8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported):  April 19, 2012

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):

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On April 19, 2012, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended March 31, 2012, and the availability of the Company’s first quarter financial supplement on the Company’s web site.  The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.

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

Item 9.01.  Financial Statements and Exhibits.

(d)	Exhibits.
Exhibit No.	Description
99.1	Press Release, dated April 19, 2012, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2012 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.)

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SIGNATURES

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

Date:       April 19, 2012	THE TRAVELERS COMPANIES, INC.
	By:	/s/ Matthew S. Furman
		Name: Matthew S. Furman
		Title:	Senior Vice President

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated April 19, 2012, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2012 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
NYSE: TRV	New York, NY 10017-2630
	www.travelers.com

Travelers Reports First Quarter Net and Operating Income per Diluted Share of $2.02 and $2.01,
an Increase of 5% and 6%, Respectively, From the Prior Year Quarter

Board of Directors Approves a 12% Increase in the Company’s Regular Quarterly Dividend per Share to $0.46

·Strong net income of $806 million in the quarter generated return on equity of 13.1%.

·Price increases accelerated in all segments.

·Book value per share of $63.81, up 7% from end of prior year quarter and 2% from year-end 2011.

·Repurchased 6 million shares for $350 million during the quarter.

New York, April 19, 2012 — The Travelers Companies, Inc. today reported net income of $806 million, or $2.02 per diluted share, for the quarter ended March 31, 2012, compared to $839 million, or $1.92 per diluted share in the prior year quarter. Operating income in the current quarter was $801 million, or $2.01 per diluted share, compared to $826 million, or $1.89 per diluted share, in the prior year quarter. Net and operating income in the prior year quarter included a $104 million benefit from the resolution of prior year tax matters.

Consolidated Highlights

($ in millions, except for per share amounts, and after-tax,	Three Months Ended March 31,
except for premiums & revenues)	2012			2011			Change
Net written premiums	$	5,497		$	5,437		1	%
Total revenues	$	6,392		$	6,278		2
Operating income	$	801		$	826		(3	)
per diluted share	$	2.01		$	1.89		6
Net income	$	806		$	839		(4	)
per diluted share	$	2.02		$	1.92		5
Diluted weighted average shares outstanding	395.8			434.4			(9	)
GAAP combined ratio	92.2		%	94.7		%	(2.5	)pts
Operating return on equity	14.7		%	14.1		%	0.6	pts
Return on equity	13.1		%	13.3		%	(0.2	)pts

	As of March 31,
	2012		2011		Change
Book value per share	$	63.81	$	59.91	7	%
Adjusted book value per share	$	56.53	$	55.61	2

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

“We are very pleased with our strong results this quarter, as we reported net and operating income in excess of $800 million and return on equity and operating return on equity of 13.1% and 14.7%, respectively,” commented Jay Fishman, Chairman and Chief Executive Officer. “Our underwriting performance reflected a GAAP combined ratio of 92.2%, an improvement of 2.5 points from the prior year quarter and 3.7 points from fourth quarter 2011. Net investment income, while down modestly from the prior year quarter as a result of continuing low fixed reinvestment yields, remained strong.

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“Our renewal price gains in the quarter continued to be very encouraging. In Business Insurance, we achieved renewal price change of 8% in the first quarter, an increase from 6% in the fourth quarter. In Financial, Professional and International Insurance, both renewal price change and retention rates increased and in Personal Insurance, renewal premium change, which includes changes in exposure, increased to 4% in Agency Auto and 10% in Agency Homeowners & Other. We are extremely pleased with the pricing gains that our field underwriters have generated while maintaining strong and stable retention rates.

“Given that low investment yields and unusual weather patterns have continued, we remain committed to actively, but selectively, seeking price increases and improved terms and conditions in order to continue to improve returns,” concluded Mr. Fishman.

First Quarter 2012 Consolidated Results

	Three Months Ended March 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	393		$	247		$	248		$	249
Underwriting gain includes:
Net favorable prior year reserve development	304			237			200			155
Catastrophes, net of reinsurance	(168		)	(186		)	(109		)	(122		)
Resolution of prior year tax matters										100
Net investment income	740			779			593			622
Other, including interest expense	(66		)	(77		)	(40		)	(45		)
Other also includes:
Resolution of prior year tax matters										4
Operating income	1,067			949			801			826
Net realized investment gains	10			20			5			13
Income before income taxes	$	1,077		$	969
Net income							$	806		$	839
GAAP combined ratio	92.2		%	94.7		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.4		%	93.8		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(5.5		)pts	(4.4		)pts
Catastrophes, net of reinsurance	3.1		pts	3.4		pts

Operating income of $801 million after tax decreased $25 million from the prior year quarter, including a $29 million quarter to quarter decrease in after-tax net investment income. On an after-tax basis, the underwriting gain in the current quarter approximated the prior year quarter, which included a $100 million benefit from the favorable resolution of prior year tax matters.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 92.2 percent, as compared to 94.7 percent in the prior year quarter. This improvement of 2.5 points in the combined ratio was driven in part by a $67 million pre-tax increase in net favorable prior year reserve development (improvement of 1.1 points), and an $18 million pre-tax decrease in catastrophe losses (improvement of 0.3 points). Catastrophe losses in the current quarter primarily resulted from tornadoes and hail storms in the Midwest and Southeast regions of the United States. Net favorable prior year reserve development in the current quarter occurred in all three segments.

The current quarter underlying underwriting gain, which excludes net favorable prior year reserve development and catastrophe losses, reflected a GAAP combined ratio of 94.6 percent, as compared to 95.7 percent in the prior year quarter.  This improvement of 1.1 points primarily resulted from a lower level of large losses in Financial, Professional and International Insurance and a decrease in the consolidated expense ratio as a result of higher earned premiums.

Total revenues of $6.392 billion in the current quarter increased $114 million, or 2 percent, from the prior year quarter. Within total revenues, earned premiums increased $152 million, while net investment income decreased $39 million. The modest decrease in net investment income was primarily driven by lower reinvestment rates in the fixed income portfolio.

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Net written premiums of $5.497 billion in the current quarter increased 1 percent from the prior year quarter. The company continued its efforts to actively seek improved pricing for its insurance products. As a result, renewal pricing gains continued across all three segments and increased from recent quarters.  While retention rates remained strong across each segment and were generally consistent with the most recent quarter, retention rates in Business Insurance were down modestly from the prior year quarter, consistent with the company’s pricing strategy. New business volumes decreased from the prior year quarter in Business Insurance and Personal Insurance, but increased in Financial Professional & International Insurance. Net written premiums in Business Insurance benefited from continued positive exposure change at renewal, as well as a meaningfully higher level of positive audit premiums compared to the prior year quarter.

Capital Management

“Our cash flows were very strong as we generated more than $800 million in cash from operating activities during the quarter,” commented Jay S. Benet, Vice Chairman and Chief Financial Officer, “while all of our capital ratios remained at or above target levels.”

During the first quarter of 2012, the company repurchased 6.0 million common shares under its existing share repurchase authorization for a total cost of $350 million and dividends were $162 million. Shareholders’ equity was $24.9 billion at the end of the first quarter of 2012, a 2 percent increase from the beginning of the year. Included in shareholders’ equity at the end of the first quarter of 2012 were after-tax net unrealized investment gains of $2.8 billion, compared to $2.9 billion at year-end 2011. Statutory surplus was $19.9 billion, up modestly from the beginning of the year. The company’s debt-to-capital ratio (excluding after-tax net unrealized investment gains) was 23.1 percent, well within its target range, and holding company liquidity was $2.2 billion.

The Board of Directors declared a regular quarterly dividend of $0.46 per common share. This dividend, which is $0.05 higher than the last regular quarterly dividend, is payable June 29, 2012, to shareholders of record as of the close of business June 8, 2012.

Business Insurance Segment Financial Results

“We are pleased with our very strong underwriting performance in Business Insurance during the quarter,” commented Brian MacLean, President and Chief Operating Officer. “On a written basis, we achieved renewal price gains of 8% in the quarter, up from 6% in the fourth quarter, attributable to increased price gains in all of our product lines. We were particularly gratified to see renewal price gains improve across all of our product lines, while loss cost trends generally remained within expectations.”

	Three Months Ended March 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	284		$	129		$	177		$	153
Underwriting gain includes:
Net favorable prior year reserve development	248			143			162			93
Catastrophes, net of reinsurance	(53		)	(112		)	(34		)	(73		)
Resolution of prior year tax matters										76
Net investment income	532			556			425			445
Other	14			9			10			6
Operating income	$	830		$	694		$	612		$	604
GAAP combined ratio	89.6		%	94.9		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(8.6		)pts	(5.2		)pts
Catastrophes, net of reinsurance	1.8		pts	4.1		pts

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Operating income of $612 million after tax increased $8 million from the prior year quarter due to a $24 million after-tax increase in the underwriting gain, partially offset by a $20 million after-tax decrease in net investment income. The underwriting gain in the prior year quarter included a $76 million benefit from the favorable resolution of prior year tax matters.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 89.6 percent, as compared to 94.9 percent in the prior year quarter. This improvement of 5.3 points in the combined ratio was due to a $105 million pre-tax increase in net favorable prior year reserve development (improvement of 3.4 points) and a $59 million pre-tax decrease in catastrophe losses (improvement of 2.3 points). Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the general liability product line for the 2004-2009 accident years and in the property product line for the 2010 accident year. This was partially offset by a strengthening of commercial automobile reserves due to higher than expected frequency and severity for the 2011 accident year.

The current quarter underlying underwriting gain, which excludes net favorable prior year reserve development and catastrophe losses, reflected a GAAP combined ratio of 96.4 percent, as compared to 96.0 percent in the prior year quarter.

Business Insurance net written premiums of $3.100 billion in the current quarter increased 3 percent from the prior year quarter. The company continued its efforts to actively seek improved pricing for its insurance products. As a result, renewal rate change was positive for the fifth consecutive quarter and once again increased from recent quarters. While retention rates and new business volumes were lower than the prior year quarter, consistent with the company’s pricing strategy and approach to improving returns on new accounts, both were generally consistent with the fourth quarter 2011. Net written premiums benefited from improved economic activity as evidenced by continued positive exposure change at renewal, as well as a meaningfully higher level of positive audit premiums compared to the prior year quarter.

Select Accounts

·Net written premiums of $718 million decreased 2 percent from the prior year quarter.

·Renewal premium change was positive for the twelfth consecutive quarter and increased from recent quarters to its highest level since the first quarter 2004 on business from both TravelersExpressSM, the company’s enhanced quote-to-issue agency platform and multivariate pricing program for smaller businesses, and larger accounts served by Select.

·While retention rates on business from TravelersExpressSM remained strong and generally consistent with recent quarters, overall Select retention rates decreased from recent quarters due to lower retention rates in larger accounts.

·New business volumes from TravelersExpressSM remained strong, but decreased modestly from the prior year quarter, while overall Select new business volumes decreased from the prior year quarter.

Commercial Accounts

·Net written premiums of $861 million increased 5 percent from the prior year quarter primarily due to increased renewal premium change as well as the benefit of positive audit premiums in the current quarter as compared to negative audit premiums in the prior year quarter.

·Renewal premium change was positive for the sixth consecutive quarter and increased from recent quarters to the highest level since the second quarter 2003.

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

·New business volumes decreased from the prior year quarter.

Other Business Insurance

Includes Industry-Focused Underwriting, Target Risk Underwriting and Specialized Distribution

·Net written premiums of $1.285 billion increased 3 percent from the prior year quarter primarily due to a meaningfully higher level of positive audit premiums.

·Renewal premium change remained positive and increased meaningfully from recent quarters.

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

·New business volumes decreased from the prior year quarter.

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National Accounts

·Net written premiums of $235 million increased 11 percent from the prior year quarter due to higher new business volumes and continued very strong retention rates.

Financial, Professional & International Insurance Segment Financial Results

“Financial, Professional & International Insurance had another quarter of strong results,” commented MacLean. “In our Management Liability business, we are seeing the favorable impact on profitability of technology investments and underwriting initiatives which have had the impact of driving premium growth in our more profitable lines. In our International business, our investments in technology, analytics and underwriting have contributed to a lower loss ratio.  Overall, we are pleased with how these businesses are positioned.”

	Three Months Ended March 31,
	2012			2011			2012		2011
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	88		$	33		$	59	$	32
Underwriting gain includes:
Net favorable prior year reserve development	46			39			31		26
Catastrophes, net of reinsurance	—			(21		)	—		(15		)
Resolution of prior year tax matters									14
Net investment income	104			106			85		84
Other	8			7			5		4
Operating income	$	200		$	146		$	149	$	120
GAAP combined ratio	87.8		%	95.3		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(6.1		)pts	(5.1		)pts
Catastrophes, net of reinsurance	—		pts	2.7		pts

Operating income of $149 million after tax increased $29 million from the prior year quarter mostly due to a $27 million after-tax increase in the underwriting gain. The underwriting gain in the prior year quarter included a $14 million benefit from the favorable resolution of prior year tax matters.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 87.8 percent, as compared to 95.3 percent in the prior year quarter. This improvement of 7.5 points in the combined ratio was partly due to a $21 million pre-tax decrease in catastrophe losses (improvement of 2.7 points) and a $7 million pre-tax increase in net favorable prior year reserve development (improvement of 1.0 point). Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the surety business within Bond & Financial Products for the 2006—2008 accident years as well as in several lines of business in Canada and the company’s operations at Lloyd’s within International.

The current quarter underlying underwriting gain, which excludes net favorable prior year reserve development and catastrophe losses, reflected a GAAP combined ratio of 93.9 percent, as compared to 97.7 percent in the prior year quarter. This improvement of 3.8 points primarily resulted from a lower level of large losses within International, partially offset by an increase in the expense ratio as a result of lower earned premiums and continued infrastructure investments within International to support growth.

Financial, Professional & International Insurance net written premiums of $604 million decreased 3 percent from the prior year quarter primarily due to lower construction surety business volumes within Bond & Financial Products.

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

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Bond & Financial Products

·Net written premiums of $357 million decreased 3 percent from the prior year quarter primarily due to lower business volumes in construction surety reflecting the continued slowdown in construction spending and disciplined underwriting.

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

·Renewal premium change remained positive and increased from recent quarters due to positive renewal rate change and higher insured exposures.

·New business volumes increased from the prior year quarter driven by the Management Liability business for private companies and not-for-profit organizations.

International

·Net written premiums of $247 million decreased 3 percent from the prior year quarter.

·Retention rates increased from recent quarters, but continued to be unfavorably impacted by the company’s exit from the personal lines business in Ireland.

·Renewal premium change was flat as the impact of positive renewal rate change was offset by reduced insured exposures.

·New business volumes increased from the prior year quarter primarily due to higher volumes at the company’s operations at Lloyd’s.

Personal Insurance Segment Financial Results

“We are pleased with the price gains we were able to achieve in the quarter,” commented MacLean. “In Agency Auto, renewal premium change was 4% in the quarter, up from 3% in the fourth quarter, and in Agency Homeowners & Other, renewal premium change was 10% in the quarter, up from 8% in the fourth quarter. In both lines we have filed for additional rate increases in a number of states. In Homeowners, we have implemented higher deductibles as well as other changes in terms and conditions in a number of states. Given the potential for continued unusual weather patterns, we are going to continue to take the actions we believe are necessary to improve returns.”

	Three Months Ended March 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	21		$	85		$	12		$	64
Underwriting gain includes:
Net favorable prior year reserve development	10			55			7			36
Catastrophes, net of reinsurance	(115		)	(53		)	(75		)	(34		)
Resolution of prior year tax matters										10
Net investment income	104			117			83			93
Other	19			18			13			13
Operating income	$	144		$	220		$	108		$	170
GAAP combined ratio	97.8		%	94.2		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	95.7		%	91.4		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(0.5		)pts	(3.0		)pts
Catastrophes, net of reinsurance	6.0		pts	2.8		pts

Operating income of $108 million after tax decreased $62 million from the prior year quarter due to a $52 million after-tax decrease in the underwriting gain and a $10 million after-tax decrease in net investment income. The underwriting gain in the prior year quarter included a $10 million benefit from the favorable resolution of prior year tax matters.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 97.8 percent, as compared to 94.2 percent in the prior year quarter. This increase of 3.6 points in the combined ratio was driven by a $62 million pre-tax

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increase in catastrophe losses (increase of 3.2 points) and a $45 million pre-tax decrease in net favorable prior year reserve development (increase of 2.5 points).

The current quarter underlying underwriting gain, which excludes net favorable prior year reserve development and catastrophe losses, reflected a GAAP combined ratio of 92.3 percent, as compared to 94.4 percent in the prior year quarter. This improvement of 2.1 points was primarily due to a decrease in the expense ratio as a result of lower advertising and other costs associated with the direct to consumer initiative and higher earned premiums.

Personal Insurance net written premiums of $1.793 billion were consistent with the prior year quarter.

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

Agency Automobile

·Net written premiums of $900 million decreased 2 percent from the prior year quarter.

·Policies in force decreased 1 percent from the prior year quarter.

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

·Renewal premium change remained positive and increased from recent quarters.

·New business volumes decreased from the prior year quarter.

Agency Homeowners & Other

·Net written premiums of $855 million increased 1 percent from the prior year quarter.

·Policies in force decreased slightly from the prior year quarter.

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

·Renewal premium change remained positive and increased from recent quarters.

·New business volumes decreased from the prior year quarter.

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, April 19, 2012. 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. The company’s diverse business lines offer its customers a wide range of coverage sold primarily through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and operations in the United States and selected International markets. For more information, visit www.travelers.com.

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.

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

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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 financial liability coverages, which primarily use credit-based underwriting processes, as well as property and casualty products that are primarily marketed on a domestic basis in the United Kingdom, Canada and the Republic of Ireland, 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 a broad range of property and casualty insurance covering individuals’ personal risks. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.

* * * * *

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. Words such as “may”, “will”, “should”, “likely”, “anticipates”, “expects”, “intends”, “plans”, “projects”, “believes”, “estimates” and similar expressions are used to identify these forward-looking statements. Specifically, statements about the company’s share repurchase plans, expected margin improvement, future pension plan contributions and the potential impact of investment markets and other economic conditions on the company’s investment portfolio and underwriting results, among others, are forward looking, and the company may also make forward-looking statements about, among other things:

·its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating income, investment income and performance, return on equity, and expected current returns and combined ratios);

·the sufficiency of the company’s asbestos and other reserves;

·the impact of emerging claims issues as well as other insurance and non-insurance litigation;

·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 economic downturn, the company’s business could be materially and adversely affected;

·if actual claims exceed the company’s claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, the company’s financial results could be materially and adversely affected;

·the company’s investment portfolio may suffer reduced returns or material realized or unrealized losses;

·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;

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·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;

·within the United States, the company’s businesses are heavily regulated by the states in which it conducts business, including licensing and supervision, and changes in regulation may reduce the company’s profitability and limit its growth;

·changes in federal regulation could impose significant burdens on the company and otherwise adversely impact its results;

·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, pay future shareholder dividends or make future share repurchases;

·disruptions to the company’s relationships with its independent agents and brokers could adversely affect the company;

·the company’s efforts to develop new products or expand in targeted markets may not be successful and may create enhanced risks;

·any net deferred tax asset could be adversely affected by a reduction in the U.S. Federal corporate income tax rate;

·the company may be adversely affected if its pricing and capital models provide materially different indications than actual results;

·the company is subject to a number of risks associated with its business outside the United States;

·new regulations outside of the U.S., including in the European Union, could adversely impact the company’s results of operations and limit its growth;

·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;

·changes to existing accounting standards may adversely impact the company’s reported results;

·the company could be adversely affected if its controls designed 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;

·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; and

·the company’s repurchase plans depend on a variety of factors, including the company’s financial position, earnings, share price, catastrophe losses, funding of the company’s qualified pension plan, capital requirements of the company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions), market conditions and other factors.

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 captions “Risk Factors” 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.

*****

GLOSSARY OF FINANCIAL MEASURES AND RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP 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

9

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. Reconciliations of non-GAAP measures to their most directly comparable GAAP measures also follow.

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, to establish financial targets on a consolidated basis and for other reasons, which are discussed below.

Some of these measures exclude net realized investment 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.

RECONCILIATION OF OPERATING INCOME AND CERTAIN OTHER NON-GAAP MEASURES TO NET INCOME

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

Reconciliation of Operating Income less Preferred Dividends and Net Income less Preferred Dividends to Net Income

	Three Months Ended
	March 31,
($ in millions, after-tax)	2012		2011
Operating income, less preferred dividends	$	801	$	825
Preferred dividends	—		1
Operating income	801		826
Net realized investment gains	5		13
Net income	$	806	$	839
Net income, less preferred dividends	$	806	$	838
Preferred dividends	—		1
Net income	$	806	$	839

	Twelve Months Ended December 31,
($ in millions, after-tax)	2011		2010		2009		2008			2007		2006		2005
Operating income, less preferred dividends	$	1,389	$	3,040	$	3,597	$	3,191		$	4,496	$	4,195	$	2,020
Preferred dividends	1		3		3		4			4		5		6
Operating income	1,390		3,043		3,600		3,195			4,500		4,200		2,026
Net realized investment gains (losses)	36		173		22		(271		)	101		8		35
Income from continuing operations	1,426		3,216		3,622		2,924			4,601		4,208		2,061
Discontinued operations	—		—		—		—			—		—		(439		)
Net income	$	1,426	$	3,216	$	3,622	$	2,924		$	4,601	$	4,208	$	1,622

10

Reconciliation of Operating Earnings per Share to Net Income per Share on a Basic and Diluted Basis

	Three Months Ended
	March 31,
	2012		2011
Basic earnings per share
Operating income	$	2.03	$	1.91
Net realized investment gains	0.01		0.03
Net income	$	2.04	$	1.94
Diluted earnings per share
Operating income	$	2.01	$	1.89
Net realized investment gains	0.01		0.03
Net income	$	2.02	$	1.92

Reconciliation of Operating Income by Segment to Total Operating Income

	Three Months Ended
	March 31,
($ in millions, after-tax)	2012			2011
Business Insurance	$	612		$	604
Financial, Professional & International Insurance	149			120
Personal Insurance	108			170
Total segment operating income	869			894
Interest Expense and Other	(68		)	(68		)
Total operating income	$	801		$	826

RECONCILIATION OF ADJUSTED SHAREHOLDERS’ EQUITY TO SHAREHOLDERS’ EQUITY AND OPERATING RETURN ON EQUITY TO RETURN ON EQUITY

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, preferred stock and discontinued operations. 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.

11

Reconciliation of Adjusted Shareholders’ Equity to Shareholders’ Equity

	As of March 31,
($ in millions)	2012		2011
Adjusted shareholders’ equity	$	22,029	$	23,358
Net unrealized investment gains, net of tax	2,838		1,806
Net realized investment gains, net of tax	5		13
Preferred stock	—		66
Shareholders’ equity	$	24,872	$	25,243

	As of December 31,
($ in millions)	2011		2010		2009		2008			2007		2006		2005			2004
Adjusted shareholders’ equity	$	21,570	$	23,375	$	25,458	$	25,647		$	25,783	$	24,545	$	22,227		$	20,087
Net unrealized investment gains (losses), net of tax	2,871		1,859		1,856		(146		)	620		453		327			866
Net realized investment gains (losses), net of tax	36		173		22		(271		)	101		8		35			(28		)
Preferred stock	—		68		79		89			112		129		153			188
Discontinued operations	—		—		—		—			—		—		(439		)	88
Shareholders’ equity	$	24,477	$	25,475	$	27,415	$	25,319		$	26,616	$	25,135	$	22,303		$	21,201

Return on equity is the ratio of annualized net income less preferred dividends to average shareholders’ equity for the periods presented. Operating return on equity is the ratio of annualized operating income 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.

Calculation of Operating Return on Equity and Return on Equity

	Three Months Ended
	March 31,
($ in millions, after-tax)	2012			2011
Annualized operating income, less preferred dividends	$	3,202		$	3,303
Adjusted average shareholders’ equity	21,817			23,453
Operating return on equity	14.7		%	14.1		%
Annualized net income, less preferred dividends	$	3,225		$	3,354
Average shareholders’ equity	24,675			25,293
Return on equity	13.1		%	13.3		%

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

a) the sum of operating income less preferred dividends for the periods presented to

b) the sum of: 1) the sum of the adjusted average shareholders’ 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, multiplied by the adjusted average shareholders’ equity of the partial year.

12

Calculation of Average Annual Operating Return on Equity from January 1, 2005 through March 31, 2012

	Three Months Ended
	March 31,						Twelve Months Ended December 31,
($ in millions)	2012			2011			2011			2010			2009			2008			2007			2006			2005
Operating income, less preferred dividends	$	801		$	825		$	1,389		$	3,040		$	3,597		$	3,191		$	4,496		$	4,195		$	2,020
Operating income, less preferred dividends - annualized	3,202			3,303
Adjusted average shareholders’ equity	21,817			23,453			22,806			24,285			25,777			25,668			25,350			23,381			21,118
Operating return on equity	14.7		%	14.1		%	6.1		%	12.5		%	14.0		%	12.4		%	17.7		%	17.9		%	9.6		%
Average annual operating return on equity for the period January 1, 2005 through March 31, 2012	13.1		%

RECONCILIATION OF PRE-TAX UNDERWRITING GAIN EXCLUDING CERTAIN ITEMS TO NET INCOME

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.  Pre-tax underwriting gain, excluding the impact of catastrophes and net favorable prior year loss reserve development, is the underwriting gain (loss) adjusted to exclude claims, claim adjustment expenses, and reinstatement premiums and assessments related to catastrophes and loss reserve development related to time periods prior to the current year. In the opinion of the company’s management, this measure is meaningful to users of the financial statements 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 and loss reserve development.

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, which may be related to one or more prior years. 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.

13

Reconciliation of Pre-tax Underwriting Gain (Excluding the Impact of Catastrophes and Net Favorable Prior Year Loss Reserve Development) to Net Income

	Three Months Ended
	March 31,
($ in millions, after-tax except as noted)	2012			2011
Pre-tax underwriting gain excluding the impact of catastrophes and net favorable prior year loss reserve development	$	257		$	196
Pre-tax impact of catastrophes	(168		)	(186		)
Pre-tax impact of net favorable prior year loss reserve development	304			237
Pre-tax underwriting gain	393			247
Income tax expense (benefit) on underwriting results	145			(2		)
Underwriting gain	248			249
Net investment income	593			622
Other, including interest expense	(40		)	(45		)
Operating income	801			826
Net realized investment gains	5			13
Net income	$	806		$	839

ADJUSTMENT TO THE GAAP COMBINED RATIO FOR THE INCREMENTAL IMPACT OF THE DIRECT TO CONSUMER INITIATIVE

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.

14

Calculation of the GAAP Combined Ratio

	Three Months Ended
	March 31,
($ in millions, pre-tax)	2012			2011
Loss and loss adjustment expense ratio
Claims and claim adjustment expenses	$	3,364		$	3,382
Less:
Policyholder dividends	12			10
Allocated fee income	35			33
Loss ratio numerator	$	3,317		$	3,339
Underwriting expense ratio
Amortization of deferred acquisition costs	$	971		$	948
General and administrative expenses	884			883
Less:
G&A included in Interest Expense and Other	7			15
Allocated fee income	47			41
Billing and policy fees	27			26
Expense ratio numerator	$	1,774		$	1,749
Earned premium	$	5,523		$	5,371
GAAP combined ratio (1)
Loss and loss adjustment expense ratio	60.1		%	62.1		%
Underwriting expense ratio	32.1		%	32.6		%
Combined ratio	92.2		%	94.7		%

(1)For purposes of computing GAAP ratios, 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.

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.

Reconciliation of the Consolidated and Personal Insurance GAAP Combined Ratios (Excluding the Incremental Impact of the Direct to Consumer Initiative) to the Consolidated and Personal Insurance GAAP Combined Ratios

	Three Months Ended
	March 31,
	2012		2011
Personal Insurance
GAAP combined ratio excluding incremental impact of direct to consumer initiative	95.7	%	91.4	%
Incremental impact of direct to consumer initiative	2.1	%	2.8	%
GAAP combined ratio	97.8	%	94.2	%
Consolidated
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.4	%	93.8	%
Incremental impact of direct to consumer initiative	0.8	%	0.9	%
GAAP combined ratio	92.2	%	94.7	%

15

ADJUSTMENT TO NET WRITTEN PREMIUMS FOR THE IMPACT OF CHANGES IN FOREIGN EXCHANGE RATES

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 International market and the FP&II segment.

Reconciliation of the Impact of Changes in Foreign Exchange Rates on International Net Written Premiums to International Net Written Premiums

	Three Months Ended
	March 31,
($ in millions)	2012			2011		Change
Net written premiums - holding foreign exchange rates constant	$	251		$	255	(2	)%
Impact of changes in foreign exchange rates	(4		)
Net written premiums	$	247		$	255	(3	)%

Reconciliation of the Impact of Changes in Foreign Exchange Rates on FP&II Net Written Premiums to FP&II Net Written Premiums

	Three Months Ended
	March 31,
($ in millions)	2012			2011		Change
Net written premiums - holding foreign exchange rates constant	$	608		$	624	(3	)%
Impact of changes in foreign exchange rates	(4		)
Net written premiums	$	604		$	624	(3	)%

RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO BOOK VALUE PER SHARE AND SHAREHOLDERS’ EQUITY

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.

16

Reconciliation of Tangible and Adjusted Common Shareholders’ Equity to Shareholders’ Equity

	As of
	March 31,			December 31,			March 31,
($ in millions, except per share amounts)	2012			2011			2011
Tangible common shareholders’ equity	$	18,299		$	17,856		$	19,576
Goodwill	3,365			3,365			3,365
Other intangible assets	417			433			482
Less: Impact of deferred tax on other intangible assets	(47		)	(48		)	(52		)
Adjusted common shareholders’ equity	22,034			21,606			23,371
Net unrealized investment gains, net of tax	2,838			2,871			1,806
Common shareholders’ equity	24,872			24,477			25,177
Preferred stock	—			—			66
Shareholders’ equity	$	24,872		$	24,477		$	25,243
Common shares outstanding	389.8			392.8			420.3
Tangible book value per share	$	46.95		$	45.46		$	46.58
Adjusted book value per share	56.53			55.01			55.61
Book value per share	63.81			62.32			59.91

RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO TOTAL CAPITALIZATION

Total capitalization is the sum of total shareholders’ equity and debt. Debt-to-capital ratio excluding net unrealized gain on investments is the ratio of debt to total capitalization 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.

Reconciliation of Total Debt and Equity Excluding Net Unrealized Investment Gain to Total Capital

	As of
	March 31,			December 31,			March 31,
($ in millions)	2012			2011			2011
Debt	$	6,606		$	6,605		$	6,611
Shareholders’ equity	24,872			24,477			25,243
Total capitalization	31,478			31,082			31,854
Net unrealized investment gains, net of tax	2,838			2,871			1,806
Total capitalization excluding net unrealized gain on investments, net of tax	$	28,640		$	28,211		$	30,048
Debt-to-capital ratio	21.0		%	21.3		%	20.8		%
Debt-to-capital ratio excluding net unrealized investment gains, net of tax	23.1		%	23.4		%	22.0		%

OTHER DEFINITIONS

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. Net written premiums reflect gross written premiums less premiums ceded to reinsurers. These are GAAP measures.

For the Business Insurance and Financial, Professional and International Insurance segments, retention is the amount of premium available for renewal that was retained, excluding rate and exposure changes. For the Personal Insurance segment, retention is the ratio of the expected number of renewal policies that will be retained throughout the annual policy period to the number of available renewal base policies. For all of the segments, renewal rate change represents the estimated change in average premium on policies that renew, excluding exposure changes. Exposure is the measure of risk used in the pricing of an insurance product. The change in exposure is the amount of change in premium on policies that renew attributable to the change in portfolio risk. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. New business volume is the amount of written premium related to new policyholders and additional products sold to

17

existing policyholders.  These are operating statistics, which are subject to change based upon a number of factors, including changes in actuarial estimates.  For the Business Insurance segment, retention, renewal premium change and new business volumes exclude National Accounts and Business Insurance-Other.

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

Holding company liquidity is the total funds available at the holding company level to fund general corporate purposes, primarily the payment of shareholder dividends and debt service.  These funds consist of cash, short-term invested assets and readily marketable securities held by the holding company.

For a glossary of other financial terms used in this press release, we refer you to the company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission.

###

Contacts
Media:	Institutional Investors:	Individual Investors:
Shane Boyd	Gabriella Nawi	Marc Parr
917.778.6267, or	917.778.6844, or	860.277.0779
Jennifer Wislocki	Andrew Hersom
860.277.7458	860.277.0902

18

EX-99.2

Exhibit 99.2

The Travelers Companies, Inc.
Financial Supplement - First Quarter 2012

	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
Selected Statistics - Direct to Consumer	21
Supplemental Detail
Interest Expense and Other	22
Consolidated Balance Sheet	23
Investment Portfolio	24
Investment Portfolio - Fixed Maturities Data	25
Investment Income	26
Net Realized and Unrealized Investment Gains	27
Reinsurance Recoverables	28
Net Reserves for Losses and Loss Adjustment Expense	29
Asbestos and Environmental Reserves	30
Capitalization	31
Statutory to GAAP Shareholders’ Equity Reconciliation	32
Statement of Cash Flows	33
Statement of Cash Flows (continued)	34
Glossary of Financial Measures and Description of Reportable Business Segments	35

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) 

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806
Net income (loss) per share:
Basic	$	1.94		$	(0.88	)	$	0.80		$	1.52		$	2.04
Diluted	$	1.92		$	(0.88	)	$	0.79		$	1.51		$	2.02
Operating income (loss)	$	826		$	(377	)	$	332		$	609		$	801
Operating income (loss) per share:
Basic	$	1.91		$	(0.91	)	$	0.79		$	1.50		$	2.03
Diluted	$	1.89		$	(0.91	)	$	0.79		$	1.48		$	2.01
Return on equity	13.3		%	(5.8		)%	5.3		%	10.0		%	13.1		%
Operating return on equity	14.1		%	(6.6		)%	5.9		%	11.1		%	14.7		%
Total assets, at period end	$	105,252		$	106,468		$	106,933		$	104,602		$	104,866
Total equity, at period end	$	25,243		$	25,008		$	25,172		$	24,477		$	24,872
Book value per share, at period end	$	59.91		$	59.62		$	60.98		$	62.32		$	63.81
Less: Net unrealized investment gains, net of tax	4.30			5.30			6.45			7.31			7.28
Adjusted book value per share, at period end	$	55.61		$	54.32		$	54.53		$	55.01		$	56.53
Weighted average number of common shares outstanding (basic)	428.2			418.6			415.0			403.0			392.0
Weighted average number of common shares outstanding and common stock equivalents (diluted)	434.4			418.6			418.5			407.0			395.8
Common shares outstanding at period end	420.3			419.5			412.8			392.8			389.8
Common stock dividends declared	$	155		$	175		$	173		$	166		$	162
Common stock repurchased:
Under Board of Director authorization
Shares	18.9			3.9			7.3			20.9			6.0
Cost	$	1,100		$	237		$	375		$	1,188		$	350
Other
Shares	0.8			0.6			—			—			0.8
Cost	$	46		$	36		$	—		$	—		$	52

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

1

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

	1Q		2Q			3Q		4Q		1Q
	2011		2011			2011		2011		2012
Net income (loss)
Operating income (loss)	$	826	$	(377	)	$	332	$	609	$	801
Net realized investment gains	13		13			1		9		5
Net income (loss)	$	839	$	(364	)	$	333	$	618	$	806
Basic earnings per share
Operating income (loss)	$	1.91	$	(0.91	)	$	0.79	$	1.50	$	2.03
Net realized investment gains	0.03		0.03			0.01		0.02		0.01
Net income (loss)	$	1.94	$	(0.88	)	$	0.80	$	1.52	$	2.04
Diluted earnings per share
Operating income (loss)	$	1.89	$	(0.91	)	$	0.79	$	1.48	$	2.01
Net realized investment gains	0.03		0.03			—		0.03		0.01
Net income (loss)	$	1.92	$	(0.88	)	$	0.79	$	1.51	$	2.02

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Basic
Net income (loss), as reported	$	839		$	(364	)	$	333		$	618		$	806
Preferred stock dividends	(1		)	—			—			—			—
Participating share-based awards - allocated income	(7		)	(2		)	(2		)	(5		)	(6		)
Net income (loss) available to common shareholders - basic	$	831		$	(366	)	$	331		$	613		$	800
Diluted
Net income (loss) available to common shareholders - basic	$	831		$	(366	)	$	331		$	613		$	800
Effect of dilutive securities:
Convertible preferred stock	1			—			—			—			—
Net income (loss) available to common shareholders - diluted	$	832		$	(366	)	$	331		$	613		$	800
Common Shares
Basic
Weighted average shares outstanding	428.2			418.6			415.0			403.0			392.0
Diluted
Weighted average shares outstanding	428.2			418.6			415.0			403.0			392.0
Weighted average effects of dilutive securities:
Convertible preferred stock	1.6			—			—			—			—
Stock options and performance shares	4.6			—			3.5			4.0			3.8
Diluted weighted average shares outstanding	434.4			418.6			418.5			407.0			395.8

(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 35.

2

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Premiums	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523
Net investment income	779			758			690			652			740
Fee income	74			74			79			69			82
Net realized investment gains	20			19			2			14			10
Other revenues	34			34			31			27			37
Total revenues	6,278			6,388			6,407			6,373			6,392
Claims and expenses
Claims and claim adjustment expenses	3,382			5,141			4,136			3,617			3,364
Amortization of deferred acquisition costs	948			970			982			976			971
General and administrative expenses	883			907			860			906			884
Interest expense	96			97			97			96			96
Total claims and expenses	5,309			7,115			6,075			5,595			5,315
Income (loss) before income taxes	969			(727		)	332			778			1,077
Income tax expense (benefit)	130			(363		)	(1		)	160			271
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806
Net realized investment gains
Other-than-temporary impairment losses:
Total gains	$	2		$	5		$	9		$	14		$	—
Non-credit component of impairments recognized in accumulated other comprehensive income	(6		)	(9		)	(21		)	(19		)	(4		)
Other-than-temporary impairment losses	(4		)	(4		)	(12		)	(5		)	(4		)
Other net realized investment gains	24			23			14			19			14
Net realized investment gains	$	20		$	19		$	2		$	14		$	10
Other statistics
Effective tax rate on net investment income	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%
Net investment income (after-tax)	$	622		$	606		$	561		$	541		$	593
Catastrophes, net of reinsurance:
Pre-tax	$	186		$	1,668		$	606		$	102		$	168
After-tax	$	122		$	1,085		$	394		$	68		$	109

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

3

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Underwriting gain (loss)	$	249		$	(924	)	$	(185	)	$	115		$	248
Net investment income	622			606			561			541			593
Other, including interest expense	(45		)	(59		)	(44		)	(47		)	(40		)
Operating income (loss)	826			(377		)	332			609			801
Net realized investment gains	13			13			1			9			5
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	62.1		%	92.6		%	72.9		%	63.7		%	60.1		%
Underwriting expense ratio	32.6		%	32.4		%	31.6		%	32.2		%	32.1		%
Combined ratio	94.7		%	125.0		%	104.5		%	95.9		%	92.2		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	93.8		%	124.1		%	103.6		%	95.1		%	91.4		%
Impact of catastrophes on combined ratio	3.4		%	30.3		%	10.8		%	1.8		%	3.1		%
Impact of prior year reserve development on combined ratio	-4.4		%	-3.1		%	-3.3		%	-2.3		%	-5.5		%

(1)  Before policyholder dividends.

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Billing and policy fees	$	26	$	25	$	26	$	25	$	27
Fee income:
Loss and loss adjustment expenses	$	33	$	34	$	38	$	28	$	35
Underwriting expenses	41		40		41		41		47
Total fee income	$	74	$	74	$	79	$	69	$	82

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

4

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Premiums	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523
Net investment income	779			758			690			652			740
Fee income	74			74			79			69			82
Other revenues	34			34			31			27			37
Total revenues	6,258			6,369			6,405			6,359			6,382
Claims and expenses
Claims and claim adjustment expenses	3,382			5,141			4,136			3,617			3,364
Amortization of deferred acquisition costs	948			970			982			976			971
General and administrative expenses	883			907			860			906			884
Interest expense	96			97			97			96			96
Total claims and expenses	5,309			7,115			6,075			5,595			5,315
Operating income (loss) before income taxes	949			(746		)	330			764			1,067
Income tax expense (benefit)	123			(369		)	(2		)	155			266
Operating income (loss)	$	826		$	(377	)	$	332		$	609		$	801
Other statistics
Effective tax rate on net investment income	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%
Net investment income (after-tax)	$	622		$	606		$	561		$	541		$	593
Catastrophes, net of reinsurance:
Pre-tax	$	186		$	1,668		$	606		$	102		$	168
After-tax	$	122		$	1,085		$	394		$	68		$	109

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

5

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

	1Q		2Q			3Q			4Q			1Q
	2011		2011			2011			2011			2012
Statutory underwriting
Gross written premiums	$	5,961	$	6,124		$	6,226		$	5,576		$	6,073
Net written premiums	$	5,437	$	5,817		$	5,672		$	5,261		$	5,497
Net earned premiums	$	5,371	$	5,503		$	5,605		$	5,611		$	5,523
Losses and loss adjustment expenses	3,342		5,100			4,094			3,570			3,318
Underwriting expenses	1,772		1,837			1,812			1,735			1,797
Statutory underwriting gain (loss)	257		(1,434		)	(301		)	306			408
Policyholder dividends	10		8			11			15			12
Statutory underwriting gain (loss) after policyholder dividends	$	247	$	(1,442	)	$	(312	)	$	291		$	396
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	40,301	$	41,482		$	41,238		$	40,899		$	40,791
Increase (decrease) in reserves	$	66	$	1,181		$	(244	)	$	(339	)	$	(108	)
Statutory surplus	$	20,588	$	20,224		$	19,842		$	19,174		$	19,867
Net written premiums/surplus (1)	1.06:1		1.09:1			1.12:1			1.16:1			1.12:1

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

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

6

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Written premiums
Gross	$	5,961		$	6,124		$	6,226		$	5,576		$	6,073
Ceded	(524		)	(307		)	(554		)	(315		)	(576		)
Net	$	5,437		$	5,817		$	5,672		$	5,261		$	5,497
Earned premiums
Gross	$	5,804		$	5,920		$	6,031		$	6,032		$	5,973
Ceded	(433		)	(417		)	(426		)	(421		)	(450		)
Net	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

7

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Premiums	$	2,745		$	2,802		$	2,890		$	2,890		$	2,876
Net investment income	556			541			487			457			532
Fee income	74			74			78			69			82
Other revenues	9			10			8			4			14
Total revenues	3,384			3,427			3,463			3,420			3,504
Claims and expenses
Claims and claim adjustment expenses	1,773			2,579			2,204			1,891			1,709
Amortization of deferred acquisition costs	444			457			460			454			467
General and administrative expenses	473			492			471			508			498
Total claims and expenses	2,690			3,528			3,135			2,853			2,674
Operating income (loss) before federal income taxes	694			(101		)	328			567			830
Income tax expense (benefit)	90			(112		)	34			122			218
Operating income	$	604		$	11		$	294		$	445		$	612
Other statistics
Effective tax rate on net investment income	20.0		%	19.9		%	18.2		%	17.1		%	20.0		%
Net investment income (after-tax)	$	445		$	433		$	398		$	379		$	425
Catastrophes, net of reinsurance:
Pre-tax	$	112		$	697		$	195		$	14		$	53
After-tax	$	73		$	453		$	127		$	9		$	34

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

8

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Underwriting gain (loss)	$	153		$	(429	)	$	(110	)	$	63		$	177
Net investment income	445			433			398			379			425
Other	6			7			6			3			10
Operating income	$	604		$	11		$	294		$	445		$	612
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	63.1		%	90.6		%	74.8		%	64.1		%	57.8		%
Underwriting expense ratio	31.8		%	32.3		%	30.6		%	31.7		%	31.8		%
Combined ratio	94.9		%	122.9		%	105.4		%	95.8		%	89.6		%
Impact of catastrophes on combined ratio	4.1		%	24.9		%	6.8		%	0.5		%	1.8		%
Impact of prior year reserve development on combined ratio	-5.2		%	-1.0		%	-0.9		%	-1.7		%	-8.6		%

(1)  Before policyholder dividends.

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Billing and policy fees	$	5	$	4	$	5	$	5	$	5
Fee income:
Loss and loss adjustment expenses	$	33	$	34	$	37	$	28	$	35
Underwriting expenses	41		40		41		41		47
Total fee income	$	74	$	74	$	78	$	69	$	82

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

9

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

	1Q		2Q			3Q			4Q		1Q
	2011		2011			2011			2011		2012
Statutory underwriting
Gross written premiums	$	3,306	$	3,094		$	3,205		$	2,813	$	3,429
Net written premiums	$	3,020	$	2,879		$	2,826		$	2,615	$	3,100
Net earned premiums	$	2,745	$	2,802		$	2,890		$	2,890	$	2,876
Losses and loss adjustment expenses	1,736		2,540			2,167			1,846		1,663
Underwriting expenses	899		918			898			864		940
Statutory underwriting gain (loss)	110		(656		)	(175		)	180		273
Policyholder dividends	7		5			7			13		10
Statutory underwriting gain (loss) after policyholder dividends	$	103	$	(661	)	$	(182	)	$	167	$	263

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.  

10

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Net written premiums by market
Select Accounts	$	732	$	738	$	666	$	648	$	718
Commercial Accounts	822		659		747		662		861
National Accounts	211		188		176		207		235
Industry-Focused Underwriting	628		579		649		551		648
Target Risk Underwriting	413		468		356		350		429
Specialized Distribution	209		246		231		194		208
Total core	3,015		2,878		2,825		2,612		3,099
Business Insurance other	5		1		1		3		1
Total	$	3,020	$	2,879	$	2,826	$	2,615	$	3,100
Net written premiums by product line
Commercial multi-peril	$	841	$	780	$	743	$	732	$	819
Workers’ compensation	854		678		750		677		944
Commercial automobile	493		505		515		442		489
Property	414		468		354		359		416
General liability	415		442		448		400		426
Other	3		6		16		5		6
Total	$	3,020	$	2,879	$	2,826	$	2,615	$	3,100
National accounts
Additions to claim volume under administration (1)	$	540	$	416	$	412	$	490	$	639
Written fees	$	73	$	63	$	63	$	64	$	88

(1)  Includes new and renewal business.

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.  

11

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Premiums	$	773		$	810		$	799		$	792		$	737
Net investment income	106			105			101			102			104
Fee income	—			—			1			—			—
Other revenues	7			6			6			7			8
Total revenues	886			921			907			901			849
Claims and expenses
Claims and claim adjustment expenses	433			378			297			379			341
Amortization of deferred acquisition costs	147			152			154			150			143
General and administrative expenses	160			160			162			166			165
Total claims and expenses	740			690			613			695			649
Operating income before federal income taxes	146			231			294			206			200
Income tax expense	26			67			83			54			51
Operating income	$	120		$	164		$	211		$	152		$	149
Other statistics
Effective tax rate on net investment income	21.2		%	21.2		%	20.8		%	15.8		%	18.9		%
Net investment income (after-tax)	$	84		$	82		$	81		$	85		$	85
Catastrophes, net of reinsurance:
Pre-tax	$	21		$	14		$	3		$	17		$	—
After-tax	$	15		$	10		$	2		$	13		$	—

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

12

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Underwriting gain	$	32		$	78		$	126		$	63		$	59
Net investment income	84			82			81			85			85
Other	4			4			4			4			5
Operating income	$	120		$	164		$	211		$	152		$	149
GAAP Combined ratio (1) (2)
Loss and loss adjustment expense ratio	55.6		%	46.2		%	36.8		%	47.3		%	46.0		%
Underwriting expense ratio	39.7		%	38.6		%	39.4		%	40.0		%	41.8		%
Combined ratio	95.3		%	84.8		%	76.2		%	87.3		%	87.8		%
Impact of catastrophes on combined ratio	2.7		%	1.7		%	0.4		%	2.2		%	0.0		%
Impact of prior year reserve development on combined ratio	-5.1		%	-11.7		%	-19.1		%	-9.0		%	-6.1		%

(1)  Before policyholder dividends.

(2)  Fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses as follows:

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Fee income:
Loss and loss adjustment expenses	$	—	$	—	$	1	$	—	$	—
Underwriting expenses	—		—		—		—		—
Total fee income	$	—	$	—	$	1	$	—	$	—

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

13

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Statutory underwriting
Gross written premiums	$	810	$	910	$	854	$	834	$	791
Net written premiums	$	624	$	879	$	808	$	791	$	604
Net earned premiums	$	773	$	810	$	799	$	792	$	737
Losses and loss adjustment expenses	430		375		294		375		341
Underwriting expenses	309		312		303		300		316
Statutory underwriting gain	34		123		202		117		80
Policyholder dividends	3		3		4		2		2
Statutory underwriting gain after policyholder dividends	$	31	$	120	$	198	$	115	$	78

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

14

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Net written premiums by market
Bond & Financial Products	$	369	$	533	$	538	$	513	$	357
International	255		346		270		278		247
Total	$	624	$	879	$	808	$	791	$	604
Net written premiums by product line
General liability	$	135	$	234	$	230	$	237	$	143
Fidelity & surety	196		264		260		237		172
International	255		346		270		278		247
Other	38		35		48		39		42
Total	$	624	$	879	$	808	$	791	$	604

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

15

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Premiums	$	1,853		$	1,891		$	1,916		$	1,929		$	1,910
Net investment income	117			112			102			93			104
Other revenues	18			18			17			17			19
Total revenues	1,988			2,021			2,035			2,039			2,033
Claims and expenses
Claims and claim adjustment expenses	1,176			2,184			1,635			1,347			1,314
Amortization of deferred acquisition costs	357			361			368			372			361
General and administrative expenses	235			225			222			226			214
Total claims and expenses	1,768			2,770			2,225			1,945			1,889
Operating income (loss) before federal income taxes	220			(749		)	(190		)	94			144
Income tax expense (benefit)	50			(278		)	(82		)	17			36
Operating income (loss)	$	170		$	(471	)	$	(108	)	$	77		$	108
Other statistics
Effective tax rate on net investment income	20.0		%	19.9		%	18.5		%	17.5		%	20.1		%
Net investment income (after-tax)	$	93		$	91		$	82		$	77		$	83
Catastrophes, net of reinsurance:
Pre-tax	$	53		$	957		$	408		$	71		$	115
After-tax	$	34		$	622		$	265		$	46		$	75

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

16

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Underwriting gain (loss)	$	64		$	(573	)	$	(201	)	$	(11	)	$	12
Net investment income	93			91			82			77			83
Other	13			11			11			11			13
Operating income (loss)	$	170		$	(471	)	$	(108	)	$	77		$	108
GAAP Combined ratio (1)
Loss and loss adjustment expense ratio	63.4		%	115.6		%	85.3		%	69.9		%	68.8		%
Underwriting expense ratio	30.8		%	29.9		%	29.7		%	29.9		%	29.0		%
Combined ratio	94.2		%	145.5		%	115.0		%	99.8		%	97.8		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.4		%	143.2		%	112.5		%	97.4		%	95.7		%
Impact of catastrophes on combined ratio	2.8		%	50.7		%	21.3		%	3.7		%	6.0		%
Impact of prior year reserve development on combined ratio	-3.0		%	-2.4		%	-0.3		%	-0.3		%	-0.5		%

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Billing and policy fees	$	21	$	21	$	21	$	20	$	22

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

17

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

	1Q		2Q			3Q			4Q		1Q
	2011		2011			2011			2011		2012
Statutory underwriting
Gross written premiums	$	1,845	$	2,120		$	2,167		$	1,929	$	1,853
Net written premiums	$	1,793	$	2,059		$	2,038		$	1,855	$	1,793
Net earned premiums	$	1,853	$	1,891		$	1,916		$	1,929	$	1,910
Losses and loss adjustment expenses	1,176		2,185			1,633			1,349		1,314
Underwriting expenses	564		607			611			571		541
Statutory underwriting gain (loss)	$	113	$	(901	)	$	(328	)	$	9	$	55
Policies in force (in thousands)
Automobile	2,559		2,570			2,574			2,571		2,554
Homeowners and other	5,183		5,210			5,226			5,225		5,195

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.  

18

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Statutory underwriting
Gross written premiums	$	923		$	952		$	950		$	881		$	904
Net written premiums	$	918		$	948		$	946		$	876		$	900
Net earned premiums	$	896		$	908		$	912		$	913		$	902
Losses and loss adjustment expenses	620			722			707			757			641
Underwriting expenses	249			249			245			237			235
Statutory underwriting gain (loss)	$	27		$	(63	)	$	(40	)	$	(81	)	$	26
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	69.2		%	79.5		%	77.5		%	82.9		%	71.1		%
Underwriting expense ratio	26.6		%	26.2		%	25.8		%	26.0		%	25.4		%
Combined ratio	95.8		%	105.7		%	103.3		%	108.9		%	96.5		%
Impact of catastrophes on combined ratio	0.1		%	6.8		%	2.1		%	1.0		%	1.0		%
Impact of prior year reserve development on combined ratio	-0.1		%	-0.3		%	2.2		%	3.7		%	-0.2		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	1		$	61		$	20		$	8		$	9
After-tax	$	—		$	41		$	12		$	6		$	6
Policies in force (in thousands)	2,497			2,502			2,501			2,494			2,473
Change from prior year quarter	2.0		%	1.4		%	0.8		%	0.2		%	-1.0		%
Change from prior quarter	0.3		%	0.2		%	0.0		%	-0.3		%	-0.8		%

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

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Billing and policy fees	$	12	$	11	$	11	$	11	$	12

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

19

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Statutory underwriting
Gross written premiums	$	891		$	1,136		$	1,179		$	1,015		$	912
Net written premiums	$	845		$	1,078		$	1,056		$	944		$	855
Net earned premiums	$	932		$	954		$	974		$	982		$	973
Losses and loss adjustment expenses	532			1,428			899			564			643
Underwriting expenses	263			308			312			282			262
Statutory underwriting gain (loss)	$	137		$	(782	)	$	(237	)	$	136		$	68
Other statistics
GAAP Combined ratio (2):
Loss and loss adjustment expense ratio	57.1		%	149.7		%	92.3		%	57.4		%	66.0		%
Underwriting expense ratio	30.0		%	29.3		%	28.8		%	29.3		%	29.0		%
Combined ratio	87.1		%	179.0		%	121.1		%	86.7		%	95.0		%
Impact of catastrophes on combined ratio	5.6		%	92.9		%	39.6		%	6.3		%	10.7		%
Impact of prior year reserve development on combined ratio	-6.1		%	-4.7		%	-2.8		%	-4.0		%	-1.1		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	52		$	887		$	385		$	62		$	104
After-tax	$	34		$	576		$	251		$	40		$	68
Policies in force (in thousands)	5,135			5,157			5,167			5,162			5,128
Change from prior year quarter	2.7		%	1.8		%	1.3		%	0.8		%	-0.1		%
Change from prior quarter	0.3		%	0.4		%	0.2		%	-0.1		%	-0.7		%

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

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

	1Q		2Q		3Q		4Q		1Q
	2011		2011		2011		2011		2012
Billing and policy fees	$	9	$	9	$	9	$	9	$	10

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

20

The Travelers Companies, Inc. Selected Statistics - Direct to Consumer (1) ($ in millions)

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Net written premiums
Automobile	$	24		$	24		$	27		$	25		$	29
Homeowners and other	6			9			9			10			9
Total net written premiums	$	30		$	33		$	36		$	35		$	38
Revenues
Premiums	$	25		$	29		$	30		$	34		$	35
Other revenues	1			—			1			—			—
Total revenues	26			29			31			34			35
Claims and expenses
Claims and claim adjustment expenses	23			36			28			27			31
Amortization of deferred acquisition costs	1			—			1			1			1
General and administrative expenses	53			48			54			51			42
Total claims and expenses	77			84			83			79			74
Operating loss before federal income taxes	(51		)	(55		)	(52		)	(45		)	(39		)
Income taxes	(18		)	(19		)	(18		)	(16		)	(14		)
Operating loss	$	(33	)	$	(36	)	$	(34	)	$	(29	)	$	(25	)
Other statistics
Policies in force (in thousands)
Automobile	62			68			73			77			81
Homeowners and other	48			53			59			63			67
Unfavorable prior year reserve development	$	3		$	2		$	2		$	—		$	2
Catastrophes, net of reinsurance:
Pre-tax	$	—		$	9		$	3		$	1		$	2
After-tax	$	—		$	5		$	2		$	—		$	1

(1)  Represents incremental premiums, other revenues and claims and expenses of Direct to Consumer business activities included in Personal Insurance operating income (loss).

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

21

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Revenues
Other revenues	$	—		$	—		$	—		$	(1	)	$	(4	)
Claims and expenses
Interest expense	96			97			97			96			96
General and administrative expenses	15			30			5			6			7
Total claims and expenses	111			127			102			102			103
Operating loss before federal income tax benefit	(111		)	(127		)	(102		)	(103		)	(107		)
Income taxes	(43		)	(46		)	(37		)	(38		)	(39		)
Operating loss	$	(68	)	$	(81	)	$	(65	)	$	(65	)	$	(68	)

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

22

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

	March 31,			December 31,
	2012 (1)			2011
Assets
Fixed maturities, available for sale, at fair value (amortized cost $60,777 and $59,994)	$	64,943		$	64,232
Equity securities, available for sale, at fair value (cost $419 and $414)	583			559
Real estate investments	860			865
Short-term securities	3,373			3,594
Other investments	3,485			3,451
Total investments	73,244			72,701
Cash	258			214
Investment income accrued	717			768
Premiums receivable	5,884			5,730
Reinsurance recoverables	10,696			11,182
Ceded unearned premiums	955			828
Deferred acquisition costs	1,801			1,786
Deferred taxes	—			7
Contractholder receivables	5,263			5,186
Goodwill	3,365			3,365
Other intangible assets	417			433
Other assets	2,266			2,402
Total assets	$	104,866		$	104,602
Liabilities
Claims and claim adjustment expense reserves	$	50,973		$	51,419
Unearned premium reserves	11,232			11,102
Contractholder payables	5,263			5,186
Payables for reinsurance premiums	511			389
Deferred taxes	120			—
Debt	6,606			6,605
Other liabilities	5,289			5,424
Total liabilities	79,994			80,125
Shareholders’ equity
Common stock (1,750.0 shares authorized; 389.8 and 392.8 shares issued and outstanding)	20,851			20,732
Retained earnings	20,223			19,579
Accumulated other comprehensive income	2,039			2,005
Treasury stock, at cost (355.8 and 349.0 shares)	(18,241		)	(17,839		)
Total shareholders’ equity	24,872			24,477
Total liabilities and shareholders’ equity	$	104,866		$	104,602

(1)  Preliminary.

23

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

	March 31,		Pre-tax Book		December 31,		Pre-tax Book
	2012		Yield (1)		2011		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	26,402	4.20	%	$	25,711	4.33	%
Tax-exempt fixed maturities	38,541		3.96	%	38,521		4.01	%
Total fixed maturities	64,943		4.06	%	64,232		4.14	%
Non-redeemable preferred stocks	132		6.33	%	131		6.30	%
Common stocks	451				428
Total equity securities	583				559
Real estate investments	860				865
Short-term securities	3,373		0.18	%	3,594		0.13	%
Private equities	1,903				1,827
Hedge funds	464				535
Real estate partnerships	615				601
Mortgage loans	36		6.25	%	36		6.28	%
Trading securities	24				25
Other investments	443				427
Total other investments	3,485				3,451
Total investments	$	73,244			$	72,701
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	2,838			$	2,871

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

24

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

	March 31,		December 31,
	2012		2011
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,462	$	2,497
Obligations of states and political subdivisions:
Pre-refunded	7,933		7,332
All other	31,082		31,690
Total	39,015		39,022
Debt securities issued by foreign governments	2,391		2,318
Mortgage-backed securities - principally obligations of U.S. Government agencies	3,469		3,515
Corporates (including redeemable preferreds)	17,606		16,880
Total fixed maturities	$	64,943	$	64,232

Fixed Maturities

Quality Characteristics (1)

	March 31, 2012
	Amount		% of Total
Quality Ratings
Aaa	$	28,887	44.5	%
Aa	20,547		31.6
A	8,151		12.5
Baa	5,325		8.2
Total investment grade	62,910		96.8
Ba	986		1.5
B	490		0.8
Caa and lower	557		0.9
Total below investment grade	2,033		3.2
Total fixed maturities	$	64,943	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	3.4

(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.

25

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Gross investment income
Fixed maturities	$	642		$	634		$	633		$	634		$	620
Short-term securities	4			3			3			2			2
Other	140			129			62			24			128
	786			766			698			660			750
Investment expenses	7			8			8			8			10
Net investment income, pre-tax	779			758			690			652			740
Income taxes	157			152			129			111			147
Net investment income, after-tax	$	622		$	606		$	561		$	541		$	593
Effective tax rate	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%
Average invested assets (1)	$	70,771		$	70,476		$	70,474		$	70,067		$	69,494
Average yield pre-tax (1)	4.4		%	4.3		%	3.9		%	3.7		%	4.3		%
Average yield after-tax	3.5		%	3.4		%	3.2		%	3.1		%	3.4		%

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

26

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Net realized investment gains
Fixed maturities	$	10		$	14		$	—		$	11		$	8
Equity securities	1			26			(4		)	17			3
Other (1)	9			(21		)	6			(14		)	(1		)
Realized investment gains before tax	20			19			2			14			10
Related taxes	7			6			1			5			5
Net realized investment gains	$	13		$	13		$	1		$	9		$	5
Gross investment gains (1)	$	109		$	102		$	132		$	107		$	121
Gross investment losses before impairments (1)	(85		)	(79		)	(118		)	(88		)	(107		)
Net investment gains before impairments	24			23			14			19			14
Other-than-temporary impairment losses:
Total gains	2			5			9			14			—
Non-credit component of impairments recognized in accumulated other comprehensive income	(6		)	(9		)	(21		)	(19		)	(4		)
Other-than-temporary impairment losses	(4		)	(4		)	(12		)	(5		)	(4		)
Net realized investment gains before tax	20			19			2			14			10
Related taxes	7			6			1			5			5
Net realized investment gains	$	13		$	13		$	1		$	9		$	5

	March 31,		June 30,		September 30,		December 31,		March 31,
	2011		2011		2011		2011		2012
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	2,556	$	3,209	$	3,944	$	4,238	$	4,166
Equity securities & other	193		176		118		161		181
Unrealized investment gains before tax	2,749		3,385		4,062		4,399		4,347
Related taxes	943		1,163		1,398		1,528		1,509
Balance, end of period	$	1,806	$	2,222	$	2,664	$	2,871	$	2,838

(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	$	47	$	32	$	46	$	47	$	47
Gross investment Treasury future losses	$	47	$	53	$	77	$	57	$	41

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.

27

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

	March 31,			December 31,
	2012			2011
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	5,735		$	6,216
Allowance for uncollectible reinsurance	(305		)	(345		)
Net reinsurance recoverables	5,430			5,871
Mandatory pools and associations	1,985			2,020
Structured settlements	3,281			3,291
Total reinsurance recoverables	$	10,696		$	11,182

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

	A.M. Best Rating of Group’s	March 31,		December 31,
Reinsurer	Predominant Reinsurer	2012		2011
Munich Re Group	A+ second highest of 16 ratings	$	614	$	670
Swiss Re Group	A+ second highest of 16 ratings	592		626
Alleghany Group (1)	A third highest of 16 ratings	312		349
Berkshire Hathaway Group	A++ highest of 16 ratings	287		289
XL Capital Group	A third highest of 16 ratings	266		281

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

The net reinsurance recoverables reflect an allowance for uncollectible reinsurance that is based upon the Company’s ongoing review of amounts outstanding, reinsurer solvency, the Company’s experience, current economic conditions, and other relevant factors.  Of the total net recoverables due from reinsurers at March 31, 2012, after deducting mandatory pools and associations and structured settlement balances, $4.4 billion, or 81%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 99% were rated A- or better.  The remaining 19% 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 3% were balances from other companies not rated by A.M. Best Company.  In addition, $1.6 billion of the net recoverables were collateralized by letters of credit, funds held and trust agreements at March 31, 2012.

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.

Included in reinsurance recoverables are certain amounts related to structured settlements, which comprise annuities purchased from various life insurance companies to settle certain personal physical injury claims, of which workers’ compensation claims comprise a significant portion.  In cases where the Company did not receive a release from the claimant, the amount due from the life insurance company related to the structured settlement is included in the Company’s consolidated balance sheet as a liability and as a reinsurance recoverable, as the Company retains the contingent liability to pay the claimant in the event that the life insurance company fails to make the required annuity payments.  The Company would be required to make such payments, to the extent the purchased annuities are not covered by state guaranty associations.  The Company’s top five groups by structured settlement is as follows:

	A.M. Best Rating of Group’s	March 31,		December 31,
Group	Predominant Insurer	2012		2011
Fidelity and Guaranty Life	B++ fifth highest of 16 ratings	$	1,002	$	1,007
Metlife	A+ second highest of 16 ratings	484		488
Genworth	A third highest of 16 ratings	446		449
Symetra	A third highest of 16 ratings	261		264
ING Group	A third highest of 16 ratings	223		222

(1)  In 1Q 2012, Alleghany Corporation and Transatlantic Holdings, Inc. completed their merger.  As a result, Transatlantic became an operating subsidiary of Alleghany.

28

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Statutory Basis Reserves for Losses and Loss Adjustment Expenses
Business Insurance
Beginning of period	$	30,505		$	30,489		$	31,158		$	31,253		$	31,131
Incurred	1,736			2,540			2,167			1,846			1,663
Paid	(1,759		)	(1,874		)	(2,059		)	(1,968		)	(1,792		)
Foreign exchange and other	7			3			(13		)	—			4
End of period	$	30,489		$	31,158		$	31,253		$	31,131		$	31,006
Financial, Professional & International Insurance
Beginning of period	$	6,068		$	6,267		$	6,297		$	6,076		$	6,019
Incurred	430			375			294			375			341
Paid	(294		)	(357		)	(412		)	(428		)	(361		)
Foreign exchange and other	63			12			(103		)	(4		)	46
End of period	$	6,267		$	6,297		$	6,076		$	6,019		$	6,045
Personal Insurance
Beginning of period	$	3,662		$	3,545		$	4,027		$	3,909		$	3,749
Incurred	1,176			2,185			1,633			1,349			1,314
Paid	(1,293		)	(1,703		)	(1,751		)	(1,509		)	(1,323		)
End of period	$	3,545		$	4,027		$	3,909		$	3,749		$	3,740
Total
Beginning of period	$	40,235		$	40,301		$	41,482		$	41,238		$	40,899
Incurred	3,342			5,100			4,094			3,570			3,318
Paid	(3,346		)	(3,934		)	(4,222		)	(3,905		)	(3,476		)
Foreign exchange and other	70			15			(116		)	(4		)	50
End of period	$	40,301		$	41,482		$	41,238		$	40,899		$	40,791
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	175		$	—		$	—
Environmental	—			76			—			—			—
All other	(143		)	(103		)	(201		)	(49		)	(248		)
Prior year development excluding accretion of discount	(143		)	(27		)	(26		)	(49		)	(248		)
Accretion of discount	11			12			11			11			12
Total Business Insurance	(132		)	(15		)	(15		)	(38		)	(236		)
Financial, Professional & International Insurance	(39		)	(96		)	(153		)	(72		)	(46		)
Personal Insurance	(55		)	(45		)	(5		)	(5		)	(10		)
Total	$	(226	)	$	(156	)	$	(173	)	$	(115	)	$	(292	)

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Asbestos reserves
Beginning reserves:
Direct	$	2,941		$	2,876		$	2,808		$	2,921		$	2,780
Ceded	(393		)	(374		)	(370		)	(388		)	(341		)
Net	2,548			2,502			2,438			2,533			2,439
Incurred losses and loss expenses:
Direct	—			—			195			—			—
Ceded	—			—			(20		)	—			—
Losses paid:
Direct	65			68			82			141			56
Ceded	(19		)	(4		)	(2		)	(47		)	(1		)
Ending reserves:
Direct	2,876			2,808			2,921			2,780			2,724
Ceded	(374		)	(370		)	(388		)	(341		)	(340		)
Net	$	2,502		$	2,438		$	2,533		$	2,439		$	2,384
Environmental reserves
Beginning reserves:
Direct	$	354		$	339		$	394		$	373		$	346
Ceded	(3		)	(3		)	(6		)	(6		)	(5		)
Net	351			336			388			367			341
Incurred losses and loss expenses:
Direct	—			80			—			—			—
Ceded	—			(4		)	—			—			—
Losses paid:
Direct	15			25			21			27			25
Ceded	—			(1		)	—			(1		)	(1		)
Ending reserves:
Direct	339			394			373			346			321
Ceded	(3		)	(6		)	(6		)	(5		)	(4		)
Net	$	336		$	388		$	367		$	341		$	317

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

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

	March 31,			December 31,
Debt	2012			2011
Short-term debt
Commercial paper	$	100		$	100
5.375% Senior notes due June 15, 2012 (1)	250			250
5.00% Senior notes due March 15, 2013 (1)	500			—
Total short-term debt	850			350
Long-term debt
5.00% Senior notes due March 15, 2013 (1)	—			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	5,769			6,269
Unamortized fair value adjustment	53			53
Unamortized debt issuance costs	(66		)	(67		)
	5,756			6,255
Total debt	6,606			6,605
Common equity (excluding net unrealized investment gains, net of tax)	22,034			21,606
Total capital (excluding net unrealized investment gains, net of tax)	$	28,640		$	28,211
Total debt to capital (excluding net unrealized investment gains, net of tax)	23.1		%	23.4		%

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

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

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

	March 31,			December 31,
	2012 (1)			2011
Statutory surplus	$	19,867		$	19,174
GAAP adjustments
Goodwill and intangible assets	3,606			3,621
Investments	4,863			4,883
Noninsurance companies	(4,479		)	(4,219		)
Deferred acquisition costs	1,801			1,786
Deferred federal income tax	(1,977		)	(1,946		)
Current federal income tax	5			(40		)
Reinsurance recoverables	242			242
Furniture, equipment & software	697			708
Employee benefits	5			(9		)
Agents balances	137			140
Other	105			137
Total GAAP adjustments	5,005			5,303
GAAP shareholders’ equity	$	24,872		$	24,477

(1) Estimated and Preliminary

See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Cash flows from operating activities
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment gains	(20		)	(19		)	(2		)	(14		)	(10		)
Depreciation and amortization	208			197			194			203			216
Deferred federal income tax expense (benefit)	153			(16		)	22			(96		)	119
Amortization of deferred acquisition costs	948			970			982			976			971
Equity in income from other investments	(122		)	(109		)	(48		)	(2		)	(114		)
Premiums receivable	(167		)	(375		)	103			202			(151		)
Reinsurance recoverables	218			7			19			563			494
Deferred acquisition costs	(964		)	(1,009		)	(1,015		)	(893		)	(984		)
Claims and claim adjustment expense reserves	(251		)	1,140			(147		)	(894		)	(503		)
Unearned premium reserves	175			220			217			(424		)	117
Other	(384		)	(374		)	259			112			(147		)
Net cash provided by operating activities	633			268			917			351			814
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,849			1,385			2,007			2,163			1,615
Proceeds from sales of investments:
Fixed maturities	490			246			106			319			223
Equity securities	8			39			4			84			15
Real estate investments	—			—			1			—			—
Other investments	161			124			197			112			203
Purchases of investments:
Fixed maturities	(1,824		)	(1,723		)	(2,677		)	(2,480		)	(2,604		)
Equity securities	(51		)	(52		)	(15		)	(13		)	(10		)
Real estate investments	(30		)	(5		)	(6		)	(25		)	(5		)
Other investments	(107		)	(522		)	(129		)	(131		)	(114		)
Net sales (purchases) of short-term securities	(31		)	628			216			1,205			226
Securities transactions in course of settlement	134			79			(17		)	(196		)	248
Other	(69		)	(74		)	(105		)	(123		)	(92		)
Net cash provided by (used in) investing activities	530			125			(418		)	915			(295		)

33

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

	1Q			2Q			3Q			4Q			1Q
	2011			2011			2011			2011			2012
Cash flows from financing activities
Payment of debt	—			(8		)	—			—			—
Dividends paid to shareholders	(155		)	(174		)	(171		)	(165		)	(161		)
Issuance of common stock - employee share options	168			77			25			44			77
Treasury stock acquired - share repurchase authorization	(1,104		)	(256		)	(395		)	(1,164		)	(354		)
Treasury stock acquired - net employee share-based compensation	(44		)	(2		)	—			—			(52		)
Excess tax benefits from share-based payment arrangements	7			4			6			1			12
Net cash used in financing activities	(1,128		)	(359		)	(535		)	(1,284		)	(478		)
Effect of exchange rate changes on cash	4			—			(6		)	1			3
Net increase (decrease) in cash	39			34			(42		)	(17		)	44
Cash at beginning of period	200			239			273			231			214
Cash at end of period	$	239		$	273		$	231		$	214		$	258
Income taxes paid (received)	$	112		$	179		$	(14	)	$	(59	)	$	20
Interest paid	$	35		$	156		$	35		$	156		$	35

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The Travelers Companies, Inc. Financial Supplement - First Quarter 2012 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 financial liability coverages, which primarily use credit-based underwriting processes, as well as property and casualty products that are primarily marketed on a domestic basis in the United Kingdom, Canada and the Republic of Ireland, and on an international basis through Lloyd’s.  The segment includes Bond & Financial Products as well as International.

Personal Insurance - The Personal Insurance segment writes a broad range of property and casualty insurance covering individuals’ personal risks.  The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.

35