8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported):  January 22, 2013

The Travelers Companies, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	001-10898	41-0518860
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

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

(917) 778-6000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On January 22, 2013, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended December 31, 2012, and the availability of the Company’s fourth quarter financial supplement on the Company’s web site.  The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.

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

Item 9.01.  Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit No.	Description
99.1	Press Release, dated January 22, 2013, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth 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:       January 22, 2013	THE TRAVELERS COMPANIES, INC.
	By:	/s/ Matthew S. Furman
		Name:	Matthew S. Furman
		Title:	Senior Vice President

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated January 22, 2013, reporting results of operations (This exhibit is furnished and not filed.)
99.2	Fourth 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

NYSE: TRV

Travelers Reports Fourth Quarter Net Income of $304 Million or $0.78 per Diluted Share After Catastrophe Losses of $689 Million After-tax, Including Storm Sandy, or $1.78 Per Diluted Share

Full Year Net Income of $2.5 Billion and Return on Equity and Operating Return on Equity of 9.8% and 11.0%, Respectively

·Fourth quarter operating income of $278 million or $0.72 per diluted share.

·Substantial improvement in underlying underwriting margin.

·Strong net investment income attributable to alternative investment returns.

·Written rate gains strong in all segments, with renewal rate change of approximately 8% in Business Insurance.

·Book value per share of $67.31, up 8% from year-end 2011.

·Repurchased 5.4 million shares for $400 million in the quarter and 22.4 million shares for $1.450 billion in the full year.

·Board of Directors approved quarterly dividend per share of $0.46.

New York, January 22, 2013 – The Travelers Companies, Inc. today reported net income of $304 million, or $0.78 per diluted share, for the quarter ended December 31, 2012, compared to $618 million, or $1.51 per diluted share, in the prior year quarter. Operating income in the current quarter was $278 million, or $0.72 per diluted share, compared to $609 million, or $1.48 per diluted share, in the prior year quarter. The decrease in net and operating income in the current quarter compared to the prior year quarter resulted from the after-tax impact of higher catastrophe losses, partially offset by higher underlying underwriting margins and higher net favorable prior year reserve development. Catastrophe losses in the current quarter were $689 million after-tax ($1.054 billion pre-tax), including losses resulting from Storm Sandy of $669 million after-tax ($1.024 billion pre-tax), compared to $68 million after-tax ($102 million pre-tax) in the prior year quarter.

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Consolidated Highlights

($ in millions, except for per share amounts, and after-tax,	Three Months Ended December 31,								Twelve Months Ended December 31,
except for premiums & revenues)	2012			2011			Change		2012			2011			Change
Net written premiums	$	5,385		$	5,261		2	%	$	22,447		$	22,187		1	%
Total revenues	$	6,477		$	6,373		2		$	25,740		$	25,446		1
Operating income	$	278		$	609		(54	)	$	2,441		$	1,390		76
per diluted share	$	0.72		$	1.48		(51	)	$	6.21		$	3.28		89
Net income	$	304		$	618		(51	)	$	2,473		$	1,426		73
per diluted share	$	0.78		$	1.51		(48	)	$	6.30		$	3.36		88
Diluted weighted average shares outstanding	385.3			407.0			(5	)	389.8			420.5			(7	)
GAAP combined ratio	105.4		%	95.9		%	9.5	pts	97.1		%	105.1		%	(8.0	)pts
Operating return on equity	5.0		%	11.1		%	(6.1	)pts	11.0		%	6.1		%	4.9	pts
Return on equity	4.7		%	10.0		%	(5.3	)pts	9.8		%	5.7		%	4.1	pts

	As of December 31,
	2012		2011		Change
Book value per share	$	67.31	$	62.32	8	%
Adjusted book value per share	$	59.09	$	55.01	7

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

“We are pleased with our fourth quarter results, as well as our full year results, particularly in light of Storm Sandy,” commented Jay Fishman, Chairman and Chief Executive Officer.  “Our full year operating income was $2.4 billion, which included $1.2 billion in after-tax catastrophe losses, compared to operating income of $1.4 billion in the prior year, which included $1.7 billion in after-tax catastrophe losses. In addition to the lower level of catastrophe losses, higher underlying underwriting margins contributed significantly to the year over year improvement.  The underlying underwriting margins improved in each of our businesses, attributable to improved non-catastrophe weather-related losses and the significant pricing gains we have been realizing. Our high quality investment portfolio continued to perform very well. Finally, in light of the overall economic environment, we remained highly disciplined in managing our expenses but continue to invest strategically in our businesses where appropriate.

“We are very encouraged by pricing trends across all three business segments. Renewal rate change in Business Insurance was approximately 8%, up from nearly 6% in the fourth quarter of last year and consistent with recent quarters.  Renewal rate change in Financial, Professional and International Insurance improved to 4%, and we once again achieved double-digit pricing improvements in Personal Insurance.

“Given the continued low interest rate environment and uncertain weather patterns, we will continue to seek improved pricing. In addition, we remain committed to returning excess capital to shareholders, and in that regard we are especially pleased that notwithstanding the high level of catastrophe losses we again experienced in 2012, we were able to return more than $2.1 billion to shareholders through dividends and share repurchases.

“This was another year in which unusual severe weather events affected many of our customers, and we remain committed to delivering on our promise of helping them restore their lives. Our entire Claim organization has again been called upon to work under difficult circumstances and has responded with their customary care and professionalism. We are deeply appreciative for all that they have done over these difficult months to make sure Travelers does it right,” concluded Fishman.

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Fourth Quarter 2012 Consolidated Results

	Three Months Ended December 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	(338	)	$	187		$	(232	)	$	115
Underwriting gain (loss) includes:
Net favorable prior year reserve development	222			126			146			83
Catastrophes, net of reinsurance	(1,054		)	(102		)	(689		)	(68		)
Net investment income	689			652			556			541
Other, including interest expense	(79		)	(75		)	(46		)	(47		)
Operating income	272			764			278			609
Net realized investment gains	39			14			26			9
Income before income taxes	$	311		$	778
Net income							$	304		$	618
GAAP combined ratio	105.4		%	95.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	104.6		%	95.1		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(4.0		)pts	(2.3		)pts
Catastrophes, net of reinsurance	18.7		pts	1.8		pts

Operating income of $278 million after-tax decreased $331 million from the prior year quarter due to a $347 million after-tax decrease in the underwriting results, reflecting the after-tax impact of higher catastrophe losses that were partially offset by higher underlying underwriting margins (which excludes net favorable prior year reserve development and catastrophe losses) and higher net favorable prior year reserve development.

The underwriting results in the current quarter reflected a GAAP combined ratio of 105.4 percent, as compared to 95.9 percent in the prior year quarter. This increase of 9.5 points in the combined ratio resulted from higher catastrophe losses (16.9 points), partially offset by higher underlying underwriting margins (5.7 points) and higher net favorable prior year reserve development (1.7 points). Catastrophe losses in the current quarter were mostly due to Storm Sandy. Net favorable prior year reserve development in the current quarter occurred in all three business segments.

The current quarter underlying GAAP combined ratio was 90.7 percent (which excludes net favorable prior year reserve development and catastrophe losses) as compared to 96.4 percent in the prior year quarter.  This improvement of 5.7 points primarily resulted from lower non-weather related property losses in Personal Insurance and earned rate increases exceeding loss cost trends in all three business segments.

Total revenues of $6.477 billion in the current quarter increased 2 percent from the prior year quarter. Within total revenues, net investment income of $689 million increased $37 million from the prior year quarter due to private equity performance in the non-fixed income portfolio, partially offset by a slight reduction in fixed income returns due to lower reinvestment rates.

Net written premiums of $5.385 billion in the current quarter increased 2 percent from the prior year quarter. Renewal rate gains continued across all segments.  Retention rates remained strong across all three business segments and were generally consistent with recent quarters. New business volumes in Business Insurance increased slightly from the prior year quarter but decreased in Financial, Professional & International Insurance and Personal Insurance. Net written premiums in Business Insurance also benefited from continued positive exposure change at renewal, as well as a modestly higher level of positive audit premiums compared to the prior year quarter.

Capital Management

“Our cash position remained strong as we ended the year with holding company liquidity of $2.0 billion,” commented Jay S. Benet, Vice Chairman and Chief Financial Officer.  “Even with the elevated claim payments related to Storm Sandy and a discretionary contribution of $150 million to our qualified pension plan to maintain our high funding ratio, operating cash flows were over $450 million in the quarter. Further, we repurchased 5.4 million shares for $400 million,

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and dividends were $178 million during the quarter, bringing the full year total capital returned to shareholders to more than $2.1 billion.”

During full year 2012, the company repurchased 22.4 million common shares under its existing share repurchase authorization at a total cost of $1.450 billion, leaving $2.159 billion of capacity under that authorization for future share repurchases. Shareholders’ equity was $25.405 billion at year-end 2012, a 4 percent increase from the end of the prior year. Included in shareholders’ equity at year-end 2012 were after-tax net unrealized investment gains of $3.103 billion, compared to $2.871 billion at year-end 2011. Statutory surplus was $20.048 billion, a 5 percent increase from the beginning of the year. The company’s debt-to-capital ratio (excluding after-tax net unrealized investment gains) was 22.2 percent, well within its target range.

The Board of Directors declared a quarterly dividend of $0.46 per share. This dividend is payable March 29, 2013, to shareholders of record as of the close of business on March 8, 2013.

Business Insurance Segment Financial Results

“We were pleased with the profitability in Business Insurance, particularly in light of Storm Sandy,” commented Brian MacLean, President and Chief Operating Officer.  “We were especially pleased that the underlying combined ratio improved over 4 points from the prior year quarter driven primarily by earned rate increases which exceeded loss cost trends. Written rate gains were between 6% and 10% across all lines, led by Workers’ Compensation and Commercial Auto, with stable retentions and slightly improved new business levels. Going forward we will continue to execute on our targeted pricing strategy to further improve underwriting margins.”

	Three Months Ended December 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	(119	)	$	106		$	(82	)	$	63
Underwriting gain (loss) includes:
Net favorable prior year reserve development	120			49			78			32
Catastrophes, net of reinsurance	(439		)	(14		)	(285		)	(9		)
Net investment income	498			457			402			379
Other	9			4			6			3
Operating income	$	388		$	567		$	326		$	445
GAAP combined ratio	103.5		%	95.8		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(4.0		)pts	(1.7		)pts
Catastrophes, net of reinsurance	14.7		pts	0.5		pts

Operating income of $326 million after-tax decreased $119 million from the prior year quarter due to a $145 million after-tax decrease in the underwriting results, reflecting the after-tax impact of higher catastrophe losses that were partially offset by higher underlying underwriting margins and higher net favorable prior year reserve development.

The underwriting results in the current quarter reflected a GAAP combined ratio of 103.5 percent, as compared to 95.8 percent in the prior year quarter. This increase of 7.7 points in the combined ratio resulted from higher catastrophe losses (14.2 points), partially offset by higher underlying underwriting margins (4.2 points) and higher net favorable prior year reserve development (2.3 points). Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience related to 2011 catastrophes as well as lower than expected claim department expenses.

The current quarter underlying GAAP combined ratio was 92.8 percent, as compared to 97.0 percent in the prior year quarter. This improvement of 4.2 points primarily resulted from earned rate increases exceeding loss cost trends.

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Business Insurance net written premiums of $2.784 billion in the current quarter increased 6 percent from the prior year quarter primarily driven by continued increases in renewal rate change. Retention rates remained strong, and new business volumes increased slightly from the prior year quarter. Net written premiums also benefited from continued positive exposure change at renewal, as well as a modestly higher level of positive audit premiums compared to the prior year quarter.

Select Accounts

·Net written premiums of $657 million increased 1 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change was positive and driven by continued strong renewal rate change.

·Retention rates increased from the prior year quarter driven by higher retention rates for larger accounts.

·New business volumes decreased from the prior year quarter.

Commercial Accounts

·Net written premiums of $718 million increased 8 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change was positive and driven by continued strong renewal rate change.

·Retention rates remained at a high level and increased from the prior year quarter.

·New business volumes increased significantly from the prior year quarter.

Other Business Insurance

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

·Net written premiums of $1.166 billion increased 6 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change was positive and driven by continued strong renewal rate change.

·Retention rates remained at a high level and increased from the prior year quarter.

·New business volumes decreased slightly from the prior year quarter.

National Accounts

·Net written premiums of $244 million increased 18 percent from the prior year quarter due to higher new business volumes and increased renewal premium change driven by payroll exposure growth, as well as favorable prior year audit and retro premium. In addition, growing workers’ compensation residual market pools contributed to our premium growth.

Financial, Professional & International Insurance Segment Financial Results

“In Financial, Professional & International Insurance, we continued to see favorable trends in the underlying combined ratio in both our Management Liability and International businesses,” commented MacLean.  “The underlying combined ratio improved by 2.6 points quarter over quarter driven by a 4.3 point improvement in the underlying loss ratio.  Net written premiums in the segment increased 2% in the quarter, primarily driven by a 6% increase in net written premiums in the International business. Written rate in the Management Liability business improved to almost 8% in the quarter, driving an overall rate increase of 4% in the segment.”

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	Three Months Ended December 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	88		$	97		$	50		$	63
Underwriting gain includes:
Net favorable prior year reserve development	69			72			46			48
Catastrophes, net of reinsurance	(45		)	(17		)	(34		)	(13		)
Net investment income	95			102			77			85
Other	5			7			4			4
Operating income	$	188		$	206		$	131		$	152
GAAP combined ratio	88.3		%	87.3		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(9.1		)pts	(9.0		)pts
Catastrophes, net of reinsurance	5.9		pts	2.2		pts

Operating income of $131 million after-tax decreased $21 million from the prior year quarter mostly due to a $13 million after-tax decrease in the underwriting gain, reflecting the after-tax impact of higher catastrophe losses that were partially offset by higher underlying underwriting margins.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 88.3 percent, as compared to 87.3 percent in the prior year quarter. This increase of 1.0 point in the combined ratio resulted from higher catastrophe losses (3.7 points), partially offset by higher underlying underwriting margins (2.6 points). Also included in the current quarter underwriting gain was net favorable prior year reserve development which primarily resulted from better than expected loss experience in the Surety business for accident years 2007-2008 and the Management Liability business for accident year 2007 and prior within Bond & Financial Products, as well as several lines of business within International.

The current quarter underlying GAAP combined ratio was 91.5 percent, as compared to 94.1 percent in the prior year quarter. This improvement of 2.6 points primarily resulted from a lower level of large losses as well as earned rate increases exceeding loss cost trends, partially offset by an increase in the expense ratio mostly due to lower earned premiums.

Financial, Professional & International Insurance net written premiums of $808 million increased 2 percent from the prior year quarter primarily driven by International.

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.

Bond & Financial Products

·Net written premiums of $514 million were approximately the same as the prior year quarter as growth in Management Liability was offset by lower construction surety production due to the continued low levels of government construction spending.

·Renewal premium change remained positive and continued to increase from recent quarters due to positive renewal rate change, partially offset by lower insured exposures.

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

·New business volumes decreased from the prior year quarter.

International

·Net written premiums of $294 million increased 6 percent from the prior year quarter (4 percent adjusting for the impact of changes in foreign exchange rates) primarily due to somewhat lower levels of ceded premium and growth in the United Kingdom, partially offset by lower surety production in Canada.

·Renewal premium change was slightly negative due to lower insured exposures.

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·Retention rates improved from the prior year quarter.

·New business volumes increased from the prior year quarter.

Personal Insurance Segment Financial Results

“In Personal Insurance, both Auto and Homeowners results were significantly impacted by catastrophe losses,” commented MacLean. “While we were very pleased with our Homeowners results given Storm Sandy, we remain concerned about uncertain weather patterns and we will continue to seek improved pricing, terms and conditions. In Auto, although we are not yet satisfied with our results due to continued elevated severity, rate gains are now exceeding our current view of loss trends and, all other things being the same, we anticipate improving margins.”

	Three Months Ended December 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	(307	)	$	(16	)	$	(200	)	$	(11	)
Underwriting gain (loss) includes:
Net favorable prior year reserve development	33			5			22			3
Catastrophes, net of reinsurance	(570		)	(71		)	(370		)	(46		)
Net investment income	96			93			77			77
Other	14			17			9			11
Operating income (loss)	$	(197	)	$	94		$	(114	)	$	77
GAAP combined ratio	115.2		%	99.8		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	113.1		%	97.4		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(1.8		)pts	(0.3		)pts
Catastrophes, net of reinsurance	30.1		pts	3.7		pts

After-tax operating results decreased $191 million from the prior year quarter mostly due to a $189 million after-tax decrease in underwriting results, reflecting the after-tax impact of higher catastrophe losses that were partially offset by higher underlying underwriting margins and higher net favorable prior year reserve development.

The underwriting results in the current quarter reflected a GAAP combined ratio of 115.2 percent, as compared to 99.8 percent in the prior year quarter. This increase of 15.4 points in the combined ratio was primarily due to higher catastrophe losses (26.4 points), partially offset by higher underlying underwriting margins (9.5 points) and higher net favorable prior year reserve development (1.5 points). The net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in Homeowners & Other attributable to catastrophe and non-catastrophe losses incurred in 2011 and in the umbrella line of business for accident years 2008-2011.

The current quarter underlying GAAP combined ratio was 86.9 percent, as compared to 96.4 percent in the prior year quarter. This improvement of 9.5 points was primarily due to lower non-weather related property losses, lower non-catastrophe weather-related losses and earned rate increases exceeding loss cost trends.

Personal Insurance net written premiums of $1.793 billion decreased 3 percent from the prior year quarter primarily due to lower new business volumes, largely as a result of the company’s pricing strategy, increasing deductibles and other profitability improvement initiatives.

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 $822 million decreased 6 percent from the prior year quarter.

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·Policies in force decreased 9 percent from the prior year quarter.

·Renewal premium change remained positive and continued to increase from recent quarters.

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

·New business volumes decreased from the prior year quarter.

Agency Homeowners & Other

·Net written premiums of $934 million decreased 1 percent from the prior year quarter.

·Policies in force decreased 7 percent from the prior year quarter.

·Renewal premium change remained positive and continued to increase from recent quarters.

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

·New business volumes decreased from the prior year quarter.

Full Year 2012 Consolidated Financial Results

	Twelve Months Ended December 31,
	2012			2011			2012			2011
($ in millions)	Pre-tax						After-tax
Underwriting gain (loss)	$	507		$	(1,266	)	$	296		$	(745	)
Underwriting gain (loss) includes:
Net favorable prior year reserve development	940			715			622			473
Catastrophes, net of reinsurance	(1,862		)	(2,562		)	(1,214		)	(1,669		)
Resolution of prior year tax matters										100
Net investment income	2,889			2,879			2,316			2,330
Other, including interest expense	(281		)	(316		)	(171		)	(195		)
Other also includes:
Resolution of prior year tax matters										4
Operating income	3,115			1,297			2,441			1,390
Net realized investment gains	51			55			32			36
Income before income taxes	$	3,166		$	1,352
Net income							$	2,473		$	1,426
GAAP combined ratio	97.1		%	105.1		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	96.3		%	104.2		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(4.2		)pts	(3.2		)pts
Catastrophes, net of reinsurance	8.3		pts	11.6		pts

Operating income of $2.441 billion after-tax increased $1.051 billion from the prior year mostly due to a $1.041 billion after-tax improvement in underwriting results, reflecting the after-tax impact of lower catastrophe losses, higher underlying underwriting margins and higher net favorable prior year reserve development.

The underwriting gain in the current year reflected a GAAP combined ratio of 97.1 percent, as compared to 105.1 percent in the prior year period. This improvement of 8.0 points in the combined ratio was due to higher underlying underwriting margins (3.7 points), lower catastrophe losses (3.3 points) and higher net favorable prior year reserve development (1.0 point).

The current year underlying GAAP combined ratio was 93.0 percent, as compared to 96.7 percent in the prior year period. This improvement of 3.7 points primarily resulted from lower non-catastrophe weather-related losses as well as earned rate increases exceeding loss cost trends.

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 Tuesday, January 22, 2013. Prior to the webcast, a slide presentation

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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 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 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, strategies to improve profitability, 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:

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·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;

·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 its 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;

·other changes to tax laws could adversely impact our investment portfolio or operating results;

·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;

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·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, common 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 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.

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

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
($ in millions, after-tax)	2012		2011		2012		2011
Operating income, less preferred dividends	$	278	$	609	$	2,441	$	1,389
Preferred dividends	—		—		—		1
Operating income	278		609		2,441		1,390
Net realized investment gains	26		9		32		36
Net income	$	304	$	618	$	2,473	$	1,426
Net income, less preferred dividends	$	304	$	618	$	2,473	$	1,425
Preferred dividends	—		—		—		1
Net income	$	304	$	618	$	2,473	$	1,426

	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

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

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
Basic earnings per share
Operating income	$	0.72	$	1.50	$	6.27	$	3.31
Net realized investment gains	0.07		0.02		0.08		0.09
Net income	$	0.79	$	1.52	$	6.35	$	3.40
Diluted earnings per share
Operating income	$	0.72	$	1.48	$	6.21	$	3.28
Net realized investment gains	0.06		0.03		0.09		0.08
Net income	$	0.78	$	1.51	$	6.30	$	3.36

Reconciliation of Operating Income by Segment to Total Operating Income

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions, after-tax)	2012			2011			2012			2011
Business Insurance	$	326		$	445		$	1,843		$	1,354
Financial, Professional & International Insurance	131			152			642			647
Personal Insurance	(114		)	77			217			(332		)
Total segment operating income	343			674			2,702			1,669
Interest Expense and Other	(65		)	(65		)	(261		)	(279		)
Total operating income	$	278		$	609		$	2,441		$	1,390

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.

13

Reconciliation of Adjusted Shareholders’ Equity to Shareholders’ Equity

	As of December 31,
($ in millions)	2012		2011		2010		2009		2008			2007		2006		2005			2004
Adjusted shareholders’ equity	$	22,270	$	21,570	$	23,375	$	25,458	$	25,647		$	25,783	$	24,545	$	22,227		$	20,087
Net unrealized investment gains (losses), net of tax	3,103		2,871		1,859		1,856		(146		)	620		453		327			866
Net realized investment gains (losses), net of tax	32		36		173		22		(271		)	101		8		35			(28		)
Preferred stock	—		—		68		79		89			112		129		153			188
Discontinued operations	—		—		—		—		—			—		—		(439		)	88
Shareholders’ equity	$	25,405	$	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						Twelve Months Ended
	December 31,						December 31,
($ in millions, after-tax)	2012			2011			2012			2011
Annualized operating income, less preferred dividends	$	1,111		$	2,437		$	2,441		$	1,389
Adjusted average shareholders’ equity	22,433			22,053			22,158			22,806
Operating return on equity	5.0		%	11.1		%	11.0		%	6.1		%
Annualized net income, less preferred dividends	$	1,215		$	2,472		$	2,473		$	1,425
Average shareholders’ equity	25,655			24,825			25,192			25,075
Return on equity	4.7		%	10.0		%	9.8		%	5.7		%

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.

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

	Twelve Months Ended December 31,
($ in millions)	2012			2011			2010			2009			2008			2007			2006			2005
Operating income, less preferred dividends	$	2,441		$	1,389		$	3,040		$	3,597		$	3,191		$	4,496		$	4,195		$	2,020
Adjusted average shareholders’ equity	22,158			22,806			24,285			25,777			25,668			25,350			23,381			21,118
Operating return on equity	11.0		%	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 December 31, 2012	12.8		%

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 and claim adjustment expenses, 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. This measure is also referred to as underlying underwriting margin or underlying underwriting gain (loss).

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 (loss), and changes in claims and claim adjustment expense reserve levels from period to period.

15

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						Twelve Months Ended
	December 31,						December 31,
($ in millions, after-tax except as noted)	2012			2011			2012			2011
Pre-tax underwriting gain excluding the impact of catastrophes and net favorable prior year loss reserve development	$	494		$	163		$	1,429		$	581
Pre-tax impact of catastrophes	(1,054		)	(102		)	(1,862		)	(2,562		)
Pre-tax impact of net favorable prior year loss reserve development	222			126			940			715
Pre-tax underwriting gain (loss)	(338		)	187			507			(1,266		)
Income tax expense (benefit) on underwriting results	(106		)	72			211			(521		)
Underwriting gain (loss)	(232		)	115			296			(745		)
Net investment income	556			541			2,316			2,330
Other, including interest expense	(46		)	(47		)	(171		)	(195		)
Operating income	278			609			2,441			1,390
Net realized investment gains	26			9			32			36
Net income	$	304		$	618		$	2,473		$	1,426

Reconciliation of Net Income per Diluted Share Excluding the Impact of Catastrophes to Net Income per Diluted Share(1)

	Three Months
	Ended
	December 31, 2012
Net income per diluted share, excluding the impact of catastrophes	$	2.56
Impact of catastrophes	(1.78		)
Net income per diluted share	$	0.78

(1)   Includes the effect of allocating a portion of earnings to participating share based awards in the per share computation

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 and other 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.

16

Calculation of the GAAP Combined Ratio

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
($ in millions, pre-tax)	2012			2011			2012			2011
Loss and loss adjustment expense ratio
Claims and claim adjustment expenses	$	4,167		$	3,617		$	14,676		$	16,276
Less:
Policyholder dividends	12			15			46			44
Allocated fee income	38			28			124			133
Loss ratio numerator	$	4,117		$	3,574		$	14,506		$	16,099
Underwriting expense ratio
Amortization of deferred acquisition costs	$	977		$	976		$	3,910		$	3,876
General and administrative expenses (G&A)	929			906			3,610			3,556
Less:
G&A included in Interest Expense and Other	6			6			23			56
Allocated fee income	52			41			199			163
Billing and policy fees and other	22			25			98			102
Expense ratio numerator	$	1,826		$	1,810		$	7,200		$	7,111
Earned premium	$	5,639		$	5,611		$	22,357		$	22,090
GAAP combined ratio (1)
Loss and loss adjustment expense ratio	73.0		%	63.7		%	64.9		%	72.9		%
Underwriting expense ratio	32.4		%	32.2		%	32.2		%	32.2		%
Combined ratio	105.4		%	95.9		%	97.1		%	105.1		%

(1)For purposes of computing GAAP ratios, billing and policy fees and other (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				Twelve Months Ended
	December 31,				December 31,
	2012		2011		2012		2011
Personal Insurance
GAAP combined ratio excluding incremental impact of direct to consumer initiative	113.1	%	97.4	%	99.6	%	111.1	%
Incremental impact of direct to consumer initiative	2.1	%	2.4	%	2.3	%	2.5	%
GAAP combined ratio	115.2	%	99.8	%	101.9	%	113.6	%
Consolidated
GAAP combined ratio excluding incremental impact of direct to consumer initiative	104.6	%	95.1	%	96.3	%	104.2	%
Incremental impact of direct to consumer initiative	0.8	%	0.8	%	0.8	%	0.9	%
GAAP combined ratio	105.4	%	95.9	%	97.1	%	105.1	%

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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 Financial, Professional & International (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						Twelve Months Ended
	December 31,						December 31,
($ in millions)	2012		2011		Change		2012			2011		Change
Net written premiums - holding foreign exchange rates constant	$	290	$	278	4	%	$	1,069		$	1,149	(7	)%
Impact of changes in foreign exchange rates	4						(12		)
Net written premiums	$	294	$	278	6	%	$	1,057		$	1,149	(8	)%

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						Twelve Months Ended
	December 31,						December 31,
($ in millions)	2012		2011		Change		2012			2011		Change
Net written premiums - holding foreign exchange rates constant	$	804	$	791	2	%	$	2,993		$	3,102	(4	)%
Impact of changes in foreign exchange rates	4						(12		)
Net written premiums	$	808	$	791	2	%	$	2,981		$	3,102	(4	)%

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.

18

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

	As of
	December 31,			December 31,
($ in millions, except per share amounts)	2012			2011
Tangible shareholders’ equity	$	18,604		$	17,856
Goodwill	3,365			3,365
Other intangible assets	381			433
Less: Impact of deferred tax on other intangible assets	(48		)	(48		)
Adjusted shareholders’ equity	22,302			21,606
Net unrealized investment gains, net of tax	3,103			2,871
Shareholders’ equity	$	25,405		$	24,477
Common shares outstanding	377.4			392.8
Tangible book value per share	$	49.29		$	45.46
Adjusted book value per share	59.09			55.01
Book value per share	67.31			62.32

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 Capitalization

	As of
	December 31,			December 31,
($ in millions)	2012			2011
Debt	$	6,350		$	6,605
Shareholders’ equity	25,405			24,477
Total capitalization	31,755			31,082
Net unrealized investment gains, net of tax	3,103			2,871
Total capitalization excluding net unrealized gain on investments, net of tax	$	28,652		$	28,211
Debt-to-capital ratio	20.0		%	21.3		%
Debt-to-capital ratio excluding net unrealized investment gains, net of tax	22.2		%	23.4		%

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

19

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 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 total cash, short-term invested assets and other 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:
Patrick Linehan	Gabriella Nawi	Marc Parr
917.778.6267	917.778.6844, or	860.277.0779
	Andrew Hersom
	860.277.0902

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EX-99.2

Exhibit 99.2

The Travelers Companies, Inc.

Financial Supplement - Fourth 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-K which will be filed with the Securities and Exchange Commission.

Index

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806		$	499		$	864		$	304		$	1,426		$	2,473
Net income (loss) per share:
Basic	$	1.94		$	(0.88	)	$	0.80		$	1.52		$	2.04		$	1.27		$	2.23		$	0.79		$	3.40		$	6.35
Diluted	$	1.92		$	(0.88	)	$	0.79		$	1.51		$	2.02		$	1.26		$	2.21		$	0.78		$	3.36		$	6.30
Operating income (loss)	$	826		$	(377	)	$	332		$	609		$	801		$	495		$	867		$	278		$	1,390		$	2,441
Operating income (loss) per share:
Basic	$	1.91		$	(0.91	)	$	0.79		$	1.50		$	2.03		$	1.27		$	2.24		$	0.72		$	3.31		$	6.27
Diluted	$	1.89		$	(0.91	)	$	0.79		$	1.48		$	2.01		$	1.26		$	2.22		$	0.72		$	3.28		$	6.21
Return on equity	13.3		%	(5.8		)%	5.3		%	10.0		%	13.1		%	8.0		%	13.6		%	4.7		%	5.7		%	9.8		%
Operating return on equity	14.1		%	(6.6		)%	5.9		%	11.1		%	14.7		%	9.0		%	15.5		%	5.0		%	6.1		%	11.0		%
Total assets, at period end	$	105,227		$	106,443		$	106,906		$	104,575		$	104,838		$	104,330		$	105,445		$	104,938		$	104,575		$	104,938
Total equity, at period end	$	25,243		$	25,008		$	25,172		$	24,477		$	24,872		$	25,049		$	25,905		$	25,405		$	24,477		$	25,405
Book value per share, at period end	$	59.91		$	59.62		$	60.98		$	62.32		$	63.81		$	64.90		$	67.81		$	67.31		$	62.32		$	67.31
Less: Net unrealized investment gains, net of tax	4.30			5.30			6.45			7.31			7.28			7.72			8.68			8.22			7.31			8.22
Adjusted book value per share, at period end	$	55.61		$	54.32		$	54.53		$	55.01		$	56.53		$	57.18		$	59.13		$	59.09		$	55.01		$	59.09
Weighted average number of common shares outstanding (basic)	428.2			418.6			415.0			403.0			392.0			388.0			384.0			381.0			415.8			386.2
Weighted average number of common shares outstanding and common stock equivalents (diluted)	434.4			418.6			418.5			407.0			395.8			391.6			387.9			385.3			420.5			389.8
Common shares outstanding at period end	420.3			419.5			412.8			392.8			389.8			386.0			382.0			377.4			392.8			377.4
Common stock dividends declared	$	155		$	175		$	173		$	166		$	162		$	181		$	179		$	178		$	669		$	700
Common stock repurchased:
Under Board of Director authorization
Shares	18.9			3.9			7.3			20.9			6.0			5.6			5.4			5.4			51.0			22.4
Cost	$	1,100		$	237		$	375		$	1,188		$	350		$	350		$	350		$	400		$	2,900		$	1,450
Other
Shares	0.8			0.6			—			—			0.8			—			—			0.1			1.4			0.9
Cost	$	46		$	36		$	—		$	—		$	52		$	1		$	—		$	2		$	82		$	55

Certain prior period amounts have been restated to conform to the 2012 presentation.

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)

																			YTD		YTD
	1Q		2Q			3Q		4Q		1Q		2Q		3Q			4Q		4Q		4Q
	2011		2011			2011		2011		2012		2012		2012			2012		2011		2012
Net income (loss)
Operating income (loss)	$	826	$	(377	)	$	332	$	609	$	801	$	495	$	867		$	278	$	1,390	$	2,441
Net realized investment gains (losses)	13		13			1		9		5		4		(3		)	26		36		32
Net income (loss)	$	839	$	(364	)	$	333	$	618	$	806	$	499	$	864		$	304	$	1,426	$	2,473
Basic earnings per share
Operating income (loss)	$	1.91	$	(0.91	)	$	0.79	$	1.50	$	2.03	$	1.27	$	2.24		$	0.72	$	3.31	$	6.27
Net realized investment gains (losses)	0.03		0.03			0.01		0.02		0.01		—		(0.01		)	0.07		0.09		0.08
Net income (loss)	$	1.94	$	(0.88	)	$	0.80	$	1.52	$	2.04	$	1.27	$	2.23		$	0.79	$	3.40	$	6.35
Diluted earnings per share
Operating income (loss)	$	1.89	$	(0.91	)	$	0.79	$	1.48	$	2.01	$	1.26	$	2.22		$	0.72	$	3.28	$	6.21
Net realized investment gains (losses)	0.03		0.03			—		0.03		0.01		—		(0.01		)	0.06		0.08		0.09
Net income (loss)	$	1.92	$	(0.88	)	$	0.79	$	1.51	$	2.02	$	1.26	$	2.21		$	0.78	$	3.36	$	6.30

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Basic
Net income (loss), as reported	$	839		$	(364	)	$	333		$	618		$	806		$	499		$	864		$	304		$	1,426		$	2,473
Participating share-based awards - allocated income	(7		)	(2		)	(2		)	(5		)	(6		)	(4		)	(6		)	(2		)	(11		)	(19		)
Preferred stock dividends	(1		)	—			—			—			—			—			—			—			(1		)	—
Net income (loss) available to common shareholders - basic	$	831		$	(366	)	$	331		$	613		$	800		$	495		$	858		$	302		$	1,414		$	2,454
Diluted
Net income (loss) available to common shareholders - basic	$	831		$	(366	)	$	331		$	613		$	800		$	495		$	858		$	302		$	1,414		$	2,454
Effect of dilutive securities:
Convertible preferred stock	1			—			—			—			—			—			—			—			1			—
Net income (loss) available to common shareholders - diluted	$	832		$	(366	)	$	331		$	613		$	800		$	495		$	858		$	302		$	1,415		$	2,454
Common Shares
Basic
Weighted average shares outstanding	428.2			418.6			415.0			403.0			392.0			388.0			384.0			381.0			415.8			386.2
Diluted
Weighted average shares outstanding	428.2			418.6			415.0			403.0			392.0			388.0			384.0			381.0			415.8			386.2
Weighted average effects of dilutive securities:
Stock options and performance shares	4.6			—			3.5			4.0			3.8			3.6			3.9			4.3			4.0			3.6
Convertible preferred stock	1.6			—			—			—			—			—			—			—			0.7			—
Diluted weighted average shares outstanding	434.4			418.6			418.5			407.0			395.8			391.6			387.9			385.3			420.5			389.8

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Premiums	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523		$	5,529		$	5,666		$	5,639		$	22,090		$	22,357
Net investment income	779			758			690			652			740			738			722			689			2,879			2,889
Fee income	74			74			79			69			82			59			92			90			296			323
Net realized investment gains (losses)	20			19			2			14			10			4			(2		)	39			55			51
Other revenues	34			34			31			27			37			29			34			20			126			120
Total revenues	6,278			6,388			6,407			6,373			6,392			6,359			6,512			6,477			25,446			25,740
Claims and expenses
Claims and claim adjustment expenses	3,382			5,141			4,136			3,617			3,364			3,786			3,359			4,167			16,276			14,676
Amortization of deferred acquisition costs	948			970			982			976			971			976			986			977			3,876			3,910
General and administrative expenses	883			907			860			906			884			893			904			929			3,556			3,610
Interest expense	96			97			97			96			96			96			93			93			386			378
Total claims and expenses	5,309			7,115			6,075			5,595			5,315			5,751			5,342			6,166			24,094			22,574
Income (loss) before income taxes	969			(727		)	332			778			1,077			608			1,170			311			1,352			3,166
Income tax expense (benefit)	130			(363		)	(1		)	160			271			109			306			7			(74		)	693
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806		$	499		$	864		$	304		$	1,426		$	2,473
Other-than-temporary impairments (OTTI):
Total OTTI gains (losses)	$	2		$	5		$	9		$	14		$	—		$	11		$	17		$	(1	)	$	30		$	27
OTTI losses recognized in net realized investment gains (losses)	$	(4	)	$	(4	)	$	(12	)	$	(5	)	$	(4	)	$	(4	)	$	(3	)	$	(4	)	$	(25	)	$	(15	)
OTTI gains recognized in other comprehensive income	$	6		$	9		$	21		$	19		$	4		$	15		$	20		$	3		$	55		$	42
Other statistics
Effective tax rate on net investment income	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%	20.2		%	20.0		%	19.2		%	19.1		%	19.8		%
Net investment income (after-tax)	$	622		$	606		$	561		$	541		$	593		$	589		$	578		$	556		$	2,330		$	2,316
Catastrophes, net of reinsurance:
Pre-tax	$	186		$	1,668		$	606		$	102		$	168		$	549		$	91		$	1,054		$	2,562		$	1,862
After-tax	$	122		$	1,085		$	394		$	68		$	109		$	357		$	59		$	689		$	1,669		$	1,214

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Underwriting gain (loss)	$	249		$	(924	)	$	(185	)	$	115		$	248		$	(47	)	$	327		$	(232	)	$	(745	)	$	296
Net investment income	622			606			561			541			593			589			578			556			2,330			2,316
Other, including interest expense	(45		)	(59		)	(44		)	(47		)	(40		)	(47		)	(38		)	(46		)	(195		)	(171		)
Operating income (loss)	826			(377		)	332			609			801			495			867			278			1,390			2,441
Net realized investment gains (losses)	13			13			1			9			5			4			(3		)	26			36			32
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806		$	499		$	864		$	304		$	1,426		$	2,473
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	62.1		%	92.6		%	72.9		%	63.7		%	60.1		%	68.1		%	58.4		%	73.0		%	72.9		%	64.9		%
Underwriting expense ratio	32.6		%	32.4		%	31.6		%	32.2		%	32.1		%	32.4		%	31.9		%	32.4		%	32.2		%	32.2		%
Combined ratio	94.7		%	125.0		%	104.5		%	95.9		%	92.2		%	100.5		%	90.3		%	105.4		%	105.1		%	97.1		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	93.8		%	124.1		%	103.6		%	95.1		%	91.4		%	99.8		%	89.3		%	104.6		%	104.2		%	96.3		%
Impact of catastrophes on combined ratio	3.4		%	30.3		%	10.8		%	1.8		%	3.1		%	10.0		%	1.6		%	18.7		%	11.6		%	8.3		%
Impact of prior year reserve development on combined ratio	-4.4		%	-3.1		%	-3.3		%	-2.3		%	-5.5		%	-4.0		%	-3.4		%	-4.0		%	-3.2		%	-4.2		%

(1)  Before policyholder dividends.

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

and underwriting expenses as follows:

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Billing and policy fees and other	$	26	$	25	$	26	$	25	$	27	$	25	$	24	$	22	$	102	$	98
Fee income:
Loss and loss adjustment expenses	$	33	$	34	$	38	$	28	$	35	$	11	$	40	$	38	$	133	$	124
Underwriting expenses	41		40		41		41		47		48		52		52		163		199
Total fee income	$	74	$	74	$	79	$	69	$	82	$	59	$	92	$	90	$	296	$	323

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Premiums	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523		$	5,529		$	5,666		$	5,639		$	22,090		$	22,357
Net investment income	779			758			690			652			740			738			722			689			2,879			2,889
Fee income	74			74			79			69			82			59			92			90			296			323
Other revenues	34			34			31			27			37			29			34			20			126			120
Total revenues	6,258			6,369			6,405			6,359			6,382			6,355			6,514			6,438			25,391			25,689
Claims and expenses
Claims and claim adjustment expenses	3,382			5,141			4,136			3,617			3,364			3,786			3,359			4,167			16,276			14,676
Amortization of deferred acquisition costs	948			970			982			976			971			976			986			977			3,876			3,910
General and administrative expenses	883			907			860			906			884			893			904			929			3,556			3,610
Interest expense	96			97			97			96			96			96			93			93			386			378
Total claims and expenses	5,309			7,115			6,075			5,595			5,315			5,751			5,342			6,166			24,094			22,574
Operating income (loss) before income taxes	949			(746		)	330			764			1,067			604			1,172			272			1,297			3,115
Income tax expense (benefit)	123			(369		)	(2		)	155			266			109			305			(6		)	(93		)	674
Operating income (loss)	$	826		$	(377	)	$	332		$	609		$	801		$	495		$	867		$	278		$	1,390		$	2,441
Other statistics
Effective tax rate on net investment income	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%	20.2		%	20.0		%	19.2		%	19.1		%	19.8		%
Net investment income (after-tax)	$	622		$	606		$	561		$	541		$	593		$	589		$	578		$	556		$	2,330		$	2,316
Catastrophes, net of reinsurance:
Pre-tax	$	186		$	1,668		$	606		$	102		$	168		$	549		$	91		$	1,054		$	2,562		$	1,862
After-tax	$	122		$	1,085		$	394		$	68		$	109		$	357		$	59		$	689		$	1,669		$	1,214

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)

																								YTD			YTD
	1Q		2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011		2011			2011			2011			2012			2012			2012			2012			2011			2012
Statutory underwriting
Gross written premiums	$	5,961	$	6,124		$	6,226		$	5,576		$	6,073		$	6,240		$	6,271		$	5,725		$	23,887		$	24,309
Net written premiums	$	5,437	$	5,817		$	5,672		$	5,261		$	5,497		$	5,868		$	5,697		$	5,385		$	22,187		$	22,447
Net earned premiums	$	5,371	$	5,503		$	5,605		$	5,611		$	5,523		$	5,529		$	5,666		$	5,639		$	22,090		$	22,357
Losses and loss adjustment expenses	3,342		5,100			4,094			3,570			3,318			3,791			3,310			4,119			16,106			14,538
Underwriting expenses	1,772		1,837			1,812			1,735			1,797			1,838			1,840			1,780			7,156			7,255
Statutory underwriting gain (loss)	257		(1,434		)	(301		)	306			408			(100		)	516			(260		)	(1,172		)	564
Policyholder dividends	10		8			11			15			12			11			11			12			44			46
Statutory underwriting gain (loss) after policyholder dividends	$	247	$	(1,442	)	$	(312	)	$	291		$	396		$	(111	)	$	505		$	(272	)	$	(1,216	)	$	518
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	40,301	$	41,482		$	41,238		$	40,899		$	40,791		$	40,925		$	40,528		$	40,656		$	40,899		$	40,656
Increase (decrease) in reserves	$	66	$	1,181		$	(244	)	$	(339	)	$	(108	)	$	134		$	(397	)	$	128		$	664		$	(243	)
Statutory basis surplus	$	20,588	$	20,224		$	19,842		$	19,174		$	19,867		$	19,841		$	20,291		$	20,048		$	19,174		$	20,048
Net written premiums/surplus (1)	1.06:1		1.09:1			1.12:1			1.16:1			1.12:1			1.12:1			1.10:1			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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Written premiums
Gross	$	5,961		$	6,124		$	6,226		$	5,576		$	6,073		$	6,240		$	6,271		$	5,725		$	23,887		$	24,309
Ceded	(524		)	(307		)	(554		)	(315		)	(576		)	(372		)	(574		)	(340		)	(1,700		)	(1,862		)
Net	$	5,437		$	5,817		$	5,672		$	5,261		$	5,497		$	5,868		$	5,697		$	5,385		$	22,187		$	22,447
Earned premiums
Gross	$	5,804		$	5,920		$	6,031		$	6,032		$	5,973		$	5,985		$	6,132		$	6,110		$	23,787		$	24,200
Ceded	(433		)	(417		)	(426		)	(421		)	(450		)	(456		)	(466		)	(471		)	(1,697		)	(1,843		)
Net	$	5,371		$	5,503		$	5,605		$	5,611		$	5,523		$	5,529		$	5,666		$	5,639		$	22,090		$	22,357

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Premiums	$	2,745		$	2,802		$	2,890		$	2,890		$	2,876		$	2,860		$	2,982		$	2,973		$	11,327		$	11,691
Net investment income	556			541			487			457			532			536			524			498			2,041			2,090
Fee income	74			74			78			69			82			58			92			90			295			322
Other revenues	9			10			8			4			14			8			9			9			31			40
Total revenues	3,384			3,427			3,463			3,420			3,504			3,462			3,607			3,570			13,694			14,143
Claims and expenses
Claims and claim adjustment expenses	1,773			2,579			2,204			1,891			1,709			2,049			1,906			2,193			8,447			7,857
Amortization of deferred acquisition costs	444			457			460			454			467			465			477			475			1,815			1,884
General and administrative expenses	473			492			471			508			498			504			504			514			1,944			2,020
Total claims and expenses	2,690			3,528			3,135			2,853			2,674			3,018			2,887			3,182			12,206			11,761
Operating income (loss) before federal income taxes	694			(101		)	328			567			830			444			720			388			1,488			2,382
Income tax expense (benefit)	90			(112		)	34			122			218			82			177			62			134			539
Operating income	$	604		$	11		$	294		$	445		$	612		$	362		$	543		$	326		$	1,354		$	1,843
Other statistics
Effective tax rate on net investment income	20.0		%	19.9		%	18.2		%	17.1		%	20.0		%	20.3		%	20.1		%	19.1		%	18.9		%	19.9		%
Net investment income (after-tax)	$	445		$	433		$	398		$	379		$	425		$	428		$	419		$	402		$	1,655		$	1,674
Catastrophes, net of reinsurance:
Pre-tax	$	112		$	697		$	195		$	14		$	53		$	252		$	50		$	439		$	1,018		$	794
After-tax	$	73		$	453		$	127		$	9		$	34		$	164		$	33		$	285		$	662		$	516

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Underwriting gain (loss)	$	153		$	(429	)	$	(110	)	$	63		$	177		$	(71	)	$	117		$	(82	)	$	(323	)	$	141
Net investment income	445			433			398			379			425			428			419			402			1,655			1,674
Other	6			7			6			3			10			5			7			6			22			28
Operating income	$	604		$	11		$	294		$	445		$	612		$	362		$	543		$	326		$	1,354		$	1,843
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	63.1		%	90.6		%	74.8		%	64.1		%	57.8		%	71.0		%	62.3		%	72.2		%	73.1		%	65.9		%
Underwriting expense ratio	31.8		%	32.3		%	30.6		%	31.7		%	31.8		%	32.0		%	31.0		%	31.3		%	31.6		%	31.5		%
Combined ratio	94.9		%	122.9		%	105.4		%	95.8		%	89.6		%	103.0		%	93.3		%	103.5		%	104.7		%	97.4		%
Impact of catastrophes on combined ratio	4.1		%	24.9		%	6.8		%	0.5		%	1.8		%	8.8		%	1.7		%	14.7		%	9.0		%	6.8		%
Impact of prior year reserve development on combined ratio	-5.2		%	-1.0		%	-0.9		%	-1.7		%	-8.6		%	-2.0		%	-1.4		%	-4.0		%	-2.2		%	-4.0		%

(1)  Before policyholder dividends.

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

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Billing and policy fees and other	$	5	$	4	$	5	$	5	$	5	$	5	$	5	$	4	$	19	$	19
Fee income:
Loss and loss adjustment expenses	$	33	$	34	$	37	$	28	$	35	$	10	$	40	$	38	$	132	$	123
Underwriting expenses	41		40		41		41		47		48		52		52		163		199
Total fee income	$	74	$	74	$	78	$	69	$	82	$	58	$	92	$	90	$	295	$	322

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)

																					YTD			YTD
	1Q		2Q			3Q			4Q		1Q		2Q			3Q		4Q			4Q			4Q
	2011		2011			2011			2011		2012		2012			2012		2012			2011			2012
Statutory underwriting
Gross written premiums	$	3,306	$	3,094		$	3,205		$	2,813	$	3,429	$	3,280		$	3,382	$	3,020		$	12,418		$	13,111
Net written premiums	$	3,020	$	2,879		$	2,826		$	2,615	$	3,100	$	3,026		$	2,962	$	2,784		$	11,340		$	11,872
Net earned premiums	$	2,745	$	2,802		$	2,890		$	2,890	$	2,876	$	2,860		$	2,982	$	2,973		$	11,327		$	11,691
Losses and loss adjustment expenses	1,736		2,540			2,167			1,846		1,663		2,057			1,860		2,147			8,289			7,727
Underwriting expenses	899		918			898			864		940		928			937		894			3,579			3,699
Statutory underwriting gain (loss)	110		(656		)	(175		)	180		273		(125		)	185		(68		)	(541		)	265
Policyholder dividends	7		5			7			13		10		8			9		10			32			37
Statutory underwriting gain (loss) after policyholder dividends	$	103	$	(661	)	$	(182	)	$	167	$	263	$	(133	)	$	176	$	(78	)	$	(573	)	$	228

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)

																			YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q			3Q		4Q			4Q		4Q
	2011		2011		2011		2011		2012		2012			2012		2012			2011		2012
Net written premiums by market
Select Accounts	$	732	$	738	$	666	$	648	$	718	$	721		$	679	$	657		$	2,784	$	2,775
Commercial Accounts	822		659		747		662		861		717			805		718			2,890		3,101
National Accounts	211		188		176		207		235		226			202		244			782		907
Industry-Focused Underwriting	628		579		649		551		648		636			671		599			2,407		2,554
Target Risk Underwriting	413		468		356		350		429		486			382		369			1,587		1,666
Specialized Distribution	209		246		231		194		208		242			222		198			880		870
Total core	3,015		2,878		2,825		2,612		3,099		3,028			2,961		2,785			11,330		11,873
Business Insurance other	5		1		1		3		1		(2		)	1		(1		)	10		(1		)
Total	$	3,020	$	2,879	$	2,826	$	2,615	$	3,100	$	3,026		$	2,962	$	2,784		$	11,340	$	11,872
Net written premiums by product line
Commercial multi-peril	$	841	$	780	$	743	$	732	$	819	$	777		$	769	$	735		$	3,096	$	3,100
Workers’ compensation	854		678		750		677		944		800			849		807			2,959		3,400
Commercial automobile	493		505		515		442		489		499			498		438			1,955		1,924
Property	414		468		354		359		416		481			373		377			1,595		1,647
General liability	415		442		448		400		426		464			452		423			1,705		1,765
Other	3		6		16		5		6		5			21		4			30		36
Total	$	3,020	$	2,879	$	2,826	$	2,615	$	3,100	$	3,026		$	2,962	$	2,784		$	11,340	$	11,872
National Accounts
Additions to claim volume under administration (1)	$	540	$	416	$	412	$	490	$	639	$	472		$	480	$	549		$	1,858	$	2,140
Written fees	$	73	$	63	$	63	$	64	$	88	$	77		$	77	$	74		$	263	$	316

(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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Premiums	$	773		$	810		$	799		$	792		$	737		$	766		$	772		$	770		$	3,174		$	3,045
Net investment income	106			105			101			102			104			99			97			95			414			395
Fee income	—			—			1			—			—			1			—			—			1			1
Other revenues	7			6			6			7			8			5			8			5			26			26
Total revenues	886			921			907			901			849			871			877			870			3,615			3,467
Claims and expenses
Claims and claim adjustment expenses	433			378			297			379			341			302			309			362			1,487			1,314
Amortization of deferred acquisition costs	147			152			154			150			143			149			149			148			603			589
General and administrative expenses	160			160			162			166			165			165			165			172			648			667
Total claims and expenses	740			690			613			695			649			616			623			682			2,738			2,570
Operating income before federal income taxes	146			231			294			206			200			255			254			188			877			897
Income tax expense	26			67			83			54			51			73			74			57			230			255
Operating income	$	120		$	164		$	211		$	152		$	149		$	182		$	180		$	131		$	647		$	642
Other statistics
Effective tax rate on net investment income	21.2		%	21.2		%	20.8		%	15.8		%	18.9		%	19.7		%	19.3		%	19.1		%	19.8		%	19.2		%
Net investment income (after-tax)	$	84		$	82		$	81		$	85		$	85		$	79		$	78		$	77		$	332		$	319
Catastrophes, net of reinsurance:
Pre-tax	$	21		$	14		$	3		$	17		$	—		$	4		$	1		$	45		$	55		$	50
After-tax	$	15		$	10		$	2		$	13		$	—		$	3		$	—		$	34		$	40		$	37

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Underwriting gain	$	32		$	78		$	126		$	63		$	59		$	99		$	97		$	50		$	299		$	305
Net investment income	84			82			81			85			85			79			78			77			332			319
Other	4			4			4			4			5			4			5			4			16			18
Operating income	$	120		$	164		$	211		$	152		$	149		$	182		$	180		$	131		$	647		$	642
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	55.6		%	46.2		%	36.8		%	47.3		%	46.0		%	39.1		%	39.7		%	46.6		%	46.4		%	42.8		%
Underwriting expense ratio	39.7		%	38.6		%	39.4		%	40.0		%	41.8		%	40.9		%	40.5		%	41.7		%	39.4		%	41.3		%
Combined ratio	95.3		%	84.8		%	76.2		%	87.3		%	87.8		%	80.0		%	80.2		%	88.3		%	85.8		%	84.1		%
Impact of catastrophes on combined ratio	2.7		%	1.7		%	0.4		%	2.2		%	0.0		%	0.4		%	0.1		%	5.9		%	1.7		%	1.7		%
Impact of prior year reserve development on combined ratio	-5.1		%	-11.7		%	-19.1		%	-9.0		%	-6.1		%	-12.5		%	-11.3		%	-9.1		%	-11.3		%	-9.8		%

(1)  Before policyholder dividends.

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

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

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Statutory underwriting
Gross written premiums	$	810	$	910	$	854	$	834	$	791	$	882	$	763	$	839	$	3,408	$	3,275
Net written premiums	$	624	$	879	$	808	$	791	$	604	$	840	$	729	$	808	$	3,102	$	2,981
Net earned premiums	$	773	$	810	$	799	$	792	$	737	$	766	$	772	$	770	$	3,174	$	3,045
Losses and loss adjustment expenses	430		375		294		375		341		299		307		359		1,474		1,306
Underwriting expenses	309		312		303		300		316		319		295		314		1,224		1,244
Statutory underwriting gain	34		123		202		117		80		148		170		97		476		495
Policyholder dividends	3		3		4		2		2		3		2		2		12		9
Statutory underwriting gain after policyholder dividends	$	31	$	120	$	198	$	115	$	78	$	145	$	168	$	95	$	464	$	486

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)

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Net written premiums by market
Bond & Financial Products	$	369	$	533	$	538	$	513	$	357	$	524	$	529	$	514	$	1,953	$	1,924
International	255		346		270		278		247		316		200		294		1,149		1,057
Total	$	624	$	879	$	808	$	791	$	604	$	840	$	729	$	808	$	3,102	$	2,981
Net written premiums by product line
General liability	$	135	$	234	$	230	$	237	$	143	$	236	$	233	$	247	$	836	$	859
Fidelity & surety	196		264		260		237		172		248		246		229		957		895
International	255		346		270		278		247		316		200		294		1,149		1,057
Other	38		35		48		39		42		40		50		38		160		170
Total	$	624	$	879	$	808	$	791	$	604	$	840	$	729	$	808	$	3,102	$	2,981

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Premiums	$	1,853		$	1,891		$	1,916		$	1,929		$	1,910		$	1,903		$	1,912		$	1,896		$	7,589		$	7,621
Net investment income	117			112			102			93			104			103			101			96			424			404
Other revenues	18			18			17			17			19			16			17			14			70			66
Total revenues	1,988			2,021			2,035			2,039			2,033			2,022			2,030			2,006			8,083			8,091
Claims and expenses
Claims and claim adjustment expenses	1,176			2,184			1,635			1,347			1,314			1,435			1,144			1,612			6,342			5,505
Amortization of deferred acquisition costs	357			361			368			372			361			362			360			354			1,458			1,437
General and administrative expenses	235			225			222			226			214			219			230			237			908			900
Total claims and expenses	1,768			2,770			2,225			1,945			1,889			2,016			1,734			2,203			8,708			7,842
Operating income (loss) before federal income taxes	220			(749		)	(190		)	94			144			6			296			(197		)	(625		)	249
Income tax expense (benefit)	50			(278		)	(82		)	17			36			(11		)	90			(83		)	(293		)	32
Operating income (loss)	$	170		$	(471	)	$	(108	)	$	77		$	108		$	17		$	206		$	(114	)	$	(332	)	$	217
Other statistics
Effective tax rate on net investment income	20.0		%	19.9		%	18.5		%	17.5		%	20.1		%	20.4		%	20.2		%	19.4		%	19.0		%	20.1		%
Net investment income (after-tax)	$	93		$	91		$	82		$	77		$	83		$	82		$	81		$	77		$	343		$	323
Catastrophes, net of reinsurance:
Pre-tax	$	53		$	957		$	408		$	71		$	115		$	293		$	40		$	570		$	1,489		$	1,018
After-tax	$	34		$	622		$	265		$	46		$	75		$	190		$	26		$	370		$	967		$	661

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Underwriting gain (loss)	$	64		$	(573	)	$	(201	)	$	(11	)	$	12		$	(75	)	$	113		$	(200	)	$	(721	)	$	(150	)
Net investment income	93			91			82			77			83			82			81			77			343			323
Other	13			11			11			11			13			10			12			9			46			44
Operating income (loss)	$	170		$	(471	)	$	(108	)	$	77		$	108		$	17		$	206		$	(114	)	$	(332	)	$	217
GAAP combined ratio (1)
Loss and loss adjustment expense ratio	63.4		%	115.6		%	85.3		%	69.9		%	68.8		%	75.4		%	59.8		%	85.0		%	83.5		%	72.3		%
Underwriting expense ratio	30.8		%	29.9		%	29.7		%	29.9		%	29.0		%	29.4		%	29.9		%	30.2		%	30.1		%	29.6		%
Combined ratio	94.2		%	145.5		%	115.0		%	99.8		%	97.8		%	104.8		%	89.7		%	115.2		%	113.6		%	101.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.4		%	143.2		%	112.5		%	97.4		%	95.7		%	102.9		%	86.8		%	113.1		%	111.1		%	99.6		%
Impact of catastrophes on combined ratio	2.8		%	50.7		%	21.3		%	3.7		%	6.0		%	15.3		%	2.1		%	30.1		%	19.6		%	13.4		%
Impact of prior year reserve development on combined ratio	-3.0		%	-2.4		%	-0.3		%	-0.3		%	-0.5		%	-3.5		%	-3.4		%	-1.8		%	-1.5		%	-2.3		%

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

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Billing and policy fees and other	$	21	$	21	$	21	$	20	$	22	$	20	$	19	$	18	$	83	$	79

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)

																					YTD			YTD
	1Q		2Q			3Q			4Q		1Q		2Q			3Q		4Q			4Q			4Q
	2011		2011			2011			2011		2012		2012			2012		2012			2011			2012
Statutory underwriting
Gross written premiums	$	1,845	$	2,120		$	2,167		$	1,929	$	1,853	$	2,078		$	2,126	$	1,866		$	8,061		$	7,923
Net written premiums	$	1,793	$	2,059		$	2,038		$	1,855	$	1,793	$	2,002		$	2,006	$	1,793		$	7,745		$	7,594
Net earned premiums	$	1,853	$	1,891		$	1,916		$	1,929	$	1,910	$	1,903		$	1,912	$	1,896		$	7,589		$	7,621
Losses and loss adjustment expenses	1,176		2,185			1,633			1,349		1,314		1,435			1,143		1,613			6,343			5,505
Underwriting expenses	564		607			611			571		541		591			608		572			2,353			2,312
Statutory underwriting gain (loss)	$	113	$	(901	)	$	(328	)	$	9	$	55	$	(123	)	$	161	$	(289	)	$	(1,107	)	$	(196	)
Policies in force (in thousands)
Automobile	2,559		2,570			2,574			2,571		2,554		2,505			2,436		2,361			2,571			2,361
Homeowners and other	5,183		5,210			5,226			5,225		5,195		5,133			5,020		4,898			5,225			4,898

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Statutory underwriting
Gross written premiums	$	923		$	952		$	950		$	881		$	904		$	903		$	911		$	826		$	3,706		$	3,544
Net written premiums	$	918		$	948		$	946		$	876		$	900		$	899		$	906		$	822		$	3,688		$	3,527
Net earned premiums	$	896		$	908		$	912		$	913		$	902		$	891		$	888		$	875		$	3,629		$	3,556
Losses and loss adjustment expenses	620			722			707			757			641			674			659			778			2,806			2,752
Underwriting expenses	249			249			245			237			235			238			233			229			980			935
Statutory underwriting gain (loss)	$	27		$	(63	)	$	(40	)	$	(81	)	$	26		$	(21	)	$	(4	)	$	(132	)	$	(157	)	$	(131	)
Other statistics
GAAP combined ratio (2):
Loss and loss adjustment expense ratio	69.2		%	79.5		%	77.5		%	82.9		%	71.1		%	75.6		%	74.1		%	89.0		%	77.3		%	77.4		%
Underwriting expense ratio	26.6		%	26.2		%	25.8		%	26.0		%	25.4		%	25.9		%	25.3		%	26.5		%	26.1		%	25.7		%
Combined ratio	95.8		%	105.7		%	103.3		%	108.9		%	96.5		%	101.5		%	99.4		%	115.5		%	103.4		%	103.1		%
Impact of catastrophes on combined ratio	0.1		%	6.8		%	2.1		%	1.0		%	1.0		%	3.8		%	0.4		%	7.9		%	2.5		%	3.3		%
Impact of prior year reserve development on combined ratio	-0.1		%	-0.3		%	2.2		%	3.7		%	-0.2		%	0.0		%	0.9		%	1.9		%	1.4		%	0.6		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	1		$	61		$	20		$	8		$	9		$	34		$	4		$	69		$	90		$	116
After-tax	$	—		$	41		$	12		$	6		$	6		$	22		$	3		$	44		$	59		$	75
Policies in force (in thousands)	2,497			2,502			2,501			2,494			2,473			2,423			2,353			2,278
Change from prior year quarter	2.0		%	1.4		%	0.8		%	0.2		%	-1.0		%	-3.2		%	-5.9		%	-8.7		%
Change from prior quarter	0.3		%	0.2		%	0.0		%	-0.3		%	-0.8		%	-2.0		%	-2.9		%	-3.2		%

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

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

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Billing and policy fees and other	$	12	$	11	$	11	$	11	$	12	$	10	$	11	$	9	$	45	$	42

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Statutory underwriting
Gross written premiums	$	891		$	1,136		$	1,179		$	1,015		$	912		$	1,135		$	1,171		$	1,002		$	4,221		$	4,220
Net written premiums	$	845		$	1,078		$	1,056		$	944		$	855		$	1,064		$	1,056		$	934		$	3,923		$	3,909
Net earned premiums	$	932		$	954		$	974		$	982		$	973		$	976		$	986		$	983		$	3,842		$	3,918
Losses and loss adjustment expenses	532			1,428			899			564			643			730			457			800			3,423			2,630
Underwriting expenses	263			308			312			282			262			309			315			294			1,165			1,180
Statutory underwriting gain (loss)	$	137		$	(782	)	$	(237	)	$	136		$	68		$	(63	)	$	214		$	(111	)	$	(746	)	$	108
Other statistics
GAAP combined ratio (2):
Loss and loss adjustment expense ratio	57.1		%	149.7		%	92.3		%	57.4		%	66.0		%	74.8		%	46.4		%	81.4		%	89.1		%	67.2		%
Underwriting expense ratio	30.0		%	29.3		%	28.8		%	29.3		%	29.0		%	29.4		%	29.0		%	29.5		%	29.3		%	29.2		%
Combined ratio	87.1		%	179.0		%	121.1		%	86.7		%	95.0		%	104.2		%	75.4		%	110.9		%	118.4		%	96.4		%
Impact of catastrophes on combined ratio	5.6		%	92.9		%	39.6		%	6.3		%	10.7		%	26.1		%	3.6		%	50.3		%	36.1		%	22.7		%
Impact of prior year reserve development on combined ratio	-6.1		%	-4.7		%	-2.8		%	-4.0		%	-1.1		%	-6.9		%	-7.3		%	-4.9		%	-4.4		%	-5.0		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	52		$	887		$	385		$	62		$	104		$	256		$	35		$	495		$	1,386		$	890
After-tax	$	34		$	576		$	251		$	40		$	68		$	166		$	22		$	322		$	901		$	578
Policies in force (in thousands)	5,135			5,157			5,167			5,162			5,128			5,061			4,945			4,821
Change from prior year quarter	2.7		%	1.8		%	1.3		%	0.8		%	-0.1		%	-1.9		%	-4.3		%	-6.6		%
Change from prior quarter	0.3		%	0.4		%	0.2		%	-0.1		%	-0.7		%	-1.3		%	-2.3		%	-2.5		%

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

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

																	YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		4Q		4Q
	2011		2011		2011		2011		2012		2012		2012		2012		2011		2012
Billing and policy fees and other	$	9	$	9	$	9	$	9	$	10	$	8	$	9	$	8	$	36	$	35

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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Net written premiums
Automobile	$	24		$	24		$	27		$	25		$	29		$	28		$	32		$	26		$	100		$	115
Homeowners and other	6			9			9			10			9			11			12			11			34			43
Total net written premiums	$	30		$	33		$	36		$	35		$	38		$	39		$	44		$	37		$	134		$	158
Revenues
Premiums	$	25		$	29		$	30		$	34		$	35		$	36		$	38		$	38		$	118		$	147
Other revenues	1			—			1			—			—			—			1			—			2			1
Total revenues	26			29			31			34			35			36			39			38			120			148
Claims and expenses
Claims and claim adjustment expenses	23			36			28			27			31			31			27			34			114			123
Amortization of deferred acquisition costs	1			—			1			1			1			1			1			—			3			3
General and administrative expenses	53			48			54			51			42			42			61			51			206			196
Total claims and expenses	77			84			83			79			74			74			89			85			323			322
Operating loss before federal income taxes	(51		)	(55		)	(52		)	(45		)	(39		)	(38		)	(50		)	(47		)	(203		)	(174		)
Income taxes	(18		)	(19		)	(18		)	(16		)	(14		)	(13		)	(17		)	(17		)	(71		)	(61		)
Operating loss	$	(33	)	$	(36	)	$	(34	)	$	(29	)	$	(25	)	$	(25	)	$	(33	)	$	(30	)	$	(132	)	$	(113	)
Other statistics
Policies in force (in thousands)
Automobile	62			68			73			77			81			82			83			83
Homeowners and other	48			53			59			63			67			72			75			77
Unfavorable prior year reserve development	$	3		$	2		$	2		$	—		$	2		$	1		$	(2	)	$	(2	)	$	7		$	(1	)
Catastrophes, net of reinsurance:
Pre-tax	$	—		$	9		$	3		$	1		$	2		$	3		$	1		$	6		$	13		$	12
After-tax	$	—		$	5		$	2		$	—		$	1		$	2		$	1		$	4		$	7		$	8

(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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Revenues
Other revenues	$	—		$	—		$	—		$	(1	)	$	(4	)	$	—		$	—		$	(8	)	$	(1	)	$	(12	)
Claims and expenses
Interest expense	96			97			97			96			96			96			93			93			386			378
General and administrative expenses	15			30			5			6			7			5			5			6			56			23
Total claims and expenses	111			127			102			102			103			101			98			99			442			401
Operating loss before federal income tax benefit	(111		)	(127		)	(102		)	(103		)	(107		)	(101		)	(98		)	(107		)	(443		)	(413		)
Income taxes	(43		)	(46		)	(37		)	(38		)	(39		)	(35		)	(36		)	(42		)	(164		)	(152		)
Operating loss	$	(68	)	$	(81	)	$	(65	)	$	(65	)	$	(68	)	$	(66	)	$	(62	)	$	(65	)	$	(279	)	$	(261	)

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

22

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

	December 31,			December 31,
	2012 (1)			2011
Assets
Fixed maturities, available for sale, at fair value (amortized cost $60,829 and $59,994)	$	65,393		$	64,232
Equity securities, available for sale, at fair value (cost $462 and $414)	645			559
Real estate investments	883			865
Short-term securities	3,483			3,594
Other investments	3,434			3,451
Total investments	73,838			72,701
Cash	330			214
Investment income accrued	752			768
Premiums receivable	5,872			5,730
Reinsurance recoverables	10,712			11,155
Ceded unearned premiums	856			828
Deferred acquisition costs	1,792			1,786
Deferred taxes	—			7
Contractholder receivables	4,806			5,186
Goodwill	3,365			3,365
Other intangible assets	381			433
Other assets	2,234			2,402
Total assets	$	104,938		$	104,575
Liabilities
Claims and claim adjustment expense reserves	$	50,922		$	51,392
Unearned premium reserves	11,241			11,102
Contractholder payables	4,806			5,186
Payables for reinsurance premiums	346			389
Deferred taxes	338			—
Debt	6,350			6,605
Other liabilities	5,530			5,424
Total liabilities	79,533			80,098
Shareholders’ equity
Common stock (1,750.0 shares authorized; 377.4 and 392.8 shares issued and outstanding)	21,161			20,732
Retained earnings	21,352			19,579
Accumulated other comprehensive income	2,236			2,005
Treasury stock, at cost (372.3 and 349.0 shares)	(19,344		)	(17,839		)
Total shareholders’ equity	25,405			24,477
Total liabilities and shareholders’ equity	$	104,938		$	104,575

(1)  Preliminary.

Certain prior period amounts have been restated to conform to the 2012 presentation.

23

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

	December 31,		Pre-tax Book		December 31,		Pre-tax Book
	2012		Yield (1)		2011		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	27,188	3.92	%	$	25,711	4.33	%
Tax-exempt fixed maturities	38,205		3.87	%	38,521		4.01	%
Total fixed maturities	65,393		3.89	%	64,232		4.14	%
Non-redeemable preferred stocks	135		6.27	%	131		6.30	%
Common stocks	510				428
Total equity securities	645				559
Real estate investments	883				865
Short-term securities	3,483		0.21	%	3,594		0.13	%
Private equities	1,888				1,827
Hedge funds	381				535
Real estate partnerships	610				601
Mortgage loans	4		6.21	%	36		6.28	%
Trading securities	30				25
Other investments	521				427
Total other investments	3,434				3,451
Total investments	$	73,838			$	72,701
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	3,103			$	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)

	December 31,		December 31,
	2012		2011
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,222	$	2,497
Obligations of states and political subdivisions:
Pre-refunded	9,025		7,332
All other	29,656		31,690
Total	38,681		39,022
Debt securities issued by foreign governments	2,257		2,318
Mortgage-backed securities - principally obligations of U.S. Government agencies	2,997		3,515
Corporates (including redeemable preferreds)	19,236		16,880
Total fixed maturities	$	65,393	$	64,232

Fixed Maturities

Quality Characteristics (1)

	December 31, 2012
	Amount		% of Total
Quality Ratings
Aaa	$	28,108	43.0	%
Aa	20,768		31.8
A	8,354		12.8
Baa	6,111		9.3
Total investment grade	63,341		96.9
Ba	989		1.5
B	462		0.7
Caa and lower	601		0.9
Total below investment grade	2,052		3.1
Total fixed maturities	$	65,393	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	3.2

(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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Gross investment income
Fixed maturities	$	642		$	634		$	633		$	634		$	620		$	611		$	604		$	604		$	2,543		$	2,439
Short-term securities	4			3			3			2			2			3			3			2			12			10
Other	140			129			62			24			128			133			124			91			355			476
	786			766			698			660			750			747			731			697			2,910			2,925
Investment expenses	7			8			8			8			10			9			9			8			31			36
Net investment income, pre-tax	779			758			690			652			740			738			722			689			2,879			2,889
Income taxes	157			152			129			111			147			149			144			133			549			573
Net investment income, after-tax	$	622		$	606		$	561		$	541		$	593		$	589		$	578		$	556		$	2,330		$	2,316
Effective tax rate	20.2		%	20.1		%	18.6		%	16.9		%	19.9		%	20.2		%	20.0		%	19.2		%	19.1		%	19.8		%
Average invested assets (1)	$	70,771		$	70,476		$	70,474		$	70,067		$	69,494		$	69,623		$	69,813		$	70,419		$	70,471		$	69,863
Average yield pre-tax (1)	4.4		%	4.3		%	3.9		%	3.7		%	4.3		%	4.2		%	4.1		%	3.9		%	4.1		%	4.1		%
Average yield after-tax	3.5		%	3.4		%	3.2		%	3.1		%	3.4		%	3.4		%	3.3		%	3.2		%	3.3		%	3.3		%

(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)

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Net realized investment gains (losses)
Fixed maturities	$	10		$	14		$	—		$	11		$	8		$	17		$	14		$	14		$	35		$	53
Equity securities	1			26			(4		)	17			3			2			—			(1		)	40			4
Other (1)	9			(21		)	6			(14		)	(1		)	(15		)	(16		)	26			(20		)	(6		)
Realized investment gains (losses) before tax	20			19			2			14			10			4			(2		)	39			55			51
Related taxes	7			6			1			5			5			—			1			13			19			19
Net realized investment gains (losses)	$	13		$	13		$	1		$	9		$	5		$	4		$	(3	)	$	26		$	36		$	32
Gross investment gains (1)	$	109		$	102		$	132		$	107		$	121		$	78		$	78		$	97		$	450		$	374
Gross investment losses before impairments (1)	(85		)	(79		)	(118		)	(88		)	(107		)	(70		)	(77		)	(54		)	(370		)	(308		)
Net investment gains before impairments	24			23			14			19			14			8			1			43			80			66
Other-than-temporary impairment losses	(4		)	(4		)	(12		)	(5		)	(4		)	(4		)	(3		)	(4		)	(25		)	(15		)
Net realized investment gains (losses) before tax	20			19			2			14			10			4			(2		)	39			55			51
Related taxes	7			6			1			5			5			—			1			13			19			19
Net realized investment gains (losses)	$	13		$	13		$	1		$	9		$	5		$	4		$	(3	)	$	26		$	36		$	32

	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,		December 31,
	2011		2011		2011		2011		2012		2012		2012		2012
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	2,556	$	3,209	$	3,944	$	4,238	$	4,166	$	4,392	$	4,870	$	4,564
Equity securities & other	193		176		118		161		181		176		209		197
Unrealized investment gains before tax	2,749		3,385		4,062		4,399		4,347		4,568		5,079		4,761
Related taxes	943		1,163		1,398		1,528		1,509		1,588		1,764		1,658
Balance, end of period	$	1,806	$	2,222	$	2,664	$	2,871	$	2,838	$	2,980	$	3,315	$	3,103

(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	$	25	$	27	$	26	$	172	$	125
Gross investment Treasury future losses	$	47	$	53	$	77	$	57	$	41	$	38	$	35	$	25	$	234	$	139

The Company entered into these arrangements as part of its strategy to shorten the duration of its 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)

	December 31,			December 31,
	2012			2011
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	5,256		$	6,255
Allowance for uncollectible reinsurance	(258		)	(345		)
Net reinsurance recoverables (i)	4,998			5,910
Mandatory pools and associations (ii)	2,549			2,020
Structured settlements (iii)	3,165			3,225
Total reinsurance recoverables	$	10,712		$	11,155

(i) The Company’s top five reinsurer groups, including retroactive reinsurance, included in net reinsurance recoverables is as follows:

	A.M. Best Rating of Group’s	December 31,		December 31,
Reinsurer	Predominant Reinsurer	2012		2011
Munich Re Group	A+ second highest of 16 ratings	$	550	$	670
Swiss Re Group	A+ second highest of 16 ratings	517		626
Alleghany Group (1)	A third highest of 16 ratings	302		349
XL Capital Group	A third highest of 16 ratings	266		281
Berkshire Hathaway Group	A++ highest of 16 ratings	258		289

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 incurred but not reported claims.  The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves.  Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.

The net reinsurance recoverables reflect an allowance for uncollectible reinsurance that is based upon the Company’s ongoing review of amounts outstanding, reinsurer solvency, the Company’s experience, current economic conditions, and other relevant factors.  Of the total net recoverables due from reinsurers at December 31, 2012, after deducting mandatory pools and associations and structured settlement balances, $4.0 billion, or 80%, were rated by A.M. Best Company.  Of the total rated by A.M. Best Company, 99% were rated A- or better.  The remaining 20% net recoverables from reinsurers were comprised of the following:  7% related to the Company’s participation in voluntary pools, 11% related to recoverables from captive insurance companies and 2% were balances from other companies not rated by A.M. Best Company.  In addition, $1.5 billion of the net recoverables were collateralized by letters of credit, funds held or trust agreements at December 31, 2012.

(ii) 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.

(iii) 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	December 31,		December 31,
Group	Predominant Insurer	2012		2011
Fidelity and Guaranty Life	B++ fifth highest of 16 ratings	$	981	$	1,007
Metlife	A+ second highest of 16 ratings	474		488
Genworth Financial Group	A third highest of 16 ratings	437		449
Symetra Financial Corporation	A third highest of 16 ratings	256		264
John Hancock Group	A+ second highest of 16 ratings	190		189

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

Certain prior period amounts have been restated to conform to the 2012 presentation.

28

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			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		$	31,006		$	31,126		$	31,051		$	30,505		$	31,131
Incurred	1,736			2,540			2,167			1,846			1,663			2,057			1,860			2,147			8,289			7,727
Paid	(1,759		)	(1,874		)	(2,059		)	(1,968		)	(1,792		)	(1,932		)	(1,937		)	(2,080		)	(7,660		)	(7,741		)
Foreign exchange and other	7			3			(13		)	—			4			(5		)	2			2			(3		)	3
End of period	$	30,489		$	31,158		$	31,253		$	31,131		$	31,006		$	31,126		$	31,051		$	31,120		$	31,131		$	31,120
Financial, Professional & International Insurance
Beginning of period	$	6,068		$	6,267		$	6,297		$	6,076		$	6,019		$	6,045		$	5,992		$	5,894		$	6,068		$	6,019
Incurred	430			375			294			375			341			299			307			359			1,474			1,306
Paid	(294		)	(357		)	(412		)	(428		)	(361		)	(307		)	(453		)	(411		)	(1,491		)	(1,532		)
Foreign exchange and other	63			12			(103		)	(4		)	46			(45		)	48			7			(32		)	56
End of period	$	6,267		$	6,297		$	6,076		$	6,019		$	6,045		$	5,992		$	5,894		$	5,849		$	6,019		$	5,849
Personal Insurance
Beginning of period	$	3,662		$	3,545		$	4,027		$	3,909		$	3,749		$	3,740		$	3,807		$	3,583		$	3,662		$	3,749
Incurred	1,176			2,185			1,633			1,349			1,314			1,435			1,143			1,613			6,343			5,505
Paid	(1,293		)	(1,703		)	(1,751		)	(1,509		)	(1,323		)	(1,368		)	(1,367		)	(1,509		)	(6,256		)	(5,567		)
End of period	$	3,545		$	4,027		$	3,909		$	3,749		$	3,740		$	3,807		$	3,583		$	3,687		$	3,749		$	3,687
Total
Beginning of period	$	40,235		$	40,301		$	41,482		$	41,238		$	40,899		$	40,791		$	40,925		$	40,528		$	40,235		$	40,899
Incurred	3,342			5,100			4,094			3,570			3,318			3,791			3,310			4,119			16,106			14,538
Paid	(3,346		)	(3,934		)	(4,222		)	(3,905		)	(3,476		)	(3,607		)	(3,757		)	(4,000		)	(15,407		)	(14,840		)
Foreign exchange and other	70			15			(116		)	(4		)	50			(50		)	50			9			(35		)	59
End of period	$	40,301		$	41,482		$	41,238		$	40,899		$	40,791		$	40,925		$	40,528		$	40,656		$	40,899		$	40,656
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	175		$	—		$	—		$	—		$	167		$	—		$	175		$	167
Environmental	—			76			—			—			—			90			—			—			76			90
All other	(143		)	(103		)	(201		)	(49		)	(248		)	(148		)	(208		)	(120		)	(496		)	(724		)
Prior year development excluding accretion of discount	(143		)	(27		)	(26		)	(49		)	(248		)	(58		)	(41		)	(120		)	(245		)	(467		)
Accretion of discount	11			12			11			11			12			13			12			11			45			48
Total Business Insurance	(132		)	(15		)	(15		)	(38		)	(236		)	(45		)	(29		)	(109		)	(200		)	(419		)
Financial, Professional & International Insurance
Asbestos	—			—			—			—			—			—			8			—			—			8
All other	(39		)	(96		)	(153		)	(72		)	(46		)	(96		)	(95		)	(69		)	(360		)	(306		)
Total Financial, Professional & International Insurance	(39		)	(96		)	(153		)	(72		)	(46		)	(96		)	(87		)	(69		)	(360		)	(298		)
Personal Insurance	(55		)	(45		)	(5		)	(5		)	(10		)	(67		)	(65		)	(33		)	(110		)	(175		)
Total	$	(226	)	$	(156	)	$	(173	)	$	(115	)	$	(292	)	$	(208	)	$	(181	)	$	(211	)	$	(670	)	$	(892	)

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

29

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Asbestos reserves
Beginning reserves:
Gross	$	2,941		$	2,876		$	2,808		$	2,921		$	2,780		$	2,724		$	2,660		$	2,771		$	2,941		$	2,780
Ceded	(393		)	(374		)	(370		)	(388		)	(341		)	(340		)	(335		)	(324		)	(393		)	(341		)
Net	2,548			2,502			2,438			2,533			2,439			2,384			2,325			2,447			2,548			2,439
Incurred losses and loss expenses:
Gross	—			—			195			—			—			—			171			—			195			171
Ceded	—			—			(20		)	—			—			—			4			—			(20		)	4
Losses paid:
Gross	65			68			82			141			56			64			60			82			356			262
Ceded	(19		)	(4		)	(2		)	(47		)	(1		)	(5		)	(7		)	(13		)	(72		)	(26		)
Ending reserves:
Gross	2,876			2,808			2,921			2,780			2,724			2,660			2,771			2,689			2,780			2,689
Ceded	(374		)	(370		)	(388		)	(341		)	(340		)	(335		)	(324		)	(311		)	(341		)	(311		)
Net	$	2,502		$	2,438		$	2,533		$	2,439		$	2,384		$	2,325		$	2,447		$	2,378		$	2,439		$	2,378
Environmental reserves
Beginning reserves:
Gross	$	354		$	339		$	394		$	373		$	346		$	321		$	396		$	380		$	354		$	346
Ceded	(3		)	(3		)	(6		)	(6		)	(5		)	(4		)	(9		)	(7		)	(3		)	(5		)
Net	351			336			388			367			341			317			387			373			351			341
Incurred losses and loss expenses:
Gross	—			80			—			—			—			96			3			—			80			99
Ceded	—			(4		)	—			—			—			(6		)	(3		)	—			(4		)	(9		)
Losses paid:
Gross	15			25			21			27			25			21			19			28			88			93
Ceded	—			(1		)	—			(1		)	(1		)	(1		)	(5		)	(2		)	(2		)	(9		)
Ending reserves:
Gross	339			394			373			346			321			396			380			352			346			352
Ceded	(3		)	(6		)	(6		)	(5		)	(4		)	(9		)	(7		)	(5		)	(5		)	(5		)
Net	$	336		$	388		$	367		$	341		$	317		$	387		$	373		$	347		$	341		$	347

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

30

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

	December 31,			December 31,
	2012			2011
Debt
Short-term debt
Commercial paper	$	100		$	100
5.375% Senior notes due June 15, 2012	—			250
5.00% Senior notes due March 15, 2013 (1)	500			—
Total short-term debt	600			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)	107			115
Total long-term debt	5,761			6,269
Unamortized fair value adjustment	52			53
Unamortized debt issuance costs	(63		)	(67		)
	5,750			6,255
Total debt	6,350			6,605
Common equity (excluding net unrealized investment gains, net of tax)	22,302			21,606
Total capital (excluding net unrealized investment gains, net of tax)	$	28,652		$	28,211
Total debt to capital (excluding net unrealized investment gains, net of tax)	22.2		%	23.4		%

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

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

31

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

	December 31,			December 31,
	2012 (1)			2011
Statutory basis surplus	$	20,048		$	19,174
GAAP adjustments
Goodwill and intangible assets	3,573			3,621
Investments	5,351			4,883
Noninsurance companies	(4,302		)	(4,219		)
Deferred acquisition costs	1,792			1,786
Deferred federal income tax	(2,220		)	(1,946		)
Current federal income tax	(9		)	(40		)
Reinsurance recoverables	201			242
Furniture, equipment & software	664			708
Employee benefits	(13		)	(9		)
Agents balances	151			140
Other	169			137
Total GAAP adjustments	5,357			5,303
GAAP shareholders’ equity	$	25,405		$	24,477

(1) Estimated and Preliminary

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

32

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Cash flows from operating activities
Net income (loss)	$	839		$	(364	)	$	333		$	618		$	806		$	499		$	864		$	304		$	1,426		$	2,473
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment (gains) losses	(20		)	(19		)	(2		)	(14		)	(10		)	(4		)	2			(39		)	(55		)	(51		)
Depreciation and amortization	208			197			194			203			216			196			206			209			802			827
Deferred federal income tax expense (benefit)	153			(16		)	22			(96		)	119			6			96			2			63			223
Amortization of deferred acquisition costs	948			970			982			976			971			976			986			977			3,876			3,910
Equity in income from other investments	(122		)	(109		)	(48		)	(2		)	(114		)	(114		)	(43		)	(71		)	(281		)	(342		)
Premiums receivable	(167		)	(375		)	103			202			(151		)	(317		)	161			169			(237		)	(138		)
Reinsurance recoverables	218			7			21			563			495			257			174			(473		)	809			453
Deferred acquisition costs	(964		)	(1,009		)	(1,015		)	(893		)	(984		)	(1,016		)	(1,005		)	(909		)	(3,881		)	(3,914		)
Claims and claim adjustment expense reserves	(251		)	1,140			(149		)	(894		)	(504		)	(95		)	(597		)	656			(154		)	(540		)
Unearned premium reserves	175			220			217			(424		)	117			229			160			(383		)	188			123
Other	(384		)	(374		)	259			112			(147		)	(166		)	497			22			(387		)	206
Net cash provided by operating activities	633			268			917			351			814			451			1,501			464			2,169			3,230
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,849			1,385			2,007			2,163			1,615			2,552			1,688			2,514			7,404			8,369
Proceeds from sales of investments:
Fixed maturities	490			246			106			319			223			319			182			363			1,161			1,087
Equity securities	8			39			4			84			15			7			9			6			135			37
Real estate investments	—			—			1			—			—			3			—			50			1			53
Other investments	161			124			197			112			203			183			130			319			594			835
Purchases of investments:
Fixed maturities	(1,824		)	(1,723		)	(2,677		)	(2,480		)	(2,604		)	(2,596		)	(2,477		)	(2,770		)	(8,704		)	(10,447		)
Equity securities	(51		)	(52		)	(15		)	(13		)	(10		)	(23		)	(6		)	(9		)	(131		)	(48		)
Real estate investments	(30		)	(5		)	(6		)	(25		)	(5		)	(53		)	(4		)	(33		)	(66		)	(95		)
Other investments	(107		)	(522		)	(129		)	(131		)	(114		)	(107		)	(71		)	(242		)	(889		)	(534		)
Net sales (purchases) of short-term securities	(31		)	628			216			1,205			226			141			(408		)	158			2,018			117
Securities transactions in course of settlement	134			79			(17		)	(196		)	248			(171		)	(24		)	(76		)	—			(23		)
Other	(69		)	(74		)	(105		)	(123		)	(92		)	(41		)	(96		)	(94		)	(371		)	(323		)
Net cash provided by (used in) investing activities	530			125			(418		)	915			(295		)	214			(1,077		)	186			1,152			(972		)

Certain prior period amounts have been restated to conform to the 2012 presentation.

33

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

																									YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			4Q			4Q
	2011			2011			2011			2011			2012			2012			2012			2012			2011			2012
Cash flows from financing activities
Payment of debt	—			(8		)	—			—			—			(258		)	—			—			(8		)	(258		)
Dividends paid to shareholders	(155		)	(174		)	(171		)	(165		)	(161		)	(180		)	(178		)	(175		)	(665		)	(694		)
Issuance of common stock - employee share options	168			77			25			44			77			93			77			48			314			295
Treasury stock acquired - share repurchase authorization	(1,104		)	(256		)	(395		)	(1,164		)	(354		)	(353		)	(349		)	(418		)	(2,919		)	(1,474		)
Treasury stock acquired - net employee share-based compensation	(44		)	(2		)	—			—			(52		)	—			—			(1		)	(46		)	(53		)
Excess tax benefits from share-based payment arrangements	7			4			6			1			12			7			13			6			18			38
Net cash used in financing activities	(1,128		)	(359		)	(535		)	(1,284		)	(478		)	(691		)	(437		)	(540		)	(3,306		)	(2,146		)
Effect of exchange rate changes on cash	4			—			(6		)	1			3			(2		)	3			—			(1		)	4
Net increase (decrease) in cash	39			34			(42		)	(17		)	44			(28		)	(10		)	110			14			116
Cash at beginning of period	200			239			273			231			214			258			230			220			200			214
Cash at end of period	$	239		$	273		$	231		$	214		$	258		$	230		$	220		$	330		$	214		$	330
Income taxes paid (received)	$	112		$	179		$	(14	)	$	(59	)	$	20		$	276		$	14		$	(122	)	$	218		$	188
Interest paid	$	35		$	156		$	35		$	156		$	35		$	156		$	35		$	149		$	382		$	375

34

The Travelers Companies, Inc.
Financial Supplement - Fourth 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 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.

Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses). Management uses operating income (loss) 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, 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 (loss), 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 and other 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. 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 basis surplus represents the excess of an insurance company’s assets over its liabilities in accordance with statutory accounting practices.

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 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