8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported):  April 23, 2013

The Travelers Companies, Inc.

(Exact name of registrant as specified in its charter)

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

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

(917) 778-6000

(Registrant’s telephone number, including area code)

Not Applicable

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

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

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On April 23, 2013, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended March 31, 2013, and the availability of the Company’s first quarter financial supplement on the Company’s web site.  The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.

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

Item 9.01.  Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit No.	Description
99.1	Press Release, dated April 23, 2013, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2013 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.)

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SIGNATURES

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

Date:      April 23, 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 April 23, 2013, reporting results of operations (This exhibit is furnished and not filed.)
99.2	First Quarter 2013 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 First Quarter Net Income per Diluted Share of $2.33, Up 15% from Prior Year Quarter

Record Quarterly Operating Income per Diluted Share of $2.31

Return on Equity and Operating Return on Equity of 14.1% and 15.8%, Respectively

Board of Directors Approves 9% Increase in the Company’s Regular Quarterly Dividend per Share to $0.50

·Net and operating income of $896 million and $887 million, respectively, both up 11% from prior year quarter.

·Continued improvement in underlying underwriting margins in all segments.

·Written rate gains continued to exceed expected loss cost trends in all segments. Renewal rate change of 8% in Business Insurance, including nearly 10% in Commercial Accounts.

·Repurchased 3.7 million shares for $300 million in the quarter.

·Book value per share of $68.00, up 7% from end of prior year quarter and 1% from year-end 2012.

New York, April 23, 2013 — The Travelers Companies, Inc. today reported net income of $896 million, or $2.33 per diluted share, for the quarter ended March 31, 2013, compared to $806 million, or $2.02 per diluted share, in the prior year quarter. Operating income in the current quarter was $887 million, or $2.31 per diluted share, compared to $801 million, or $2.01 per diluted share, in the prior year quarter. The increase in net and operating income in the current quarter compared to the prior year quarter resulted from higher underlying underwriting margins (i.e., excluding net favorable prior year reserve development and catastrophe losses) and lower catastrophe losses, which more than offset lower net investment income and lower net favorable prior year reserve development.

Consolidated Highlights

($ in millions, except for per share amounts,	Three Months Ended March 31,
and after-tax, except for premiums & revenues)	2013			2012			Change
Net written premiums	$	5,597		$	5,497		2	%
Total revenues	$	6,328		$	6,392		(1	)
Operating income	$	887		$	801		11
per diluted share	$	2.31		$	2.01		15
Net income	$	896		$	806		11
per diluted share	$	2.33		$	2.02		15
Diluted weighted average shares outstanding	381.9			395.8			(4	)
GAAP combined ratio	88.5		%	92.2		%	(3.7	)pts
Operating return on equity	15.8		%	14.7		%	1.1	pts
Return on equity	14.1		%	13.1		%	1.0	pts
	As of March 31,
	2013			2012			Change
Book value per share	$	68.00		$	63.81		7	%
Adjusted book value per share	$	60.39		$	56.53		7

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

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“We are pleased to report our highest quarterly operating income per diluted share since Travelers’ initial public offering in 2002,” commented Jay Fishman, Chairman and Chief Executive Officer. “Operating income of $887 million and operating return on equity of 15.8% reflect continued improvement in our underlying underwriting margins primarily due to the pricing and underwriting actions we have taken across all segments. Our high quality investment portfolio continued to perform well, with returns modestly declining in line with our expectations given continued low interest rates.

“We continue to be encouraged by the fact that in each of our segments renewal pricing exceeded expected loss cost trends and retentions remained stable.  In Business Insurance, renewal rate change of 8% was generally consistent with levels achieved over the last five quarters and new business volumes modestly improved.  In Financial, Professional and International Insurance, renewal rate change was consistent with the most recent quarter and improved meaningfully from a year ago, driven primarily by our Management Liability business. In Personal Insurance, we continue to achieve the improvements in pricing and terms and conditions needed to improve profitability.

“We are very pleased with the current quarter results and remain committed to our strategy of improving returns through selectively seeking price increases and improved terms and conditions given the continued low interest rates and uncertain weather patterns,” concluded Mr. Fishman.

First Quarter 2013 Consolidated Results

	Three Months Ended March 31,
	2013			2012			2013			2012
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	602		$	393		$	385		$	248
Underwriting gain includes:
Net favorable prior year reserve development	231			304			154			200
Catastrophes, net of reinsurance	(99		)	(168		)	(65		)	(109		)
Net investment income	670			740			542			593
Other, including interest expense	(62		)	(66		)	(40		)	(40		)
Operating income	1,210			1,067			887			801
Net realized investment gains	10			10			9			5
Income before income taxes	$	1,220		$	1,077
Net income							$	896		$	806
GAAP combined ratio	88.5		%	92.2		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	87.8		%	91.4		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(4.1		)pts	(5.5		)pts
Catastrophes, net of reinsurance	1.8		pts	3.1		pts

Operating income of $887 million after-tax increased $86 million, or 11 percent, from the prior year quarter primarily reflecting higher underlying underwriting margins and lower catastrophe losses, partially offset by lower net investment income and lower net favorable prior year reserve development. Included in net prior year reserve development in the current quarter was a $42 million pre-tax ($27 million after-tax) charge that was precipitated by legislation in New York enacted during the first quarter 2013 related to the New York Fund for Reopened Cases for workers’ compensation.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 88.5 percent, as compared to 92.2 percent in the prior year quarter. This improvement of 3.7 points in the combined ratio resulted from higher underlying underwriting margins (3.8 points) and lower catastrophe losses (1.3 points), partially offset by lower net favorable prior year reserve development (1.4 points). Catastrophe losses in the current quarter were due to tornadoes and hail storms in the Southeastern United States. Net favorable prior year reserve development in the current quarter occurred in all segments.

The current quarter underlying GAAP combined ratio was 90.8 percent, as compared to 94.6 percent in the prior year quarter. This improvement of 3.8 points primarily resulted from earned rate increases exceeding loss cost trends in each segment.

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Total revenues of $6.328 billion in the current quarter decreased 1 percent from the prior year quarter. Within total revenues, net investment income decreased from the prior year quarter due to lower real estate partnership and private equity returns in the non-fixed income portfolio and lower reinvestment rates in the fixed income portfolio.

Net written premiums of $5.597 billion in the current quarter increased 2 percent from the prior year quarter. Renewal rate gains continued in all segments and retention rates remained strong and generally consistent with recent quarters. New business volumes in Business Insurance increased from the prior year quarter but decreased in Financial, Professional & International Insurance and Personal Insurance.

Capital Management

“During the quarter, we repaid $500 million of maturing debt from existing holding company liquidity and returned approximately $500 million in capital to our shareholders through share repurchases and dividends,” commented Jay S. Benet, Vice Chairman and Chief Financial Officer. “We announced today a 9% increase to our quarterly dividend per share, which brings the compound annual growth rate of our quarterly dividend per share to approximately 10% since our 2004 merger.”

During the first quarter of 2013, the company repurchased 3.7 million shares under its existing share repurchase authorization at a total cost of $300 million, leaving $1.859 billion of capacity under that authorization for future share repurchases. Shareholders’ equity was $25.596 billion at the end of the first quarter of 2013, a 1 percent increase from year-end 2012. Included in shareholders’ equity were after-tax net unrealized investment gains of $2.864 billion, compared to $3.103 billion at year-end 2012. Adjusted shareholders’ equity (which excludes after-tax net unrealized investment gains) increased 2 percent from year-end 2012.  Statutory surplus was $20.692 billion, and the ratio of debt-to-capital (excluding after-tax net unrealized investment gains) was 20.5 percent, within the company’s target range of 15 percent to 25 percent.

The Board of Directors declared a regular quarterly dividend of $0.50 per share. This dividend, which is $0.04 higher than the last regular quarterly dividend, is payable June 28, 2013, to shareholders of record as of the close of business June 10, 2013.

Business Insurance Segment Financial Results

“In Business Insurance, our underlying underwriting results continued to increase meaningfully as evidenced by the four point improvement in the underlying combined ratio,” commented Brian MacLean, President and Chief Operating Officer, “and we achieved a record level of net written premiums. Production results were very strong and generally consistent with the fourth quarter. Written rate gains were between 6% and 10% across all lines, led by Worker’s Compensation and Commercial Auto, retentions were stable and new business levels improved.”

	Three Months Ended March 31,
	2013			2012			2013			2012
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	298		$	284		$	188		$	177
Underwriting gain includes:
Net favorable prior year reserve development	113			248			75			162
Catastrophes, net of reinsurance	(35		)	(53		)	(23		)	(34		)
Net investment income	487			532			394			425
Other	13			14			8			10
Operating income	$	798		$	830		$	590		$	612
GAAP combined ratio	89.4		%	89.6		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(3.9		)pts	(8.6		)pts
Catastrophes, net of reinsurance	1.2		pts	1.8		pts

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Operating income of $590 million after-tax decreased $22 million, or 4 percent, from the prior year quarter primarily reflecting lower net favorable prior year reserve development and lower net investment income, partially offset by higher underlying underwriting margins and lower catastrophe losses.  Included in net prior year reserve development in the current quarter was a $42 million pre-tax ($27 million after-tax) charge that was precipitated by legislation in New York enacted during the first quarter 2013 related to the New York Fund for Reopened Cases for workers’ compensation.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 89.4 percent, as compared to 89.6 percent in the prior year quarter. This improvement of 0.2 points in the combined ratio resulted from higher underlying underwriting margins (4.3 points) and lower catastrophe losses (0.6 points), mostly offset by lower net favorable prior year reserve development (4.7 points). Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the general liability product line for accident years 2010 and prior and in the property product line for accident years 2010 through 2012.

The current quarter underlying GAAP combined ratio was 92.1 percent, as compared to 96.4 percent in the prior year quarter. This improvement of 4.3 points primarily resulted from earned rate increases exceeding loss cost trends.

Business Insurance net written premiums of $3.260 billion in the current quarter increased 5 percent from the prior year quarter primarily due to continued increases in renewal premium change. Retention rates remained strong, and new business volumes increased from the prior year quarter.

Select Accounts

·Net written premiums of $724 million increased 1 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change remained strong and was driven by both renewal rate change and higher insured exposures.

·Retention rates increased from the prior year quarter.

·New business volumes decreased from the prior year quarter.

Commercial Accounts

·Net written premiums of $908 million increased 5 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change remained strong and was primarily driven by renewal rate change.

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

·New business volumes increased from the prior year quarter.

Other Business Insurance (Includes Industry-Focused Underwriting, Target Risk Underwriting and Specialized Distribution)

·Net written premiums of $1.351 billion increased 5 percent from the prior year quarter primarily due to higher renewal premium change.

·Renewal premium change remained strong and was primarily driven by renewal rate change.

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

·New business volumes increased from the prior year quarter.

National Accounts

·Net written premiums of $277 million increased 18 percent from the prior year quarter due to continued strong renewal premium change, high retention rates and favorable audit and retrospective premiums. In addition, growth in workers’ compensation residual market pools also contributed to premium growth.

Financial, Professional & International Insurance Segment Financial Results

“In our Financial, Professional & International Insurance segment, the combined ratio continued to improve, dropping to 82.3% in the first quarter of 2013,” commented MacLean. “The underlying loss ratio for the quarter benefited from underwriting actions across the segment and increased rate in our Management Liability businesses, and has now improved sequentially for nine consecutive quarters. Net written premiums in the segment increased 7% from the first quarter

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of 2012, primarily driven by favorable reinsurance costs, as well as increased rate in our Management Liability businesses.”

	Three Months Ended March 31,
	2013			2012			2013		2012
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	128		$	88		$	85	$	59
Underwriting gain includes:
Net favorable prior year reserve development	58			46			40		31
Catastrophes, net of reinsurance	—			—			—		—
Net investment income	92			104			75		85
Other	5			8			3		5
Operating income	$	225		$	200		$	163	$	149
GAAP combined ratio	82.3		%	87.8		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(7.8		)pts	(6.1		)pts
Catastrophes, net of reinsurance	—		pts	—		pts

Operating income of $163 million after-tax increased $14 million, or 9 percent, from the prior year quarter primarily reflecting higher underlying underwriting margins and higher net favorable prior year reserve development, partially offset by lower net investment income.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 82.3 percent, as compared to 87.8 percent in the prior year quarter. This improvement of 5.5 points in the combined ratio resulted from higher underlying underwriting margins (3.8 points) and higher net favorable prior year reserve development (1.7 points). Net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in the Surety business for accident years 2006 through 2008 and 2010 within Bond & Financial Products, as well as in several lines of business within International.

The current quarter underlying GAAP combined ratio was 90.1 percent, as compared to 93.9 percent in the prior year quarter. This improvement of 3.8 points primarily resulted from earned rate increases exceeding loss cost trends, as well as a lower level of large losses within International.

Financial, Professional & International Insurance net written premiums of $647 million increased 7 percent from the prior year quarter primarily driven by Bond & Financial Products.

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

Bond & Financial Products

·Net written premiums of $395 million increased 11 percent from the prior year quarter primarily driven by lower reinsurance costs (resulting from price decreases and slightly higher retention levels), as well as renewal rate increases in Management Liability.

·Renewal premium change remained strong and continued to increase from recent quarters primarily driven by renewal rate change.

·Retention rates were down slightly from the prior year quarter but remained strong and consistent with recent quarters.

·New business volumes, while below the prior year quarter, increased from recent quarters.

International

·Net written premiums of $252 million increased 2 percent from the prior year quarter.

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

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·Retention rates improved slightly from the prior year quarter.

·New business volumes decreased from the prior year quarter.

Personal Insurance Segment Financial Results

“In Personal Insurance, underlying underwriting margins in both Auto and Homeowners improved,” commented MacLean. “Pricing gains and retention rates were consistent with recent quarters in both products, and new business levels, while lower than historical norms, were generally consistent with the fourth quarter of 2012. We were pleased that earned rate increases in Auto continued to exceed loss cost trends and we will continue to execute on our underwriting and product strategies.”

	Three Months Ended March 31,
	2013			2012			2013			2012
($ in millions)	Pre-tax						After-tax
Underwriting gain	$	176		$	21		$	112		$	12
Underwriting gain includes:
Net favorable prior year reserve development	60			10			39			7
Catastrophes, net of reinsurance	(64		)	(115		)	(42		)	(75		)
Net investment income	91			104			73			83
Other	18			19			12			13
Operating income	$	285		$	144		$	197		$	108
GAAP combined ratio	89.4		%	97.8		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	87.5		%	95.7		%
Impact on GAAP combined ratio
Net favorable prior year reserve development	(3.3		)pts	(0.5		)pts
Catastrophes, net of reinsurance	3.5		pts	6.0		pts

Operating income of $197 million after-tax increased $89 million, or 82 percent, from the prior year quarter primarily reflecting higher underlying underwriting margins, lower catastrophe losses and higher net favorable prior year reserve development, partially offset by lower net investment income.

The underwriting gain in the current quarter reflected a GAAP combined ratio of 89.4 percent, as compared to 97.8 percent in the prior year quarter. This improvement of 8.4 points in the combined ratio was primarily due to higher underlying underwriting margins (3.1 points), higher net favorable prior year reserve development (2.8 points) and lower catastrophe losses (2.5 points). The net favorable prior year reserve development in the current quarter primarily resulted from better than expected loss experience in Homeowners & Other for accident year 2011.

The current quarter underlying GAAP combined ratio was 89.2 percent, as compared to 92.3 percent in the prior year quarter. This improvement of 3.1 points was primarily due to earned rate increases exceeding loss cost trends in both Automobile and Homeowners & Other, as well as lower non-catastrophe weather-related losses.

Personal Insurance net written premiums of $1.690 billion decreased 6 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 $831 million decreased 8 percent from the prior year quarter.

·Policies in force decreased 11 percent from the prior year quarter.

·Renewal premium change remained strong and consistent with recent quarters.

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

·New business volumes, while below the prior year quarter, were generally consistent with the most recent quarter.

Agency Homeowners & Other

·Net written premiums of $820 million decreased 4 percent from the prior year quarter.

·Policies in force decreased 8 percent from the prior year quarter.

·Renewal premium change remained strong and consistent with recent quarters.

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

·New business volumes, while below the prior year quarter, were generally consistent with the most recent quarter.

Financial Supplement and Conference Call

The information in this press release should be read in conjunction with a financial supplement that is available on our website at www.travelers.com. Travelers management will discuss the contents of this release and other relevant topics via webcast at 9:30 a.m. Eastern (8:30 a.m. Central) on Tuesday, April 23, 2013. Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the company’s website. Following the live event, an audio playback of the webcast and the slide presentation will be available on the company’s website.

To view the slides or to listen to the webcast or the playback, visit the “Webcasts & Presentations” section of the Travelers investor relations website at http://investor.travelers.com.

About Travelers

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. The company’s diverse business lines offer its customers a wide range of coverage sold primarily through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and operations in the United States and selected International markets. For more information, visit www.travelers.com.

From time to time, Travelers may use its website and/or social media outlets, such as Facebook and Twitter, as distribution channels of material company information.  Financial and other important information regarding the company is routinely accessible through and posted on our website at http://investor.travelers.com, our Facebook page at https://www.facebook.com/travelers and our Twitter account (@TRV_Insurance) at https://twitter.com/TRV_Insurance.  In addition, you may automatically receive email alerts and other information about Travelers when you enroll your email address 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.

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* * * * *

Forward-Looking Statements

This press release contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may”, “will”, “should”, “likely”, “anticipates”, “expects”, “intends”, “plans”, “projects”, “believes”, “estimates” and similar expressions are used to identify these forward-looking statements. Specifically, statements about the company’s share repurchase plans, expected margin improvement, future pension plan contributions and the potential impact of investment markets and other economic conditions on the company’s investment portfolio and underwriting results, among others, are forward looking, and the company may also make forward-looking statements about, among other things:

·its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating income, investment income and performance, loss costs, 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 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;

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·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;

·changes in U.S. tax laws or in the tax laws of other jurisdictions in which the company operates could adversely impact the company;

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

·the company’s business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology;

·if the company experiences difficulties with technology, data security and/or outsourcing relationships, the company’s ability to conduct its business could be negatively impacted;

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

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

·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 to ensure compliance with guidelines, policies and legal and regulatory standards are not effective;

·the company’s businesses may be adversely affected if it is unable to hire and retain qualified employees;

·loss of or significant restriction on the use of credit scoring in the pricing and underwriting of Personal Insurance products could reduce the company’s future profitability; and

·the company’s repurchase plans depend on a variety of factors, including the company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels commensurate with the company’s desired ratings from independent rating agencies, 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.

9

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

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

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

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

Reconciliation of Operating Income less Preferred Dividends to Net Income

	Three Months Ended
	March 31,
($ in millions, after-tax)	2013		2012
Operating income	$	887	$	801
Net realized investment gains	9		5
Net income	$	896	$	806

	Twelve Months Ended December 31,
($ in millions, after-tax)	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
Preferred dividends	—		1		3		3		4			4		5		6
Operating income	2,441		1,390		3,043		3,600		3,195			4,500		4,200		2,026
Net realized investment gains (losses)	32		36		173		22		(271		)	101		8		35
Income from continuing operations	2,473		1,426		3,216		3,622		2,924			4,601		4,208		2,061
Discontinued operations	—		—		—		—		—			—		—		(439		)
Net income	$	2,473	$	1,426	$	3,216	$	3,622	$	2,924		$	4,601	$	4,208	$	1,622

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

	Three Months Ended
	March 31,
	2013		2012
Basic earnings per share
Operating income	$	2.33	$	2.03
Net realized investment gains	0.03		0.01
Net income	$	2.36	$	2.04
Diluted earnings per share
Operating income	$	2.31	$	2.01
Net realized investment gains	0.02		0.01
Net income	$	2.33	$	2.02

10

Reconciliation of Operating Income by Segment to Total Operating Income

	Three Months Ended
	March 31,
($ in millions, after-tax)	2013			2012
Business Insurance	$	590		$	612
Financial, Professional & International Insurance	163			149
Personal Insurance	197			108
Total segment operating income	950			869
Interest Expense and Other	(63		)	(68		)
Total operating income	$	887		$	801

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.

Reconciliation of Adjusted Shareholders’ Equity to Shareholders’ Equity

	As of March 31,
($ in millions)	2013		2012
Adjusted shareholders’ equity	$	22,723	$	22,029
Net unrealized investment gains, net of tax	2,864		2,838
Net realized investment gains, net of tax	9		5
Shareholders’ equity	$	25,596	$	24,872

	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.

11

Calculation of Operating Return on Equity and Return on Equity

	Three Months Ended
	March 31,
($ in millions, after-tax)	2013			2012
Annualized operating income	$	3,550		$	3,202
Adjusted average shareholders’ equity	22,512			21,817
Operating return on equity	15.8		%	14.7		%
Annualized net income	$	3,586		$	3,225
Average shareholders’ equity	25,500			24,675
Return on equity	14.1		%	13.1		%

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.

Calculation of Average Annual Operating Return on Equity from January 1, 2005 through March 31, 2013

	Three Months Ended
	March 31,						Twelve Months Ended December 31,
($ in millions)	2013			2012			2012			2011			2010			2009			2008			2007			2006			2005
Operating income, less preferred dividends	$	887		$	801		$	2,441		$	1,389		$	3,040		$	3,597		$	3,191		$	4,496		$	4,195		$	2,020
Annualized operating income	3,550			3,202
Adjusted average shareholders’ equity	22,512			21,817			22,158			22,806			24,285			25,777			25,668			25,350			23,381			21,118
Operating return on equity	15.8		%	14.7		%	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 March 31, 2013	12.9		%

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

Underwriting gain 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 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.

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.

12

Net favorable (unfavorable) prior year loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims, which may be related to one or more prior years. In the opinion of the company’s management, a discussion of loss reserve development is meaningful to users of the financial statements as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and operating income, and changes in claims and claim adjustment expense reserve levels from period to period.

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

	Three Months Ended
	March 31,
($ in millions, after-tax except as noted)	2013			2012
Pre-tax underwriting gain excluding the impact of catastrophes and net favorable prior year loss reserve development	$	470		$	257
Pre-tax impact of catastrophes	(99		)	(168		)
Pre-tax impact of net favorable prior year loss reserve development	231			304
Pre-tax underwriting gain	602			393
Income tax expense on underwriting results	217			145
Underwriting gain	385			248
Net investment income	542			593
Other, including interest expense	(40		)	(40		)
Operating income	887			801
Net realized investment gains	9			5
Net income	$	896		$	806

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.

13

Calculation of the GAAP Combined Ratio

	Three Months Ended
	March 31,
($ in millions, pre-tax)	2013			2012
Loss and loss adjustment expense ratio
Claims and claim adjustment expenses	$	3,153		$	3,364
Less:
Policyholder dividends	10			12
Allocated fee income	42			35
Loss ratio numerator	$	3,101		$	3,317
Underwriting expense ratio
Amortization of deferred acquisition costs	$	948		$	971
General and administrative expenses (G&A)	915			884
Less:
G&A included in Interest Expense and Other	4			7
Allocated fee income	55			47
Billing and policy fees and other	24			27
Expense ratio numerator	$	1,780		$	1,774
Earned premium	$	5,517		$	5,523
GAAP combined ratio (1)
Loss and loss adjustment expense ratio	56.2		%	60.1		%
Underwriting expense ratio	32.3		%	32.1		%
Combined ratio	88.5		%	92.2		%

(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
	March 31,
	2013		2012
Personal Insurance
GAAP combined ratio excluding incremental impact of direct to consumer initiative	87.5	%	95.7	%
Incremental impact of direct to consumer initiative	1.9	%	2.1	%
GAAP combined ratio	89.4	%	97.8	%
Consolidated
GAAP combined ratio excluding incremental impact of direct to consumer initiative	87.8	%	91.4	%
Incremental impact of direct to consumer initiative	0.7	%	0.8	%
GAAP combined ratio	88.5	%	92.2	%

14

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
	March 31,
($ in millions)	2013			2012		Change
Net written premiums - holding foreign exchange rates constant	$	253		$	247	2	%
Impact of changes in foreign exchange rates	(1		)
Net written premiums	$	252		$	247	2	%

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

	Three Months Ended
	March 31,
($ in millions)	2013			2012		Change
Net written premiums - holding foreign exchange rates constant	$	648		$	604	7	%
Impact of changes in foreign exchange rates	(1		)
Net written premiums	$	647		$	604	7	%

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.

15

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

	As of
	March 31,			December 31,			March 31,
($ in millions, except per share amounts)	2013			2012			2012
Tangible shareholders’ equity	$	19,046		$	18,604		$	18,299
Goodwill	3,365			3,365			3,365
Other intangible assets	370			381			417
Less: Impact of deferred tax on other intangible assets	(49		)	(48		)	(47		)
Adjusted shareholders’ equity	22,732			22,302			22,034
Net unrealized investment gains, net of tax	2,864			3,103			2,838
Shareholders’ equity	$	25,596		$	25,405		$	24,872
Common shares outstanding	376.4			377.4			389.8
Tangible book value per share	$	50.60		$	49.29		$	46.95
Adjusted book value per share	60.39			59.09			56.53
Book value per share	68.00			67.31			63.81

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
	March 31,			December 31,			March 31,
($ in millions)	2013			2012			2012
Debt	$	5,851		$	6,350		$	6,606
Shareholders’ equity	25,596			25,405			24,872
Total capitalization	31,447			31,755			31,478
Net unrealized investment gains, net of tax	2,864			3,103			2,838
Total capitalization excluding net unrealized gain on investments, net of tax	$	28,583		$	28,652		$	28,640
Debt-to-capital ratio	18.6		%	20.0		%	21.0		%
Debt-to-capital ratio excluding net unrealized investment gains, net of tax	20.5		%	22.2		%	23.1		%

OTHER DEFINITIONS

Gross written premiums reflect the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. Net written premiums reflect gross written premiums less premiums ceded to reinsurers. These are GAAP measures.

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

16

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

17

EX-99.2

Exhibit 99.2

The Travelers Companies, Inc.
Financial Supplement - First Quarter 2013

	Page Number
Consolidated Results
Financial Highlights	1
Reconciliation to Net Income and Earnings Per Share	2
Statement of Income	3
Net Income by Major Component and Combined Ratio	4
Operating Income	5
Selected Statistics - Property and Casualty Operations	6
Written and Earned Premiums - Property and Casualty Operations	7
Business Insurance
Operating Income	8
Operating Income by Major Component and Combined Ratio	9
Selected Statistics	10
Net Written Premiums	11
Financial, Professional & International Insurance
Operating Income	12
Operating Income by Major Component and Combined Ratio	13
Selected Statistics	14
Net Written Premiums	15
Personal Insurance
Operating Income (Loss)	16
Operating Income (Loss) by Major Component and Combined Ratio	17
Selected Statistics	18
Selected Statistics - Agency Automobile	19
Selected Statistics - Agency Homeowners and Other	20
Selected Statistics - Direct to Consumer	21
Supplemental Detail
Interest Expense and Other	22
Consolidated Balance Sheet	23
Investment Portfolio	24
Investment Portfolio - Fixed Maturities Data	25
Investment Income	26
Net Realized and Unrealized Investment Gains	27
Reinsurance Recoverables	28
Net Reserves for Losses and Loss Adjustment Expense	29
Asbestos and Environmental Reserves	30
Capitalization	31
Statutory to GAAP Shareholders’ Equity Reconciliation	32
Statement of Cash Flows	33
Statement of Cash Flows (continued)	34
Glossary of Financial Measures and Description of Reportable Business Segments	35

The information included in the Financial Supplement is unaudited.  This document should be read in conjunction with the Company’s Form 10-Q which will be filed with the Securities and Exchange Commission.

Index

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Net income	$	806		$	499		$	864		$	304		$	896
Net income per share:
Basic	$	2.04		$	1.27		$	2.23		$	0.79		$	2.36
Diluted	$	2.02		$	1.26		$	2.21		$	0.78		$	2.33
Operating income	$	801		$	495		$	867		$	278		$	887
Operating income per share:
Basic	$	2.03		$	1.27		$	2.24		$	0.72		$	2.33
Diluted	$	2.01		$	1.26		$	2.22		$	0.72		$	2.31
Return on equity	13.1		%	8.0		%	13.6		%	4.7		%	14.1		%
Operating return on equity	14.7		%	9.0		%	15.5		%	5.0		%	15.8		%
Total assets, at period end	$	104,838		$	104,330		$	105,445		$	104,938		$	103,897
Total equity, at period end	$	24,872		$	25,049		$	25,905		$	25,405		$	25,596
Book value per share, at period end	$	63.81		$	64.90		$	67.81		$	67.31		$	68.00
Less: Net unrealized investment gains, net of tax	7.28			7.72			8.68			8.22			7.61
Adjusted book value per share, at period end	$	56.53		$	57.18		$	59.13		$	59.09		$	60.39
Weighted average number of common shares outstanding (basic)	392.0			388.0			384.0			381.0			377.7
Weighted average number of common shares outstanding and common stock equivalents (diluted)	395.8			391.6			387.9			385.3			381.9
Common shares outstanding at period end	389.8			386.0			382.0			377.4			376.4
Common stock dividends declared	$	162		$	181		$	179		$	178		$	176
Common stock repurchased:
Under Board of Directors authorization
Shares	6.0			5.6			5.4			5.4			3.7
Cost	$	350		$	350		$	350		$	400		$	300
Other
Shares	0.8			—			—			0.1			0.7
Cost	$	52		$	1		$	—		$	2		$	58

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

1

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

	1Q		2Q		3Q			4Q		1Q
	2012		2012		2012			2012		2013
Net income
Operating income	$	801	$	495	$	867		$	278	$	887
Net realized investment gains (losses)	5		4		(3		)	26		9
Net income	$	806	$	499	$	864		$	304	$	896
Basic earnings per share
Operating income	$	2.03	$	1.27	$	2.24		$	0.72	$	2.33
Net realized investment gains (losses)	0.01		—		(0.01		)	0.07		0.03
Net income	$	2.04	$	1.27	$	2.23		$	0.79	$	2.36
Diluted earnings per share
Operating income	$	2.01	$	1.26	$	2.22		$	0.72	$	2.31
Net realized investment gains (losses)	0.01		—		(0.01		)	0.06		0.02
Net income	$	2.02	$	1.26	$	2.21		$	0.78	$	2.33

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Basic and Diluted
Net income, as reported	$	806		$	499		$	864		$	304		$	896
Participating share-based awards - allocated income	(6		)	(4		)	(6		)	(2		)	(6		)
Net income available to common shareholders - basic and diluted	$	800		$	495		$	858		$	302		$	890
Common Shares
Basic
Weighted average shares outstanding	392.0			388.0			384.0			381.0			377.7
Diluted
Weighted average shares outstanding	392.0			388.0			384.0			381.0			377.7
Weighted average effects of dilutive securities - stock options and performance shares	3.8			3.6			3.9			4.3			4.2
Diluted weighted average shares outstanding	395.8			391.6			387.9			385.3			381.9

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

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

2

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Premiums	$	5,523		$	5,529		$	5,666		$	5,639		$	5,517
Net investment income	740			738			722			689			670
Fee income	82			59			92			90			97
Net realized investment gains (losses)	10			4			(2		)	39			10
Other revenues	37			29			34			20			34
Total revenues	6,392			6,359			6,512			6,477			6,328
Claims and expenses
Claims and claim adjustment expenses	3,364			3,786			3,359			4,167			3,153
Amortization of deferred acquisition costs	971			976			986			977			948
General and administrative expenses	884			893			904			929			915
Interest expense	96			96			93			93			92
Total claims and expenses	5,315			5,751			5,342			6,166			5,108
Income before income taxes	1,077			608			1,170			311			1,220
Income tax expense	271			109			306			7			324
Net income	$	806		$	499		$	864		$	304		$	896
Other-than-temporary impairments (OTTI):
Total OTTI gains (losses)	$	—		$	11		$	17		$	(1	)	$	—
OTTI losses recognized in net realized investment gains (losses)	$	(4	)	$	(4	)	$	(3	)	$	(4	)	$	(5	)
OTTI gains recognized in other comprehensive income	$	4		$	15		$	20		$	3		$	5
Other statistics
Effective tax rate on net investment income	19.9		%	20.2		%	20.0		%	19.2		%	19.2		%
Net investment income (after-tax)	$	593		$	589		$	578		$	556		$	542
Catastrophes, net of reinsurance:
Pre-tax	$	168		$	549		$	91		$	1,054		$	99
After-tax	$	109		$	357		$	59		$	689		$	65

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

3

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Underwriting gain (loss)	$	248		$	(47	)	$	327		$	(232	)	$	385
Net investment income	593			589			578			556			542
Other, including interest expense	(40		)	(47		)	(38		)	(46		)	(40		)
Operating income	801			495			867			278			887
Net realized investment gains (losses)	5			4			(3		)	26			9
Net income	$	806		$	499		$	864		$	304		$	896
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	60.1		%	68.1		%	58.4		%	73.0		%	56.2		%
Underwriting expense ratio	32.1		%	32.4		%	31.9		%	32.4		%	32.3		%
Combined ratio	92.2		%	100.5		%	90.3		%	105.4		%	88.5		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	91.4		%	99.8		%	89.3		%	104.6		%	87.8		%
Impact of catastrophes on combined ratio	3.1		%	10.0		%	1.6		%	18.7		%	1.8		%
Impact of prior year reserve development on combined ratio	-5.5		%	-4.0		%	-3.4		%	-4.0		%	-4.1		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Billing and policy fees and other	$	27	$	25	$	24	$	22	$	24
Fee income:
Loss and loss adjustment expenses	$	35	$	11	$	40	$	38	$	42
Underwriting expenses	47		48		52		52		55
Total fee income	$	82	$	59	$	92	$	90	$	97

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

4

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Premiums	$	5,523		$	5,529		$	5,666		$	5,639		$	5,517
Net investment income	740			738			722			689			670
Fee income	82			59			92			90			97
Other revenues	37			29			34			20			34
Total revenues	6,382			6,355			6,514			6,438			6,318
Claims and expenses
Claims and claim adjustment expenses	3,364			3,786			3,359			4,167			3,153
Amortization of deferred acquisition costs	971			976			986			977			948
General and administrative expenses	884			893			904			929			915
Interest expense	96			96			93			93			92
Total claims and expenses	5,315			5,751			5,342			6,166			5,108
Operating income before income taxes	1,067			604			1,172			272			1,210
Income tax expense (benefit)	266			109			305			(6		)	323
Operating income	$	801		$	495		$	867		$	278		$	887
Other statistics
Effective tax rate on net investment income	19.9		%	20.2		%	20.0		%	19.2		%	19.2		%
Net investment income (after-tax)	$	593		$	589		$	578		$	556		$	542
Catastrophes, net of reinsurance:
Pre-tax	$	168		$	549		$	91		$	1,054		$	99
After-tax	$	109		$	357		$	59		$	689		$	65

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

5

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Statutory underwriting
Gross written premiums	$	6,073		$	6,240		$	6,271		$	5,725		$	6,188
Net written premiums	$	5,497		$	5,868		$	5,697		$	5,385		$	5,597
Net earned premiums	$	5,523		$	5,529		$	5,666		$	5,639		$	5,517
Losses and loss adjustment expenses	3,318			3,791			3,310			4,119			3,070
Underwriting expenses	1,797			1,838			1,840			1,780			1,799
Statutory underwriting gain (loss)	408			(100		)	516			(260		)	648
Policyholder dividends	12			11			11			12			10
Statutory underwriting gain (loss) after policyholder dividends	$	396		$	(111	)	$	505		$	(272	)	$	638
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	40,791		$	40,925		$	40,528		$	40,656		$	40,215
Increase (decrease) in reserves	$	(108	)	$	134		$	(397	)	$	128		$	(441	)
Statutory basis surplus	$	19,867		$	19,841		$	20,291		$	20,048		$	20,692
Net written premiums/surplus (1)	1.12:1			1.12:1			1.10:1			1.12:1			1.09:1

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

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

6

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Written premiums
Gross	$	6,073		$	6,240		$	6,271		$	5,725		$	6,188
Ceded	(576		)	(372		)	(574		)	(340		)	(591		)
Net	$	5,497		$	5,868		$	5,697		$	5,385		$	5,597
Earned premiums
Gross	$	5,973		$	5,985		$	6,132		$	6,110		$	5,985
Ceded	(450		)	(456		)	(466		)	(471		)	(468		)
Net	$	5,523		$	5,529		$	5,666		$	5,639		$	5,517

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

7

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Premiums	$	2,876		$	2,860		$	2,982		$	2,973		$	2,942
Net investment income	532			536			524			498			487
Fee income	82			58			92			90			97
Other revenues	14			8			9			9			13
Total revenues	3,504			3,462			3,607			3,570			3,539
Claims and expenses
Claims and claim adjustment expenses	1,709			2,049			1,906			2,193			1,749
Amortization of deferred acquisition costs	467			465			477			475			475
General and administrative expenses	498			504			504			514			517
Total claims and expenses	2,674			3,018			2,887			3,182			2,741
Operating income before federal income taxes	830			444			720			388			798
Income tax expense	218			82			177			62			208
Operating income	$	612		$	362		$	543		$	326		$	590
Other statistics
Effective tax rate on net investment income	20.0		%	20.3		%	20.1		%	19.1		%	19.2		%
Net investment income (after-tax)	$	425		$	428		$	419		$	402		$	394
Catastrophes, net of reinsurance:
Pre-tax	$	53		$	252		$	50		$	439		$	35
After-tax	$	34		$	164		$	33		$	285		$	23

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

8

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Underwriting gain (loss)	$	177		$	(71	)	$	117		$	(82	)	$	188
Net investment income	425			428			419			402			394
Other	10			5			7			6			8
Operating income	$	612		$	362		$	543		$	326		$	590
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	57.8		%	71.0		%	62.3		%	72.2		%	57.7		%
Underwriting expense ratio	31.8		%	32.0		%	31.0		%	31.3		%	31.7		%
Combined ratio	89.6		%	103.0		%	93.3		%	103.5		%	89.4		%
Impact of catastrophes on combined ratio	1.8		%	8.8		%	1.7		%	14.7		%	1.2		%
Impact of prior year reserve development on combined ratio	-8.6		%	-2.0		%	-1.4		%	-4.0		%	-3.9		%

(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:

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Billing and policy fees and other	$	5	$	5	$	5	$	4	$	4
Fee income:
Loss and loss adjustment expenses	$	35	$	10	$	40	$	38	$	42
Underwriting expenses	47		48		52		52		55
Total fee income	$	82	$	58	$	92	$	90	$	97

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

9

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

	1Q		2Q			3Q		4Q			1Q
	2012		2012			2012		2012			2013
Statutory underwriting
Gross written premiums	$	3,429	$	3,280		$	3,382	$	3,020		$	3,626
Net written premiums	$	3,100	$	3,026		$	2,962	$	2,784		$	3,260
Net earned premiums	$	2,876	$	2,860		$	2,982	$	2,973		$	2,942
Losses and loss adjustment expenses	1,663		2,057			1,860		2,147			1,668
Underwriting expenses	940		928			937		894			969
Statutory underwriting gain (loss)	273		(125		)	185		(68		)	305
Policyholder dividends	10		8			9		10			8
Statutory underwriting gain (loss) after policyholder dividends	$	263	$	(133	)	$	176	$	(78	)	$	297

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

10

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

	1Q		2Q			3Q		4Q			1Q
	2012		2012			2012		2012			2013
Net written premiums by market
Select Accounts	$	718	$	721		$	679	$	657		$	724
Commercial Accounts	861		717			805		718			908
National Accounts	235		226			202		244			277
Industry-Focused Underwriting	648		636			671		599			699
Target Risk Underwriting	429		486			382		369			448
Specialized Distribution	208		242			222		198			204
Total core	3,099		3,028			2,961		2,785			3,260
Business Insurance other	1		(2		)	1		(1		)	—
Total	$	3,100	$	3,026		$	2,962	$	2,784		$	3,260
Net written premiums by product line
Commercial multi-peril	$	819	$	777		$	769	$	735		$	828
Workers’ compensation	944		800			849		807			1,056
Commercial automobile	489		499			498		438			484
Commercial property	416		481			373		377			427
General liability	426		464			452		423			458
Other	6		5			21		4			7
Total	$	3,100	$	3,026		$	2,962	$	2,784		$	3,260
National Accounts
Additions to claim volume under administration (1)	$	639	$	472		$	480	$	549		$	701
Written fees	$	88	$	77		$	77	$	74		$	104

(1)  Includes new and renewal business.

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

11

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Premiums	$	737		$	766		$	772		$	770		$	735
Net investment income	104			99			97			95			92
Fee income	—			1			—			—			—
Other revenues	8			5			8			5			5
Total revenues	849			871			877			870			832
Claims and expenses
Claims and claim adjustment expenses	341			302			309			362			302
Amortization of deferred acquisition costs	143			149			149			148			143
General and administrative expenses	165			165			165			172			162
Total claims and expenses	649			616			623			682			607
Operating income before federal income taxes	200			255			254			188			225
Income tax expense	51			73			74			57			62
Operating income	$	149		$	182		$	180		$	131		$	163
Other statistics
Effective tax rate on net investment income	18.9		%	19.7		%	19.3		%	19.1		%	18.6		%
Net investment income (after-tax)	$	85		$	79		$	78		$	77		$	75
Catastrophes, net of reinsurance:
Pre-tax	$	—		$	4		$	1		$	45		$	—
After-tax	$	—		$	3		$	—		$	34		$	—

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

12

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Underwriting gain	$	59		$	99		$	97		$	50		$	85
Net investment income	85			79			78			77			75
Other	5			4			5			4			3
Operating income	$	149		$	182		$	180		$	131		$	163
GAAP combined ratio (1) (2)
Loss and loss adjustment expense ratio	46.0		%	39.1		%	39.7		%	46.6		%	40.8		%
Underwriting expense ratio	41.8		%	40.9		%	40.5		%	41.7		%	41.5		%
Combined ratio	87.8		%	80.0		%	80.2		%	88.3		%	82.3		%
Impact of catastrophes on combined ratio	0.0		%	0.4		%	0.1		%	5.9		%	0.0		%
Impact of prior year reserve development on combined ratio	-6.1		%	-12.5		%	-11.3		%	-9.1		%	-7.8		%

(1)Before policyholder dividends.

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

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Fee income:
Loss and loss adjustment expenses	$	—	$	1	$	—	$	—	$	—
Underwriting­ expenses	—		—		—		—		—
Total fee income	$	—	$	1	$	—	$	—	$	—

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

13

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

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Statutory underwriting
Gross written premiums	$	791	$	882	$	763	$	839	$	799
Net written premiums	$	604	$	840	$	729	$	808	$	647
Net earned premiums	$	737	$	766	$	772	$	770	$	735
Losses and loss adjustment expenses	341		299		307		359		300
Underwriting expenses	316		319		295		314		317
Statutory underwriting gain	80		148		170		97		118
Policyholder dividends	2		3		2		2		2
Statutory underwriting gain after policyholder dividends	$	78	$	145	$	168	$	95	$	116

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

14

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

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Net written premiums by market
Bond & Financial Products	$	357	$	524	$	529	$	514	$	395
International	247		316		200		294		252
Total	$	604	$	840	$	729	$	808	$	647
Net written premiums by product line
General liability	$	143	$	236	$	233	$	247	$	168
Fidelity & surety	172		248		246		229		178
International	247		316		200		294		252
Other	42		40		50		38		49
Total	$	604	$	840	$	729	$	808	$	647

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

15

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Premiums	$	1,910		$	1,903		$	1,912		$	1,896		$	1,840
Net investment income	104			103			101			96			91
Other revenues	19			16			17			14			18
Total revenues	2,033			2,022			2,030			2,006			1,949
Claims and expenses
Claims and claim adjustment expenses	1,314			1,435			1,144			1,612			1,102
Amortization of deferred acquisition costs	361			362			360			354			330
General and administrative expenses	214			219			230			237			232
Total claims and expenses	1,889			2,016			1,734			2,203			1,664
Operating income (loss) before federal income taxes	144			6			296			(197		)	285
Income tax expense (benefit)	36			(11		)	90			(83		)	88
Operating income (loss)	$	108		$	17		$	206		$	(114	)	$	197
Other statistics
Effective tax rate on net investment income	20.1		%	20.4		%	20.2		%	19.4		%	19.5		%
Net investment income (after-tax)	$	83		$	82		$	81		$	77		$	73
Catastrophes, net of reinsurance:
Pre-tax	$	115		$	293		$	40		$	570		$	64
After-tax	$	75		$	190		$	26		$	370		$	42

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

16

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Underwriting gain (loss)	$	12		$	(75	)	$	113		$	(200	)	$	112
Net investment income	83			82			81			77			73
Other	13			10			12			9			12
Operating income (loss)	$	108		$	17		$	206		$	(114	)	$	197
GAAP combined ratio (1)
Loss and loss adjustment expense ratio	68.8		%	75.4		%	59.8		%	85.0		%	59.9		%
Underwriting expense ratio	29.0		%	29.4		%	29.9		%	30.2		%	29.5		%
Combined ratio	97.8		%	104.8		%	89.7		%	115.2		%	89.4		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative	95.7		%	102.9		%	86.8		%	113.1		%	87.5		%
Impact of catastrophes on combined ratio	6.0		%	15.3		%	2.1		%	30.1		%	3.5		%
Impact of prior year reserve development on combined ratio	-0.5		%	-3.5		%	-3.4		%	-1.8		%	-3.3		%

(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 and other are as follows:

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Billing and policy fees and other	$	22	$	20	$	19	$	18	$	20

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

17

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

	1Q		2Q			3Q		4Q			1Q
	2012		2012			2012		2012			2013
Statutory underwriting
Gross written premiums	$	1,853	$	2,078		$	2,126	$	1,866		$	1,763
Net written premiums	$	1,793	$	2,002		$	2,006	$	1,793		$	1,690
Net earned premiums	$	1,910	$	1,903		$	1,912	$	1,896		$	1,840
Losses and loss adjustment expenses	1,314		1,435			1,143		1,613			1,102
Underwriting expenses	541		591			608		572			513
Statutory underwriting gain (loss)	$	55	$	(123	)	$	161	$	(289	)	$	225
Policies in force (in thousands)
Automobile	2,554		2,505			2,436		2,361			2,286
Homeowners and other	5,195		5,133			5,020		4,898			4,792

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

18

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Statutory underwriting
Gross written premiums	$	904		$	903		$	911		$	826		$	835
Net written premiums	$	900		$	899		$	906		$	822		$	831
Net earned premiums	$	902		$	891		$	888		$	875		$	844
Losses and loss adjustment expenses	641			674			659			778			594
Underwriting expenses	235			238			233			229			218
Statutory underwriting gain (loss)	$	26		$	(21	)	$	(4	)	$	(132	)	$	32
Other statistics
GAAP combined ratio (2):
Loss and loss adjustment expense ratio	71.1		%	75.6		%	74.1		%	89.0		%	70.4		%
Underwriting expense ratio	25.4		%	25.9		%	25.3		%	26.5		%	25.6		%
Combined ratio	96.5		%	101.5		%	99.4		%	115.5		%	96.0		%
Impact of catastrophes on combined ratio	1.0		%	3.8		%	0.4		%	7.9		%	1.0		%
Impact of prior year reserve development on combined ratio	-0.2		%	0.0		%	0.9		%	1.9		%	0.6		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	9		$	34		$	4		$	69		$	8
After-tax	$	6		$	22		$	3		$	44		$	6
Policies in force (in thousands)	2,473			2,423			2,353			2,278			2,204
Change from prior year quarter	-1.0		%	-3.2		%	-5.9		%	-8.7		%	-10.9		%
Change from prior quarter	-0.8		%	-2.0		%	-2.9		%	-3.2		%	-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 and other are as follows:

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Billing and policy fees and other	$	12	$	10	$	11	$	9	$	10

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

19

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Statutory underwriting
Gross written premiums	$	912		$	1,135		$	1,171		$	1,002		$	889
Net written premiums	$	855		$	1,064		$	1,056		$	934		$	820
Net earned premiums	$	973		$	976		$	986		$	983		$	957
Losses and loss adjustment expenses	643			730			457			800			480
Underwriting expenses	262			309			315			294			255
Statutory underwriting gain (loss)	$	68		$	(63	)	$	214		$	(111	)	$	222
Other statistics
GAAP combined ratio (2):
Loss and loss adjustment expense ratio	66.0		%	74.8		%	46.4		%	81.4		%	50.2		%
Underwriting expense ratio	29.0		%	29.4		%	29.0		%	29.5		%	29.8		%
Combined ratio	95.0		%	104.2		%	75.4		%	110.9		%	80.0		%
Impact of catastrophes on combined ratio	10.7		%	26.1		%	3.6		%	50.3		%	5.6		%
Impact of prior year reserve development on combined ratio	-1.1		%	-6.9		%	-7.3		%	-4.9		%	-6.7		%
Catastrophe losses, net of reinsurance:
Pre-tax	$	104		$	256		$	35		$	495		$	54
After-tax	$	68		$	166		$	22		$	322		$	35
Policies in force (in thousands)	5,128			5,061			4,945			4,821			4,713
Change from prior year quarter	-0.1		%	-1.9		%	-4.3		%	-6.6		%	-8.1		%
Change from prior quarter	-0.7		%	-1.3		%	-2.3		%	-2.5		%	-2.2		%

(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 and other are as follows:

	1Q		2Q		3Q		4Q		1Q
	2012		2012		2012		2012		2013
Billing and policy fees and other	$	10	$	8	$	9	$	8	$	9

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

20

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Net written premiums
Automobile	$	29		$	28		$	32		$	26		$	29
Homeowners and other	9			11			12			11			10
Total net written premiums	$	38		$	39		$	44		$	37		$	39
Revenues
Premiums	$	35		$	36		$	38		$	38		$	39
Other revenues	—			—			1			—			—
Total revenues	35			36			39			38			39
Claims and expenses
Claims and claim adjustment expenses	31			31			27			34			28
Amortization of deferred acquisition costs	1			1			1			—			1
General and administrative expenses	42			42			61			51			40
Total claims and expenses	74			74			89			85			69
Operating loss before federal income taxes	(39		)	(38		)	(50		)	(47		)	(30		)
Income taxes	(14		)	(13		)	(17		)	(17		)	(11		)
Operating loss	$	(25	)	$	(25	)	$	(33	)	$	(30	)	$	(19	)
Other statistics
Policies in force (in thousands)
Automobile	81			82			83			83			82
Homeowners and other	67			72			75			77			79
Unfavorable (favorable) prior year reserve development	$	2		$	1		$	(2	)	$	(2	)	$	(1	)
Catastrophes, net of reinsurance:
Pre-tax	$	2		$	3		$	1		$	6		$	2
After-tax	$	1		$	2		$	1		$	4		$	1

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

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

21

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Revenues
Other revenues	$	(4	)	$	—		$	—		$	(8	)	$	(2	)
Claims and expenses
Interest expense	96			96			93			93			92
General and administrative expenses	7			5			5			6			4
Total claims and expenses	103			101			98			99			96
Operating loss before federal income tax benefit	(107		)	(101		)	(98		)	(107		)	(98		)
Income taxes	(39		)	(35		)	(36		)	(42		)	(35		)
Operating loss	$	(68	)	$	(66	)	$	(62	)	$	(65	)	$	(63	)

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

22

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

	March 31,			December 31,
	2013 (1)			2012
Assets
Fixed maturities, available for sale, at fair value (amortized cost $60,578 and $60,829)	$	64,699		$	65,393
Equity securities, available for sale, at fair value (cost $446 and $462)	694			645
Real estate investments	879			883
Short-term securities	3,368			3,483
Other investments	3,441			3,434
Total investments	73,081			73,838
Cash	243			330
Investment income accrued	686			752
Premiums receivable	6,021			5,872
Reinsurance recoverables	10,249			10,712
Ceded unearned premiums	976			856
Deferred acquisition costs	1,795			1,792
Contractholder receivables	4,824			4,806
Goodwill	3,365			3,365
Other intangible assets	370			381
Other assets	2,287			2,234
Total assets	$	103,897		$	104,938
Liabilities
Claims and claim adjustment expense reserves	$	50,018		$	50,922
Unearned premium reserves	11,406			11,241
Contractholder payables	4,824			4,806
Payables for reinsurance premiums	459			346
Deferred taxes	352			338
Debt	5,851			6,350
Other liabilities	5,391			5,530
Total liabilities	78,301			79,533
Shareholders’ equity
Common stock (1,750.0 shares authorized; 376.4 and 377.4 shares issued and outstanding)	21,300			21,161
Retained earnings	22,072			21,352
Accumulated other comprehensive income	1,926			2,236
Treasury stock, at cost (376.7 and 372.3 shares)	(19,702		)	(19,344		)
Total shareholders’ equity	25,596			25,405
Total liabilities and shareholders’ equity	$	103,897		$	104,938

(1)  Preliminary.

23

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

	March 31,		Pre-tax Book		December 31,		Pre-tax Book
	2013		Yield (1)		2012		Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)	$	26,923	3.85	%	$	27,188	3.92	%
Tax-exempt fixed maturities	37,776		3.85	%	38,205		3.87	%
Total fixed maturities	64,699		3.85	%	65,393		3.89	%
Non-redeemable preferred stocks	133		6.29	%	135		6.27	%
Common stocks	561				510
Total equity securities	694				645
Real estate investments	879				883
Short-term securities	3,368		0.20	%	3,483		0.21	%
Private equities	1,907				1,888
Hedge funds	378				381
Real estate partnerships	596				610
Mortgage loans	2		5.41	%	4		6.21	%
Trading securities	14				30
Other investments	544				521
Total other investments	3,441				3,434
Total investments	$	73,081			$	73,838
Net unrealized investment gains, net of tax, included in shareholders’ equity	$	2,864			$	3,103

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

24

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

	March 31,		December 31,
	2013		2012
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,136	$	2,222
Obligations of states and political subdivisions:
Pre-refunded	9,648		9,025
All other	28,598		29,656
Total	38,246		38,681
Debt securities issued by foreign governments	2,189		2,257
Mortgage-backed securities - principally obligations of U.S. Government agencies	2,776		2,997
Corporates (including redeemable preferreds)	19,352		19,236
Total fixed maturities	$	64,699	$	65,393

Fixed Maturities

Quality Characteristics (1)

	March 31, 2013
	Amount		% of Total
Quality Ratings
Aaa	$	27,502	42.5	%
Aa	20,556		31.8
A	8,514		13.2
Baa	6,024		9.3
Total investment grade	62,596		96.8
Ba	1,024		1.6
B	483		0.7
Caa and lower	596		0.9
Total below investment grade	2,103		3.2
Total fixed maturities	$	64,699	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)

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Gross investment income
Fixed maturities	$	620		$	611		$	604		$	604		$	586
Short-term securities	2			3			3			2			2
Other	128			133			124			91			92
	750			747			731			697			680
Investment expenses	10			9			9			8			10
Net investment income, pre-tax	740			738			722			689			670
Income taxes	147			149			144			133			128
Net investment income, after-tax	$	593		$	589		$	578		$	556		$	542
Effective tax rate	19.9		%	20.2		%	20.0		%	19.2		%	19.2		%
Average invested assets (1)	$	69,494		$	69,623		$	69,813		$	70,419		$	69,996
Average yield pre-tax (1)	4.3		%	4.2		%	4.1		%	3.9		%	3.8		%
Average yield after-tax	3.4		%	3.4		%	3.3		%	3.2		%	3.1		%

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

26

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Net realized investment gains (losses)
Fixed maturities	$	8		$	17		$	14		$	14		$	11
Equity securities	3			2			—			(1		)	6
Other (1)	(1		)	(15		)	(16		)	26			(7		)
Realized investment gains (losses) before tax	10			4			(2		)	39			10
Related taxes	5			—			1			13			1
Net realized investment gains (losses)	$	5		$	4		$	(3	)	$	26		$	9
Gross investment gains (1)	$	121		$	78		$	78		$	97		$	108
Gross investment losses before impairments (1)	(107		)	(70		)	(77		)	(54		)	(93		)
Net investment gains before impairments	14			8			1			43			15
Other-than-temporary impairment losses	(4		)	(4		)	(3		)	(4		)	(5		)
Net realized investment gains (losses) before tax	10			4			(2		)	39			10
Related taxes	5			—			1			13			1
Net realized investment gains (losses)	$	5		$	4		$	(3	)	$	26		$	9

	March 31,		June 30,		September 30,		December 31,		March 31,
	2012		2012		2012		2012		2013
Net unrealized investment gains, net of tax, by asset type
Fixed maturities	$	4,166	$	4,392	$	4,870	$	4,564	$	4,121
Equity securities & other	181		176		209		197		274
Unrealized investment gains before tax	4,347		4,568		5,079		4,761		4,395
Related taxes	1,509		1,588		1,764		1,658		1,531
Balance, end of period	$	2,838	$	2,980	$	3,315	$	3,103	$	2,864

(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	$	25	$	27	$	26	$	56
Gross investment Treasury future losses	$	41	$	38	$	35	$	25	$	75

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)

	March 31,			December 31,
	2013			2012
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	5,070		$	5,256
Allowance for uncollectible reinsurance	(256		)	(258		)
Net reinsurance recoverables (i)	4,814			4,998
Mandatory pools and associations (ii)	2,251			2,549
Structured settlements (iii)	3,184			3,165
Total reinsurance recoverables	$	10,249		$	10,712

(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	March 31,		December 31,
Reinsurer	Predominant Reinsurer	2013		2012
Munich Re Group	A+ second highest of 16 ratings	$	539	$	550
Swiss Re Group	A+ second highest of 16 ratings	519		517
Alleghany Group	A third highest of 16 ratings	301		302
XL Capital Group	A third highest of 16 ratings	262		266
Berkshire Hathaway Group	A++ highest of 16 ratings	247		258

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 March 31, 2013, after deducting mandatory pools and associations and structured settlement balances, $3.9 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% of net recoverables from reinsurers were comprised of the following:  7% related to the Company’s participation in voluntary pools, 10% related to recoverables from captive insurance companies and 3% were balances from other companies not rated by A.M. Best Company.  In addition, $1.4 billion of the net recoverables were collateralized by letters of credit, funds held or trust agreements at March 31, 2013.

(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	March 31,		December 31,
Group	Predominant Insurer	2013		2012
Fidelity and Guaranty Life	B++ fifth highest of 16 ratings	$	987	$	981
Metlife	A+ second highest of 16 ratings	471		474
Genworth Financial Group	A third highest of 16 ratings	436		437
Symetra Financial Corporation	A third highest of 16 ratings	255		256
John Hancock Group	A+ second highest of 16 ratings	186		190

28

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Statutory Basis Reserves for Losses and Loss Adjustment Expenses
Business Insurance
Beginning of period	$	31,131		$	31,006		$	31,126		$	31,051		$	31,120
Incurred	1,663			2,057			1,860			2,147			1,668
Paid	(1,792		)	(1,932		)	(1,937		)	(2,080		)	(1,860		)
Foreign exchange and other	4			(5		)	2			2			1
End of period	$	31,006		$	31,126		$	31,051		$	31,120		$	30,929
Financial, Professional & International Insurance
Beginning of period	$	6,019		$	6,045		$	5,992		$	5,894		$	5,849
Incurred	341			299			307			359			300
Paid	(361		)	(307		)	(453		)	(411		)	(316		)
Foreign exchange and other	46			(45		)	48			7			(76		)
End of period	$	6,045		$	5,992		$	5,894		$	5,849		$	5,757
Personal Insurance
Beginning of period	$	3,749		$	3,740		$	3,807		$	3,583		$	3,687
Incurred	1,314			1,435			1,143			1,613			1,102
Paid	(1,323		)	(1,368		)	(1,367		)	(1,509		)	(1,260		)
End of period	$	3,740		$	3,807		$	3,583		$	3,687		$	3,529
Total
Beginning of period	$	40,899		$	40,791		$	40,925		$	40,528		$	40,656
Incurred	3,318			3,791			3,310			4,119			3,070
Paid	(3,476		)	(3,607		)	(3,757		)	(4,000		)	(3,436		)
Foreign exchange and other	50			(50		)	50			9			(75		)
End of period	$	40,791		$	40,925		$	40,528		$	40,656		$	40,215
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—		$	—		$	167		$	—		$	—
Environmental	—			90			—			—			—
All other	(248		)	(148		)	(208		)	(120		)	(113		)
Prior year development excluding accretion of discount	(248		)	(58		)	(41		)	(120		)	(113		)
Accretion of discount	12			13			12			11			12
Total Business Insurance	(236		)	(45		)	(29		)	(109		)	(101		)
Financial, Professional & International Insurance
Asbestos	—			—			8			—			—
All other	(46		)	(96		)	(95		)	(69		)	(58		)
Total Financial, Professional & International Insurance	(46		)	(96		)	(87		)	(69		)	(58		)
Personal Insurance	(10		)	(67		)	(65		)	(33		)	(60		)
Total	$	(292	)	$	(208	)	$	(181	)	$	(211	)	$	(219	)

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)

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Asbestos reserves
Beginning reserves:
Gross	$	2,780		$	2,724		$	2,660		$	2,771		$	2,689
Ceded	(341		)	(340		)	(335		)	(324		)	(311		)
Net	2,439			2,384			2,325			2,447			2,378
Incurred losses and loss expenses:
Gross	—			—			171			—			—
Ceded	—			—			4			—			—
Losses paid:
Gross	56			64			60			82			63
Ceded	(1		)	(5		)	(7		)	(13		)	(19		)
Ending reserves:
Gross	2,724			2,660			2,771			2,689			2,626
Ceded	(340		)	(335		)	(324		)	(311		)	(292		)
Net	$	2,384		$	2,325		$	2,447		$	2,378		$	2,334
Environmental reserves
Beginning reserves:
Gross	$	346		$	321		$	396		$	380		$	352
Ceded	(5		)	(4		)	(9		)	(7		)	(5		)
Net	341			317			387			373			347
Incurred losses and loss expenses:
Gross	—			96			3			—			—
Ceded	—			(6		)	(3		)	—			—
Losses paid:
Gross	25			21			19			28			12
Ceded	(1		)	(1		)	(5		)	(2		)	(1		)
Ending reserves:
Gross	321			396			380			352			340
Ceded	(4		)	(9		)	(7		)	(5		)	(4		)
Net	$	317		$	387		$	373		$	347		$	336

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

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

	March 31,			December 31,
Debt	2013			2012
Short-term debt
Commercial paper	$	100		$	100
5.00% Senior notes due March 15, 2013 (1)	—			500
Total short-term debt	100			600
Long-term debt
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			107
Total long-term debt	5,761			5,761
Unamortized fair value adjustment	52			52
Unamortized debt issuance costs	(62		)	(63		)
	5,751			5,750
Total debt	5,851			6,350
Common equity (excluding net unrealized investment gains, net of tax)	22,732			22,302
Total capital (excluding net unrealized investment gains, net of tax)	$	28,583		$	28,652
Total debt to capital (excluding net unrealized investment gains, net of tax)	20.5		%	22.2		%

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

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

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

	March 31,			December 31,
	2013 (1)			2012
Statutory basis surplus	$	20,692		$	20,048
GAAP adjustments
Goodwill and intangible assets	3,563			3,573
Investments	4,892			5,351
Noninsurance companies	(4,395		)	(4,302		)
Deferred acquisition costs	1,795			1,792
Deferred federal income tax	(2,128		)	(2,220		)
Current federal income tax	(11		)	(9		)
Reinsurance recoverables	201			201
Furniture, equipment & software	653			664
Employee benefits	(17		)	(13		)
Agents balances	147			151
Other	204			169
Total GAAP adjustments	4,904			5,357
GAAP shareholders’ equity	$	25,596		$	25,405

(1) Estimated and Preliminary

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

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Cash flows from operating activities
Net income	$	806		$	499		$	864		$	304		$	896
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	(10		)	(4		)	2			(39		)	(10		)
Depreciation and amortization	216			196			206			209			219
Deferred federal income tax expense	119			6			96			2			131
Amortization of deferred acquisition costs	971			976			986			977			948
Equity in income from other investments	(114		)	(114		)	(43		)	(71		)	(74		)
Premiums receivable	(151		)	(317		)	161			169			(155		)
Reinsurance recoverables	495			257			174			(473		)	390
Deferred acquisition costs	(984		)	(1,016		)	(1,005		)	(909		)	(954		)
Claims and claim adjustment expense reserves	(504		)	(95		)	(597		)	656			(751		)
Unearned premium reserves	117			229			160			(383		)	187
Other	(147		)	(166		)	497			22			(297		)
Net cash provided by operating activities	814			451			1,501			464			530
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,615			2,552			1,688			2,514			2,123
Proceeds from sales of investments:
Fixed maturities	223			319			182			363			234
Equity securities	15			7			9			6			36
Real estate investments	—			3			—			50			—
Other investments	203			183			130			319			174
Purchases of investments:
Fixed maturities	(2,604		)	(2,596		)	(2,477		)	(2,770		)	(2,339		)
Equity securities	(10		)	(23		)	(6		)	(9		)	(13		)
Real estate investments	(5		)	(53		)	(4		)	(33		)	(6		)
Other investments	(114		)	(107		)	(71		)	(242		)	(95		)
Net sales (purchases) of short-term securities	226			141			(408		)	158			109
Securities transactions in course of settlement	248			(171		)	(24		)	(76		)	180
Other	(92		)	(41		)	(96		)	(94		)	(100		)
Net cash provided by (used in) investing activities	(295		)	214			(1,077		)	186			303

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

	1Q			2Q			3Q			4Q			1Q
	2012			2012			2012			2012			2013
Cash flows from financing activities
Payment of debt	—			(258		)	—			—			(500		)
Dividends paid to shareholders	(161		)	(180		)	(178		)	(175		)	(175		)
Issuance of common stock - employee share options	77			93			77			48			98
Treasury stock acquired - share repurchase authorization	(354		)	(353		)	(349		)	(418		)	(300		)
Treasury stock acquired - net employee share-based compensation	(52		)	—			—			(1		)	(58		)
Excess tax benefits from share-based payment arrangements	12			7			13			6			21
Net cash used in financing activities	(478		)	(691		)	(437		)	(540		)	(914		)
Effect of exchange rate changes on cash	3			(2		)	3			—			(6		)
Net increase (decrease) in cash	44			(28		)	(10		)	110			(87		)
Cash at beginning of period	214			258			230			220			330
Cash at end of period	$	258		$	230		$	220		$	330		$	243
Income taxes paid (received)	$	20		$	276		$	14		$	(122	)	$	27
Interest paid	$	35		$	156		$	35		$	149		$	35

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The Travelers Companies, Inc. Financial Supplement - First Quarter 2013 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 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 and net realized investment gains (losses), net of tax, for the period presented.  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) to average shareholders’ equity for the periods presented.  Operating return on equity is the ratio of annualized operating income (loss) 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