on equity is the ratio of annualized operating income (loss) less preferred dividends to adjusted average shareholders’ equity for the periods presented.  In the opinion of the Company’s management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.

Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses.  In the opinion of the Company’s management, it is important to measure the profitability of each segment excluding the results of investing activities, which are managed separately from the insurance business.  This measure is used to assess each segment’s business performance and as a tool in making business decisions.

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 to users of the financial statements to understand the Company’s periodic earnings and the variability in periodic earnings caused by the unpredictable nature of catastrophes.

Net favorable (unfavorable) prior year 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, a discussion of loss reserve development is meaningful to users of the financial statements 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) and the underwriting expense ratio.  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 the incremental impact of the 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 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.

Total capital is the sum of total shareholders’ equity and debt.  Debt-to-capital ratio excluding net unrealized gain (loss) on investments is the ratio of debt to total capital 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 financial leverage.

Statutory surplus represents the excess of an insurance company’s assets over its liabilities in accordance with the statutory accounting practices required by state laws and regulations.

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 Partner Services; 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