10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number: 001-10898

The Travelers Companies, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	41-0518860
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

485 Lexington Avenue

New York, NY 10017

(Address of principal executive offices) (Zip Code)

(917) 778-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o  No x

The number of shares of the Registrant’s Common Stock, without par value, outstanding at July 18, 2016 was 288,281,317.

The Travelers Companies, Inc.

Quarterly Report on Form 10-Q

For Quarterly Period Ended June 30, 2016

TABLE OF CONTENTS

		Page
Part I — Financial Information
Item 1.	Financial Statements:
	Consolidated Statement of Income (Unaudited) — Three Months and Six Months Ended June 30, 2016 and 2015	3
	Consolidated Statement of Comprehensive Income (Unaudited) — Three Months and Six Months Ended June 30, 2016 and 2015	4
	Consolidated Balance Sheet — June 30, 2016 (Unaudited) and December 31, 2015	5
	Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) — Six Months Ended June 30, 2016 and 2015	6
	Consolidated Statement of Cash Flows (Unaudited) — Six Months Ended June 30, 2016 and 2015	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 4.	Controls and Procedures	73
Part II — Other Information
Item 1.	Legal Proceedings	73
Item 1A.	Risk Factors	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 5.	Other Information	74
Item 6.	Exhibits	75
	SIGNATURES	75
	EXHIBIT INDEX	76

2

PART 1 — FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

(in millions, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Revenues
Premiums	$	6,067	$	5,931	$	12,048	$	11,819
Net investment income	549		632		1,093		1,224
Fee income	119		115		236		229
Net realized investment gains (1)	19		10		10		20
Other revenues	31		22		84		47
Total revenues	6,785		6,710		13,471		13,339
Claims and expenses
Claims and claim adjustment expenses	3,762		3,547		7,474		6,978
Amortization of deferred acquisition costs	989		963		1,960		1,926
General and administrative expenses	1,054		1,032		2,049		2,027
Interest expense	93		92		184		184
Total claims and expenses	5,898		5,634		11,667		11,115
Income before income taxes	887		1,076		1,804		2,224
Income tax expense	223		264		449		579
Net income	$	664	$	812	$	1,355	$	1,645
Net income per share
Basic	$	2.27	$	2.56	$	4.60	$	5.14
Diluted	$	2.24	$	2.53	$	4.55	$	5.08
Weighted average number of common shares outstanding
Basic	290.1		314.8		292.1		317.7
Diluted	293.6		318.0		295.6		321.2
Cash dividends declared per common share	$	0.67	$	0.61	$	1.28	$	1.16

(1)Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively.  Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains.  In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

The accompanying notes are an integral part of the consolidated financial statements.

3

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

(in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016		2015
Net income	$	664		$	812		$	1,355	$	1,645
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	879			(1,065		)	1,593		(896		)
Having credit losses recognized in the consolidated statement of income	12			(5		)	17		(10		)
Net changes in benefit plan assets and obligations	18			23			34		47
Net changes in unrealized foreign currency translation	(35		)	94			68		(180		)
Other comprehensive income (loss) before income taxes	874			(953		)	1,712		(1,039		)
Income tax expense (benefit)	323			(353		)	590		(328		)
Other comprehensive income (loss), net of taxes	551			(600		)	1,122		(711		)
Comprehensive income	$	1,215		$	212		$	2,477	$	934

The accompanying notes are an integral part of the consolidated financial statements.

4

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions)

	June 30, 2016			December 31, 2015
	(Unaudited)
Assets
Fixed maturities, available for sale, at fair value (amortized cost $59,975 and $58,878)	$	63,311		$	60,658
Equity securities, available for sale, at fair value (cost $525 and $528)	752			705
Real estate investments	929			989
Short-term securities	3,988			4,671
Other investments	3,490			3,447
Total investments	72,470			70,470
Cash	265			380
Investment income accrued	627			642
Premiums receivable	7,014			6,437
Reinsurance recoverables	8,603			8,910
Ceded unearned premiums	726			656
Deferred acquisition costs	1,954			1,849
Deferred taxes	—			296
Contractholder receivables	4,541			4,374
Goodwill	3,588			3,573
Other intangible assets	274			279
Other assets	2,384			2,318
Total assets	$	102,446		$	100,184
Liabilities
Claims and claim adjustment expense reserves	$	47,953		$	48,295
Unearned premium reserves	12,520			11,971
Contractholder payables	4,541			4,374
Payables for reinsurance premiums	401			296
Deferred taxes	370			—
Debt	6,436			6,344
Other liabilities	5,511			5,306
Total liabilities	77,732			76,586
Shareholders’ equity
Common stock (1,750.0 shares authorized; 288.3 and 295.9 shares issued and outstanding)	22,349			22,172
Retained earnings	30,921			29,945
Accumulated other comprehensive income (loss)	965			(157		)
Treasury stock, at cost (478.1 and 467.6 shares)	(29,521		)	(28,362		)
Total shareholders’ equity	24,714			23,598
Total liabilities and shareholders’ equity	$	102,446		$	100,184

The accompanying notes are an integral part of the consolidated financial statements.

5

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)

For the six months ended June 30,	2016			2015
Common stock
Balance, beginning of year	$	22,172		$	21,843
Employee share-based compensation	95			87
Compensation amortization under share-based plans and other changes	82			109
Balance, end of period	22,349			22,039
Retained earnings
Balance, beginning of year	29,945			27,251
Net income	1,355			1,645
Dividends	(378		)	(372		)
Other	(1		)	—
Balance, end of period	30,921			28,524
Accumulated other comprehensive income (loss), net of tax
Balance, beginning of year	(157		)	880
Other comprehensive income (loss)	1,122			(711		)
Balance, end of period	965			169
Treasury stock (at cost)
Balance, beginning of year	(28,362		)	(25,138		)
Treasury stock acquired — share repurchase authorization	(1,100		)	(1,400		)
Net shares acquired related to employee share-based compensation plans	(59		)	(73		)
Balance, end of period	(29,521		)	(26,611		)
Total shareholders’ equity	$	24,714		$	24,121
Common shares outstanding
Balance, beginning of year	295.9			322.2
Treasury stock acquired — share repurchase authorization	(10.0		)	(13.5		)
Net shares issued under employee share-based compensation plans	2.4			2.5
Balance, end of period	288.3			311.2

The accompanying notes are an integral part of the consolidated financial statements.

6

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(in millions)

For the six months ended June 30,	2016			2015
Cash flows from operating activities
Net income	$	1,355		$	1,645
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment gains	(10		)	(20		)
Depreciation and amortization	413			429
Deferred federal income tax expense	75			142
Amortization of deferred acquisition costs	1,960			1,926
Equity in income from other investments	(44		)	(134		)
Premiums receivable	(567		)	(486		)
Reinsurance recoverables	316			263
Deferred acquisition costs	(2,062		)	(1,991		)
Claims and claim adjustment expense reserves	(387		)	(826		)
Unearned premium reserves	531			362
Other	(287		)	(435		)
Net cash provided by operating activities	1,293			875
Cash flows from investing activities
Proceeds from maturities of fixed maturities	3,773			5,314
Proceeds from sales of investments:
Fixed maturities	739			1,226
Equity securities	38			28
Real estate investments	69			10
Other investments	343			354
Purchases of investments:
Fixed maturities	(5,705		)	(6,239		)
Equity securities	(26		)	(22		)
Real estate investments	(20		)	(69		)
Other investments	(290		)	(275		)
Net sales of short-term securities	681			433
Securities transactions in course of settlement	461			183
Other	(154		)	(178		)
Net cash provided by (used in) investing activities	(91		)	765
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	(1,100		)	(1,400		)
Treasury stock acquired — net employee share-based compensation	(59		)	(72		)
Dividends paid to shareholders	(375		)	(369		)
Payment of debt	(400		)	—
Issuance of debt	491			—
Issuance of common stock — employee share options	129			117
Excess tax benefits from share-based payment arrangements	—			31
Net cash used in financing activities	(1,314		)	(1,693		)
Effect of exchange rate changes on cash	(3		)	(4		)
Net decrease in cash	(115		)	(57		)
Cash at beginning of year	380			374
Cash at end of period	$	265		$	317
Supplemental disclosure of cash flow information
Income taxes paid	$	467		$	597
Interest paid	$	180		$	183

The accompanying notes are an integral part of the consolidated financial statements.

7

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Basis of Presentation

The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited.  In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected.  Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted.  All material intercompany transactions and balances have been eliminated.  The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the Company’s 2015 Annual Report).

The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.  Actual results could differ from those estimates.  Certain reclassifications have been made to the 2015 financial statements to conform to the 2016 presentation.

Adoption of Accounting Standards

Compensation — Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued updated guidance to resolve diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period.  The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. As such, the performance target that affects vesting should not be reflected in estimating the fair value of the award at the grant date. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Derivatives and Hedging: Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity

In November 2014, the FASB issued updated guidance to clarify when the separation of certain embedded derivative features in a hybrid financial instrument that is issued in the form of a share is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

8

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1.BASIS OF PRESENTATION AND ACCOUNTING POLICIES, Continued

Consolidation: Amendments to the Consolidation Analysis

In February 2015, the FASB issued updated guidance that makes targeted amendments to the current consolidation accounting guidance. The update is in response to accounting complexity concerns, particularly from the asset management industry. The guidance simplifies consolidation accounting by reducing the number of approaches to consolidation, provides a scope exception to registered money market funds and similar unregistered money market funds and ends the indefinite deferral granted to investment companies from applying the variable interest entity guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Interest — Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs

In April 2015, the FASB issued updated guidance to clarify the required presentation of debt issuance costs.  The amended guidance requires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying amount of the recognized debt liability, consistent with the treatment of debt discounts.  Amortization of debt issuance costs is to be reported as interest expense.  The recognition and measurement guidance for debt issuance costs are not affected by the updated guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The updated guidance is consistent with the Company’s accounting policy and its adoption did not have any effect on the Company’s results of operations, financial position or liquidity.

Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments

In September 2015, the FASB issued updated guidance regarding business combinations that requires an acquirer to recognize post-close measurement adjustments for provisional amounts in the period the adjustment amounts are determined rather than retrospectively.  The acquirer is also required to recognize, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the provisional amount, calculated as if the accounting had been completed at the acquisition date.  The updated guidance is to be applied prospectively effective for reporting periods beginning after December 15, 2015.  In connection with business combinations which have already been completed, the adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued updated guidance to simplify several aspects of accounting for share-based payment transactions as follows:

Accounting for Income Taxes

Under current accounting guidance, if the deduction for a share-based payment award for tax purposes exceeds, or is less than, the compensation cost recognized for financial reporting purposes, the resulting excess tax benefit, or tax deficiency, is reported as part of additional paid-in capital.  Under the updated guidance, these excess tax benefits, or tax deficiencies, are reported as part of income tax expense or benefit in the income statement.  The updated guidance also removes the requirement to delay recognition of any excess tax benefit when there are no current taxes payable to which the benefit would be applied.  The tax-related cash flows resulting from share-based payments are to be included with other income tax cash flows as an operating activity rather than being reported separately as a financing activity.

Forfeitures

The updated guidance permits an entity to make an accounting policy election to either account for forfeitures when they occur or continue to apply the current method of accruing the compensation cost based on the number of awards that are expected to vest.

9

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1.BASIS OF PRESENTATION AND ACCOUNTING POLICIES, Continued

Minimum Statutory Tax Withholding Requirements

The updated guidance changes the threshold amount an entity can withhold for taxes when settling an equity award and still qualify for equity classification. A company can withhold up to the maximum statutory tax rates in the employees’ applicable jurisdiction rather than withholding up to the employers’ minimum statutory withholding requirement. The update also clarifies that all cash payments made to taxing authorities on behalf of employees for withheld shares are to be presented in financing activities on the statement of cash flows.

Transition

The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted in any interim period; if early adoption is elected, the entity must adopt all of the amendments in the same reporting period and reflect any adjustments as of the beginning of the fiscal year.

The Company adopted the updated guidance effective January 1, 2016.  With respect to the forfeiture accounting policy election, the Company elected to retain its policy of accruing the compensation cost based on the number of awards that are expected to vest. The adoption did not result in any cumulative effect adjustments or restatement and did not have a material effect on the Company’s results of operations, financial position or liquidity.

Accounting Standards Not Yet Adopted

Leases

In February 2016, the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than 12 months.  The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease).  Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows.  Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset.  Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease.   The accounting by lessors is not significantly changed by the updated guidance.  The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements.

The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied.  Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Investments — Equity Method and Joint Ventures:  Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued updated guidance that eliminates the requirement to retroactively apply the equity method of accounting when an investment that was previously accounted for using another method of accounting becomes qualified to apply the equity method due to an increase in the level of ownership interest or degree of influence.  If the investment was previously accounted for as an available-for-sale security, any related unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for the equity method is recognized through earnings.  The updated guidance is effective for reporting periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

10

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1.BASIS OF PRESENTATION AND ACCOUNTING POLICIES, Continued

Derivatives and Hedging:  Contingent Put and Call Options in Debt Instruments

In March 2016, the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does not need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately.  The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Financial Instruments — Credit Losses:  Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued updated guidance for the accounting for credit losses for financial instruments.  The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value.  In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists.

The updated guidance is effective for reporting periods beginning after December 15, 2019.  Early adoption is permitted for reporting periods beginning after December 15, 2018.  The Company will not be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

Additional Accounting Standards Not Yet Adopted

For information regarding additional accounting standards that the Company has not yet adopted, see the “Other Accounting Standards Not Yet Adopted” section of note 1 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Nature of Operations

The Company is organized into three reportable business segments: Business and International Insurance; Bond & Specialty Insurance; and Personal Insurance. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of products and services based on type of customer, how the business is marketed and the manner in which risks are underwritten.  For more information regarding the Company’s nature of operations, see the “Nature of Operations” section of note 1 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

11

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2.SEGMENT INFORMATION

The following tables summarize the components of the Company’s operating revenues, operating income and total assets by reportable business segments:

(for the three months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	3,631	$	518	$	1,918	$	6,067
Net investment income	420		51		78		549
Fee income	115		—		4		119
Other revenues	8		6		14		28
Total operating revenues (1)	$	4,174	$	575	$	2,014	$	6,763
Operating income (1)	$	393	$	202	$	116	$	711
2015
Premiums	$	3,609	$	524	$	1,798	$	5,931
Net investment income	487		57		88		632
Fee income	111		—		4		115
Other revenues	5		5		12		22
Total operating revenues (1)	$	4,212	$	586	$	1,902	$	6,700
Operating income (1)	$	543	$	151	$	174	$	868

(1)Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

(for the six months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty  Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	7,230	$	1,026	$	3,792	$	12,048
Net investment income	835		103		155		1,093
Fee income	229		—		7		236
Other revenues	41		9		28		78
Total operating revenues (1)	$	8,335	$	1,138	$	3,982	$	13,455
Operating income (1)	$	869	$	346	$	255	$	1,470
2015
Premiums	$	7,229	$	1,028	$	3,562	$	11,819
Net investment income	941		113		170		1,224
Fee income	222		—		7		229
Other revenues	13		10		24		47
Total operating revenues (1)	$	8,405	$	1,151	$	3,763	$	13,319
Operating income (1)	$	1,058	$	275	$	426	$	1,759

(1)Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

12

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2.SEGMENT INFORMATION, Continued

Business Segment Reconciliations

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Revenue reconciliation
Earned premiums
Business and International Insurance:
Domestic:
Workers’ compensation	$	987		$	957		$	1,968		$	1,919
Commercial automobile	503			477			994			945
Commercial property	442			440			879			880
General liability	485			469			967			937
Commercial multi-peril	786			779			1,568			1,553
Other	9			10			14			20
Total Domestic	3,212			3,132			6,390			6,254
International	419			477			840			975
Total Business and International Insurance	3,631			3,609			7,230			7,229
Bond & Specialty Insurance:
Fidelity and surety	239			240			469			465
General liability	235			240			469			476
Other	44			44			88			87
Total Bond & Specialty Insurance	518			524			1,026			1,028
Personal Insurance:
Automobile	974			863			1,910			1,699
Homeowners and Other	944			935			1,882			1,863
Total Personal Insurance	1,918			1,798			3,792			3,562
Total earned premiums	6,067			5,931			12,048			11,819
Net investment income	549			632			1,093			1,224
Fee income	119			115			236			229
Other revenues	28			22			78			47
Total operating revenues for reportable segments	6,763			6,700			13,455			13,319
Other revenues	3			—			6			—
Net realized investment gains	19			10			10			20
Total consolidated revenues	$	6,785		$	6,710		$	13,471		$	13,339
Income reconciliation, net of tax
Total operating income for reportable segments	$	711		$	868		$	1,470		$	1,759
Interest Expense and Other (1)	(62		)	(62		)	(123		)	(126		)
Total operating income	649			806			1,347			1,633
Net realized investment gains	15			6			8			12
Total consolidated net income	$	664		$	812		$	1,355		$	1,645

(1)The primary component of Interest Expense and Other was after-tax interest expense of $60 million in each of the three months ended June 30, 2016 and 2015, and $120 million in each of the six months ended June 30, 2016 and 2015.

13

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2.SEGMENT INFORMATION, Continued

(in millions)	June 30, 2016		December 31, 2015
Asset reconciliation:
Business and International Insurance	$	81,214	$	79,692
Bond & Specialty Insurance	7,745		7,360
Personal Insurance	13,109		12,748
Total assets for reportable segments	102,068		99,800
Other assets (1)	378		384
Total consolidated assets	$	102,446	$	100,184

(1)The primary component of other assets at June 30, 2016 was other intangible assets and the primary components at December 31, 2015 were other intangible assets and deferred taxes.

3.INVESTMENTS

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:

	Amortized		Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,038	$	36	$	1	$	2,073
Obligations of states, municipalities and political subdivisions:
Local general obligation	13,816		954		1		14,769
Revenue	10,270		787		—		11,057
State general obligation	1,958		124		—		2,082
Pre-refunded	5,490		234		—		5,724
Total obligations of states, municipalities and political subdivisions	31,534		2,099		1		33,632
Debt securities issued by foreign governments	1,745		56		—		1,801
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,702		132		1		1,833
All other corporate bonds	22,858		1,062		52		23,868
Redeemable preferred stock	98		6		—		104
Total	$	59,975	$	3,391	$	55	$	63,311

14

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3.INVESTMENTS, Continued

	Amortized		Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,202	$	8	$	16	$	2,194
Obligations of states, municipalities and political subdivisions:
Local general obligation	12,744		577		3		13,318
Revenue	9,492		472		4		9,960
State general obligation	1,978		97		2		2,073
Pre-refunded	5,813		247		—		6,060
Total obligations of states, municipalities and political subdivisions	30,027		1,393		9		31,411
Debt securities issued by foreign governments	1,829		45		1		1,873
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,863		124		6		1,981
All other corporate bonds	22,854		523		288		23,089
Redeemable preferred stock	103		7		—		110
Total	$	58,878	$	2,100	$	320	$	60,658

Pre-refunded bonds of $5.72 billion and $6.06 billion at June 30, 2016 and December 31, 2015, respectively, were bonds for which states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities, which were created to satisfy their responsibility for payments of principal and interest.

Proceeds from sales of fixed maturities classified as available for sale were $739 million and $1.23 billion during the six months ended June 30, 2016 and 2015, respectively. Gross gains of $46 million and $40 million and gross losses of $8 million and $3 million were realized on those sales during the six months ended June 30, 2016 and 2015, respectively.

Equity Securities

The cost and fair value of investments in equity securities were as follows:

			Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	214	$	3	$	597
Non-redeemable preferred stock	139		23		7		155
Total	$	525	$	237	$	10	$	752

			Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	164	$	7	$	543
Non-redeemable preferred stock	142		26		6		162
Total	$	528	$	190	$	13	$	705

Proceeds from sales of equity securities classified as available for sale were $38 million and $28 million during the six months ended June 30, 2016 and 2015, respectively.  Gross gains of $8 million and $5 million and gross losses of $2 million and $3 million were realized on those sales during the six months ended June 30, 2016 and 2015, respectively.

15

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3.INVESTMENTS, Continued

Unrealized Investment Losses

The following tables summarize, for all investments in an unrealized loss position at June 30, 2016 and December 31, 2015, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position.  The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

	Less than 12 months				12 months or longer				Total
(at June 30, 2016, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	37	$	—	$	10	$	1	$	47	$	1
Obligations of states, municipalities and political subdivisions	639		1		14		—		653		1
Debt securities issued by foreign governments	3		—		—		—		3		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	42		—		37		1		79		1
All other corporate bonds	779		12		720		40		1,499		52
Redeemable preferred stock	7		—		—		—		7		—
Total fixed maturities	1,507		13		781		42		2,288		55
Equity securities
Public common stock	24		2		34		1		58		3
Non-redeemable preferred stock	30		1		58		6		88		7
Total equity securities	54		3		92		7		146		10
Total	$	1,561	$	16	$	873	$	49	$	2,434	$	65

16

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3.INVESTMENTS, Continued

	Less than 12 months				12 months or longer				Total
(at December 31, 2015, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	1,820	$	15	$	28	$	1	$	1,848	$	16
Obligations of states, municipalities and political subdivisions	928		7		142		2		1,070		9
Debt securities issued by foreign governments	172		1		—		—		172		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	473		4		57		2		530		6
All other corporate bonds	7,725		197		710		91		8,435		288
Redeemable preferred stock	8		—		—		—		8		—
Total fixed maturities	11,126		224		937		96		12,063		320
Equity securities
Public common stock	48		6		33		1		81		7
Non-redeemable preferred stock	47		3		38		3		85		6
Total equity securities	95		9		71		4		166		13
Total	$	11,221	$	233	$	1,008	$	100	$	12,229	$	333

Unrealized losses for all fixed maturities and equity securities reported at fair value for which fair value is less than 80% of amortized cost at June 30, 2016 totaled $11 million, representing less than 1% of the combined fixed maturity and equity security portfolios on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis.

Impairment Charges

Impairment charges included in net realized investment gains in the consolidated statement of income were $4 million and $6 million for the three months ended June 30, 2016 and 2015, respectively, and $22 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

For fixed maturities held at June 30, 2016 and 2015, the cumulative amount of credit losses recognized in the consolidated statement of income from other-than-temporary impairments (OTTI) was $88 million at both dates, on investments for which a portion of the OTTI was recognized in other comprehensive income (loss).  These credit losses represent less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis at both dates.  There were no significant changes in the credit component of OTTI during the six months ended June 30, 2016 and 2015 from that disclosed in note 3 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Derivative Financial Instruments

From time to time, the Company enters into U.S. Treasury note futures contracts to modify the effective duration of specific assets within the investment portfolio.  U.S. Treasury futures contracts require a daily mark-to-market and settlement with the broker.  At both June 30, 2016 and December 31, 2015, the Company had $400 million notional value of open U.S. Treasury futures contracts.  Net realized investment gains and losses related to U.S. Treasury futures contracts in the three months and six months ended June 30, 2016 and 2015 were not significant.

17

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4.FAIR VALUE MEASUREMENTS

The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance.  The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available.  The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable.  In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions.  The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.  The three levels of the hierarchy are as follows:

·Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.

·Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.

·Level 3 - Valuations based on models where significant inputs are not observable.  The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use.

Valuation of Investments Reported at Fair Value in Financial Statements

The Company utilized a pricing service to estimate fair value measurements for approximately 98% of its fixed maturities at both June 30, 2016 and December 31, 2015.

While the vast majority of the Company’s fixed maturities are included in Level 2, the Company holds a number of municipal bonds and corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using an internal pricing matrix with some unobservable inputs that are significant to the valuation.  Due to the limited amount of observable market information, the Company includes the fair value estimates for these particular bonds in Level 3.  The fair value of the fixed maturities for which the Company used an internal pricing matrix was $96 million and $101 million at June 30, 2016 and December 31, 2015, respectively.  Additionally, the Company holds a small amount of other fixed maturity investments that have characteristics that make them unsuitable for matrix pricing.  For these fixed maturities, the Company obtains a quote from a broker (primarily the market maker).  The fair value of the fixed maturities for which the Company received a broker quote was $87 million and $117 million at June 30, 2016 and December 31, 2015, respectively.  Due to the disclaimers on the quotes that indicate that the price is indicative only, the Company includes these fair value estimates in Level 3.

For more information regarding the valuation of the Company’s fixed maturities, equity securities and other investments, see note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Fair Value Hierarchy

The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis at June 30, 2016 and December 31, 2015.  An investment transferred between levels during a period is transferred at its fair value as of the beginning of that period.

18

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4.FAIR VALUE MEASUREMENTS, Continued

(at June 30, 2016, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,073	$	2,073	$	—	$	—
Obligations of states, municipalities and political subdivisions	33,632		11		33,608		13
Debt securities issued by foreign governments	1,801		—		1,801		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,833		—		1,833		—
All other corporate bonds	23,868		3		23,702		163
Redeemable preferred stock	104		3		94		7
Total fixed maturities	63,311		2,090		61,038		183
Equity securities
Public common stock	597		597		—		—
Non-redeemable preferred stock	155		66		89		—
Total equity securities	752		663		89		—
Other investments	61		17		—		44
Total	$	64,124	$	2,770	$	61,127	$	227

(at December 31, 2015, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,194	$	2,194	$	—	$	—
Obligations of states, municipalities and political subdivisions	31,411		—		31,398		13
Debt securities issued by foreign governments	1,873		—		1,873		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,981		—		1,957		24
All other corporate bonds	23,089		—		22,915		174
Redeemable preferred stock	110		3		100		7
Total fixed maturities	60,658		2,197		58,243		218
Equity securities
Public common stock	543		543		—		—
Non-redeemable preferred stock	162		55		107		—
Total equity securities	705		598		107		—
Other investments	56		18		—		38
Total	$	61,419	$	2,813	$	58,350	$	256

During the six months ended June 30, 2016 and the year ended December 31, 2015, the Company’s transfers between Level 1 and Level 2 were not significant.

There was no significant activity in Level 3 of the hierarchy during the six months ended June 30, 2016 or the year ended December 31, 2015.

19

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4.FAIR VALUE MEASUREMENTS, Continued

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following tables present the carrying value and fair value of the Company’s financial assets and financial liabilities disclosed, but not carried, at fair value, and the level within the fair value hierarchy at which such assets and liabilities are categorized.

(at June 30, 2016, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	3,988	$	3,988	$	792	$	3,151	$	45
Financial liabilities:
Debt	$	6,336	$	7,743	$	—	$	7,743	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

(at December 31, 2015, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	4,671	$	4,671	$	1,685	$	2,958	$	28
Financial liabilities:
Debt	$	6,244	$	7,180	$	—	$	7,180	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

The Company utilized a pricing service to estimate fair value for approximately 99% of short-term securities at both June 30, 2016 and December 31, 2015.  For a description of the process and inputs used by the pricing service to estimate fair value, see the “Fixed Maturities” section in note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

The Company utilized a pricing service to estimate fair value for 100% of its debt, including commercial paper, at June 30, 2016 and December 31, 2015.

The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the six months ended June 30, 2016 or twelve months ended December 31, 2015.

5.GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table presents the carrying amount of the Company’s goodwill by segment at June 30, 2016 and December 31, 2015:

(in millions)	June 30, 2016		December 31,  2015
Business and International Insurance (1)	$	2,454	$	2,439
Bond & Specialty Insurance	496		496
Personal Insurance	612		612
Other	26		26
Total	$	3,588	$	3,573

(1)Includes goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.

20

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5.GOODWILL AND OTHER INTANGIBLE ASSETS, Continued

Other Intangible Assets

The following tables present a summary of the Company’s other intangible assets by major asset class at June 30, 2016 and December 31, 2015:

(at June 30, 2016, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	153	$	57
Not subject to amortization	217		—		217
Total	$	427	$	153	$	274

(at December 31, 2015, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	148	$	62
Not subject to amortization	217		—		217
Total	$	427	$	148	$	279

(1)Intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract and customer-related intangibles.  The time value of money and the risk adjustment (cost of capital) components of the intangible asset run off at different rates, and, as such, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.

Amortization expense of intangible assets was $2 million and $9 million for the three months ended June 30, 2016 and 2015, respectively, and $5 million and $20 million for the six months ended June 30, 2016 and 2015, respectively.  Intangible asset amortization expense is estimated to be $5 million for the remainder of 2016, $9 million in 2017, $8 million in 2018, $7 million in 2019 and $5 million in 2020.

6.OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the changes in the Company’s accumulated other comprehensive income (AOCI) for the six months ended June 30, 2016.

(in millions)	Changes in Net  Unrealized Gains on Investment  Securities Having No Credit Losses  Recognized in the  Consolidated  Statement of Income			Changes in Net  Unrealized Gains on Investment  Securities Having  Credit Losses  Recognized in the  Consolidated  Statement of Income		Net Benefit Plan  Assets and  Obligations  Recognized in  Shareholders’ Equity			Net Unrealized  Foreign Currency  Translation			Total Accumulated Other  Comprehensive  Income (Loss)
Balance, December 31, 2015	$	1,100		$	189	$	(713	)	$	(733	)	$	(157	)
Other comprehensive income (OCI) before reclassifications	1,064			3		3			47			1,117
Amounts reclassified from AOCI	(23		)	8		20			—			5
Net OCI, current period	1,041			11		23			47			1,122
Balance, June 30, 2016	$	2,141		$	200	$	(690	)	$	(686	)	$	965

21

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

6.OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME, Continued

The following table presents the pretax components of the Company’s other comprehensive income (loss) and the related income tax expense (benefit) for the three months and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,						Six Months Ended June 30,
( in millions)	2016			2015			2016		2015
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	$	879		$	(1,065	)	$	1,593	$	(896	)
Income tax expense (benefit)	305			(368		)	552		(312		)
Net of taxes	574			(697		)	1,041		(584		)
Having credit losses recognized in the consolidated statement of income	12			(5		)	17		(10		)
Income tax expense (benefit)	4			(2		)	6		(4		)
Net of taxes	8			(3		)	11		(6		)
Net changes in benefit plan assets and obligations	18			23			34		47
Income tax expense	6			8			11		16
Net of taxes	12			15			23		31
Net changes in unrealized foreign currency translation	(35		)	94			68		(180		)
Income tax expense (benefit)	8			9			21		(28		)
Net of taxes	(43		)	85			47		(152		)
Total other comprehensive income (loss)	874			(953		)	1,712		(1,039		)
Total income tax expense (benefit)	323			(353		)	590		(328		)
Total other comprehensive income (loss), net of taxes	$	551		$	(600	)	$	1,122	$	(711	)

22

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

6.OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME, Continued

The following table presents the pre-tax and related income tax (expense) benefit components of the amounts reclassified from the Company’s AOCI to the Company’s consolidated statement of income for the three months and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Reclassification adjustments related to unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income (1)	$	(24	)	$	(17	)	$	(35	)	$	(35	)
Income tax expense (2)	(8		)	(6		)	(12		)	(12		)
Net of taxes	(16		)	(11		)	(23		)	(23		)
Having credit losses recognized in the consolidated statement of income (1)	1			2			12			2
Income tax benefit (2)	—			—			4			—
Net of taxes	1			2			8			2
Reclassification adjustment related to benefit plan assets and obligations (3)	15			24			31			47
Income tax benefit (2)	6			9			11			17
Net of taxes	9			15			20			30
Reclassification adjustment related to foreign currency translation (1)	—			—			—			—
Income tax benefit (2)	—			—			—			—
Net of taxes	—			—			—			—
Total reclassifications	(8		)	9			8			14
Total income tax (expense) benefit	(2		)	3			3			5
Total reclassifications, net of taxes	$	(6	)	$	6		$	5		$	9

(1)(Increases) decreases net realized investment gains on the consolidated statement of income.

(2)(Increases) decreases income tax expense on the consolidated statement of income.

(3)Increases (decreases) general and administrative expenses on the consolidated statement of income.

7.DEBT

Debt Issuance.  On May 11, 2016, the Company issued $500 million aggregate principal amount of 3.75% senior notes that will mature on May 15, 2046.  The net proceeds of the issuance, after the deduction of underwriting and other expenses, totaled approximately $491 million.  Interest on the senior notes is payable semi-annually in arrears on May 15 and November 15, commencing on November 15, 2016.  Prior to November 15, 2045, the senior notes may be redeemed, in whole or in part, at the Company’s option, at any time or from time to time, at a redemption price equal to the greater of (a) 100% of the principal amount of any senior notes to be redeemed or (b) the sum of the present values of the remaining scheduled payments of principal and interest on any senior notes to be redeemed (exclusive of interest accrued to the date of

23

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

7.DEBT, Continued

redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury rate (as defined in the senior notes), plus 20 basis points.  On or after November 15, 2045, the senior notes may be redeemed, in whole or in part, at the Company’s option, at any time or from time to time, at a redemption price equal to 100% of the principal amount of any senior notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Debt Payment.  On June 20, 2016, the Company’s $400 million, 6.25% senior notes matured and were fully paid.

8.COMMON SHARE REPURCHASES

During the three months and six months ended June 30, 2016, the Company repurchased 4.9 million and 10.0 million shares, respectively, under its share repurchase authorization, for a total cost of $550 million and $1.10 billion, respectively.  The average cost per share repurchased was $112.12 and $110.26, respectively.  At June 30, 2016, the Company had $2.23 billion of capacity remaining under its share repurchase authorization.  In addition, the Company acquired 5,146 and 0.5 million shares for a total cost of $0.6 million and $59 million during the three months and six months ended June 30, 2016, respectively, that were not part of the publicly announced share repurchase authorization.  These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards and shares used by employees to cover the exercise price of certain stock options that were exercised.

9.EARNINGS PER SHARE

The following is a reconciliation of the net income and share data used in the basic and diluted earnings per share computations for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share amounts)	2016			2015			2016			2015
Basic and Diluted
Net income, as reported	$	664		$	812		$	1,355		$	1,645
Participating share-based awards — allocated income	(5		)	(6		)	(10		)	(12		)
Net income available to common shareholders — basic and diluted	$	659		$	806		$	1,345		$	1,633
Common Shares
Basic
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Diluted
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Weighted average effects of dilutive securities — stock options and performance shares	3.5			3.2			3.5			3.5
Total	293.6			318.0			295.6			321.2
Net Income per Common Share
Basic	$	2.27		$	2.56		$	4.60		$	5.14
Diluted	$	2.24		$	2.53		$	4.55		$	5.08

24

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

10.SHARE-BASED INCENTIVE COMPENSATION

The following information relates to fully vested stock option awards at June 30, 2016:

Stock Options	Number	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining	Aggregate Intrinsic Value ($ in millions)
Vested at end of period (1)	8,006,375	$	78.85	6.5 years	$	322
Exercisable at end of period	4,406,788	$	62.60	4.8 years	$	249

(1) Represents awards for which the requisite service has been rendered, including those that are retirement eligible.

The total compensation cost for all share-based incentive compensation awards recognized in earnings was $32 million and $31 million for the three months ended June 30, 2016 and 2015, respectively, and $82 million and $78 million for the six months ended June 30, 2016 and 2015, respectively.  The related tax benefits recognized in the consolidated statement of income were $11 million and $10 million for the three months ended June 30, 2016 and 2015, respectively, and $28 million and $26 million for the six months ended June 30, 2016 and 2015, respectively.

The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at June 30, 2016 was $184 million, which is expected to be recognized over a weighted-average period of 2.0 years.

11.PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS

The following tables summarize the components of net periodic benefit cost for the Company’s pension and postretirement benefit plans recognized in the consolidated statement of income.

	Pension Plans						Postretirement Benefit Plans
(for the three months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	30		$	32		$	—		$	—
Interest cost on benefit obligation	31			36			2			2
Expected return on plan assets	(58		)	(57		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(1		)	—
Net actuarial loss	16			24			—			—
Net periodic benefit cost	$	20		$	35		$	1		$	2
	Pension Plans						Postretirement Benefit Plans
(for the six months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	59		$	65		$	—		$	—
Interest cost on benefit obligation	61			72			4			5
Expected return on plan assets	(115		)	(115		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(2		)	(1		)
Net actuarial loss	33			48			—			—
Net periodic benefit cost	$	39		$	70		$	2		$	4

25

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

11.PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS, Continued

In first quarter 2016, the Company began to use a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit costs for its qualified and nonqualified domestic pension plans and its domestic postretirement benefit plans. The full yield curve approach applies the specific spot rates along the yield curve that the Company used to determine its projected benefit obligation at the beginning of the year to the projected cash flows related to service and interest costs.  Previously, the Company estimated these service and interest cost components by applying a single weighted-average discount rate derived from this yield curve.  This change was made to provide a better estimate of the service and interest cost components of net periodic benefit costs, consistent with the methodology used to estimate the projected benefit obligation for each of the benefit plans.

This change did not affect the measurement of the Company’s total benefit obligations, as the change in service cost and interest cost is completely offset in the actuarial (gain) loss reported for the period.  The change reduced the service and interest cost components of net periodic benefit costs by $2 million and $7 million, respectively, for the three months ended June 30, 2016, and by $3 million and $15 million, respectively, for the six months ended June 30, 2016.  The weighted average discount rates that are being used to measure service and interest costs during 2016 are 4.77% and 3.64%, respectively, for the domestic qualified pension plan, 4.53% and 3.47%, respectively, for the domestic nonqualified pension plan and 0.00% and 3.53%, respectively, for the domestic postretirement benefit plan. The discount rate associated with the service cost component of the domestic postretirement benefit plan is zero as it is a closed plan and all participants are fully vested.  Under the Company’s prior estimation approach, the weighted average discount rate for both the service and interest cost components would have been 4.50% for the domestic qualified pension plan, 4.37% for the domestic nonqualified pension plan and 4.35% for the domestic postretirement benefit plan.  The Company accounted for this change as a change in estimate, and accordingly, is recognizing the effect prospectively beginning in 2016.

12.CONTINGENCIES, COMMITMENTS AND GUARANTEES

Contingencies

The major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or to which any of the Company’s properties is subject are described below.

Asbestos and Environmental Claims and Litigation

In the ordinary course of its insurance business, the Company has received and continues to receive claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos- and environmental-related exposures that are the subject of related coverage litigation.  The Company is defending asbestos- and environmental-related litigation vigorously and believes that it has meritorious defenses; however, the outcomes of these disputes are uncertain.  In this regard, the Company employs dedicated specialists and aggressive resolution strategies to manage asbestos and environmental loss exposure, including settling litigation under appropriate circumstances.  Currently, it is not possible to predict legal outcomes and their impact on the future development of claims and litigation relating to asbestos and environmental claims. Any such development will be affected by future court decisions and interpretations, as well as changes in applicable legislation. Because of these uncertainties, additional liabilities may arise for amounts in excess of the Company’s current reserves. In addition, the Company’s estimate of ultimate claims and claim adjustment expenses may change. These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company’s results of operations in future periods.

Other Proceedings Not Arising Under Insurance Contracts or Reinsurance Agreements

The Company is involved in other lawsuits, including lawsuits alleging extra-contractual damages relating to insurance contracts or reinsurance agreements, that do not arise under insurance contracts or reinsurance agreements.  The legal costs associated with such lawsuits are expensed in the period in which the costs are incurred.  Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Company’s results of operations or would have a material adverse effect on the Company’s financial position or liquidity.

26

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

12.CONTINGENCIES, COMMITMENTS AND GUARANTEES, Continued

Gain Contingency

On August 17, 2010, in a reinsurance dispute in New York state court captioned United States Fidelity & Guaranty Company v. American Re-Insurance Company, et al., the trial court granted summary judgment for United States Fidelity and Guaranty Company (USF&G), a subsidiary of the Company, and denied summary judgment for American Re-Insurance Company, a subsidiary of Munich Re, and three other reinsurers — two of which are subsidiaries of the same company, while the other has since settled with the Company.  That summary judgment was largely affirmed on appeal, but the Court of Appeals remanded the case for trial on two discrete issues.  On June 3, 2015, the trial court entered orders on pretrial motions filed by all parties and ruled in the Company’s favor that the issues for trial will be limited to the two discrete issues remanded by the Court of Appeals.  The reinsurers’ appeals of the trial court’s orders were unsuccessful.  On March 24, 2016, the reinsurers filed a motion to change the venue, which the Company has opposed.  On April 26, 2016, the trial court denied the reinsurers’ motion to change venue, and on June 10, 2016, the reinsurers appealed that decision to the Appellate Division, First Department.  The previously scheduled trial date was postponed by the trial court, and there is presently no scheduled date for trial.  At June 30, 2016, the claim totaled $519 million, comprising $238 million of reinsurance recoverable plus interest amounting to $281 million as of that date.  Interest will continue to accrue at an annual rate of 9% until the claim is paid, though the reinsurers contested that interest is owed in a brief filed on May 25, 2016.  The $238 million of reinsurance recoverable owed to the Company under the terms of the disputed reinsurance contract has been reported as part of reinsurance recoverables in the Company’s consolidated balance sheet.  The interest that would be owed as part of any judgment ultimately entered in favor of the Company is treated for accounting purposes as a gain contingency in accordance with FASB Topic 450, Contingencies, and accordingly has not been recognized in the Company’s consolidated financial statements.

Other Commitments and Guarantees

Commitments

Investment Commitments — The Company has unfunded commitments to private equity limited partnerships and real estate partnerships in which it invests.  These commitments totaled $1.69 billion and $1.71 billion at June 30, 2016 and December 31, 2015, respectively.

Guarantees

The maximum amount of the Company’s contingent obligation for indemnifications related to the sale of businesses that are quantifiable was $391 million at June 30, 2016, of which $2 million was recognized on the balance sheet at that date.

The maximum amount of the Company’s obligation for guarantees of certain investments and third-party loans related to certain investments that are quantifiable was $150 million at June 30, 2016, approximately $75 million of which is indemnified by a third party.  The maximum amount of the Company’s obligation related to the guarantee of certain insurance policy obligations of a former insurance subsidiary was $480 million at June 30, 2016, all of which is indemnified by a third party.  For more information regarding Company guarantees, see note 16 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

The following consolidating financial statements of the Company have been prepared pursuant to Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies, Inc. (excluding its subsidiaries, TRV) has fully and unconditionally guaranteed certain debt obligations of Travelers Property Casualty Corp. (TPC), which totaled $700 million at June 30, 2016.

Prior to the merger of TPC and The St. Paul Companies, Inc. in 2004, TPC fully and unconditionally guaranteed the payment of all principal, premiums, if any, and interest on certain debt obligations of its wholly-owned subsidiary, Travelers Insurance Group Holdings, Inc. (TIGHI). Concurrent with the merger, TRV fully and unconditionally assumed such guarantee obligations of TPC. TPC is deemed to have no assets or operations independent of TIGHI. Consolidating financial information for TIGHI has not been presented herein because such financial information would be substantially the same as the financial information provided for TPC.

27

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,161		$	1,906	$	—		$	—		$	6,067
Net investment income	377			168		4			—			549
Fee income	119			—		—			—			119
Net realized investment gains (losses) (1)	(1		)	20		—			—			19
Other revenues	33			1		—			(3		)	31
Total revenues	4,689			2,095		4			(3		)	6,785
Claims and expenses
Claims and claim adjustment expenses	2,575			1,187		—			—			3,762
Amortization of deferred acquisition costs	666			323		—			—			989
General and administrative expenses	743			313		1			(3		)	1,054
Interest expense	12			—		81			—			93
Total claims and expenses	3,996			1,823		82			(3		)	5,898
Income (loss) before income taxes	693			272		(78		)	—			887
Income tax expense (benefit)	191			69		(37		)	—			223
Net income of subsidiaries	—			—		705			(705		)	—
Net income	$	502		$	203	$	664		$	(705	)	$	664

(1)Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI losses recognized in net realized investment gains (losses)	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI gains (losses) recognized in OCI	$	—		$	—		$	—	$	—	$	—

28

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,044	$	1,887		$	—		$	—		$	5,931
Net investment income	424		206			2			—			632
Fee income	115		—			—			—			115
Net realized investment gains (losses) (1)	17		(7		)	—			—			10
Other revenues	19		3			—			—			22
Total revenues	4,619		2,089			2			—			6,710
Claims and expenses
Claims and claim adjustment expenses	2,409		1,138			—			—			3,547
Amortization of deferred acquisition costs	651		312			—			—			963
General and administrative expenses	721		308			3			—			1,032
Interest expense	12		—			80			—			92
Total claims and expenses	3,793		1,758			83			—			5,634
Income (loss) before income taxes	826		331			(81		)	—			1,076
Income tax expense (benefit)	198		86			(20		)	—			264
Net income of subsidiaries	—		—			873			(873		)	—
Net income	$	628	$	245		$	812		$	(873	)	$	812

(1)Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(7	)	$	(1	)	$	—	$	—	$	(8	)
OTTI losses recognized in net realized investment gains (losses)	$	(5	)	$	(1	)	$	—	$	—	$	(6	)
OTTI losses recognized in OCI	$	(2	)	$	—		$	—	$	—	$	(2	)

29

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,246		$	3,802	$	—		$	—		$	12,048
Net investment income	753			334		6			—			1,093
Fee income	236			—		—			—			236
Net realized investment gains (losses) (1)	(17		)	27		—			—			10
Other revenues	81			17		—			(14		)	84
Total revenues	9,299			4,180		6			(14		)	13,471
Claims and expenses
Claims and claim adjustment expenses	5,095			2,379		—			—			7,474
Amortization of deferred acquisition costs	1,316			644		—			—			1,960
General and administrative expenses	1,447			611		5			(14		)	2,049
Interest expense	24			—		160			—			184
Total claims and expenses	7,882			3,634		165			(14		)	11,667
Income (loss) before income taxes	1,417			546		(159		)	—			1,804
Income tax expense (benefit)	390			138		(79		)	—			449
Net income of subsidiaries	—			—		1,435			(1,435		)	—
Net income	$	1,027		$	408	$	1,355		$	(1,435	)	$	1,355

(1)Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(17	)	$	(15	)	$	—	$	—	$	(32	)
OTTI losses recognized in net realized investment gains (losses)	$	(12	)	$	(10	)	$	—	$	—	$	(22	)
OTTI losses recognized in OCI	$	(5	)	$	(5	)	$	—	$	—	$	(10	)

30

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,040	$	3,779	$	—		$	—		$	11,819
Net investment income	835		386		3			—			1,224
Fee income	229		—		—			—			229
Net realized investment gains (1)	19		—		1			—			20
Other revenues	40		7		—			—			47
Total revenues	9,163		4,172		4			—			13,339
Claims and expenses
Claims and claim adjustment expenses	4,718		2,260		—			—			6,978
Amortization of deferred acquisition costs	1,293		633		—			—			1,926
General and administrative expenses	1,419		600		8			—			2,027
Interest expense	24		—		160			—			184
Total claims and expenses	7,454		3,493		168			—			11,115
Income (loss) before income taxes	1,709		679		(164		)	—			2,224
Income tax expense (benefit)	449		179		(49		)	—			579
Net income of subsidiaries	—		—		1,760			(1,760		)	—
Net income	$	1,260	$	500	$	1,645		$	(1,760	)	$	1,645

(1)Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(8	)	$	(4	)	$	—	$	—	$	(12	)
OTTI losses recognized in net realized investment gains	$	(6	)	$	(3	)	$	—	$	—	$	(9	)
OTTI losses recognized in OCI	$	(2	)	$	(1	)	$	—	$	—	$	(3	)

31

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	502	$	203		$	664		$	(705	)	$	664
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	570		306			3			—			879
Having credit losses recognized in the consolidated statement of income	6		6			—			—			12
Net changes in benefit plan assets and obligations	18		19			(19		)	—			18
Net changes in unrealized foreign currency translation	25		(60		)	—			—			(35		)
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries	619		271			(16		)	—			874
Income tax expense (benefit)	216		113			(6		)	—			323
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	403		158			(10		)	—			551
Other comprehensive income of subsidiaries	—		—			561			(561		)	—
Other comprehensive income	403		158			551			(561		)	551
Comprehensive income	$	905	$	361		$	1,215		$	(1,266	)	$	1,215

32

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	628		$	245		$	812		$	(873	)	$	812
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(719		)	(345		)	(1		)	—			(1,065		)
Having credit losses recognized in the consolidated statement of income	(5		)	—			—			—			(5		)
Net changes in benefit plan assets and obligations	1			—			22			—			23
Net changes in unrealized foreign currency translation	34			60			—			—			94
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(689		)	(285		)	21			—			(953		)
Income tax expense (benefit)	(246		)	(115		)	8			—			(353		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(443		)	(170		)	13			—			(600		)
Other comprehensive loss of subsidiaries	—			—			(613		)	613			—
Other comprehensive loss	(443		)	(170		)	(600		)	613			(600		)
Comprehensive income	$	185		$	75		$	212		$	(260	)	$	212

33

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,027	$	408		$	1,355		$	(1,435	)	$	1,355
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	1,055		534			4			—			1,593
Having credit losses recognized in the consolidated statement of income	8		9			—			—			17
Net changes in benefit plan assets and obligations	18		20			(4		)	—			34
Net changes in unrealized foreign currency translation	119		(51		)	—			—			68
Other comprehensive income before income taxes and other comprehensive income of subsidiaries	1,200		512			—			—			1,712
Income tax expense	397		192			1			—			590
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	803		320			(1		)	—			1,122
Other comprehensive income of subsidiaries	—		—			1,123			(1,123		)	—
Other comprehensive income	803		320			1,122			(1,123		)	1,122
Comprehensive income	$	1,830	$	728		$	2,477		$	(2,558	)	$	2,477

34

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(585		)	(312		)	1			—			(896		)
Having credit losses recognized in the consolidated statement of income	(9		)	(1		)	—			—			(10		)
Net changes in benefit plan assets and obligations	1			1			45			—			47
Net changes in unrealized foreign currency translation	(145		)	(35		)	—			—			(180		)
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(738		)	(347		)	46			—			(1,039		)
Income tax expense (benefit)	(232		)	(112		)	16			—			(328		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(506		)	(235		)	30			—			(711		)
Other comprehensive loss of subsidiaries	—			—			(741		)	741			—
Other comprehensive loss	(506		)	(235		)	(711		)	741			(711		)
Comprehensive income	$	754		$	265		$	934		$	(1,019	)	$	934

35

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING BALANCE SHEET (Unaudited)

At June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $59,975)	$	43,859	$	19,403		$	49		$	—		$	63,311
Equity securities, available for sale, at fair value (cost $525)	194		412			146			—			752
Real estate investments	55		874			—			—			929
Short-term securities	1,754		537			1,697			—			3,988
Other investments	2,594		895			1			—			3,490
Total investments	48,456		22,121			1,893			—			72,470
Cash	121		141			3			—			265
Investment income accrued	441		182			4			—			627
Premiums receivable	4,722		2,292			—			—			7,014
Reinsurance recoverables	5,928		2,675			—			—			8,603
Ceded unearned premiums	649		77			—			—			726
Deferred acquisition costs	1,753		201			—			—			1,954
Contractholder receivables	3,570		971			—			—			4,541
Goodwill	2,584		1,004			—			—			3,588
Other intangible assets	203		71			—			—			274
Investment in subsidiaries	—		—			28,755			(28,755		)	—
Other assets	2,106		(52		)	330			—			2,384
Total assets	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446
Liabilities
Claims and claim adjustment expense reserves	$	32,096	$	15,857		$	—		$	—		$	47,953
Unearned premium reserves	8,708		3,812			—			—			12,520
Contractholder payables	3,570		971			—			—			4,541
Payables for reinsurance premiums	227		174			—			—			401
Deferred taxes	330		118			(78		)	—			370
Debt	693		—			5,743			—			6,436
Other liabilities	4,188		707			616			—			5,511
Total liabilities	49,812		21,639			6,281			—			77,732
Shareholders’ equity
Common stock (1,750.0 shares authorized; 288.3 shares issued and outstanding)	—		390			22,349			(390		)	22,349
Additional paid-in capital	11,634		6,499			—			(18,133		)	—
Retained earnings	7,890		744			30,911			(8,624		)	30,921
Accumulated other comprehensive income	1,197		411			965			(1,608		)	965
Treasury stock, at cost (478.1 shares)	—		—			(29,521		)	—			(29,521		)
Total shareholders’ equity	20,721		8,044			24,704			(28,755		)	24,714
Total liabilities and shareholders’ equity	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446

36

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING BALANCE SHEET (Unaudited)

At December 31, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $58,878)	$	42,289	$	18,323	$	46		$	—		$	60,658
Equity securities, available for sale, at fair value (cost $528)	189		375		141			—			705
Real estate investments	56		933		—			—			989
Short-term securities	1,947		1,178		1,546			—			4,671
Other investments	2,516		930		1			—			3,447
Total investments	46,997		21,739		1,734			—			70,470
Cash	225		153		2			—			380
Investment income accrued	453		185		4			—			642
Premiums receivable	4,336		2,101		—			—			6,437
Reinsurance recoverables	5,849		3,061		—			—			8,910
Ceded unearned premiums	610		46		—			—			656
Deferred acquisition costs	1,660		189		—			—			1,849
Deferred taxes	178		83		35			—			296
Contractholder receivables	3,387		987		—			—			4,374
Goodwill	2,573		1,000		—			—			3,573
Other intangible assets	203		76		—			—			279
Investment in subsidiaries	—		—		27,573			(27,573		)	—
Other assets	1,958		344		16			—			2,318
Total assets	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184
Liabilities
Claims and claim adjustment expense reserves	$	31,965	$	16,330	$	—		$	—		$	48,295
Unearned premium reserves	8,335		3,636		—			—			11,971
Contractholder payables	3,387		987		—			—			4,374
Payables for reinsurance premiums	175		121		—			—			296
Debt	693		—		5,651			—			6,344
Other liabilities	3,958		1,221		127			—			5,306
Total liabilities	48,513		22,295		5,778			—			76,586
Shareholders’ equity
Common stock (1,750.0 shares authorized; 295.9 shares issued and outstanding)	—		390		22,172			(390		)	22,172
Additional paid-in capital	11,634		6,499		—			(18,133		)	—
Retained earnings	7,888		688		29,933			(8,564		)	29,945
Accumulated other comprehensive income (loss)	394		92		(157		)	(486		)	(157		)
Treasury stock, at cost (467.6 shares)	—		—		(28,362		)	—			(28,362		)
Total shareholders’ equity	19,916		7,669		23,586			(27,573		)	23,598
Total liabilities and shareholders’ equity	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184

37

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,027		$	408		$	1,355		$	(1,435	)	$	1,355
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(17		)	(222		)	116			61			(62		)
Net cash provided by operating activities	1,010			186			1,471			(1,374		)	1,293
Cash flows from investing activities
Proceeds from maturities of fixed maturities	2,728			1,040			5			—			3,773
Proceeds from sales of investments:
Fixed maturities	385			352			2			—			739
Equity securities	10			28			—			—			38
Real estate investments	—			69			—			—			69
Other investments	233			110			—			—			343
Purchases of investments:
Fixed maturities	(3,588		)	(2,108		)	(9		)	—			(5,705		)
Equity securities	(5		)	(19		)	(2		)	—			(26		)
Real estate investments	—			(20		)	—			—			(20		)
Other investments	(221		)	(69		)	—			—			(290		)
Net (purchases) sales of short-term securities	193			639			(151		)	—			681
Securities transactions in course of settlement	325			137			(1		)	—			461
Other	(151		)	(3		)	—			—			(154		)
Net cash provided by (used in) investing activities	(91		)	156			(156		)	—			(91		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,100		)	—			(1,100		)
Treasury stock acquired — net employee share-based compensation	—			—			(59		)	—			(59		)
Dividends paid to shareholders	—			—			(375		)	—			(375		)
Payment of debt	—			—			(400		)	—			(400		)
Issuance of debt	—			—			491			—			491
Issuance of common stock — employee share options	—			—			129			—			129
Dividends paid to parent company	(1,025		)	(349		)	—			1,374			—
Net cash used in financing activities	(1,025		)	(349		)	(1,314		)	1,374			(1,314		)
Effect of exchange rate changes on cash	2			(5		)	—			—			(3		)
Net increase (decrease) in cash	(104		)	(12		)	1			—			(115		)
Cash at beginning of year	225			153			2			—			380
Cash at end of period	$	121		$	141		$	3		$	—		$	265
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	398		$	142		$	(73	)	$	—		$	467
Interest paid	$	24		$	—		$	156		$	—		$	180

38

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13.CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES, Continued

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(410		)	(520		)	182			(22		)	(770		)
Net cash provided by (used in) operating activities	850			(20		)	1,827			(1,782		)	875
Cash flows from investing activities
Proceeds from maturities of fixed maturities	3,604			1,707			3			—			5,314
Proceeds from sales of investments:
Fixed maturities	710			516			—			—			1,226
Equity securities	11			17			—			—			28
Real estate investments	—			10			—			—			10
Other investments	244			110			—			—			354
Purchases of investments:
Fixed maturities	(4,352		)	(1,869		)	(18		)	—			(6,239		)
Equity securities	(2		)	(19		)	(1		)	—			(22		)
Real estate investments	—			(69		)	—			—			(69		)
Other investments	(222		)	(53		)	—			—			(275		)
Net (purchases) sales of short-term securities	327			224			(118		)	—			433
Securities transactions in course of settlement	190			(7		)	—			—			183
Other	(175		)	(3		)	—			—			(178		)
Net cash provided by (used in) investing activities	335			564			(134		)	—			765
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,400		)	—			(1,400		)
Treasury stock acquired — net employee share-based compensation	—			—			(72		)	—			(72		)
Dividends paid to shareholders	—			—			(369		)	—			(369		)
Issuance of common stock — employee share options	—			—			117			—			117
Excess tax benefits from share-based payment arrangements	—			—			31			—			31
Dividends paid to parent company	(1,222		)	(560		)	—			1,782			—
Net cash used in financing activities	(1,222		)	(560		)	(1,693		)	1,782			(1,693		)
Effect of exchange rate changes on cash	—			(4		)	—			—			(4		)
Net decrease in cash	(37		)	(20		)	—			—			(57		)
Cash at beginning of year	221			151			2			—			374
Cash at end of period	$	184		$	131		$	2		$	—		$	317
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	534		$	197		$	(134	)	$	—		$	597
Interest paid	$	24		$	—		$	159		$	—		$	183

39

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the Company’s financial condition and results of operations.

FINANCIAL HIGHLIGHTS

2016 Second Quarter Consolidated Results of Operations

·Net income of $664 million, or $2.27 per share basic and $2.24 per share diluted

·Net earned premiums of $6.07 billion

·Catastrophe losses of $333 million ($222 million after-tax)

·Net favorable prior year reserve development of $288 million ($192 million after-tax)

·Combined ratio of 93.1%

·Net investment income of $549 million ($442 million after-tax)

·Operating cash flows of $443 million

2016 Second Quarter Consolidated Financial Condition

·Total investments of $72.47 billion; fixed maturities and short-term securities comprised 93% of total investments

·Total assets of $102.45 billion

·Total debt of $6.44 billion, resulting in a debt-to-total capital ratio of 20.7% (22.3% excluding net unrealized investment gains, net of tax)

·Repurchased 4.9 million common shares for total cost of $550 million and paid $195 million of dividends to shareholders

·Shareholders’ equity of $24.71 billion

·Net unrealized investment gains of $3.59 billion ($2.34 billion after-tax)

·Book value per common share of $85.73

·Holding company liquidity of $1.75 billion

40

CONSOLIDATED OVERVIEW

Consolidated Results of Operations

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except ratio and per share amounts)	2016			2015			2016			2015
Revenues
Premiums	$	6,067		$	5,931		$	12,048		$	11,819
Net investment income	549			632			1,093			1,224
Fee income	119			115			236			229
Net realized investment gains	19			10			10			20
Other revenues	31			22			84			47
Total revenues	6,785			6,710			13,471			13,339
Claims and expenses
Claims and claim adjustment expenses	3,762			3,547			7,474			6,978
Amortization of deferred acquisition costs	989			963			1,960			1,926
General and administrative expenses	1,054			1,032			2,049			2,027
Interest expense	93			92			184			184
Total claims and expenses	5,898			5,634			11,667			11,115
Income before income taxes	887			1,076			1,804			2,224
Income tax expense	223			264			449			579
Net income	$	664		$	812		$	1,355		$	1,645
Net income per share
Basic	$	2.27		$	2.56		$	4.60		$	5.14
Diluted	$	2.24		$	2.53		$	4.55		$	5.08
Combined ratio
Loss and loss adjustment expense ratio	61.1		%	58.9		%	61.1		%	58.2		%
Underwriting expense ratio	32.0			31.9			31.6			31.7
Combined ratio	93.1		%	90.8		%	92.7		%	89.9		%
Incremental impact of direct to consumer initiative on combined ratio	0.4		%	0.5		%	0.3		%	0.5		%

The following discussions of the Company’s net income and segment operating income are presented on an after-tax basis.  Discussions of the components of net income and segment operating income are presented on a pre-tax basis, unless otherwise noted.  Discussions of net income per common share are presented on a diluted basis.

Overview

Diluted net income per share of $2.24 in the second quarter of 2016 decreased by 11% from diluted net income per share of $2.53 in the same period of 2015.  Net income of $664 million in the second quarter of 2016 decreased by 18% from net income of $812 million in the same period of 2015.  The lower rate of decrease in diluted net income per share reflected the impact of share repurchases in recent periods.  The decrease in net income primarily reflected the pre-tax impacts of (i) higher catastrophe losses, (ii) lower underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”) and (iii) lower net investment income, partially offset by (iv) higher net favorable prior year reserve development.  Catastrophe losses in the second quarters of 2016 and 2015 were $333 million and $221 million, respectively.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 was $288 million and $207 million, respectively.  The lower underlying underwriting margins primarily resulted from (i) higher non-catastrophe

41

weather-related losses and (ii) loss cost trends that exceeded earned pricing.  Partially offsetting this net pre-tax decrease in income was a related decrease in income tax expense.  Income tax expense in the second quarter of 2015 was reduced by $32 million as a result of the resolution of prior year tax matters.

Diluted net income per share of $4.55 in the first six months of 2016 decreased by 10% from diluted net income per share of $5.08 in the same period of 2015.  Net income of $1.36 billion in the first six months of 2016 decreased by 18% from net income of $1.65 billion in the same period of 2015.  The lower rate of decrease in diluted net income per share reflected the impact of share repurchases in recent periods.  The decrease in net income primarily reflected the pre-tax impacts of (i) higher catastrophe losses, (ii) lower net investment income and (iii) lower underlying underwriting margins, partially offset by (iv) higher other revenues and (v) higher net favorable prior year reserve development.  Catastrophe losses in the first six months of 2016 and 2015 were $651 million and $383 million, respectively.  Net favorable prior year reserve development in the first six months of 2016 and 2015 was $468 million and $450 million, respectively.  The lower underlying underwriting margins primarily resulted from loss cost trends that exceeded earned pricing.  Partially offsetting this net pre-tax decrease in income was a related decrease in income tax expense.  Income tax expense in the first six months of 2015 was reduced as a result of the resolution of prior year tax matters in the second quarter of 2015.

The Company has insurance operations in Canada, the United Kingdom and the Republic of Ireland, as well as in Brazil, primarily through a joint venture.  Because these operations are conducted in local currencies other than the U.S. dollar, the Company is subject to the impact of changes in foreign currency exchange rates.  For the three months and six months ended June 30, 2016 and 2015, changes in foreign currency exchange rates had the impact of lowering the reported line items in the statement of income by insignificant amounts.  The impact of these changes was not material to the Company’s net income or the Business and International Insurance segment’s operating income for the periods reported.

Revenues

Earned Premiums

Earned premiums in the second quarter of 2016 were $6.07 billion, $136 million or 2% higher than in the same period of 2015.  Earned premiums in the first six months of 2016 were $12.05 billion, $229 million or 2% higher than in the same period of 2015.  In the Business and International Insurance segment, earned premiums in the second quarter of 2016 increased by 1% over the same period of 2015, and earned premiums in the first six months of 2016 were comparable with the same period of 2015.  In the Bond & Specialty Insurance segment, earned premiums in the second quarter were 1% lower than in the same period of 2015, and earned premiums in the first six months of 2016 were comparable with the same period of 2015.  In the Personal Insurance segment, earned premiums in the second quarter and first six months of 2016 increased by 7% and 6%, respectively, over the same periods of 2015.  Factors contributing to the changes in earned premiums in each segment are discussed in more detail in the segment discussions that follow.

Net Investment Income

The following table sets forth information regarding the Company’s investments.

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2016			2015			2016			2015
Average investments (1)	$	70,033		$	70,291		$	69,989		$	70,548
Pre-tax net investment income	549			632			1,093			1,224
After-tax net investment income	442			503			881			981
Average pre-tax yield (2)	3.1		%	3.6		%	3.1		%	3.5		%
Average after-tax yield (2)	2.5		%	2.9		%	2.5		%	2.8		%

(1)Excludes net unrealized investment gains and losses and reflects cash, receivables for investment sales, payables on investment purchases and accrued investment income.

(2)Excludes net realized and net unrealized investment gains and losses.

42

Net investment income in the second quarter of 2016 was $549 million, $83 million or 13% lower than in the same period of 2015.  Net investment income in the first six months of 2016 was $1.09 billion, $131 million or 11% lower than in the same period of 2015.  Net investment income from fixed maturity investments in the second quarter and first six months of 2016 was $497 million and $1.00 billion, respectively, $29 million and $57 million lower, respectively, than in the same periods of 2015.  The decreases primarily resulted from lower long-term reinvestment rates available in the market.  Net investment income generated by non-fixed maturity investments in the second quarter of 2016 was $53 million, $60 million lower than in the same period of 2015, primarily due to lower returns from private equity limited partnerships and real estate partnerships. Net investment income generated by non-fixed maturity investments in the first six months of 2016 was $97 million, $85 million lower than in the same period of 2015, primarily due to lower returns from private equity limited partnerships, hedge funds and real estate partnerships.

Fee Income

The National Accounts market in the Business and International Insurance segment is the primary source of the Company’s fee-based business.  The $4 million and $7 million increases in fee income in the second quarter and first six months of 2016, respectively, compared with the same periods of 2015 are discussed in the Business and International Insurance segment discussion that follows.

Net Realized Investment Gains

The following table sets forth information regarding the Company’s net realized investment gains.

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Net Realized Investment Gains
Other-than-temporary impairment losses	$	(4	)	$	(6	)	$	(22	)	$	(9	)
Other net realized investment gains	23			16			32			29
Net realized investment gains	$	19		$	10		$	10		$	20

Other Revenues

Other revenues in the second quarters and first six months of 2016 and 2015 included installment premium charges.  Other revenues in the first six months of 2016 also included proceeds from the favorable settlement of a claims-related legal matter in the Business and International Insurance segment in the first quarter of 2016.

Claims and Expenses

Claims and Claim Adjustment Expenses

Claims and claim adjustment expenses in the second quarter of 2016 were $3.76 billion, $215 million or 6% higher than in the same period of 2015, primarily reflecting the impacts of (i) higher catastrophe losses, (ii) loss cost trends, (iii) higher non-catastrophe weather-related losses and (iv) higher volumes of insured exposures, partially offset by (v) higher net favorable prior year reserve development.  Catastrophe losses in the second quarter of 2016 primarily resulted from wind and hail storms in several regions of the United States and wildfires in Canada.  Catastrophe losses in the second quarter of 2015 primarily resulted from wind and hail storms in several regions of the United States.  Factors contributing to net favorable prior year reserve development in each segment during the second quarters of 2016 and 2015 are discussed in the segment discussions that follow.

Claims and claim adjustment expenses in the first six months of 2016 were $7.47 billion, $496 million or 7% higher than in the same period of 2015, primarily reflecting the impacts of (i) higher catastrophe losses, (ii) loss cost trends and (iii) higher volumes of insured exposures, partially offset by (iv) higher net favorable prior year reserve development.  Catastrophe losses in the first six months of 2016 and 2015 included the second quarter events described above, as well as wind and hail storms in Texas and several other regions of the United States and winter storms in the eastern United States in the first quarter of 2016, and a winter storm in the eastern United States in the first quarter of 2015.  Factors contributing to net favorable prior year reserve development in each segment during these periods are discussed in the segment discussions that follow.

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Significant Catastrophe Losses

The following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in 2016, 2015 and 2014, the amount of related net unfavorable (favorable) prior year reserve development recognized in the three months and six months ended June 30, 2016 and 2015, and the estimate of ultimate losses for those catastrophes at June 30, 2016 and December 31, 2015.  For purposes of the table, a significant catastrophe is an event for which the Company estimates its ultimate losses will be $100 million or more after reinsurance and before taxes. For the Company’s definition of a catastrophe, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations — Consolidated Overview” in the Company’s 2015 Annual Report.

	Losses Incurred/Unfavorable (Favorable) Prior Year Reserve Development
	Three Months Ended June 30,						Six Months Ended June 30,						Estimated Ultimate Losses
(in millions, pre-tax and net of reinsurance)	2016			2015			2016			2015			June 30, 2016		December 31, 2015
2014
PCS Serial Number:
32 — Winter storm	$	—		$	(2	)	$	(1	)	$	(3	)	$	138	$	139
43 — Severe wind and hail storms	5			(1		)	5			(1		)	181		176
2015
PCS Serial Number:
68 — Winter storm	(2		)	(9		)	(2		)	153			138		140
2016
PCS Serial Number:
21 — Severe wind and hail storms	(16		)	n/a			147			n/a			147		n/a
25 — Severe wind and hail storms	163			n/a			163			n/a			163		n/a

n/a: not applicable.

Amortization of Deferred Acquisition Costs

Amortization of deferred acquisition costs in the second quarter of 2016 was $989 million, $26 million or 3% higher than in the same period of 2015.  Amortization of deferred acquisition costs in the first six months of 2016 was $1.96 billion, $34 million or 2% higher than in the same period of 2015.  Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.

General and Administrative Expenses

General and administrative expenses in the second quarter of 2016 were $1.05 billion, $22 million or 2% higher than in the same period of 2015.  General and administrative expenses in the first six months of 2016 were $2.05 billion, $22 million or 1% higher than in the same period of 2015.  General and administrative expenses are discussed in more detail in the segment discussions that follow.

Interest Expense

Interest expense in the second quarter and first six months of 2016 was $93 million and $184 million, respectively, compared with $92 million and $184 million, respectively, in the same periods of 2015.

Income Tax Expense

Income tax expense in the second quarter of 2016 was $223 million, $41 million or 16% lower than in the same period of 2015, primarily reflecting the impact of the $189 million decrease in income before income taxes in the second quarter of 2016, partially offset by the impact of the $32 million reduction in income tax expense in the second quarter of 2015 resulting from the resolution of prior year tax matters.  Income tax expense in the first six months of 2016 was $449 million, $130 million or 22% lower than in the same period of 2015, primarily reflecting the impact of the $420 million decrease in income before income taxes in the first six months of 2016, partially offset by the resolution of prior year tax matters in the second quarter of 2015.

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The Company’s effective tax rate in both the second quarter and first six months of 2016 was 25%.  In the second quarter and first six months of 2015, the Company’s effective tax rates were 25% and 26%, respectively.  The effective tax rates in all periods were lower than the statutory rate of 35% primarily due to the impact of tax-exempt investment income on the calculation of the Company’s income tax provision.  In addition, the effective tax rates in the second quarter and first six months of 2015 were reduced by the impact of the resolution of prior year tax matters discussed above.

Combined Ratio

The combined ratio of 93.1% in the second quarter of 2016 was 2.3 points higher than the combined ratio of 90.8% in the same period of 2015.  The combined ratio of 92.7% in the first six months of 2016 was 2.8 points higher than the combined ratio of 89.9% in the same period of 2015.

The loss and loss adjustment expense ratio of 61.1% in the second quarter of 2016 was 2.2 points higher than the loss and loss adjustment expense ratio of 58.9% in the same period of 2015.  Catastrophe losses accounted for 5.5 points and 3.7 points of the 2016 and 2015 second quarter loss and loss adjustment expense ratios, respectively.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 provided 4.7 points and 3.5 points of benefit, respectively, to the loss and loss adjustment expense ratio.  The loss and loss adjustment expense ratio excluding catastrophe losses and prior year reserve development (“underlying loss and loss adjustment expense ratio”) in the second quarter of 2016 was 1.6 points higher than the 2015 ratio on the same basis, primarily reflecting (i) higher non-catastrophe weather-related losses and (ii) the impact of loss cost trends that exceeded earned pricing.

The loss and loss adjustment expense ratio of 61.1% in the first six months of 2016 was 2.9 points higher than the loss and loss adjustment expense ratio of 58.2% in the same period of 2015.  Catastrophe losses accounted for 5.4 points and 3.3 points of the 2016 and 2015 six-month loss and loss adjustment expense ratios, respectively.  Net favorable prior year reserve development in the first six months of 2016 and 2015 provided 3.9 points and 3.8 points of benefit, respectively, to the loss and loss adjustment expense ratio.  The underlying loss and loss adjustment expense ratio in the first six months of 2016 was 0.9 points higher than the 2015 ratio on the same basis, primarily reflecting the impact of loss cost trends that exceeded earned pricing.

The underwriting expense ratio of 32.0% for the second quarter of 2016 was 0.1 points higher than the underwriting expense ratio of 31.9% in the same period of 2015.  In the first six months of 2016, the underwriting expense ratio of 31.6% was 0.1 points lower than the underwriting expense ratio of 31.7% in the same period of 2015.

Written Premiums

Consolidated gross and net written premiums were as follows:

	Gross Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Business and International Insurance	$	3,997	$	4,027	$	8,363	$	8,303
Bond & Specialty Insurance	549		537		1,085		1,059
Personal Insurance	2,142		1,978		3,952		3,654
Total	$	6,688	$	6,542	$	13,400	$	13,016

	Net Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Business and International Insurance	$	3,680	$	3,679	$	7,594	$	7,476
Bond & Specialty Insurance	536		534		1,028		1,012
Personal Insurance	2,129		1,956		3,889		3,578
Total	$	6,345	$	6,169	$	12,511	$	12,066

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Gross written premiums in the second quarter and first six months of 2016 increased by 2% and 3%, respectively, over the same periods of 2015.  Net written premiums in the second quarter and first six months of 2016 increased by 3% and 4%, respectively, over the same periods of 2015. Factors contributing to the changes in gross and net written premiums in each segment are discussed in more detail in the segment discussions that follow.

RESULTS OF OPERATIONS BY SEGMENT

Business and International Insurance

Results of the Company’s Business and International Insurance segment were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2016			2015			2016			2015
Revenues
Earned premiums	$	3,631		$	3,609		$	7,230		$	7,229
Net investment income	420			487			835			941
Fee income	115			111			229			222
Other revenues	8			5			41			13
Total revenues	$	4,174		$	4,212		$	8,335		$	8,405
Total claims and expenses	$	3,669		$	3,490		$	7,210		$	6,993
Operating income	$	393		$	543		$	869		$	1,058
Loss and loss adjustment expense ratio	64.2		%	60.6		%	63.3		%	60.9		%
Underwriting expense ratio	33.3			32.6			32.9			32.4
Combined ratio	97.5		%	93.2		%	96.2		%	93.3		%

Overview

Operating income in the second quarter of 2016 was $393 million, $150 million or 28% lower than operating income of $543 million in the same period of 2015, primarily reflecting the pre-tax impacts of (i) higher catastrophe losses, (ii) lower underlying underwriting margins and (iii) lower net investment income, partially offset by (iv) higher net favorable prior year reserve development.  Catastrophe losses in the second quarters of 2016 and 2015 were $212 million and $108 million, respectively. Net favorable prior year reserve development in the second quarters of 2016 and 2015 was $138 million and $103 million, respectively.  The lower underlying underwriting margins primarily resulted from (i) higher non-catastrophe weather-related losses and (ii) loss cost trends that exceeded earned pricing.  Partially offsetting this net pre-tax decrease in operating income was a related decrease in income tax expense.  Income tax expense in the second quarter of 2015 was reduced by $12 million as a result of the resolution of prior year tax matters.

Operating income in the first six months of 2016 was $869 million, $189 million or 18% lower than operating income of $1.06 billion in the same period of 2015, primarily reflecting the pre-tax impacts of (i) higher catastrophe losses, (ii) lower net investment income and (iii) lower underlying underwriting margins, partially offset by (iv) higher net favorable prior year reserve development and (v) higher other revenues.  Catastrophe losses in the first six months of 2016 and 2015 were $360 million and $207 million, respectively.  Net favorable prior year reserve development in the first six months of 2016 and 2015 was $231 million and $180 million, respectively.  The lower underlying underwriting margins primarily resulted from loss cost trends that exceeded earned pricing.  Partially offsetting this net pre-tax decrease in operating income was a related decrease in income tax expense.  Income tax expense in the first six months of 2015 was reduced by $12 million as a result of the resolution of prior year tax matters in the second quarter of 2015.

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Revenues

Earned Premiums

Earned premiums in the second quarter of 2016 were $3.63 billion, $22 million or 1% higher than in the same period of 2015.  Earned premiums in the first six months of 2016 were $7.23 billion, comparable with the same period of 2015.

Net Investment Income

Net investment income in the second quarter of 2016 was $420 million, $67 million or 14% lower than in the same 2015 period.  Net investment income in the first six months of 2016 was $835 million, $106 million or 11% lower than in the same period of 2015.  Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion herein for a description of the factors contributing to the decreases in the Company’s consolidated net investment income in the second quarter and first six months of 2016 compared with the same periods of 2015.  In addition, refer to note 2 of notes to the Company’s consolidated financial statements in the Company’s 2015 Annual Report for a discussion of the Company’s net investment income allocation methodology.

Fee Income

National Accounts is the primary source of fee income.  Fee income in the second quarter of 2016 was $115 million, $4 million or 4% higher than in the same period of 2015.  Fee income in the first six months of 2016 was $229 million, $7 million or 3% higher than in the same period of 2015.  The increase in both periods of 2016 primarily reflected higher fee income associated with servicing growth in the large deductible business.

Other Revenues

Other revenues in all periods of 2016 and 2015 included installment premium charges.  Other revenues in the first six months of 2016 also included proceeds from the favorable settlement of a claims-related legal matter in the first quarter of 2016.

Claims and Expenses

Claims and Claim Adjustment Expenses

Claims and claim adjustment expenses in the second quarter of 2016 were $2.39 billion, $147 million or 7% higher than in the same period of 2015, primarily reflecting the impacts of (i) higher catastrophe losses, (ii) loss cost trends and (iii) higher non-catastrophe weather-related losses, partially offset by (iv) higher net favorable prior year reserve development.  Net favorable prior year reserve development in the second quarter of 2016 was primarily driven by better than expected loss experience in the Company’s domestic operations in (i) the workers’ compensation product line for accident years 2006 and prior as well as accident year 2015 and (ii) the general liability product line for both primary and excess coverages for accident years 2011 and 2015 (excluding an increase to environmental reserves discussed below), as well as in the Company’s international operations in Europe.  Net favorable prior year reserve development in the second quarter of 2015 was primarily driven by better than expected loss experience in the Company’s domestic operations in (i) the workers’ compensation product line for accident years 2006 and prior, (ii) the general liability product line (excluding an increase to environmental reserves discussed below), primarily related to primary coverages for accident years 2008 through 2013, (iii) property coverages in the commercial multi-peril product line primarily related to non-catastrophe losses for accident years 2012 and 2014 and (iv) the property product line related to catastrophe losses for accident year 2014, as well as in the Company’s operations at Lloyd’s and in Canada.  These factors contributing to net favorable prior year reserve development in the second quarters of 2016 and 2015 were partially offset by $82 million and $72 million increases, respectively, to environmental reserves, which are discussed in further detail in the “Environmental Claims and Litigation” section herein.

Claims and claim adjustment expenses in the first six months of 2016 were $4.68 billion, $181 million or 4% higher than in the same period of 2015, primarily reflecting the impacts of (i) higher catastrophe losses and (ii) loss cost trends, partially offset by (iii) higher net favorable prior year reserve development.  Net favorable prior year reserve development in the first six months of 2016 was primarily driven by better than expected loss experience in the Company’s domestic operations in (i) the workers’ compensation product line for accident years 2006 and prior as well as accident year 2015 and (ii) the general liability product line (excluding an increase to environmental reserves discussed below), related to both primary and excess coverages for accident years 2011, 2013 and 2015 and (iii) the commercial automobile product line for accident years 2010 and prior, as well as in the Company’s international operations in Europe and Canada.  Net favorable prior year reserve development in the first six months of 2015 was primarily driven by better than expected loss experience in the Company’s

47

domestic operations in (i) the general liability product line (excluding an increase to environmental reserves discussed below), primarily related to primary coverages for accident years 2005 and prior and for 2009 through 2013, (ii) the workers’ compensation line of business for accident years 2006 and prior, (iii) the property product line related to catastrophe losses for accident years 2012 through 2014 and (iv) property coverages in the commercial multi-peril product line primarily related to non-catastrophe losses for accident years 2012 and 2014, as well as in the Company’s operations at Lloyd’s and in Canada.  These factors contributing to net favorable prior year reserve development in the first six months of 2016 and 2015 were partially offset by the $82 million and $72 million increases, respectively, to environmental reserves, which are discussed in further detail in the “Environmental Claims and Litigation” section herein.

Amortization of Deferred Acquisition Costs

Amortization of deferred acquisition costs in the second quarter of 2016 was $588 million, $10 million or 2% higher than in the same period of 2015.  Amortization of deferred acquisition costs in the first six months of 2016 was $1.17 billion comparable with the same period of 2015.

General and Administrative Expenses

General and administrative expenses in the second quarter of 2016 were $696 million, $22 million or 3% higher than in the same period of 2015.  General and administrative expenses in the first six months of 2016 were $1.36 billion, $31 million or 2% higher than in the same period of 2015.

Income Tax Expense

Income tax expense in the second quarter of 2016 was $112 million, $67 million or 37% lower than in the same period of 2015, primarily reflecting the $217 million decrease in income before income taxes, partially offset by the impact of the $12 million reduction in income tax expense in the second quarter of 2015 resulting from the resolution of prior year tax matters.  Income tax expense in the first six months of 2016 was $256 million, $98 million or 28% lower than in the same period of 2015, primarily reflecting the $287 million decrease in income before income taxes, partially offset by the resolution of prior year tax matters in the second quarter of 2015.

Combined Ratio

The combined ratio of 97.5% in the second quarter of 2016 was 4.3 points higher than the combined ratio of 93.2% in the same period of 2015.  The combined ratio of 96.2% in the first six months of 2016 was 2.9 points higher than the combined ratio of 93.3% in the same period of 2015.

The loss and loss adjustment expense ratio of 64.2% in the second quarter of 2016 was 3.6 points higher than the loss and loss adjustment expense ratio of 60.6% in the same period of 2015.  Catastrophe losses in the second quarters of 2016 and 2015 accounted for 5.8 points and 2.9 points, respectively, of the loss and loss adjustment expense ratio.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 provided 3.8 points and 2.8 points of benefit, respectively, to the loss and loss adjustment expense ratio. The 2016 second quarter underlying loss and loss adjustment expense ratio was 1.7 points higher than the 2015 ratio on the same basis, primarily reflecting (i) higher non-catastrophe weather-related losses and (ii) the impact of loss cost trends that exceeded earned pricing.

The loss and loss adjustment expense ratio of 63.3% in the first six months of 2016 was 2.4 points higher than the loss and loss adjustment expense ratio of 60.9% in the same period of 2015.  Catastrophe losses in the first six months of 2016 and 2015 accounted for 5.0 points and 2.9 points, respectively, of the loss and loss adjustment expense ratio.  Net favorable prior year reserve development in the first six months of 2016 and 2015 provided 3.2 points and 2.5 points of benefit, respectively, to the loss and loss adjustment expense ratio.  The underlying loss and loss adjustment expense ratio in the first six months of 2016 was 1.0 points higher than the 2015 ratio on the same basis, primarily reflecting the impact of loss cost trends that exceeded earned pricing.

The underwriting expense ratio of 33.3% for the second quarter of 2016 was 0.7 points higher than the underwriting expense ratio of 32.6% in the same period of 2015.  In the first six months of 2016, the underwriting expense ratio of 32.9% was 0.5 points higher than the underwriting expense ratio of 32.4% in the same 2015 period.

48

Written Premiums

The Business and International Insurance segment’s gross and net written premiums by market were as follows:

	Gross Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Domestic:
Select Accounts	$	721	$	723	$	1,465	$	1,463
Middle Market	1,564		1,530		3,465		3,349
National Accounts	377		376		911		886
First Party	510		506		950		929
Specialized Distribution	302		301		590		571
Total Domestic	3,474		3,436		7,381		7,198
International	523		591		982		1,105
Total Business and International Insurance	$	3,997	$	4,027	$	8,363	$	8,303

	Net Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Domestic:
Select Accounts	$	709	$	709	$	1,433	$	1,431
Middle Market	1,494		1,451		3,323		3,177
National Accounts	234		228		554		527
First Party	466		452		824		792
Specialized Distribution	302		300		588		568
Total Domestic	3,205		3,140		6,722		6,495
International	475		539		872		981
Total Business and International Insurance	$	3,680	$	3,679	$	7,594	$	7,476

Gross written premiums in the second quarter and first six months of 2016 decreased by 1% and increased by 1%, respectively, over the same periods of 2015.  Net written premiums in the second quarter of 2016 were comparable to the same period of 2015, and net written premiums in the first six months of 2016 increased by 2% over the same period of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

Select Accounts.  Net written premiums of $709 million and $1.43 billion in the second quarter and first six months of 2016, respectively, were comparable to the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over from the same periods of 2015.

Middle Market.  Net written premiums of $1.49 billion and $3.32 billion in the second quarter and first six months of 2016, respectively, increased by 3% and 5%, respectively, over the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

49

National Accounts.  Net written premiums of $234 million and $554 million in the second quarter and first six months of 2016, respectively, increased by 3% and 5%, respectively, over the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive and were higher than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

First Party.  Net written premiums of $466 million and $824 million in the second quarter and first six months of 2016, respectively, increased by 3% and 4%, respectively, over the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 were slightly negative, consistent with the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

Specialized Distribution.  Net written premiums of $302 million and $588 million in the second quarter and first six months of 2016, respectively, increased by 1% and 4%, respectively, over the same periods of 2015.  Business retention rates in the second quarter of 2016 remained strong but were lower than in the same period of 2015.  Business retention rates in the first six months of 2016 remained strong and were comparable with the same period of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter of 2016 decreased from the same period of 2015, while new business premiums in the first six months of 2016 increased over the same period of 2015.

International.  Net written premiums of $475 million and $872 million in the second quarter and first six months of 2016, respectively, decreased by 12% and 11%, respectively, from the same periods of 2015, primarily driven by the impact of changes in foreign currency exchange rates and the impacts of disciplined underwriting and lower levels of economic activity impacting insured exposures in the Company’s European operations, including Lloyd’s.  Excluding the surety line of business, for which the following are not relevant measures, business retention rates in the second quarter and first six months of 2016 remained strong but were lower than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 were slightly negative and were comparable with the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

Bond & Specialty Insurance

Results of the Company’s Bond & Specialty Insurance segment were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2016			2015			2016			2015
Revenues
Earned premiums	$	518		$	524		$	1,026		$	1,028
Net investment income	51			57			103			113
Other revenues	6			5			9			10
Total revenues	$	575		$	586		$	1,138		$	1,151
Total claims and expenses	$	274		$	388		$	628		$	774
Operating income	$	202		$	151		$	346		$	275
Loss and loss adjustment expense ratio	15.0		%	36.3		%	23.4		%	36.9		%
Underwriting expense ratio	37.4			37.4			37.4			38.0
Combined ratio	52.4		%	73.7		%	60.8		%	74.9		%

50

Overview

Operating income in the second quarter of 2016 was $202 million, $51 million or 34% higher than operating income of $151 million in the same period of 2015, primarily reflecting the pre-tax impact of higher net favorable prior year reserve development.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 was $150 million and $40 million, respectively.  Catastrophe losses in the second quarters of 2016 and 2015 were $3 million and $1 million, respectively.  Partially offsetting this net pre-tax increase in operating income was a related increase in income tax expense.  Income tax expense in the second quarter of 2015 was reduced by $16 million as a result of the resolution of prior year tax matters.

Operating income in the first six months of 2016 was $346 million, $71 million or 26% higher than operating income of $275 million in the same period of 2015, primarily reflecting the pre-tax impact of higher net favorable prior year reserve development.  Net favorable prior year reserve development in the first six months of 2016 and 2015 was $210 million and $75 million, respectively.  Catastrophe losses in the first six months of 2016 and 2015 were $4 million and $2 million, respectively.  Partially offsetting this net pre-tax increase in operating income was a related increase in income tax expense.  Income tax expense in the first six months of 2015 was reduced by $16 million as a result of the resolution of prior year tax matters in the second quarter of 2015.

Revenues

Earned Premiums

Earned premiums in the second quarter of 2016 were $518 million, $6 million or 1% lower than in the same period of 2015. Earned premiums in the first six months of 2016 were $1.03 billion, comparable with the same period of 2015.

Net Investment Income

Net investment income in the second quarter of 2016 was $51 million, $6 million or 11% lower than in the same period of 2015.  Net investment income in the first six months of 2016 was $103 million, $10 million or 9% lower than in the same period of 2015.  Refer to the “Net Investment Income” section of “Consolidated Results of Operations” herein for a discussion of the decreases in the Company’s consolidated net investment income in the second quarter and first six months of 2016 as compared with the same periods of 2015.  In addition, refer to note 2 of notes to the Company’s consolidated financial statements in the Company’s 2015 Annual Report for a discussion of the Company’s net investment income allocation methodology.

Claims and Expenses

Claims and Claim Adjustment Expenses

Claims and claim adjustment expenses in the second quarter of 2016 were $80 million, $112 million or 58% lower than in the same period of 2015, primarily reflecting higher net favorable prior year reserve development.  Net favorable prior year reserve development in the second quarter of 2016 was primarily driven by better than expected loss experience in (i) the fidelity and surety product line for accident years 2010, 2013 and 2014 and (ii) the general liability product line for accident years 2007 through 2011.  Net favorable prior year reserve development in the second quarter of 2015 was primarily driven by better than expected loss experience in the contract surety product line for accident years 2010 through 2013.

Claims and claim adjustment expenses in the first six months of 2016 were $244 million, $140 million or 36% lower than in the same period of 2015, primarily reflecting higher net favorable prior year reserve development.  Net favorable prior year reserve development in the first six months of 2016 was primarily driven by better than expected loss experience in (i) the fidelity and surety product line for accident years 2010 through 2014 and (ii) the general liability product line for accident years 2007 through 2011.  Net favorable prior year reserve development in the first six months of 2015 was primarily driven by better than expected loss experience in the contract surety product line for accident years 2010 through 2013.

Amortization of Deferred Acquisition Costs

Amortization of deferred acquisition costs in the second quarter of 2016 was $98 million, $1 million or 1% higher than in the same period of 2015.  Amortization of deferred acquisition costs in the first six months of 2016 was $194 million, $3 million or 2% higher than in the same period of 2015.

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General and Administrative Expenses

General and administrative expenses in the second quarter of 2016 were $96 million, $3 million or 3% lower than in the same period of 2015.  General and administrative expenses in the first six months of 2016 were $190 million, $9 million or 5% lower than in the same period of 2015.  The declines in both periods primarily reflected the impact of certain customer-related intangible assets which became fully amortized in the second quarter of 2015.

Income Tax Expense

Income tax expense in the second quarter of 2016 was $99 million, $52 million higher than in the same period of 2015, primarily reflecting the impact of the $103 million increase in income before income taxes in the second quarter of 2016 and the $16 million reduction in income tax expense in the second quarter of 2015 resulting from the resolution of prior year tax matters.  Income tax expense in the first six months of 2016 was $164 million, $62 million or 61% higher than in the same period of 2015, primarily reflecting the impact of the $133 million increase in income before income taxes in the first six months of 2016 and the resolution of prior year tax matters in the second quarter of 2015.

Combined Ratio

The combined ratio of 52.4% in the second quarter of 2016 was 21.3 points lower than the combined ratio of 73.7% in the same period of 2015.  The combined ratio of 60.8% in the first six months of 2016 was 14.1 points lower than the combined ratio of 74.9% in the same period of 2015.

The loss and loss adjustment expense ratio of 15.0% in the second quarter of 2016 was 21.3 points lower than the loss and loss adjustment expense ratio of 36.3% in the same period of 2015.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 provided 29.1 points and 7.7 points of benefit, respectively, to the loss and loss adjustment expense ratio.  Catastrophe losses in the second quarters of 2016 and 2015 accounted for 0.6 points and 0.3 points, respectively, of the loss and loss adjustment expense ratio.  The 2016 second quarter underlying loss and loss adjustment expense ratio was 0.2 points lower than the 2015 ratio on the same basis.

The loss and loss adjustment expense ratio of 23.4% in the first six months of 2016 was 13.5 points lower than the loss and loss adjustment expense ratio of 36.9% in the same period of 2015.  Net favorable prior year reserve development in the first six months of 2016 and 2015 provided 20.6 points and 7.3 points of benefit, respectively, to the loss and loss adjustment expense ratio.  Catastrophe losses in the first six months of 2016 and 2015 accounted for 0.4 points and 0.2 points, respectively, of the loss and loss adjustment expense ratio.  The underlying loss and loss adjustment expense ratio in the first six months of 2016 was 0.4 points lower than the 2015 ratio on the same basis.

The underwriting expense ratio of 37.4% in the second quarter of 2016 was level with the underwriting expense ratio in the same period of 2015.  In the first six months of 2016, the underwriting expense ratio of 37.4% was 0.6 points lower than the underwriting expense ratio of 38.0% in the same period of 2015.

Written Premiums

The Bond & Specialty Insurance segment’s gross and net written premiums were as follows:

	Gross Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Bond & Specialty Insurance	$	549	$	537	$	1,085	$	1,059

	Net Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Bond & Specialty Insurance	$	536	$	534	$	1,028	$	1,012

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Gross written premiums in the second quarter and first six months of 2016 increased by 2% over the same periods of 2015.  Net written premiums in the second quarter of 2016 were comparable to the same period of 2015, and net written premiums in the first six months of 2016 increased by 2% over the same period of 2015.  Excluding the surety line of business, for which the following are not relevant measures, business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter of 2016 remained positive and were higher than in the same period of 2015.  Renewal premium changes in the first six months of 2016 remained positive but were slightly lower than in the same period of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

Personal Insurance

Results of the Company’s Personal Insurance segment were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in millions)	2016			2015			2016			2015
Revenues
Earned premiums	$	1,918		$	1,798		$	3,792		$	3,562
Net investment income	78			88			155			170
Fee income	4			4			7			7
Other revenues	14			12			28			24
Total revenues	$	2,014		$	1,902		$	3,982		$	3,763
Total claims and expenses	$	1,855		$	1,657		$	3,630		$	3,150
Operating income	$	116		$	174		$	255		$	426
Loss and loss adjustment expense ratio	67.6		%	62.2		%	67.1		%	58.7		%
Underwriting expense ratio	28.1			28.9			27.6			28.6
Combined ratio	95.7		%	91.1		%	94.7		%	87.3		%
Incremental impact of direct to consumer initiative on combined ratio	1.1		%	1.7		%	1.0		%	1.7		%

Overview

Operating income in the second quarter of 2016 was $116 million, $58 million or 33% lower than operating income of $174 million in the same period of 2015, primarily reflecting the pre-tax impact of lower net favorable prior year reserve development.  Catastrophe losses in the second quarters of 2016 and 2015 were $118 million and $112 million, respectively.  There was no net prior year reserve development in the second quarter of 2016.  Net favorable prior year reserve development in the second quarter of 2015 was $64 million.  Partially offsetting this net pre-tax decrease in operating income was a related decrease in income tax expense.  Income tax expense in the second quarter of 2015 was reduced by $4 million as a result of the resolution of prior year tax matters.

Operating income in the first six months of 2016 was $255 million, $171 million or 40% lower than operating income of $426 million in the same period of 2015, primarily reflecting the pre-tax impacts of (i) lower net favorable prior year reserve development, (ii) higher catastrophe losses and (iii) lower net investment income, partially offset by (iv) higher underlying underwriting margins.  Catastrophe losses in the first six months of 2016 and 2015 were $287 million and $174 million, respectively.  Net favorable prior year reserve development in the first six months of 2016 and 2015 was $27 million and $195 million, respectively.  Partially offsetting this net pre-tax decrease in operating income was a related decrease in income tax expense.  Income tax expense in the first six months of 2015 was reduced by $4 million as a result of the resolution of prior year tax matters in the second quarter of 2015.

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Revenues

Earned Premiums

Earned premiums in the second quarter of 2016 were $1.92 billion, $120 million or 7% higher than in the same period of 2015.  Earned premiums in the first six months of 2016 were $3.79 billion, $230 million or 6% higher than in the same period of 2015.  The increases in both periods primarily reflected the impact of increases in net written premiums over the preceding twelve months.

Net Investment Income

Net investment income in the second quarter of 2016 was $78 million, $10 million or 11% lower than in the same period of 2015.  Net investment income in the first six months of 2016 was $155 million, $15 million or 9% lower than in the same period of 2015.  Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion herein for a description of the factors contributing to the decreases in the Company’s consolidated net investment income in the second quarter and first six months of 2016 compared with the same periods of 2015.  In addition, refer to note 2 of notes to the Company’s consolidated financial statements in the Company’s 2015 Annual Report for a discussion of the Company’s net investment income allocation methodology.

Other Revenues

Other revenues in the second quarters and first six months of 2016 and 2015 primarily consisted of installment premium charges.

Claims and Expenses

Claims and Claim Adjustment Expenses

Claims and claim adjustment expenses in the second quarter of 2016 were $1.30 billion, $180 million or 16% higher than in the same period of 2015, primarily reflecting (i) lower net favorable prior year reserve development, (ii) higher non-catastrophe weather-related losses, (iii) the impact of loss cost trends and (iv) higher volumes of insured exposures.  There was no net prior year reserve development in the second quarter of 2016.  Net favorable prior year reserve development in the second quarter of 2015 was primarily driven by better than expected loss experience in (i) the Homeowners and Other product line for liability coverages for accident years 2011 through 2014 and for non-catastrophe weather-related losses for accident year 2014, and (ii) the Automobile product line for liability coverages for accident years 2012 through 2014.

Claims and claim adjustment expenses in the first six months of 2016 were $2.55 billion, $455 million or 22% higher than in the same period of 2015, primarily reflecting (i) lower net favorable prior year reserve development, (ii) higher catastrophe losses, (iii) higher volumes of insured exposures and (iv) the impact of loss cost trends.  Net favorable prior year reserve development in the first six months of 2016 was primarily driven by better than expected loss experience in (i) the Automobile product line for accident year 2014 and (ii) the Homeowners and Other product line for liability coverages for accident year 2014.  Net favorable prior year reserve development in the first six months of 2015 was primarily driven by better than expected loss experience in (i) the Homeowners and Other product line for liability coverages for accident years 2011 through 2014, for non-catastrophe weather-related losses for accident year 2014 and for catastrophe losses for accident year 2011, and (ii) the Automobile product line for liability coverages for accident years 2012 and 2013.

Amortization of Deferred Acquisition Costs

Amortization of deferred acquisition costs in the second quarter of 2016 was $303 million, $15 million or 5% higher than in the same period of 2015.  Amortization of deferred acquisition costs in the first six months of 2016 was $599 million, $26 million or 5% higher than in the same period of 2015.  The increases in both periods of 2016 were generally consistent with the increases in earned premiums.

General and Administrative Expenses

General and administrative expenses in the second quarter of 2016 were $255 million, $3 million or 1% higher than in the same period of 2015.  General and administrative expenses in the first six months of 2016 were $485 million, comparable with the same period of 2015.

Income Tax Expense

Income tax expense in the second quarter of 2016 was $43 million, $28 million or 39% lower than in the same period of 2015, primarily reflecting the $86 million decrease in income before income taxes, partially offset by the impact of the $4

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million reduction in income tax expense in the second quarter of 2015 resulting from the resolution of prior year tax matters. Income tax expense in the first six months of 2016 was $97 million, $90 million or 48% lower than in the same period of 2015, primarily reflecting the $261 million decrease in income before income taxes, partially offset by the impact of the resolution of prior year tax matters in the second quarter of 2015.

Combined Ratio

The combined ratio of 95.7% in the second quarter of 2016 was 4.6 points higher than the combined ratio of 91.1% in the same period of 2015.  The combined ratio of 94.7% in the first six months of 2016 was 7.4 points higher than the combined ratio of 87.3% in the same period of 2015.

The loss and loss adjustment expense ratio of 67.6% in the second quarter of 2016 was 5.4 points higher than the loss and loss adjustment expense ratio of 62.2% in the same period of 2015.  Catastrophe losses accounted for 6.2 points of the loss and loss adjustment expense ratios in the second quarters of both 2016 and 2015.  Net favorable prior year reserve development in the second quarters of 2016 and 2015 provided 0 points and 3.5 points of benefit, respectively, to the loss and loss adjustment expense ratio. The 2016 second quarter underlying loss and loss adjustment expense ratio was 1.9 points higher than the 2015 ratio on the same basis, primarily reflecting (i) the impact of a significant level of new business in recent years and (ii) normal quarterly variability in weather-related and other loss activity.

The loss and loss adjustment expense ratio of 67.1% in the first six months of 2016 was 8.4 points higher than the loss and loss adjustment expense ratio of 58.7% in the same period of 2015.  Catastrophe losses accounted for 7.6 points and 4.9 points of the loss and loss adjustment expense ratios in the first six months of 2016 and 2015, respectively.  Net favorable prior year reserve development in the first six months of 2016 and 2015 provided 0.7 points and 5.5 points of benefit, respectively, to the loss and loss adjustment expense ratio.  The 2016 underlying loss and loss adjustment expense ratio in the first six months of 2016 was 0.9 points higher than the 2015 ratio on the same basis, primarily reflecting the impact of a significant level of new business in recent years.

The underwriting expense ratio of 28.1% for the second quarter of 2016 was 0.8 points lower than the underwriting expense ratio of 28.9% in the same period of 2015.  In the first six months of 2016, the underwriting expense ratio of 27.6% was 1.0 points lower than the underwriting expense ratio of 28.6% in the same period of 2015.  The declines in both periods of 2016 primarily reflected the impact of an increase in earned premiums.

Agency Written Premiums

Personal Insurance’s gross and net written premiums by product line were as follows for its Agency business, which comprises business written through agents, brokers and other intermediaries and represents almost all of the Personal Insurance segment’s gross and net written premiums:

	Gross Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Agency Automobile	$	1,022	$	893	$	1,961	$	1,721
Agency Homeowners and Other	1,045		1,029		1,848		1,824
Total Agency Personal Insurance	$	2,067	$	1,922	$	3,809	$	3,545

	Net Written Premiums
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2016		2015		2016		2015
Agency Automobile	$	1,018	$	890	$	1,950	$	1,712
Agency Homeowners and Other	1,036		1,010		1,796		1,758
Total Agency Personal Insurance	$	2,054	$	1,900	$	3,746	$	3,470

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Gross agency written premiums in the second quarter and first six months of 2016 were 8% and 7% higher, respectively, than in the same periods of 2015.  Net agency written premiums in each of the second quarter and first six months of 2016 were 8% higher than in the same periods of 2015.

In the Agency Automobile line of business, net written premiums in each of the second quarter and first six months of 2016 were 14% higher than in the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015 as a result of the Company’s private passenger automobile product, Quantum Auto 2.0.

In the Agency Homeowners and Other line of business, net written premiums in the second quarter and first six months were 3% and 2% higher, respectively, than in the same periods of 2015.  Business retention rates in the second quarter and first six months of 2016 remained strong and were higher than in the same periods of 2015.  Renewal premium changes in the second quarter and first six months of 2016 remained positive but were lower than in the same periods of 2015.  New business premiums in the second quarter and first six months of 2016 increased over the same periods of 2015.

For its Agency business, the Personal Insurance segment had approximately 6.4 million and 6.1 million active policies at June 30, 2016 and 2015, respectively.

Direct to Consumer Written Premiums

In the direct to consumer business, net written premiums in the second quarter and first six months of 2016 were $75 million and $143 million, respectively, compared with $56 million and $108 million in the respective periods of 2015.  In the second quarter and first six months of 2016, automobile net written premiums increased by $15 million and $28 million, respectively, or 39% and 37%, respectively, over the same periods of 2015.  In the second quarter and first six months of 2016, homeowners and other net written premiums increased by $4 million and $7 million, respectively, or 22% over the same periods of 2015.  The direct to consumer business had 269,000 and 213,000 active policies at June 30, 2016 and 2015, respectively.

Interest Expense and Other

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Operating income (loss)	$	(62	)	$	(62	)	$	(123	)	$	(126	)

The operating income (loss) for Interest Expense and Other in the second quarters of both 2016 and 2015 was $(62) million.  The operating income (loss) for Interest Expense and Other in the first six months of 2016 was $(123) million, compared with $(126) million in the same period of 2015.  After-tax interest expense in the second quarters and first six months of both 2016 and 2015 was $60 million and $120 million, respectively.

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ASBESTOS CLAIMS AND LITIGATION

The Company believes that the property and casualty insurance industry has suffered from court decisions and other trends that have expanded insurance coverage for asbestos claims far beyond the original intent of insurers and policyholders. The Company has received and continues to receive a significant number of asbestos claims from the Company’s policyholders (which includes others seeking coverage under a policy).  Factors underlying these claim filings include continued intensive advertising by lawyers seeking asbestos claimants and the continued focus by plaintiffs on defendants who were not traditionally primary targets of asbestos litigation.  The focus on these defendants is primarily the result of the number of traditional asbestos defendants who have sought bankruptcy protection in previous years.  In addition to contributing to the overall number of claims, bankruptcy proceedings may increase the volatility of asbestos-related losses by initially delaying the reporting of claims and later by significantly accelerating and increasing loss payments by insurers, including the Company. The bankruptcy of many traditional defendants has also caused increased settlement demands against those policyholders who are not in bankruptcy but remain in the tort system. Currently, in many jurisdictions, those who allege very serious injury and who can present credible medical evidence of their injuries are receiving priority trial settings in the courts, while those who have not shown any credible disease manifestation are having their hearing dates delayed or placed on an inactive docket.  Prioritizing claims involving credible evidence of injuries, along with the focus on defendants who were not traditionally primary targets of asbestos litigation, contributes to the claims and claim adjustment expense payment patterns experienced by the Company.  The Company’s asbestos-related claims and claim adjustment expense experience also has been impacted by the unavailability of other insurance sources potentially available to policyholders, whether through exhaustion of policy limits or through the insolvency of other participating insurers.

The Company continues to be involved in coverage litigation concerning a number of policyholders, some of whom have filed for bankruptcy, who in some instances have asserted that all or a portion of their asbestos-related claims are not subject to aggregate limits on coverage. In these instances, policyholders also may assert that each individual bodily injury claim should be treated as a separate occurrence under the policy. It is difficult to predict whether these policyholders will be successful on both issues. To the extent both issues are resolved in a policyholder’s favor and other Company defenses are not successful, the Company’s coverage obligations under the policies at issue would be materially increased and bounded only by the applicable per-occurrence limits and the number of asbestos bodily injury claims against the policyholders.  Although the Company has seen a moderation in the overall risk associated with these lawsuits, it remains difficult to predict the ultimate cost of these claims.

Many coverage disputes with policyholders are only resolved through settlement agreements. Because many policyholders make exaggerated demands, it is difficult to predict the outcome of settlement negotiations. Settlements involving bankrupt policyholders may include extensive releases which are favorable to the Company but which could result in settlements for larger amounts than originally anticipated. There also may be instances where a court may not approve a proposed settlement, which may result in additional litigation and potentially less beneficial outcomes for the Company. As in the past, the Company will continue to pursue settlement opportunities.

In addition to claims against policyholders, proceedings have been launched directly against insurers, including the Company, by individuals challenging insurers’ conduct with respect to the handling of past asbestos claims and by individuals seeking damages arising from alleged asbestos-related bodily injuries.  Travelers Property Casualty Corp. (TPC) had previously entered into settlement agreements in connection with a number of these direct action claims (Direct Action Settlements).  The Company had been involved in litigation concerning whether all of the conditions of the Direct Action Settlements had been satisfied.  On July 22, 2014, the United States Court of Appeals for the Second Circuit ruled that all of the conditions of the Direct Action Settlements had been satisfied.  On January 15, 2015, the bankruptcy court entered an order directing the Company to pay $579 million to the plaintiffs, comprised of the $502 million settlement amounts, plus pre- and post-judgment interest of $77 million, and the Company made that payment in 2015.  For a full discussion of these settlement agreements and related litigation, see the “Settlement of Asbestos Direct Action Litigation” section of note 16 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.  It is possible that the filing of other direct actions against insurers, including the Company, could be made in the future.  It is difficult to predict the outcome of these proceedings, including whether the plaintiffs will be able to sustain these actions against insurers based on novel legal theories of liability. The Company believes it has meritorious defenses to these claims and has received favorable rulings in certain jurisdictions.

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On January 29, 2009, the Company and PPG Industries, Inc. (PPG), along with approximately 30 other insurers of PPG, agreed in principle to settle asbestos-related coverage litigation under insurance policies issued to PPG (the “Agreement”). The Agreement was incorporated into the Modified Third Amended Plan of Reorganization (“Amended Plan”) proposed as part of the Pittsburgh Corning Corp. (PCC, which is 50% owned by PPG) bankruptcy proceeding. Pursuant to the Amended Plan, which was filed on January 30, 2009, PCC, along with enumerated other companies (including PPG as well as the Company as a participating insurer), receive protections afforded by Section 524(g) of the Bankruptcy Code from certain asbestos-related bodily injury claims.  Under the Agreement, the Company had the option to make a series of payments over 20 years totaling approximately $620 million to the Trust created under the Amended Plan, or it could elect to make a discounted payment.  On January 7, 2016, the remaining objections to the Amended Plan were dismissed. On April 27, 2016, the Amended Plan became effective and all the remaining conditions to the Agreement were satisfied.  The Company fully satisfied its obligation under the Agreement by making a discounted payment in the second quarter of 2016. The Company’s payments totaled $524 million, of which $518 million was related to asbestos reserves.  The Company’s obligations under the Agreement were included in its claims and claim adjustment expense reserves at March 31, 2016 and December 31, 2015.

The Company’s quarterly asbestos reserve reviews include an analysis of exposure and claim payment patterns by policyholder category, as well as recent settlements, policyholder bankruptcies, judicial rulings and legislative actions.  The Company also analyzes developing payment patterns among policyholders in the Home Office and Field Office, and Assumed Reinsurance and Other categories as well as projected reinsurance billings and recoveries.  In addition, the Company reviews its historical gross and net loss and expense paid experience, year-by-year, to assess any emerging trends, fluctuations, or characteristics suggested by the aggregate paid activity.  Conventional actuarial methods are not utilized to establish asbestos reserves nor have the Company’s evaluations resulted in any way of determining a meaningful average asbestos defense or indemnity payment.  Over the past decade, the property and casualty insurance industry, including the Company, has experienced net unfavorable prior year reserve development with regard to asbestos reserves.  While the Company believes that over the past several years there has been a reduction in the volatility associated with the Company’s overall asbestos exposure, there nonetheless remains a high degree of uncertainty with respect to future exposure from asbestos claims.

Because each policyholder presents different liability and coverage issues, the Company generally reviews the exposure presented by each policyholder at least annually.  Among the factors which the Company may consider in the course of this review are: available insurance coverage, including the role of any umbrella or excess insurance the Company has issued to the policyholder; limits and deductibles; an analysis of the policyholder’s potential liability; the jurisdictions involved; past and anticipated future claim activity and loss development on pending claims; past settlement values of similar claims; allocated claim adjustment expense; potential role of other insurance; the role, if any, of non-asbestos claims or potential non-asbestos claims in any resolution process; and applicable coverage defenses or determinations, if any, including the determination as to whether or not an asbestos claim is a products/completed operation claim subject to an aggregate limit and the available coverage, if any, for that claim.

Net asbestos paid loss and loss expenses in the first six months of 2016 were $575 million, compared with $623 million in the same period of 2015.  Net payments in the first six months of 2016 included the payment of the $518 million settlement amounts related to PPG as described above.  Net payments in the first six months of 2015 included the payment of the $502 million settlement amounts related to the Settlement of Asbestos Direct Action Litigation as described above and in more detail in note 16 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.  Net asbestos reserves were $1.23 billion at June 30, 2016, compared with $1.73 billion at June 30, 2015.

The following table displays activity for asbestos losses and loss expenses and reserves:

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(at and for the six months ended June 30, in millions)	2016			2015
Beginning reserves:
Gross	$	1,989		$	2,520
Ceded	(179		)	(163		)
Net	1,810			2,357
Incurred losses and loss expenses:
Gross	—			—
Ceded	—			—
Net	—			—
Paid loss and loss expenses:
Gross	671			664
Ceded	(96		)	(41		)
Net	575			623
Foreign exchange and other:
Gross	(1		)	—
Ceded	—			—
Net	(1		)	—
Ending reserves:
Gross	1,317			1,856
Ceded	(83		)	(122		)
Net	$	1,234		$	1,734

See “—Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves.”

ENVIRONMENTAL CLAIMS AND LITIGATION

The Company has received and continues to receive claims from policyholders who allege that they are liable for injury or damage arising out of their alleged disposition of toxic substances. Mostly, these claims are due to various legislative as well as regulatory efforts aimed at environmental remediation. For instance, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), enacted in 1980 and later modified, enables private parties as well as federal and state governments to take action with respect to releases and threatened releases of hazardous substances. This federal statute permits the recovery of response costs from some liable parties and may require liable parties to undertake their own remedial action. Liability under CERCLA may be joint and several with other responsible parties.

The Company has been, and continues to be, involved in litigation involving insurance coverage issues pertaining to environmental claims. The Company believes that some court decisions have interpreted the insurance coverage to be broader than the original intent of the insurers and policyholders. These decisions often pertain to insurance policies that were issued by the Company prior to the mid-1980s. These decisions continue to be inconsistent and vary from jurisdiction to jurisdiction. Environmental claims, when submitted, rarely indicate the monetary amount being sought by the claimant from the policyholder, and the Company does not keep track of the monetary amount being sought in those few claims which indicate a monetary amount.

The resolution of environmental exposures by the Company generally occurs through settlements with policyholders as opposed to claimants.  Generally, the Company strives to extinguish any obligations it may have under any policy issued to the policyholder for past, present and future environmental liabilities and extinguish any pending coverage litigation dispute with the policyholder.  This form of settlement is commonly referred to as a “buy-back” of policies for future environmental liability. In addition, many of the agreements have also extinguished any insurance obligation which the Company may have for other claims, including but not limited to asbestos and other cumulative injury claims.  The Company and its policyholders may also agree to settlements which extinguish any liability arising from known specified sites or claims.  Where appropriate, these agreements also include indemnities and hold harmless provisions to protect the Company.  The Company’s general purpose in executing these agreements is to reduce the Company’s potential environmental exposure and eliminate the risks presented by coverage litigation with the policyholder and related costs.

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In establishing environmental reserves, the Company evaluates the exposure presented by each policyholder and the anticipated cost of resolution, if any. In the course of this analysis, the Company generally considers the probable liability, available coverage and relevant judicial interpretations.  In addition, the Company considers the many variables presented, such as: the nature of the alleged activities of the policyholder at each site; the number of sites; the total number of potentially responsible parties at each site; the nature of the alleged environmental harm and the corresponding remedy at each site; the nature of government enforcement activities at each site; the ownership and general use of each site; the overall nature of the insurance relationship between the Company and the policyholder, including the role of any umbrella or excess insurance the Company has issued to the policyholder; the involvement of other insurers; the potential for other available coverage, including the number of years of coverage; the role, if any, of non-environmental claims or potential non-environmental claims in any resolution process; and the applicable law in each jurisdiction.  The evaluation of the exposure presented by a policyholder can change as information concerning that policyholder and the many variables presented is developed.  Conventional actuarial methods are not used to estimate these reserves.

In its review of environmental reserves, the Company considers: past settlement payments; changing judicial and legislative trends; its reserves for the costs of litigating environmental coverage matters; the potential for policyholders with smaller exposures to be named in new clean-up actions for both on- and off-site waste disposal activities; the potential for adverse development; the potential for additional new claims beyond previous expectations; and the potential higher costs for new settlements.

The duration of the Company’s investigation and review of these claims and the extent of time necessary to determine an appropriate estimate, if any, of the value of the claim to the Company vary significantly and are dependent upon a number of factors. These factors include, but are not limited to, the cooperation of the policyholder in providing claim information, the pace of underlying litigation or claim processes, the pace of coverage litigation between the policyholder and the Company and the willingness of the policyholder and the Company to negotiate, if appropriate, a resolution of any dispute pertaining to these claims. Because these factors vary from claim-to-claim and policyholder-by-policyholder, the Company cannot provide a meaningful average of the duration of an environmental claim. However, based upon the Company’s experience in resolving these claims, the duration may vary from months to several years.

The Company continues to receive notices from policyholders tendering claims for the first time, frequently under policies issued prior to the mid-1980s.  These policyholders continue to present smaller exposures, have fewer sites and are lower tier defendants.  Further, in many instances, clean-up costs have been reduced because regulatory agencies are willing to accept risk-based site analyses and more efficient clean-up technologies.  Over the past several years, the Company has experienced generally favorable trends in the number of new policyholders tendering environmental claims for the first time and in the number of pending declaratory judgment actions relating to environmental matters.  However, the degree to which those favorable trends have continued has been less than anticipated.  In addition, reserve development on existing environmental claims has been greater than anticipated, driven by claims and legal developments in a limited number of jurisdictions.  As a result of these factors, the Company increased its net environmental reserves by $82 million and $72 million in the second quarters of 2016 and 2015, respectively.

Net environmental paid loss and loss expenses in the first six months of 2016 were $23 million, compared with $25 million in the same period of 2015.  At June 30, 2016, approximately 94% of the net environmental reserve (approximately $394 million) was carried in a bulk reserve and included unresolved environmental claims, incurred but not reported environmental claims and the anticipated cost of coverage litigation disputes relating to these claims. The bulk reserve the Company carries is established and adjusted based upon the aggregate volume of in-process environmental claims and the Company’s experience in resolving those claims. The balance, approximately 6% of the net environmental reserve (approximately $27 million), consists of case reserves.

The following table displays activity for environmental losses and loss expenses and reserves:

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(at and for the six months ended June 30, in millions)	2016			2015
Beginning reserves:
Gross	$	375		$	353
Ceded	(14		)	(7		)
Net	361			346
Incurred losses and loss expenses:
Gross	87			81
Ceded	(5		)	(9		)
Net	82			72
Paid loss and loss expenses:
Gross	24			26
Ceded	(1		)	(1		)
Net	23			25
Foreign exchange and other:
Gross	1			(2		)
Ceded	—			—
Net	1			(2		)
Ending reserves:
Gross	439			406
Ceded	(18		)	(15		)
Net	$	421		$	391

UNCERTAINTY REGARDING ADEQUACY OF ASBESTOS AND ENVIRONMENTAL RESERVES

As a result of the processes and procedures discussed above, management believes that the reserves carried for asbestos and environmental claims are appropriately established based upon known facts, current law and management’s judgment. However, the uncertainties surrounding the final resolution of these claims continue, and it is difficult to determine the ultimate exposure for asbestos and environmental claims and related litigation. As a result, these reserves are subject to revision as new information becomes available and as claims develop. The continuing uncertainties include, without limitation, the risks and lack of predictability inherent in complex litigation, any impact from the bankruptcy protection sought by various asbestos producers and other asbestos defendants, a further increase or decrease in the cost to resolve, and/or the number of, asbestos and environmental claims beyond that which is anticipated, the emergence of a greater number of asbestos claims than anticipated as a result of extended life expectancies resulting from medical advances and lifestyle improvements, the role of any umbrella or excess policies the Company has issued, the resolution or adjudication of disputes pertaining to the amount of available coverage for asbestos and environmental claims in a manner inconsistent with the Company’s previous assessment of these claims, the number and outcome of direct actions against the Company, future developments pertaining to the Company’s ability to recover reinsurance for asbestos and environmental claims and the unavailability of other insurance sources potentially available to policyholders, whether through exhaustion of policy limits or through the insolvency of other participating insurers.  In addition, uncertainties arise from the insolvency or bankruptcy of policyholders and other defendants.  It is also not possible to predict changes in the legal, regulatory and legislative environment and their impact on the future development of asbestos and environmental claims.  This environment could be affected by changes in applicable legislation and future court and regulatory decisions and interpretations, including the outcome of legal challenges to legislative and/or judicial reforms establishing medical criteria for the pursuit of asbestos claims.  It is also difficult to predict the ultimate outcome of complex coverage disputes until settlement negotiations near completion and significant legal questions are resolved or, failing settlement, until the dispute is adjudicated. This is particularly the case with policyholders in bankruptcy where negotiations often involve a large number of claimants and other parties and require court approval to be effective. As part of its continuing analysis of asbestos and environmental reserves, the Company continues to study the implications of these and other developments.

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Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the Company’s current reserves.  In addition, the Company’s estimate of claims and claim adjustment expenses may change.  These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company’s operating results in future periods.

INVESTMENT PORTFOLIO

The Company’s invested assets at June 30, 2016 were $72.47 billion, of which 93% was invested in fixed maturity and short-term investments, 1% in equity securities, 1% in real estate investments and 5% in other investments.  Because the primary purpose of the investment portfolio is to fund future claims payments, the Company employs a conservative investment philosophy.  A significant majority of funds available for investment are deployed in a widely diversified portfolio of high quality, liquid, taxable U.S. government, tax-exempt U.S. municipal and taxable corporate and U.S. agency mortgage-backed bonds.

The carrying value of the Company’s fixed maturity portfolio at June 30, 2016 was $63.31 billion.  The Company closely monitors the duration of its fixed maturity investments, and investment purchases and sales are executed with the objective of having adequate funds available to satisfy the Company’s insurance and debt obligations.  The weighted average credit quality of the Company’s fixed maturity portfolio, both including and excluding U.S. Treasury securities, was “Aa2” at both June 30, 2016 and December 31, 2015.  Below investment grade securities represented 2.8% of the total fixed maturity investment portfolio at both June 30, 2016 and December 31, 2015.  The average effective duration of fixed maturities and short-term securities was 3.9 (4.2 excluding short-term securities) at both June 30, 2016 and December 31, 2015.

Obligations of States, Municipalities and Political Subdivisions

The Company’s fixed maturity investment portfolio at June 30, 2016 and December 31, 2015 included $33.63 billion and $31.41 billion, respectively, of securities which are obligations of states, municipalities and political subdivisions (collectively referred to as the municipal bond portfolio).  The municipal bond portfolio is diversified across the United States, the District of Columbia and Puerto Rico and includes general obligation and revenue bonds issued by states, cities, counties, school districts and similar issuers.  Included in the municipal bond portfolio at June 30, 2016 and December 31, 2015 were $5.72 billion and $6.06 billion, respectively, of pre-refunded bonds, which are bonds for which states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities, which were created to satisfy their responsibility for payments of principal and interest.  The irrevocable trusts are verified as to their sufficiency by an independent verification agent of the underwriter, issuer or trustee.  All of the Company’s holdings of securities issued by Puerto Rico and related entities have been pre-refunded and therefore are defeased by U.S. Treasury securities.

The Company bases its investment decision on the underlying credit characteristics of the municipal security.  While its municipal bond portfolio includes a number of securities that were enhanced by third-party insurance for the payment of principal and interest in the event of an issuer default, the Company does not rely on enhanced credit characteristics provided by such third-party insurance as part of its investing decisions.  Of the insured municipal securities in the Company’s investment portfolio at June 30, 2016, approximately 97% were rated at “A3” or above, and approximately 92% were rated at “Aa3” or above, without the benefit of insurance.  The Company believes that a loss of the benefit of insurance would not result in a material adverse impact on the Company’s results of operations, financial position or liquidity, due to the underlying credit strength of the issuers of the securities, as well as the Company’s ability and intent to hold the securities.  The average credit rating of the underlying issuers of these securities was “Aa2” at June 30, 2016.  The average credit rating of the entire municipal bond portfolio was “Aa1” at June 30, 2016, with and without the enhancement provided by third-party insurance.

Mortgage-Backed Securities, Collateralized Mortgage Obligations and Pass-Through Securities

The Company’s fixed maturity investment portfolio at June 30, 2016 and December 31, 2015 included $1.83 billion and $1.98 billion, respectively, of residential mortgage-backed securities, including pass-through-securities and collateralized mortgage obligations (CMOs), all of which are subject to prepayment risk (either shortening or lengthening of duration).  While prepayment risk for securities and its effect on income cannot be fully controlled, particularly when interest rates move dramatically, the Company’s investment strategy generally favors securities that reduce this risk within expected interest rate

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ranges.  Included in the totals at June 30, 2016 and December 31, 2015 were $616 million and $676 million, respectively, of GNMA, FNMA, FHLMC (excluding FHA project loans) and Canadian government guaranteed residential mortgage-backed pass-through securities classified as available for sale.  Also included in those totals were residential CMOs classified as available for sale with a fair value of $1.22 billion and $1.30 billion at June 30, 2016 and December 31, 2015, respectively.  Approximately 48% of the Company’s CMO holdings at both June 30, 2016 and December 31, 2015 were guaranteed by or fully collateralized by securities issued by GNMA, FNMA or FHLMC.  The average credit rating of the $635 million and $683 million of non-guaranteed CMO holdings was “Baa1” and “Baa2” at June 30, 2016 and December 31, 2015, respectively.  The average credit rating of all of the above securities was “Aa2” and “Aa3” at June 30, 2016 and December 31, 2015, respectively.  For further discussion regarding the Company’s investments in residential CMOs, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investment Portfolio” in the Company’s 2015 Annual Report.

Equity Securities Available for Sale, Real Estate and Short-Term Investments

See note 1 of notes to the consolidated financial statements in the Company’s 2015 Annual Report for further information about these invested asset classes.

Other Investments

The Company also invests in private equity limited partnerships, hedge funds, and real estate partnerships.  Also included in other investments are non-public common and preferred equities and derivatives.  These asset classes have historically provided a higher return than fixed maturities but are subject to more volatility.  At June 30, 2016 and December 31, 2015, the carrying value of the Company’s other investments was $3.49 billion and $3.45 billion, respectively.

CATASTROPHE REINSURANCE COVERAGE

The Company’s catastrophe reinsurance coverage is discussed in the “Catastrophe Reinsurance” section of “Part I — Item 1 — Business” in the Company’s 2015 Annual Report.  Except as discussed below, there have been no material changes to the Company’s catastrophe reinsurance coverage from that reported in the Company’s 2015 Annual Report.

Catastrophe Bonds. In May 2016, an indemnity reinsurance agreement with Long Point Re III Ltd. that provided up to $300 million of coverage for certain losses expired as scheduled.  With respect to the Company’s remaining indemnity reinsurance agreement with Long Point Re III Ltd., the attachment point and maximum limit were reset as required annually to adjust the expected loss of the layer within a predetermined range.  For the period May 16, 2016 through and including May 15, 2017, the Company will be entitled to begin recovering amounts under this reinsurance agreement if the covered losses in the covered area for a single occurrence reach an initial attachment amount of $1.968 billion.  The full $300 million coverage amount is available on a proportional basis until such covered losses reach a maximum $2.468 billion.

Other Catastrophe Reinsurance Treaties.  Catastrophe reinsurance treaties that renewed on July 1, 2016 were as follows:

·Northeast General Catastrophe Reinsurance Treaty.  The northeast general catastrophe treaty provides up to $800 million part of $850 million of coverage, subject to a $2.25 billion retention, for certain losses arising from hurricanes, tornados, hail storms, earthquakes and winter storm or freeze losses from Virginia to Maine for the period July 1, 2016 through and including June 30, 2017.  Losses from a covered event (occurring over several days) anywhere in the United States, Canada, the Caribbean and Mexico and waters contiguous thereto may be used to satisfy the retention.  Recoveries under the catastrophe bonds (if any) would be first applied to reduce losses subject to this treaty.

·Middle Markets Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty. This earthquake excess-of-loss treaty provides for up to $150 million part of $165 million of coverage, subject to a $70 million retention, for losses arising from an earthquake, including fire following and sprinkler leakage incurred under policies written by Technology, Public Sector Services and Commercial Accounts in the Company’s Business and International Insurance segment for the period July 1, 2016 through and including June 30, 2017.

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·Canadian Property Catastrophe Excess-of-Loss Reinsurance Contract.  This contract, effective for the period July 1, 2016 through and including June 30, 2017, covers the accumulation of net property losses arising out of one occurrence on business written by the Company’s Canadian businesses.  The treaty covers all property written by the Company’s Canadian businesses for Canadian insureds, including, but not limited to, habitational property, commercial property, inland marine, ocean marine and auto physical damages exposures, with respect to risks located worldwide, written for Canadian insureds.  The treaty provides coverage for 50% of losses in excess of C$100 million (US$77 million at June 30, 2016), up to C$200 million (US$154 million at June 30, 2016) and for 100% of losses in excess of C$200 million (US$154 million at June 30, 2016), up to C$600 million (US$462 million at June 30, 2016).

The Company regularly reviews its catastrophe reinsurance coverage and may adjust such coverage in the future.

REINSURANCE RECOVERABLES

For a description of the Company’s reinsurance recoverables, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reinsurance Recoverables” in the Company’s 2015 Annual Report.

The following table summarizes the composition of the Company’s reinsurance recoverables:

(in millions)	June 30, 2016			December 31, 2015
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	3,530		$	3,848
Allowance for uncollectible reinsurance	(151		)	(157		)
Net reinsurance recoverables	3,379			3,691
Mandatory pools and associations	2,026			2,015
Structured settlements	3,198			3,204
Total reinsurance recoverables	$	8,603		$	8,910

The $312 million decline in net reinsurance recoverables from December 31, 2015 primarily reflected the impact of cash collections in the first six months of 2016.

OUTLOOK

The following discussion provides outlook information for certain key drivers of the Company’s results of operations and capital position.

Premiums.  The Company’s earned premiums are a function of net written premium volume.  Net written premiums comprise both renewal business and new business and are recognized as earned premium over the life of the underlying policies. When business renews, the amount of net written premiums associated with that business may increase or decrease (renewal premium change) as a result of increases or decreases in rate and/or insured exposures, which the Company considers as a measure of units of exposure (such as the number and value of vehicles or properties insured).  Net written premiums from both renewal and new business, and therefore earned premiums, are impacted by competitive market conditions as well as general economic conditions, which, particularly in the case of the Business and International Insurance segment, affect audit premium adjustments, policy endorsements and mid-term cancellations.  Property and casualty insurance market conditions are expected to remain competitive.  Net written premiums may also be impacted by the structure of reinsurance programs and related costs, as well as changes in foreign currency exchange rates.

Overall, the Company expects retention levels (the amount of expiring premium that renews, before the impact of renewal premium changes) will remain strong by historical standards.  In the Business and International Insurance segment, the Company expects that domestic renewal premium changes during the remainder of 2016 and into 2017 will remain positive and will be broadly consistent with the levels attained in the first six months of 2016.  Given the relatively smaller amount of premium that the Company generates from outside the United States and the transactional nature of some of those markets, particularly Lloyd’s, international renewal premium changes during the remainder of 2016 and into 2017 could be somewhat

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higher, broadly consistent with or somewhat lower than the levels attained in the first six months of 2016.  In the Bond & Specialty Insurance segment, the Company expects that renewal premium changes with respect to management liability business during the remainder of 2016 and into 2017 will remain positive, but will be slightly lower than the levels attained in the first six months of 2016.  With respect to surety business within the Bond & Specialty Insurance segment, the Company expects that net written premium volume during the remainder of 2016 and into 2017 will be slightly higher than the levels attained in the same periods of 2015 and 2016.  In the Personal Insurance segment, the Company expects that Agency Auto renewal premium changes during the remainder of 2016 and into 2017 will remain positive and will be slightly higher than the levels attained in the first six months of 2016, and Agency Homeowners and Other renewal premium changes during the remainder of 2016 and into 2017 will remain positive, and will be broadly consistent with the levels attained in the first six months of 2016.  The need for state regulatory approval for changes to personal property and casualty insurance prices, as well as competitive market conditions, may impact the timing and extent of renewal premium changes.

Property and casualty insurance market conditions are expected to remain competitive during the remainder of 2016 and into 2017 for new business.  In each of the Company’s business segments, new business generally has less of an impact on underwriting profitability than renewal business, given the volume of new business relative to renewal business.  However, in periods of meaningful increases in new business, despite its positive impact on underwriting gains over time, the impact of higher new business levels may negatively impact the combined ratio in the short-term.

General uncertainty regarding a variety of domestic and international matters, such as the U.S. Federal budget and taxes, implementation of the Affordable Care Act, the political and regulatory environment, geopolitical instability, the United Kingdom’s expected withdrawal from the European Union, slow growth and economic uncertainty in the United States and in various parts of the world, rapid changes in commodity prices, such as in oil, and fluctuations in interest rates and foreign currency exchange rates, has added to the uncertainty regarding economic conditions generally.  If economic conditions deteriorate, the resulting low levels of economic activity could impact exposure changes at renewal and the Company’s ability to write business at acceptable rates.  Additionally, low levels of economic activity could adversely impact audit premium adjustments, policy endorsements and mid-term cancellations after policies are written.  All of the foregoing, in turn, could adversely impact net written premiums in the remainder of 2016 and into 2017, and because earned premiums are a function of net written premiums, earned premiums could be adversely impacted on a lagging basis.

Underwriting Gain/Loss.  The Company’s underwriting gain/loss can be significantly impacted by catastrophe losses and net favorable or unfavorable prior year reserve development, as well as underlying underwriting margins.

Catastrophe and non-catastrophe weather-related losses are inherently unpredictable from period to period.  The Company experienced significant catastrophe and non-catastrophe weather-related losses in a number of periods during the past decade, which adversely impacted its results of operations.  The Company’s results of operations could be adversely impacted if significant catastrophe and non-catastrophe weather-related losses were to occur.

For a number of years, the Company’s results have included significant amounts of net favorable prior year reserve development driven by better than expected loss experience in all of the Company’s segments.  However, given the inherent uncertainty in estimating claims and claim adjustment expense reserves, loss experience could develop such that the Company recognizes higher or lower levels of favorable prior year reserve development, no favorable prior year reserve development or unfavorable prior year reserve development in future periods.  In addition, the ongoing review of prior year claims and claim adjustment expense reserves, or other changes in current period circumstances, may result in the Company revising current year loss estimates upward or downward in future periods of the current year.

It is possible that the steps taken by the federal government in recent years, particularly by the Federal Reserve, to improve economic conditions could lead to higher inflation than the Company had anticipated, which could in turn lead to an increase in the Company’s loss costs and the need to strengthen claims and claim adjustment expense reserves. These impacts of inflation on loss costs and claims and claim adjustment expense reserves could be more pronounced for those lines of business that are considered “long tail”, such as general liability, as they require a relatively long period of time to finalize and settle claims for a given accident year.  For a further discussion, see “Part I—Item 1A—Risk Factors—If actual claims exceed our claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, our financial results could be materially and adversely affected” in the Company’s 2015 Annual Report.

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In Business and International Insurance, the Company expects underlying underwriting margins and the combined ratio excluding catastrophe losses and prior year reserve development (“underlying combined ratio”) during the remainder of 2016 and into 2017 will be broadly consistent with those in the same periods of 2015 and 2016, reflecting the impact of loss trends in excess of earned pricing, largely offset by lower (and more normalized) levels of what the Company defines as large losses and non-catastrophe weather-related losses.

In Bond & Specialty Insurance, the Company expects underlying underwriting margins and the underlying combined ratio during the remainder of 2016 and into 2017 will be broadly consistent with those in the same periods of 2015 and 2016.

In Personal Insurance, the Company expects underlying underwriting margins during the remainder of 2016 and into 2017 will be lower and the underlying combined ratio will be higher than in the same periods of 2015 and 2016.  In Agency Automobile, the Company expects underlying underwriting margins during the remainder of 2016 will be slightly lower and the underlying combined ratio will be higher than in the same period of 2015.  The increase in the underlying combined ratio reflects the impact of significant new business levels in recent years.  For the early part of 2017, the Company expects underlying underwriting margins to be slightly higher and the underlying combined ratio to be broadly consistent with the comparable period of 2016.  The underlying combined ratio reflects the impact of significant new business levels in recent years, largely offset by lower (and more normalized) levels of loss activity.  In Agency Homeowners and Other, the Company expects underlying underwriting margins during the remainder of 2016 and into 2017 will be lower and the underlying combined ratio will be higher than in the same periods of 2015 and 2016, reflecting higher (and more normalized) levels of loss activity.  Also in Personal Insurance, the Company’s direct to consumer initiative, the distribution channel that the Company launched in 2009, while intended to enhance the Company’s long-term ability to compete successfully in a consumer-driven marketplace, is expected to remain modest with respect to premium volume and remain unprofitable for a number of years as this book of business grows and matures.

Investment Portfolio.  The Company expects to continue to focus its investment strategy on maintaining a high-quality investment portfolio and a relatively short average effective duration.  The average effective duration of fixed maturities and short-term securities was 3.9 (4.2 excluding short-term securities) at June 30, 2016.  From time to time, the Company enters into short positions in U.S. Treasury futures contracts to manage the duration of its fixed maturity portfolio.  At June 30, 2016, the Company had $400 million notional value of open U.S. Treasury futures contracts.  The Company continually evaluates its investment alternatives and mix.  Currently, the majority of the Company’s investments are comprised of a widely diversified portfolio of high-quality, liquid, taxable U.S. government, tax-exempt U.S. municipal and taxable corporate and U.S. agency mortgage-backed bonds.

The Company also invests much smaller amounts in equity securities, real estate, private equity limited partnerships, hedge funds, and real estate partnerships and joint ventures.  These investment classes have the potential for higher returns but also the potential for higher degrees of risk, including less stable rates of return and less liquidity.

Net investment income is a material contributor to the Company’s results of operations.  Interest rates remain at very low levels by historical standards.  Based on the current interest rate environment, the Company estimates that the impacts of lower reinvestment yields and a lower level of fixed maturity investments could, during the remainder of 2016 and into 2017, result in approximately $20 million to $25 million of lower after-tax net investment income from that portfolio on a quarterly basis as compared to the corresponding quarters of 2015 and 2016.  Net investment income from the non-fixed maturity investment portfolio in the first six months of 2016 was lower than in the same period of 2015.  Given recent levels of market volatility, there is more than the usual uncertainty as to the impact of future market conditions on net investment income from the non-fixed maturity investment portfolio during the remainder of 2016 and into 2017.  If general economic conditions and/or investment market conditions deteriorate during the remainder of 2016 and into 2017, the Company could experience a further reduction in net investment income and/or significant realized investment losses, including impairments.

The Company had a net pre-tax unrealized investment gain of $3.34 billion ($2.18 billion after-tax) in its fixed maturity investment portfolio at June 30, 2016.  While the Company does not attempt to predict future interest rate movements, a rising interest rate environment would reduce the market value of fixed maturity investments and, therefore, reduce shareholders’ equity, and a declining interest rate environment would have the opposite effects.

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For further discussion of the Company’s investment portfolio, see “Investment Portfolio” herein.  For a discussion of the risks to the Company’s business during or following a financial market disruption and risks to the Company’s investment portfolio, see the risk factors entitled “During or following a period of financial market disruption or economic downturn, our business could be materially and adversely affected” and “Our investment portfolio may suffer reduced returns or material realized or unrealized losses” included in “Part I—Item 1A—Risk Factors” in the Company’s 2015 Annual Report.  For a discussion of the risks to the Company’s investments from foreign currency exchange rate fluctuations, see the risk factor entitled “We are subject to a number of risks associated with our business outside the United States” included in “Part I—Item 1A—Risk Factors” in the Company’s 2015 Annual Report and see “Part II—Item 7A—Quantitative and Qualitative Disclosure About Market Risk—Foreign Currency Exchange Rate Risk” in the Company’s 2015 Annual Report.

Capital Position. The Company believes it has a strong capital position and, as part of its ongoing efforts to create shareholder value, expects to continue to return capital not needed to support its business operations to its shareholders.  The Company expects that, generally over time, the combination of dividends to common shareholders and common share repurchases will likely not exceed operating income.  In addition, the timing and actual number of shares to be repurchased in the future will depend on a variety of additional 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 and related financings), market conditions and other factors.  For information regarding the Company’s common share repurchases in 2016, see “Liquidity and Capital Resources” herein.  As a result of the Company’s business outside of the United States, primarily in Canada, the United Kingdom (including Lloyd’s), the Republic of Ireland and Brazil, the Company’s capital is also subject to the effects of changes in foreign currency exchange rates.  For example, strengthening of the U.S. dollar in comparison to other currencies could result in a reduction of shareholders’ equity.  For additional discussion of the Company’s foreign exchange market risk exposure, see “Part II—Item 7A—Quantitative and Qualitative Disclosure About Market Risk” in the Company’s 2015 Annual Report.

Many of the statements in this “Outlook” section are forward-looking statements, which are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control.  Actual results could differ materially from those expressed or implied by such forward-looking statements.  Further, such forward-looking statements speak only as of the date of this report and the Company undertakes no obligation to update them.  See “—Forward Looking Statements.”  For a discussion of potential risks and uncertainties that could impact the Company’s results of operations or financial position, see “Part I—Item 1A—Risk Factors” in the Company’s 2015 Annual Report and “Critical Accounting Estimates” herein.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is a measure of a company’s ability to generate sufficient cash flows to meet the cash requirements of its business operations and to satisfy general corporate purposes when needed.

Operating Company Liquidity.  The liquidity requirements of the Company’s insurance subsidiaries are met primarily by funds generated from premiums, fees, income received on investments and investment maturities.  For further discussion of operating company liquidity, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in the Company’s 2015 Annual Report.

Holding Company Liquidity.  TRV’s liquidity requirements primarily include shareholder dividends, debt servicing, common share repurchases and, from time to time, contributions to its qualified domestic pension plan.  At June 30, 2016, TRV held total cash and short-term invested assets in the United States aggregating $1.75 billion and having a weighted average maturity of 69 days.  TRV has established a holding company liquidity target equal to its estimated annual pre-tax interest expense and common shareholder dividends (currently approximately $1.1 billion).  TRV’s holding company liquidity of $1.75 billion at June 30, 2016 exceeded this target and it is the opinion of the Company’s management that these assets are sufficient to meet TRV’s current liquidity requirements.

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TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs.  U.S. income taxes have not been recognized on substantially all of the Company’s foreign operations’ undistributed earnings as of June 30, 2016, as such earnings are intended to be permanently reinvested in those operations.  Furthermore, taxes paid to foreign governments on these earnings may be used as credits against the U.S. tax on dividend distributions if such earnings were to be distributed to the holding company.  The amount of undistributed earnings from foreign operations and related taxes on those undistributed earnings were not material to the Company’s financial position or liquidity at June 30, 2016.

TRV has a shelf registration statement with the Securities and Exchange Commission that expires on June 17, 2019 which permits it to issue securities from time to time.  TRV also has a $1.0 billion line of credit facility with a syndicate of financial institutions that expires on June 7, 2018.  This line of credit also supports TRV’s $800 million commercial paper program, of which $100 million was outstanding at June 30, 2016.  TRV is not reliant on its commercial paper program to meet its operating cash flow needs.

The Company utilized uncollateralized letters of credit issued by major banks with an aggregate limit of approximately $200 million, to provide a portion of the capital needed to support its obligations at Lloyd’s at June 30, 2016.  If uncollateralized letters of credit are not available at a reasonable price or at all in the future, the Company can collateralize these letters of credit or may have to seek alternative means of supporting its obligations at Lloyd’s, which could include utilizing holding company funds on hand.

Operating Activities

Net cash flows provided by operating activities in the first six months of 2016 and 2015 were $1.29 billion and $875 million, respectively.  Cash flows in the first six months of 2016 included the Company’s $524 million payment in the second quarter of 2016 related to the settlement of the PPG Industries, Inc. litigation as described in more detail in the “Asbestos Claims and Litigation” section herein.  Cash flows in the first six months of 2015 included the Company’s $579 million payment in the first quarter of 2015 related to the settlement of the Asbestos Direct Action Litigation as described in more detail in the “Asbestos Claims and Litigation” section herein.

Investing Activities

Net cash flows used in investing activities in the first six months of 2016 were $91 million, compared with net cash flows provided by investing activities of $765 million in the first six months of 2015.  The Company’s consolidated total investments at June 30, 2016 increased by $2.00 billion, or 3% from year-end 2015, primarily reflecting an increase in the unrealized appreciation of investments and net cash flows provided by operating activities, partially offset by common share repurchases and dividends paid to shareholders.

Financing Activities

Net cash flows used in financing activities in the first six months of 2016 and 2015 were $1.31 billion and $1.69 billion, respectively.  The totals in both periods primarily reflected common share repurchases and dividends to shareholders, partially offset by the proceeds from employee stock option exercises.  The total in 2016 also included the impact of the issuance and payment of debt as described in more detail in note 7 of notes to the consolidated financial statements herein.

Dividends.  Dividends paid to shareholders were $375 million and $369 million in the first six months of 2016 and 2015, respectively.  The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Company’s board of directors and will depend upon many factors, including the Company’s financial position, earnings, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints and other factors as the board of directors deems relevant.  Dividends will be paid by the Company only if declared by its board of directors out of funds legally available, subject to any other restrictions that may be applicable to the Company.  On July 21, 2016, the Company announced that it declared a regular quarterly dividend of $0.67 per share, payable September 30, 2016, to shareholders of record on September 9, 2016.

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Share Repurchase Authorization.  The Company’s board of directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise.  The authorizations do not have a stated expiration date.  The timing and actual number of shares to be repurchased in the future will 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 and related financings), market conditions and other factors.  During the three months and six months ended June 30, 2016, the Company repurchased 4.9 million and 10.0 million shares, respectively, under its share repurchase authorization, for a total cost of $550 million and $1.10 billion, respectively.  The average cost per share repurchased was $112.12 and $110.26, respectively.  At June 30, 2016, the Company had $2.23 billion of capacity remaining under the share repurchase authorization.

Capital Structure.  The following table summarizes the components of the Company’s capital structure at June 30, 2016 and December 31, 2015.

(in millions)	June 30, 2016			December 31, 2015
Debt:
Short-term	$	100		$	500
Long-term	6,361			5,861
Net unamortized fair value adjustments and debt issuance costs	(25		)	(17		)
Total debt	6,436			6,344
Shareholders’ equity:
Common stock and retained earnings, less treasury stock	23,749			23,755
Accumulated other comprehensive income (loss)	965			(157		)
Total shareholders’ equity	24,714			23,598
Total capitalization	$	31,150		$	29,942

On May 11, 2016, the Company issued $500 million aggregate principal amount of 3.75% senior notes that will mature on May 15, 2046.  The Company used a portion of the net proceeds of this offering to retire its $400 million aggregate principal amount of 6.25% senior notes which matured on June 20, 2016, and intends to use the remaining portion for general corporate purposes, including the potential redemption of its 6.25% fixed-to-floating rate junior subordinated debentures due March 15, 2067.  See note 7 of notes to the consolidated financial statements herein for further discussion.

The following table provides a reconciliation of total capitalization excluding net unrealized gain on investments to total capitalization presented in the foregoing table.

(dollars in millions)	June 30, 2016			December 31, 2015
Total capitalization excluding net unrealized gain on investments	$	28,809		$	28,653
Net unrealized gain on investments, net of taxes	2,341			1,289
Total capitalization	$	31,150		$	29,942
Debt-to-total capital ratio	20.7		%	21.2		%
Debt-to-total capital ratio excluding net unrealized gain on investments	22.3		%	22.1		%

The debt-to-total capital ratio excluding net unrealized gain on investments is calculated by dividing (a) debt by (b) total capitalization excluding net unrealized gains and losses on investments, net of taxes.  Net unrealized gains and losses on investments can be significantly impacted by both interest rate movements and other economic factors.  Accordingly, in the opinion of the Company’s management, the debt-to-total capital ratio calculated on this basis provides another useful metric

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for investors to understand the Company’s financial leverage position.  The Company’s ratio of debt-to-total capital (excluding after-tax net unrealized investment gains) of 22.3% at June 30, 2016 was within the Company’s target range of 15% to 25%.

RATINGS

Ratings are an important factor in assessing the Company’s competitive position in the insurance industry.  The Company receives ratings from the following major rating agencies: A.M. Best Company (A.M. Best), Fitch Ratings (Fitch), Moody’s Investors Service (Moody’s) and Standard & Poor’s (S&P).  There were no rating agency actions taken with respect to the Company since April 21, 2016, the date on which the Company’s Form 10-Q for the quarter ended March 31, 2016 was filed with the Securities and Exchange Commission.  For additional discussion of ratings, see “Part I—Item 1—Business—Ratings” in the Company’s 2015 Annual Report.

CRITICAL ACCOUNTING ESTIMATES

For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the Company’s 2015 Annual Report.  The Company considers its most significant accounting estimates to be those applied to claims and claim adjustment expense reserves and related reinsurance recoverables, investment valuation and impairments, and goodwill and other intangible assets impairments. Except as shown in the table below, there have been no material changes to the Company’s critical accounting estimates since December 31, 2015.

Claims and Claim Adjustment Expense Reserves

The table below displays the Company’s gross claims and claim adjustment expense reserves by product line.  Additional liabilities may arise for amounts in excess of the current related reserves.  In addition, the Company’s estimate of claims and claim adjustment expenses may change. These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company’s operating results in future periods. In particular, a portion of the Company’s gross claims and claim adjustment expense reserves (totaling $1.76 billion at June 30, 2016) are for asbestos and environmental claims and related litigation. While the ongoing review of asbestos and environmental claims and associated liabilities considers the inconsistencies of court decisions as to coverage, plaintiffs’ expanded theories of liability and the risks inherent in complex litigation and other uncertainties, in the opinion of the Company’s management, it is possible that the outcome of the continued uncertainties regarding these claims could result in liability in future periods that differs from current reserves by an amount that could be material to the Company’s future operating results. See the preceding discussion of “Asbestos Claims and Litigation” and “Environmental Claims and Litigation.”

Gross claims and claim adjustment expense reserves by product line were as follows:

	June 30, 2016						December 31, 2015
(in millions)	Case		IBNR		Total		Case		IBNR		Total
General liability	$	4,937	$	7,011	$	11,948	$	5,588	$	7,120	$	12,708
Commercial property	712		430		1,142		715		397		1,112
Commercial multi-peril	1,840		1,978		3,818		1,888		1,750		3,638
Commercial automobile	2,105		1,206		3,311		2,068		1,253		3,321
Workers’ compensation	10,206		8,749		18,955		10,269		8,470		18,739
Fidelity and surety	225		404		629		229		475		704
Personal automobile	1,742		816		2,558		1,710		842		2,552
Homeowners and personal—other	619		519		1,138		601		399		1,000
International and other	2,860		1,572		4,432		2,808		1,690		4,498
Property-casualty	25,246		22,685		47,931		25,876		22,396		48,272
Accident and health	22		—		22		23		—		23
Claims and claim adjustment expense reserves	$	25,268	$	22,685	$	47,953	$	25,899	$	22,396	$	48,295

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The $342 million decrease in gross claims and claim adjustment expense reserves since December 31, 2015 primarily reflected the impact of the Company’s $524 million payment in the second quarter of 2016 related to the settlement of the PPG Industries, Inc. litigation as described in more detail in the “Asbestos Claims and Litigation” section herein and net favorable prior year reserve development, partially offset by catastrophe losses incurred in the first six months of 2016 and changes in foreign currency exchange rates.

Asbestos and environmental reserves are included in the General liability, Commercial multi-peril and International and other lines in the summary table above.  Asbestos and environmental reserves are discussed separately; see “Asbestos Claims and Litigation”, “Environmental Claims and Litigation” and “Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves” in this report.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

See note 1 of notes to the Company’s unaudited consolidated financial statements contained in this quarterly report and in the Company’s 2015 Annual Report for a discussion of recently issued accounting pronouncements.

FORWARD-LOOKING STATEMENTS

This report 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.  These statements include, among other things, the Company’s statements about:

·the Company’s outlook and its future results of operations and financial condition (including, among other things, anticipated premium volume, premium rates, margins, net and operating income, investment income and performance, loss costs, return on equity and expected current returns and combined ratios);

·share repurchase plans;

·future pension plan contributions;

·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 (including rapid changes in commodity prices, such as a significant decline in oil and gas prices, as well as fluctuations in foreign currency exchange rates) and underwriting market conditions; and

·strategic initiatives to improve profitability and competitiveness.

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, economic downturn or prolonged period of slow economic growth, 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 material realized or unrealized losses. The Company’s investment portfolio may also suffer reduced or low returns, particularly if interest rates remain at historically low levels for a prolonged period of time or decline further as a result of actions taken by central banks (a risk which potentially could be increased by, among other things, the United Kingdom’s expected withdrawal from the European Union);

·the Company’s business could be harmed because of its potential exposure to asbestos and environmental claims and related litigation;

·the Company is exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances;

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FORWARD-LOOKING STATEMENTS, Continued

·the effects of emerging claim and coverage issues on the Company’s business are uncertain;

·the intense competition that the Company faces could harm its ability to maintain or increase its business volumes and its profitability;

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

·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 and investment operations including through the utilization of reinsurance or structured settlements, as well as guarantees or indemnifications from third parties;

·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 the Company’s results;

·a downgrade in the Company’s claims-paying and financial strength ratings could adversely impact the Company’s business volumes, adversely impact the Company’s ability to access the capital markets and increase the Company’s borrowing costs;

·the inability of the Company’s insurance subsidiaries to pay dividends to the Company’s holding company in sufficient amounts would harm the Company’s ability to meet its obligations, pay future shareholder dividends or make future share repurchases;

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

·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 and network security, including as a result of cyber-attacks, outsourcing relationships, or cloud-based technology, the Company’s ability to conduct its business could be negatively impacted;

·the Company is also subject to a number of additional risks associated with its business outside the United States, including foreign currency exchange fluctuations and restrictive regulations, as well as the risks and uncertainties associated with the United Kingdom’s expected withdrawal from the European Union;

·regulatory changes outside of the United States, including in Canada and the European Union, could adversely impact the Company’s results of operations and limit its growth;

·loss of or significant restrictions on the use of particular types of underwriting criteria, such as credit scoring, or other data or methodologies, in the pricing and underwriting of the Company’s products could reduce the Company’s future profitability;

·acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences;

·the Company could be adversely affected if its controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective;

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

·intellectual property is important to the Company’s business, and the Company may be unable to protect and enforce its own intellectual property or the Company may be subject to claims for infringing the intellectual property of others;

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

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

·the Company’s share 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 and related financings), market conditions and other factors.

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FORWARD-LOOKING STATEMENTS, Continued

The Company’s forward-looking statements speak only as of the date of this report or as of the date they are made, and the Company undertakes no obligation to update forward-looking statements.  For a more detailed discussion of these factors, see the information under the captions “Part I—Item 1A—Risk Factors” in the Company’s 2015 Annual Report filed with the Securities and Exchange Commission and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in the Company’s 2015 Annual Report as updated by the Company’s periodic filings with the Securities and Exchange Commission.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

From time to time, the Company 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 the Company’s website at http://investor.travelers.com, its Facebook page at http://www.facebook.com/travelers and its Twitter account (@Travelers) at http://twitter.com/travelers.  In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Notifications” section at http://investor.travelers.com.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For the Company’s disclosures about market risk, please see “Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk” in the Company’s 2015 Annual Report filed with the Securities and Exchange Commission.  There have been no material changes to the Company’s disclosures about market risk in Part II—Item 7A of the Company’s 2015 Annual Report.

Item 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2016.  Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2016, the design and operation of the Company’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

In addition, there was no change in the Company’s internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company regularly seeks to identify, develop and implement improvements to its technology systems and business processes, some of which may affect its internal control over financial reporting. These changes may include such activities as implementing new, more efficient systems, updating existing systems or platforms, or automating manual processes.  These systems changes are often phased in over multiple periods in order to limit the implementation risk in any one period, and as each change is implemented the Company monitors its effectiveness as part of its internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

The information required with respect to this item can be found under “Contingencies” in note 12 of notes to the Company’s unaudited consolidated financial statements contained in this quarterly report and is incorporated by reference into this Item 1.

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Item 1A.  RISK FACTORS

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” in the Company’s 2015 Annual Report filed with the Securities and Exchange Commission.  In addition, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook” and “—Critical Accounting Estimates” herein and in the Company’s 2015 Annual Report.  There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Company’s 2015 Annual Report.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth information regarding repurchases by the Company of its common stock during the periods indicated.

ISSUER PURCHASES OF EQUITY SECURITIES

Period Beginning	Period Ending	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
April 1, 2016	April 30, 2016	680,900	$	109.65	680,900	$	2,709
May 1, 2016	May 31, 2016	2,755,520	$	111.82	2,755,394	$	2,401
June 1, 2016	June 30, 2016	1,474,186	$	113.82	1,469,166	$	2,234
Total		4,910,606	$	112.12	4,905,460	$	2,234

The Company’s board of directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise.  The authorizations do not have a stated expiration date.  The timing and actual number of shares to be repurchased in the future will 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 and related financings), market conditions and other factors.

The Company acquired 5,146 shares for a total cost of approximately $0.6 million during the three months ended June 30, 2016 that were not part of the publicly announced share repurchase authorization.  These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock awards and shares used by employees to cover the exercise price of certain stock options that were exercised.

Item 5.OTHER INFORMATION

Executive Ownership and Sales. All of the Company’s executive officers hold equity in the Company in excess of the required level under the Company’s executive stock ownership policy. For a summary of this policy as currently in effect, see “Compensation Discussion and Analysis — Stock Ownership Guidelines, Anti-Hedging and Pledging Policies, and Other Trading Restrictions” in the Company’s proxy statement filed with the Securities and Exchange Commission on April 1, 2016. From time to time, some of the Company’s executives may determine that it is advisable to diversify their investments for personal financial planning reasons, or may seek liquidity for other reasons, and may sell shares of common stock of the Company in the open market, in private transactions or to the Company. To effect such sales, some of the Company’s executives have entered into, and may in the future enter into, trading plans designed to comply with the Company’s Securities Trading Policy and the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934. The trading plans will not reduce any of the executives’ ownership of the Company’s shares below the applicable executive stock ownership guidelines. The Company does not undertake any obligation to report Rule 10b5-1 plans that may be adopted by any employee or director of the Company in the future, or to report any modifications or termination of any publicly announced plan.

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Item 5.OTHER INFORMATION, Continued

As of the date of this report, Jay S. Benet, Vice Chairman and Chief Financial Officer, was the only “named executive officer” (i.e., an executive officer named in the compensation disclosures in the Company’s most recent proxy statement) that has entered into a Rule 10b5-1 trading plan that remains in effect. Under the Company’s stock ownership guidelines, Mr. Benet has a target ownership level established as the lesser of 30,000 shares or the equivalent value of 300% of base salary (as such amount is calculated for purposes of the stock ownership guidelines). See “Compensation Discussion and Analysis — Stock Ownership Guidelines, Anti-Hedging and Pledging Policies, and Other Trading Restrictions” in the Company’s proxy statement filed with the SEC on April 1, 2016.

Item 6.EXHIBITS

See Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, The Travelers Companies, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE TRAVELERS COMPANIES, INC.
	(Registrant)
Date: July 21, 2016	By	/S/   KENNETH F. SPENCE III
		Kenneth F. Spence III Executive Vice President and General Counsel (Authorized Signatory)
Date: July 21, 2016	By	/S/    DOUGLAS K. RUSSELL
		Douglas K. Russell Senior Vice President and Corporate Controller (Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Articles of Incorporation of The Travelers Companies, Inc. (the Company), as amended and restated May 23, 2013, were filed as Exhibit 3.1 to the Company’s current report on Form 8-K filed on May 24, 2013, and are incorporated herein by reference.
3.2	Amended and Restated Bylaws of the Company, effective as of August 5, 2014, were filed as Exhibit 3.2 to the Company’s current report on Form 8-K filed on August 11, 2014, and are incorporated herein by reference.
10.1	The Travelers Companies, Inc. Amended and Restated 2014 Stock Incentive Plan was filed as Exhibit 10.1 to the Company’s current report on Form 8-K filed on May 19, 2016, and is incorporated herein by reference.
10.2†	Current Director Compensation Program, effective as of May 19, 2016.
10.3†	Separation Agreement, dated June 2, 2016, between The Travelers Indemnity Company and Doreen Spadorcia.
12.1†	Statement regarding the computation of the ratio of earnings to fixed charges.
31.1†	Certification of Alan D. Schnitzer, Chief Executive Officer of the Company, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†	Certification of Jay S. Benet, Vice Chairman and Chief Financial Officer of the Company, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†	Certification of Alan D. Schnitzer, Chief Executive Officer of the Company, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†	Certification of Jay S. Benet, Vice Chairman and Chief Financial Officer of the Company, as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101.1†	The following financial information from The Travelers Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 formatted in XBRL: (i) Consolidated Statement of Income for the three months and six months ended June 30, 2016 and 2015; (ii) Consolidated Statement of Comprehensive Income for the three months and six months ended June 30, 2016 and 2015; (iii) Consolidated Balance Sheet at June 30, 2016 and December 31, 2015; (iv) Consolidated Statement of Changes in Shareholders’ Equity for the six months ended June 30, 2016 and 2015; (v) Consolidated Statement of Cash Flows for the six months ended June 30, 2016 and 2015; and (vi) Notes to Consolidated Financial Statements.

†Filed herewith.

The total amount of securities authorized pursuant to any instrument defining rights of holders of long-term debt of the Company does not exceed 10% of the total assets of the Company and its consolidated subsidiaries.  Therefore, the Company is not filing any instruments evidencing long-term debt.  However, the Company will furnish copies of any such instrument to the Securities and Exchange Commission upon request.

Copies of any of the exhibits referred to above will be furnished to security holders who make written request therefor to The Travelers Companies, Inc., 385 Washington Street, Saint Paul, MN 55102, Attention: Corporate Secretary.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.  In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs at the date they were made or at any other time.

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EX-10.2

Exhibit 10.2

CURRENT DIRECTOR COMPENSATION PROGRAM

As of May 19, 2016

1.Annual Retainer:  $130,000 - Paid in quarterly installments in arrears at the end of each quarter in cash or, if the director so elects, in deferred stock units to be distributed at a later date designated by the director.

2.Annual Deferred Stock Award:  $175,000 (effective with respect to awards granted after December 31, 2016) — Awarded in February to incumbent directors who are nominated for re-election at the next shareholders’ meeting in the form of deferred stock units.  Deferred stock units vest one day prior to the date of the annual shareholder meeting occurring in the year following the year of the date of grant.  Vested deferred stock units are distributed either in a lump sum six months after termination of service as a director or, if the director so elects, in annual installments beginning at least six months following termination of service as a director.

3.Committee Chair Fees:  The annual amount of committee chair fees, which are paid quarterly in arrears, are as follows:  Audit - $25,000, Compensation - $25,000, Nominating and Governance - $20,000, Investment and Capital Markets - $20,000 and Risk - $25,000.

4.Lead Director:   The Lead Director will be paid $35,000 per year (payable in arrears in quarterly installments as of the last business day of each quarter).

EX-10.3

Exhibit 10.3

CONFIDENTIAL SEPARATION AGREEMENT

This Confidential Separation Agreement (“Agreement”) is made and entered into as of the date (the “Effective Date”) last indicated below between The Travelers Indemnity Company (the “Company,” and together with The Travelers Companies, Inc. and its subsidiaries, affiliates, joint ventures, successors and assigns, collectively, the “Company Entities” and singularly “Company Entity”) and Doreen Spadorcia (“Employee”).

The Company wishes to provide for the separation of Employee’s employment relationship with the Company.  The Company and Employee wish to provide for a full and final settlement of any and all actual and potential disputes Employee may have arising out of Employee’s employment with the Company, separation from employment with the Company, or otherwise, without any admission of any kind by either party.

Therefore, in consideration of the mutual promises and agreements set forth in this Agreement, the Company and Employee agree as follows:

I.EMPLOYMENT SEPARATION

A.Separation Date.  Employee’s employment with the Company shall be terminated effective with the close of business on September 1, 2016 (“Separation Date”).  Employee hereby resigns from all officer and director positions with the Company Entities as of the Separation Date and agrees to execute related letters of resignation as requested by the Company.

B.Separation.  Employee shall have no duties and no authority to make any representations or commitments on behalf of any Company Entity as an employee or in any other capacity whatsoever after the Separation Date.  Thereafter, Employee shall have no rights deriving from Employee’s employment by the Company, and shall not be entitled to any further compensation, except as provided in this Agreement.  Consistent with Subsection IV(B) of this Agreement, Employee has twenty-one (21) days from the date this Agreement is presented to consider whether to accept the terms of this Agreement.  If this Agreement is not duly executed by Employee and duly and timely returned to the Company as specified in Subsection IV(B) or if Employee cancels Employee’s acceptance of this Agreement as set forth in Subsection IV(C), the Company’s obligations under this Agreement will be null and void at the outset and Employee will not be eligible to receive any of the payments or benefits described in Section II of this Agreement (the “Consideration”).

C.Possible Reduction in Payments and Adjustment in Separation Date.  If after this Agreement has been provided to Employee (whether or not it has been executed) and prior to the Separation Date, Employee engages in conduct that would violate the any term of Section III, engages in insubordinate conduct, is disruptive in the workplace, engages in conduct that otherwise damages the morale of Employee’s work unit or the office as a whole and/or produces a significantly or consistently inferior work product, in each case, as determined by the Company in its sole discretion, Employee acknowledges that the Company has the right to terminate

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Employee immediately and accelerate Employee’s Separation Date for all purposes hereunder.  If the Company invokes this right, the Company is no longer obligated to provide the Consideration.  Notwithstanding, should the Company elect to provide the Consideration, nothing in this Subsection I(C) shall result in the acceleration of the issuance of the Separation Payment (as defined in Subsection II(A)) or a change to the end of the Restricted Period (as defined in Subsection III(E)) or Non-Competition Restricted Period (as defined in Subsection III(E)), although both such periods shall commence on the accelerated separation date.

II.CONSIDERATION

In exchange for the promises contained in Sections III and IV and subject to the terms and conditions set forth in this Agreement, the Company agrees to provide Employee with the Consideration set forth in this Section II.  If Employee elects not to sign this Agreement or the Second Release referenced in Subsection IV(D) (the “Second Release”) or cancels under the terms of Subsection IV(C) or the Second Release, Employee shall receive only those benefits and payments required by law.

A.Separation Payment.  The Company will issue Employee separation payments in amounts and at the times described under the Company’s contractual obligations to Employee under the Non-Solicitation and Non-Disclosure Agreement (the “NSND Agreement”) between Employee and The Travelers Companies, Inc. dated February 8, 2006 and the Non-Competition Agreement (the “Non-Competition Agreement”) among Employee, the Company and The Travelers Companies, Inc. dated February 2, 2010.

B.Payments Upon Death.  In the event of Employee’s death, any unpaid payments under Subsection II(A) will be paid in a lump sum to Employee’s estate or to such other person as Employee may designate in a written request delivered to the Company before Employee’s death.

C.Offsets.  If Employee is eligible on account of Employee’s termination of employment to receive any amount under any other plan, policy of, or agreement with the Company, the Separation Payment shall be reduced by the amount(s) Employee receives under the other plan, policy or agreement.  In addition, the Separation Payment will be reduced by any amounts outstanding that Employee owes to the Company (including, without limitation, unreimbursed salary advances, loans and used but unaccrued Paid Time Off).

D.Status of Separation Payment if Employee Re-Employed By the Company.  If Employee is re-employed by the Company at a date subsequent to the Separation Date, Employee agrees that, as a condition of re-employment, any remaining payments under Subsection II(A) will discontinue as of the effective date of re-employment, and Employee shall have no further right to such payments.

E.Outplacement Services.  Employee shall receive outplacement services from Lee Hecht Harrison at the Company’s expense pursuant to the terms and conditions established by

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the Company.  In no event shall outplacement services be offered to Employee after the end of the second calendar year following the year of the Separation Date.

F.Satisfaction of Obligations.  The Consideration to be provided under Section II of this Agreement is in full satisfaction of, and not in addition to, the Company’s obligations under the NSND Agreement, the Non-Competition Agreement, Travelers Severance Plan and any other severance or benefit plan under which Employee asserts any Company Entity is obligated to provide separation benefits.

G.Withholding.  The Company will withhold from the payments referenced in Subsections II(A) all appropriate deductions for employee benefits, if applicable, and the amounts necessary for the Company to satisfy its withholding obligations under federal, state and local income and employment tax laws, including those taxes applicable to any equity vesting as a result of Employee’s separation of employment.

III.EMPLOYEE’S COVENANTS TO THE COMPANY

The parties desire to provide for the protection of the business, goodwill, confidential information, relationships and other proprietary rights of the Company Entities.  Accordingly, Employee agrees to the following:

A.Property of the Company.  By the Separation Date, Employee will return to the Company (and will not retain originals or copies of) any and all:  (i) records, files, reports, notes, compilations, or other recorded matter, or copies or reproductions thereof (in any form or medium) relating to the Company’s operations, activities or business, made or received by Employee during employment; and (ii) identification cards, keys, parts, tools, equipment, computer hardware, software, and disks, owned or leased vehicles, credit cards and other tangible or personal property owned by any Company Entity.

B.Future Conduct.  Employee agrees not to engage in any form of conduct, or make any statements or representations, that are untruthful or disparage or otherwise harm or potentially harm the reputation, goodwill or commercial interests of any Company Entity or any current, past or future director, employee or manager of any Company Entity.  This includes, but is not limited to, statements or representations to the press or other media.

In addition, Employee agrees to cooperate fully with the Company, including its attorneys and accountants, in connection with transitioning her responsibilities and any potential, threatened or actual litigation, arbitrations, claims, disputes, proceedings, or internal or government investigations (“Proceedings”), which directly or indirectly involve any Company Entity.  Employee agrees to appear as a witness voluntarily, upon the Company’s request, regardless of whether served with a subpoena, and be available to attend depositions, court proceedings, consultations or meetings regarding any such Proceedings, as requested by the Company.  The Company acknowledges that these efforts, if necessary, will impose on Employee’s time and would likely interfere with other commitments Employee may have in the future.  Consequently, the Company shall attempt to schedule such depositions, court

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proceedings, consultations or meetings in coordination with Employee’s schedule, but Employee recognizes that any such scheduling may be beyond the Company’s control.  Likewise, the Company agrees to compensate Employee for her time hereunder at a rate of one hundred percent (100%) of Employee’s base salary as of the Separation Date pro-rated to an hourly rate, for actual time spent traveling to and from and attending such depositions, consultations or meetings, not to include ancillary time spent at hotels and related locations during evenings between proceedings.  The Company also agrees to reimburse Employee for the out-of-pocket expenditures actually and reasonably incurred by Employee in connection with the performance of the services contemplated by this Subsection III(B), including hotel accommodations, air fare, transportation and meals consistent with the Company’s generally-applicable expense reimbursement policies.  Any compensation paid by the Company to Employee under this Subsection III(B) shall be in exchange for Employee’s time and is not dependent upon the character or content of any information Employee discloses with respect to any such Proceedings.

C.Confidentiality of this Agreement.  Employee and the Company agree that this Agreement and its terms will be regarded and treated as confidential communications between the parties, and that neither the parties nor their counsel or advisors will reveal or disclose either the existence or the terms of this Agreement to any other person or entity, except as required by law, subpoena, court order, or other legal process.  If disclosure is so required of Employee, Employee agrees to notify the Company as soon as notice of such process is received and before disclosure or appearance takes place.  Employee may further disclose the terms of this Agreement to Employee’s spouse, accountant, financial advisor and attorney upon their agreement to maintain this Agreement in strict confidence, as set forth in this Subsection III(C).  Employee may also disclose Section III to prospective or subsequent employers who have a legitimate business interest in knowing of these covenants, following their agreement to maintain such provisions in strict confidence, as set forth in this Subsection III(C).  Further, nothing in this Subsection III(C) limits the Company’s ability to disclose the information internally or externally to those persons with a legitimate business or regulatory reason to have access to the information or if required by law.

D.Non-Disclosure.  Employee acknowledges that Employee has had access to confidential and proprietary business information of the Company Entities, which may have included:  non-public information such as internal information about the Company’s business, such as financial, sales, marketing, claim, technical and business information, including profit and loss statements, business/marketing strategy and trade secrets; client, customer, policyholder, insured person, claimant, vendor, consultant and agent information, including personal information such as social security numbers and medical information; legal advice obtained; product and system information; and any compilation of this information or employee information obtained as part of Employee’s responsibilities at the Company (“Confidential Information”).  Employee agrees not to, either during or any time after her employment, use, publish, make available, or otherwise disclose, except for the Company’s benefit in the course of such employment, any Confidential Information, whether developed by, for, or at the expense of the Company, or assigned or entrusted to the Company or otherwise, unless such information is or becomes generally known outside of the Company through no fault of Employee.  In addition,

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Employee agrees to keep such Confidential Information at all times subject to the Company’s control.  Employee also agrees to cooperate to remedy any unauthorized use or disclosure of such Confidential Information and not to violate any Company policy regarding the same.

Employee further agrees that all Confidential Information, including, without limitation, all records, files, reports, notes, compilations, or other recorded matter, and copies or reproductions thereof, made or received by Employee during Employee’s employment with the Company are, and shall be, the property of the Company exclusively, and Employee will keep the same at all times subject to the Company’s control and will deliver to or leave the same with the Company prior to Employee’s Separation Date.

E.Covenants Not to Solicit/Hire/Interfere.  Employee acknowledges and agrees that, by virtue of opportunities derived from Employee’s access to Confidential Information and employment with the Company, Employee is capable of significantly and adversely impacting the existing relationships of the Company Entities with their clients, customers, policyholders, vendors, consultants, employees and/or agents.  Employee acknowledges that the Company Entities have a legitimate interest in protecting these relationships against solicitation and/or interference by Employee during Employee’s employment and for a reasonable period of time following the Separation Date.  Accordingly, the parties agree that the covenants described in this Subsection III(E)(1) and (2) shall apply during employee’s employment with the Company and for a duration of eighteen (18) months following the Separation Date (together, the “Restricted Period”), and the covenants described in Subsection III(E)(3) shall apply during employee’s employment with the Company and for a duration of twelve (12) months following the Separation Date (the “Non-Competition Restricted Period”).  Employee acknowledges and agrees that the covenants described in this Subsection III(E) and its subparts are expressly intended to protect and preserve the legitimate business interests and goodwill of the Company Entities.  Employee acknowledges that the Consideration provides independent and fair consideration for these covenants.

1.Non-Solicitation/Non-Hire of Employees.  Employee acknowledges that the Company Entities sustain their operations and the goodwill of their clients, customers, policyholders, vendors, consultants, producers, agents and brokers (“Customers”) through their employees.  The Company Entities have made significant investment in their employees and their ability to establish and maintain relationships with each other and with the Company Entities’ Customers in order to further their operations and cultivate goodwill.  Employee acknowledges that the loss of the Company Entities’ employees could adversely affect its operations and jeopardize the goodwill that has been established through these employees, and that the Company Entities therefore have a legitimate interest in preventing the solicitation of their employees.  Accordingly, Employee shall not, without the prior written consent of the Company, at any time during the Restricted Period, directly or indirectly, seek to recruit or solicit, attempt to influence or assist, participate in or promote the solicitation of, or otherwise attempt to adversely affect the employment of any person who was or is employed by any Company Entity on the Separation Date or was employed by any Company Entity within twelve (12) months prior to the Separation Date or thereafter. Without limiting the foregoing restriction, Employee shall not, on behalf of Employee or any other person, hire, employ or engage any such

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person and shall not engage in the aforesaid conduct through a third party for the purpose of colluding to avoid the restrictions in this Subsection III(E)(1).  Without limiting the generality of the restrictions under this Subsection(E)(1), by way of example, the restrictions under this Subsection III(E)(1) shall prohibit Employee from (i) interviewing a Company Entity employee, (ii) communicating in any manner with a Company Entity employee in connection with a current or future employment opportunity outside of the Company Entity, (iii) identifying Company Entity employees to potentially be solicited or hired, (iv) providing information or feedback regarding Company Entity employees seeking employment with Employee’s subsequent employer and/or (v) otherwise assisting or participating in the solicitation or hiring of a Company Entity employee.  Employee further agrees that, during such time, if a person who is employed by any Company Entity contacts Employee about prospective employment, Employee will inform such person that Employee cannot discuss the matter, unless and until consent of the Company has been obtained.  Employee shall not provide any other person the name of, or information regarding, any person employed by any Company Entity who contacts Employee about prospective employment.  For purposes of this Subsection III(E)(1), requests for consent must be delivered via overnight mail (signature required) to John P. Clifford, Jr., Executive Vice President - Human Resources, Travelers, 385 Washington Street, Mail Code 9275-SB02W, Saint Paul, Minnesota 55102-1396 (or his successor), with a copy via overnight mail (signature required) to Kenneth F. Spence, III, Executive Vice President and General Counsel, Travelers, 385 Washington Street, Mail Code 9275-LC12L, Saint Paul, Minnesota 55102-1396 (or his successor).

2.Non-Solicitation of and Non-Interference with Existing Commercial Relationships.  Employee acknowledges that by virtue of her employment with the Company, Employee has developed relationships with and/or had access to Confidential Information about the Company Entities’ Customers and is, therefore, capable of significantly and adversely impacting existing relationships that the Company Entities have with them.  Employee further acknowledges that the Company Entities have invested in their and Employee’s relationship with the Company Entities’ Customers and the goodwill that has been developed with them, and therefore have a legitimate interest in protecting these relationships against solicitation and/or interference by Employee for a reasonable period of time after the Separation Date.  Accordingly, Employee shall not, without the prior written consent of the Company, at any time during the Restricted Period, directly or indirectly, solicit any person or entity, who or that, as of the Separation Date, was or is a Customer of any Company Entity, to discontinue business with any Company Entity and/or move that business elsewhere, or otherwise change an existing customer relationship with any Company Entity.  Employee further agrees that, during such time, if such a Customer contacts Employee about discontinuing business with any Company Entity and/or moving that business elsewhere, or otherwise changing an existing commercial relationship with any Company Entity, Employee will inform such Customer that Employee cannot discuss the matter without notifying the Company.  Prior to any discussion of the matter, Employee is obligated to notify the Company of the name of the person who made the contact, the Customer with whom the person is affiliated, and the nature and date of the contact. After notifying the Company of the contact, Employee must receive written consent from the Company before discussing the matter with such Customer.  For purposes of this Subsection III(E)(2), requests for consent must be delivered via overnight mail (signature required) to Brian

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MacLean, President and Chief Operating Officer, Travelers, One Tower Square, Hartford, Connecticut 06183 (or his successor), with a copy via overnight mail (signature required) to Kenneth F. Spence, III, Executive Vice President and General Counsel, Travelers, 385 Washington Street, Mail Code 9275-LC12L, Saint Paul, Minnesota 55102-1396 (or his successor).

3.Non-Competition.  For the reasons set forth above, Employee acknowledges that the Company Entities have a legitimate interest in protecting their relationships with their Customers and employees against competition by Employee for a reasonable period of time after the Separation Date.  Accordingly, Employee shall not, without the prior written consent of the Company, at any time prior to the Separation Date or during the Non-Competition Restricted Period, directly or indirectly, in any manner or capacity, including without limitation, formally or informally, as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, consultant, advisor or otherwise, (a) perform services for, advise, consult with or have any ownership interest in (i) any entity that, taken together with its affiliates, is primarily engaged in the property and casualty insurance business (the “Business”) or (ii) any business, business unit or division that is primarily engaged in the Business (in each case, a “Restricted Entity”) or (b) engage in the Business.  Notwithstanding the foregoing, the following shall not constitute non-compliance with this Agreement or a breach of this Subsection III(E)(3):  (a) ownership by Employee, as a passive investment, of less than five (5) percent of the outstanding voting shares of any entity, (b) performing services for or having an ownership interest in an entity (other than a Restricted Entity) that is engaged in the business of acting as an agent or broker (including those engaged in the distribution of property and casualty insurance) so long as Employee is not actively engaged in underwriting, claims, investment activities or third party administration, in each case, relating to property and casualty insurance, (c) seeking and/or accepting (and taking any action in furtherance of seeking and/or accepting, including discussions regarding potential investment) any position or relationship with an entity that would otherwise breach Subsection III(E)(3), so long as such position, relationship or investment or any services related thereto does not commence before the end of the Non-Competition Restricted Period and (d) non-compliance with this Subsection III(E)(3) that is isolated, unintentional and immaterial.

F.Breach; Remedies.  Employee expressly acknowledges that the terms of Section III are material to this Agreement, and if Employee breaches any term of Section III or of any equity agreement Employee may have executed with any Company Entity, Employee shall be responsible for all damages and the forfeiture and/or return of all Consideration, without prejudice to any other rights and remedies that the Company may have.

Employee further acknowledges and agrees that any breach by Employee of the provisions of Section III and/or any of its subsections will cause the applicable Company Entities irreparable injury and damage that cannot be reasonably or adequately compensated by monetary damages.  Employee therefore expressly agrees that the Company shall be entitled to injunctive or other equitable relief in a court of competent jurisdiction in order to prevent a breach of Section III or any other part thereof, in addition to such other remedies legally available to the Company.  Employee expressly and explicitly waives any claim and/or defense that the

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Company has an adequate remedy at law and therefore should not be able to obtain injunctive relief or specific performance.

G.Disclaimer.  Nothing in this Agreement, including but not limited to the provisions of Subsections III(A)-(D) related to property of the Company, future conduct, cooperation, confidentiality or non-disclosure, or the general waiver and release provisions of Section IV, below, prevents Employee from filing a charge or complaint with, making disclosures to, communicating with, or participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), the United States Securities and Exchange Commission (“SEC”), or any other federal, state or local agency charged with the enforcement of any laws, or from sharing information concerning Employee’s wages or other terms and conditions of employment for purposes of pursuing Employee’s legal rights or engaging in joint activity with other employees under Section 7 of the National Labor Relations Act or state or local law.

IV.GENERAL WAIVER AND RELEASE BY EMPLOYEE

A.General Waiver and Release.

1.As a material inducement to the Company to enter into this Agreement, and in consideration of the Company’s covenant to provide the Consideration if Employee duly qualifies for its receipt, Employee on behalf of herself and Employee’s assigns, personal or legal representatives, executors, administrators, successors, heirs, devisees and legatees, hereby knowingly and voluntarily waives, releases and forever discharges all Company Entities and all of their past, present and future respective agents, officers, directors, shareholders, employees, attorneys, insurers, fiduciaries, employee benefit plans, and assigns from any past, current or future federal, state or local charges, claims, demands, actions, liabilities, suits, or causes of action at law or equity or otherwise and any and all rights to or claims for continued employment after the Separation Date, attorneys’ fees, damages (including contract, compensatory, punitive or liquidated damages) or equitable relief, that Employee or Employee’s assigns, personal or legal representatives, executors, administrators, successors, heirs, devisees and legatees may ever have had, have now or may ever have, whether known or unknown, actual or potential, certain or contingent, on account of or relating to Employee’s employment with the Company, separation from employment with the Company or otherwise.

2.This release includes, but is not limited to rights and claims arising under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act of 2002, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (except for any claim for benefit or other relief arising under Section 502(a)(1)(B) of ERISA), the Lilly Ledbetter Fair Pay Act of 2009, the Labor Management Relations Act, any federal, state or local human rights statute or ordinance, any claims or rights of action relating to breach of contract, tort, public policy, personal or emotional injury, defamation, protection of “whistleblowers,” additional

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compensation, fringe benefits, debts, obligations, promises or agreements.  Employee specifically waives the benefit of any statute or rule of law which, if applied to this Agreement, would otherwise exclude from its binding effect any claims not now known by Employee to exist.  This release does not purport to waive claims for enforcement of this Agreement, claims for benefits or other relief arising under Section 502(a)(1)(B) of ERISA, claims arising under these laws after the Effective Date, or for claims that cannot be released by private agreement.

This release does not limit any right Employee may have to file a charge or complaint with the EEOC, SEC, or any other federal, state or local agency charged with the enforcement of any laws, or prevent Employee from participating in an investigation or proceeding conducted by any such agency. This Agreement does, however, waive and release any right by Employee to recover monetary damages or other individual relief in connection with any such charge, complaint, or assertion of claims, except where such a waiver of individual relief is prohibited by law.

B.Time Period for Review.  Employee acknowledges that she has reviewed the Consideration described above and provided as part of this Agreement.  Employee acknowledges that she has been granted at least twenty-one (21) days within which to consider and to execute this Agreement.  Employee further acknowledges that if this Agreement is not duly executed by Employee and returned to the Company as specified in this Subsection IV(B) within twenty-two (22) days from the date this Agreement was presented to Employee, this Agreement shall be deemed null and void at the outset, and Employee will not be eligible to receive any such Consideration.  This duly executed Agreement must be post-marked or received by the Company prior to the close of the business day on the twenty-second (22nd) day after it was presented to Employee.  The Agreement must be delivered to the Company personally or via overnight mail (signature required) to the attention of Diane Bengston, Senior Vice President — Human Resources, Travelers, One Tower Square, Hartford, Connecticut 06183.

Employee further acknowledges that by virtue of being presented with this Agreement, Employee is hereby advised in writing to consult with legal counsel prior to executing this Agreement.  Employee understands that if she executes this Agreement prior to the expiration of twenty-one (21) days, or chooses to forego the advice of legal counsel, she does so freely and knowingly, and waives any and all future claims that such action or actions would affect the validity of this Agreement.  Employee acknowledges that any changes made to this Agreement after its first presentation to Employee, whether material or immaterial, do not re-start this twenty-one (21) day period.

C.Cancellation Rights.  Employee understands that she may cancel this Agreement at any time on or before the fifteenth (15th) day following the date on which she signs this Agreement.  To be effective, the decision to cancel must be in writing and delivered to the Company, personally or by overnight mail (signature required), to the attention of Diane Bengston, Senior Vice President — Human Resources, Travelers, One Tower Square, Hartford, Connecticut 06183, on or before the fifteenth (15th) day after Employee signs this Agreement.  No payments shall be made under Subsection II(A) prior to (i) the expiration of Employee’s cancellation rights as described in this Subsection IV(C) and (ii) Employee’s execution of the

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Second Release and the expiration of the corresponding cancellation rights set forth therein.  If Employee exercises the limited right to cancel as set forth in this Subsection IV(C) or in the Second Release or if the release provisions of Section IV or the Second Release are held invalid for any reason whatsoever, Employee agrees that this Agreement is deemed null and void at the outset, Employee is not entitled to any Consideration and Employee must return any Consideration already paid.

D.Second Release.  Employee agrees to execute a Second Release, including a general waiver and release, in substantially the same form as the provisions of Section IV within twenty-two (22) days following her Separation Date and prior to the commencement of any payments under Subsection II(A).  If Employee refuses to execute the Second Release, Employee agrees that Employee is not entitled to any Consideration and Employee must return any Consideration already received.

V.MISCELLANEOUS PROVISIONS

A.Non-Assignment of Claims.  Employee represents and warrants that Employee has not sold, assigned, transferred, conveyed or otherwise disposed of to any third party, by operation of law or otherwise, any action, cause of action, suit, debt, obligation, account, contract, agreement, covenant, guarantee, controversy, judgment, damage, claim, counterclaim, liability or demand of any nature whatsoever relating to any matter covered by this Agreement.

B.Successors.  This Agreement shall be binding upon, enforceable by and inure to the benefit of Employee’s assigns, personal or legal representatives, executors, administrators, successors, heirs, devisees and legatees and the Company and any successor company, but neither this Agreement nor any rights or payments arising hereunder may be assigned, pledged, transferred or hypothecated by Employee.

C.Controlling Law and Venue; Arbitration.

1.The parties select and irrevocably submit to the exclusive jurisdiction of the United States District Court for the District of Minnesota and the state courts for the State of Minnesota located in or near St. Paul, Minnesota for any action to enforce, construe or interpret this Agreement, including any action seeking the issuance of an injunction or the obtaining of any other remedy contemplated by or permitted under this Agreement.  The parties agree that venue for any such actions shall be proper only in Minnesota and expressly and explicitly waive any objection and/or defenses that the venue of any such action is improper in Minnesota on any basis, including without limitation, forum non conveniens or of convenience of the parties.

2.The parties agree that any employment-related claim or dispute that arises after the Effective Date or that is not released under Section IV of this Agreement must be resolved through binding arbitration in accordance with the then-current rules of the American Arbitration Association.  Notwithstanding the foregoing, however, to the extent the claim or dispute arises under ERISA and is not released under Section IV of this Agreement, that portion of the claim or dispute (and only that portion) shall be brought in the United States District Court

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for the District of Minnesota unless both parties agree to submit that portion of the dispute to binding arbitration.  Judgment upon any arbitration award may be entered in any court having jurisdiction thereof, and each party hereby submits itself to the personal jurisdiction of any such court for the purpose of entering such judgment.

3.To the extent not preempted by ERISA or otherwise governed by federal law, all disputes under Subsections V(C)(1) and (2) above shall be governed by the laws of the State of Minnesota, without giving effect to choice of law or conflict of law principles.

4.Nothing in Subsections V(C)(1) through (3) above shall limit the Company’s right to obtain injunctive or equitable relief in a court of competent jurisdiction in aid of arbitration or in connection with Employee’s covenants under Section III or IV of this Agreement.

D.Amendment.  Any amendment to this Agreement shall only be made in writing and signed by the parties.

E.Waiver.  No claim or right arising out of a breach or default under this Agreement can be discharged by a waiver of that claim or right unless the waiver is in writing signed by the party hereto to be bound by such waiver.  A waiver by any party of a breach or default by the other party of any provision of this Agreement shall not be deemed a waiver of future compliance with such provision, and such provision shall remain in full force and effect.

F.IRC Section 409A.  While each party is responsible for determining the tax consequences to that party of the payments provided under this Agreement, this Agreement shall be interpreted in light of the mutual intent of both parties that the payments provided under this Agreement either are not subject to Section 409A of the Internal Revenue Code (“Code Section 409A”) or are structured to be paid in a manner consistent and in compliance with Code Section 409A.

G.Notice.  Except as otherwise provided in this Agreement, all notices, requests, and other communications under the Agreement shall be in writing and sent by overnight mail (signature required), postage prepaid, and properly addressed as follows:

To Employee:	At Employee’s home address listed in the Company’s employee database, as updated by Employee from time to time in writing to the Employee Services Unit
To the Company:	John P. Clifford, Jr. (or his successor)
	Executive Vice President - Human Resources
	Travelers
	385 Washington Street, Mail Code: 9275-SB02L
	St. Paul, Minnesota 55102-1396

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With a copy to:

Kenneth F. Spence, III (or his successor)

Executive Vice President and General Counsel

Travelers

385 Washington Street, Mail Code: 9275-LC12L

Saint Paul, Minnesota 55102-1396

The parties agree to notify each other promptly of any change in mailing address.

H.Outstanding Business Expenses.  Employee will submit for reimbursement any outstanding business expenses within thirty (30) days of the Separation Date.  To the extent any of the expenses are improper or otherwise not approved by Employee’s manager, Employee retains responsibility for the payment of any such disapproved expenses.

I.Headings.  Headings used in this Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement.

J.Entire Agreement.  The Company and Employee each represent and warrant that no promise or inducement has been offered or made except as set forth in this Agreement and that the Consideration stated is the sole consideration for this Agreement.  This Agreement along with the Second Release is a complete agreement and states fully all understandings, promises and commitments as between Employee and the Company relating to the separation of Employee’s employment from the Company and any consideration due to Employee relating to her employment.  This Agreement supersedes any prior agreements, whether oral or written, between Employee and any Company Entity (including, without limitation, the NSND Agreement and the Non-Competition Agreement) except any written agreements relating to equity grants, the arbitration of employment disputes or the protection of any Company Entity’s intellectual property (including, without limitation, the Principles of Employment Agreement).  To the extent that there are any inconsistencies between any prior written agreement and this Agreement, this Agreement governs.  Employee acknowledges that, except as expressly provided in the Agreement or any applicable benefit plan, Employee is not entitled to any other or further compensation or remuneration following the Separation Date.  In the event an inadvertent error was made in the calculation of economic benefits under Section II, the Company reserves the right to make necessary corrections up until the time both parties have signed the Agreement.

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Date	Doreen Spadorcia

12

K.Limited Severability.  If any section of this Agreement is found by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified or restricted to the minimum extent necessary to render the same valid and enforceable, and this Agreement shall be construed and enforced to the maximum extent permitted by law, if any.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year set forth below:

Date:	June 2, 2016	THE TRAVELERS INDEMNITY COMPANY
		By:	/s/ Diane D. Bengston
		Its:	Senior Vice President — Human Resources
Date:	June 2, 2016	/s/ Doreen Spadorcia
		DOREEN SPADORCIA

13

EX-12.1

Exhibit 12.1

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except ratios)	2016		2015		2016		2015
Income before income taxes	$	887	$	1,076	$	1,804	$	2,224
Interest	93		92		184		184
Portion of rentals deemed to be interest	16		16		33		32
Income available for fixed charges	$	996	$	1,184	$	2,021	$	2,440
Fixed charges:
Interest	$	93	$	92	$	184	$	184
Portion of rentals deemed to be interest	16		16		33		32
Total fixed charges	$	109	$	108	$	217	$	216
Ratio of earnings to fixed charges	9.13		10.99		9.33		11.29

The ratio of earnings to fixed charges is computed by dividing income available for fixed charges by the total fixed charges. For purposes of this ratio, fixed charges consist of interest and that portion of rentals deemed representative of the appropriate interest factor.

1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Alan D. Schnitzer, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 of The Travelers Companies, Inc. (the Company);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date:	July 21, 2016	By:	/S/ ALAN D. SCHNITZER
			Alan D. Schnitzer Chief Executive Officer

1

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jay S. Benet, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 of The Travelers Companies, Inc. (the Company);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date:	July 21, 2016	By:	/S/ JAY S. BENET
			Jay S. Benet Vice Chairman and Chief Financial Officer

1

EX-32.1

Exhibit 32.1

THE TRAVELERS COMPANIES, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, the undersigned officer of The Travelers Companies, Inc. (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 21, 2016	By:	/S/ ALAN D. SCHNITZER
			Name: Alan D. Schnitzer Title: Chief Executive Officer

1

EX-32.2

Exhibit 32.2

THE TRAVELERS COMPANIES, INC.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, the undersigned officer of The Travelers Companies, Inc. (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	July 21, 2016	By:	/S/ JAY S. BENET
			Name: Jay S. Benet Title: Vice Chairman and Chief Financial Officer

1

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 18, 2016
Document and Entity Information
Registrant name	Travelers Companies, Inc.
Central index key	0000086312
Document type	10-Q
Document period end date	Jun. 30, 2016
Amendment flag	false
Current fiscal year end date	--12-31
Well-known seasoned issuer	Yes
Voluntary filers	No
Current reporting status	Yes
Filer category	Large Accelerated Filer
Common stock shares outstanding		288,281,317
Document fiscal year focus	2016
Document fiscal period focus	Q2

XML

Consolidated Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues
Premiums		$ 6,067	$ 5,931	$ 12,048	$ 11,819
Net investment income		549	632	1,093	1,224
Fee income		119	115	236	229
Net realized investment gains	[1]	19	10	10	20
Other revenues		31	22	84	47
Total revenues		6,785	6,710	13,471	13,339
Claims and expenses
Claims and claim adjustment expenses		3,762	3,547	7,474	6,978
Amortization of deferred acquisition costs		989	963	1,960	1,926
General and administrative expenses		1,054	1,032	2,049	2,027
Interest expense		93	92	184	184
Total claims and expenses		5,898	5,634	11,667	11,115
Income before income taxes		887	1,076	1,804	2,224
Income tax expense		223	264	449	579
Net income		$ 664	$ 812	$ 1,355	$ 1,645
Net income per share
Basic		$ 2.27	$ 2.56	$ 4.60	$ 5.14
Diluted		$ 2.24	$ 2.53	$ 4.55	$ 5.08
Weighted average number of common shares outstanding
Basic		290.1	314.8	292.1	317.7
Diluted		293.6	318.0	295.6	321.2
Cash dividends declared per share		$ 0.67	$ 0.61	$ 1.28	$ 1.16

[1] Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively. Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains. In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

XML

Consolidated Statement of Income Parentheticals (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statement of Income (Unaudited)
Total other-than-temporary impairment losses	$ (4)	$ (8)	$ (32)	$ (12)
Other-than-temporary impairment, credit losses recognized in net realized investment gains	(4)	(6)	(22)	(9)
Unrealized gains (losses) from other changes in total other-than-temporary impairments recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income	$ 0	$ (2)	$ (10)	$ (3)

XML

Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statement of Comprehensive Income (Unaudited)
Net income	$ 664	$ 812	$ 1,355	$ 1,645
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income	879	(1,065)	1,593	(896)
Changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income	12	(5)	17	(10)
Net changes in benefit plan assets and obligations	18	23	34	47
Net changes in unrealized foreign currency translation	(35)	94	68	(180)
Other comprehensive income (loss) before income taxes	874	(953)	1,712	(1,039)
Income tax expense (benefit)	323	(353)	590	(328)
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Comprehensive income	$ 1,215	$ 212	$ 2,477	$ 934

XML

Consolidated Balance Sheet (Unaudited at June 30, 2016) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Assets
Fixed maturities, available for sale, at fair value (amortized cost $59,975 and $58,878)	$ 63,311	$ 60,658
Equity securities, available for sale, at fair value (cost $525 and $528)	752	705
Real estate investments	929	989
Short-term securities	3,988	4,671
Other investments	3,490	3,447
Total investments	72,470	70,470
Cash	265	380	$ 317	$ 374
Investment income accrued	627	642
Premiums receivable	7,014	6,437
Reinsurance recoverables	8,603	8,910
Ceded unearned premiums	726	656
Deferred acquisition costs	1,954	1,849
Deferred taxes		296
Contractholder receivables	4,541	4,374
Goodwill	3,588	3,573
Other intangible assets	274	279
Other assets	2,384	2,318
Total assets	102,446	100,184
Liabilities
Claims and claim adjustment expense reserves	47,953	48,295
Unearned premium reserves	12,520	11,971
Contractholder payables	4,541	4,374
Payables for reinsurance premiums	401	296
Deferred taxes	370
Debt	6,436	6,344
Other liabilities	5,511	5,306
Total liabilities	77,732	76,586
Shareholders' equity
Common stock (1,750.0 shares authorized; 288.3 and 295.9 shares issued and outstanding)	22,349	22,172
Retained earnings	30,921	29,945
Accumulated other comprehensive income (loss)	965	(157)
Treasury stock, at cost (478.1 and 467.6 shares)	(29,521)	(28,362)
Total shareholders' equity	24,714	23,598	$ 24,121
Total liabilities and shareholders' equity	$ 102,446	$ 100,184

XML

Consolidated Balance Sheet Parentheticals (Unaudited at June 30, 2016) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheet (Unaudited at June 30, 2016)
Fixed maturities, available for sale, amortized cost	$ 59,975	$ 58,878
Equity securities, available for sale, cost	$ 525	$ 528
Common stock, shares authorized	1,750.0	1,750.0
Common stock, shares issued	288.3	295.9
Common stock, shares outstanding	288.3	295.9
Treasury stock, at cost, shares	478.1	467.6

XML

Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common stock [Member]	Retained earnings [Member]	Accumulated other comprehensive income (loss), net of tax [Member]	Treasury stock, at cost [Member]	Common shares outstanding [Member]
Shareholders' equity, beginning of year at Dec. 31, 2014		$ 21,843	$ 27,251	$ 880	$ (25,138)
Shareholders' Equity [Rollforward]
Employee share-based compensation		87
Compensation amortization under share-based plans and other changes		109
Net income	$ 1,645		1,645
Dividends			(372)
Other comprehensive income (loss)	(711)			(711)
Treasury stock acquired - share repurchase authorization					(1,400)
Net shares acquired related to employee share-based compensation plans					(73)
Shareholders' equity, end of period at Jun. 30, 2015	24,121	22,039	28,524	169	(26,611)
Balance, beginning of year at Dec. 31, 2014						322.2
Common shares outstanding
Treasury stock acquired - share repurchase authorization						(13.5)
Net shares issued under employee share-based compensation plans						2.5
Balance, end of period at Jun. 30, 2015						311.2
Shareholders' equity, beginning of year at Dec. 31, 2015	23,598	22,172	29,945	(157)	(28,362)
Shareholders' Equity [Rollforward]
Employee share-based compensation		95
Compensation amortization under share-based plans and other changes		82
Net income	1,355		1,355
Dividends			(378)
Other			(1)
Other comprehensive income (loss)	1,122			1,122
Treasury stock acquired - share repurchase authorization	(1,100)				(1,100)
Net shares acquired related to employee share-based compensation plans	(59)				(59)
Shareholders' equity, end of period at Jun. 30, 2016	$ 24,714	$ 22,349	$ 30,921	$ 965	$ (29,521)
Balance, beginning of year at Dec. 31, 2015	295.9					295.9
Common shares outstanding
Treasury stock acquired - share repurchase authorization	(10.0)					(10.0)
Net shares issued under employee share-based compensation plans						2.4
Balance, end of period at Jun. 30, 2016	288.3					288.3

XML

Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities
Net income		$ 1,355	$ 1,645
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment gains	[1]	(10)	(20)
Depreciation and amortization		413	429
Deferred federal income tax expense		75	142
Amortization of deferred acquisition costs		1,960	1,926
Equity in income from other investments		(44)	(134)
Premiums receivable		(567)	(486)
Reinsurance recoverables		316	263
Deferred acquisition costs		(2,062)	(1,991)
Claims and claim adjustment expense reserves		(387)	(826)
Unearned premium reserves		531	362
Other operating activities		(287)	(435)
Net cash provided by operating activities		1,293	875
Cash flows from investing activities
Proceeds from maturities of fixed maturities		3,773	5,314
Proceeds from sales of investments:
Fixed maturities		739	1,226
Equity securities		38	28
Real estate investments		69	10
Other investments		343	354
Purchases of investments:
Fixed maturities		(5,705)	(6,239)
Equity securities		(26)	(22)
Real estate investments		(20)	(69)
Other investments		(290)	(275)
Net sales of short-term securities		681	433
Securities transactions in course of settlement		461	183
Other investing activities		(154)	(178)
Net cash provided by (used in) investing activities		(91)	765
Cash flows from financing activities
Treasury stock acquired - share repurchase authorization		(1,100)	(1,400)
Treasury stock acquired - net employee share-based compensation		(59)	(72)
Dividends paid to shareholders		(375)	(369)
Payment of debt		(400)
Issuance of debt		491
Issuance of common stock - employee share options		129	117
Excess tax benefits from share-based payment arrangements			31
Net cash used in financing activities		(1,314)	(1,693)
Effect of exchange rate changes on cash		(3)	(4)
Net decrease in cash		(115)	(57)
Cash at beginning of year		380	374
Cash at end of period		265	317
Supplemental disclosure of cash flow information
Income taxes paid		467	597
Interest paid		$ 180	$ 183

[1] Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively. Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains. In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

XML

Basis of Presentation and Accounting Policies

6 Months Ended

Jun. 30, 2016

Basis of Presentation and Accounting Policies disclosure

Basis of Presentation and Accounting Policies disclosure [Text Block]

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Basis of Presentation

The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited.  In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected.  Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted.  All material intercompany transactions and balances have been eliminated.  The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the Company’s 2015 Annual Report).

The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.  Actual results could differ from those estimates.  Certain reclassifications have been made to the 2015 financial statements to conform to the 2016 presentation.

Adoption of Accounting Standards

Compensation — Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued updated guidance to resolve diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period.  The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. As such, the performance target that affects vesting should not be reflected in estimating the fair value of the award at the grant date. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Derivatives and Hedging: Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity

In November 2014, the FASB issued updated guidance to clarify when the separation of certain embedded derivative features in a hybrid financial instrument that is issued in the form of a share is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Consolidation: Amendments to the Consolidation Analysis

In February 2015, the FASB issued updated guidance that makes targeted amendments to the current consolidation accounting guidance. The update is in response to accounting complexity concerns, particularly from the asset management industry. The guidance simplifies consolidation accounting by reducing the number of approaches to consolidation, provides a scope exception to registered money market funds and similar unregistered money market funds and ends the indefinite deferral granted to investment companies from applying the variable interest entity guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Interest — Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs

In April 2015, the FASB issued updated guidance to clarify the required presentation of debt issuance costs.  The amended guidance requires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying amount of the recognized debt liability, consistent with the treatment of debt discounts.  Amortization of debt issuance costs is to be reported as interest expense.  The recognition and measurement guidance for debt issuance costs are not affected by the updated guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The updated guidance is consistent with the Company’s accounting policy and its adoption did not have any effect on the Company’s results of operations, financial position or liquidity.

Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments

In September 2015, the FASB issued updated guidance regarding business combinations that requires an acquirer to recognize post-close measurement adjustments for provisional amounts in the period the adjustment amounts are determined rather than retrospectively.  The acquirer is also required to recognize, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the provisional amount, calculated as if the accounting had been completed at the acquisition date.  The updated guidance is to be applied prospectively effective for reporting periods beginning after December 15, 2015.  In connection with business combinations which have already been completed, the adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued updated guidance to simplify several aspects of accounting for share-based payment transactions as follows:

Accounting for Income Taxes

Under current accounting guidance, if the deduction for a share-based payment award for tax purposes exceeds, or is less than, the compensation cost recognized for financial reporting purposes, the resulting excess tax benefit, or tax deficiency, is reported as part of additional paid-in capital.  Under the updated guidance, these excess tax benefits, or tax deficiencies, are reported as part of income tax expense or benefit in the income statement.  The updated guidance also removes the requirement to delay recognition of any excess tax benefit when there are no current taxes payable to which the benefit would be applied.  The tax-related cash flows resulting from share-based payments are to be included with other income tax cash flows as an operating activity rather than being reported separately as a financing activity.

Forfeitures

The updated guidance permits an entity to make an accounting policy election to either account for forfeitures when they occur or continue to apply the current method of accruing the compensation cost based on the number of awards that are expected to vest.

Minimum Statutory Tax Withholding Requirements

The updated guidance changes the threshold amount an entity can withhold for taxes when settling an equity award and still qualify for equity classification. A company can withhold up to the maximum statutory tax rates in the employees’ applicable jurisdiction rather than withholding up to the employers’ minimum statutory withholding requirement. The update also clarifies that all cash payments made to taxing authorities on behalf of employees for withheld shares are to be presented in financing activities on the statement of cash flows.

Transition

The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted in any interim period; if early adoption is elected, the entity must adopt all of the amendments in the same reporting period and reflect any adjustments as of the beginning of the fiscal year.

The Company adopted the updated guidance effective January 1, 2016.  With respect to the forfeiture accounting policy election, the Company elected to retain its policy of accruing the compensation cost based on the number of awards that are expected to vest. The adoption did not result in any cumulative effect adjustments or restatement and did not have a material effect on the Company’s results of operations, financial position or liquidity.

Accounting Standards Not Yet Adopted

Leases

In February 2016, the FASB issued updated guidance to require lessees to recognize a right-to-use asset and a lease liability for leases with terms of more than 12 months.  The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease).  Both lease classifications require the lessee to record the right-to-use asset and the lease liability based upon the present value of cash flows.  Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-to-use asset.  Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease.   The accounting by lessors is not significantly changed by the updated guidance.  The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the financial statements.

The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied.  Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Investments — Equity Method and Joint Ventures:  Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued updated guidance that eliminates the requirement to retroactively apply the equity method of accounting when an investment that was previously accounted for using another method of accounting becomes qualified to apply the equity method due to an increase in the level of ownership interest or degree of influence.  If the investment was previously accounted for as an available-for-sale security, any related unrealized gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for the equity method is recognized through earnings.  The updated guidance is effective for reporting periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Derivatives and Hedging:  Contingent Put and Call Options in Debt Instruments

In March 2016, the FASB issued updated guidance clarifying that when a call (put) option in a debt instrument can accelerate the repayment of principal on the debt instrument, a reporting entity does not need to assess whether the contingent event that triggers the ability to exercise the call (put) option is related to interest rates or credit risk in determining whether the option should be accounted for separately.  The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position or liquidity.

Financial Instruments — Credit Losses:  Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued updated guidance for the accounting for credit losses for financial instruments.  The updated guidance applies a new credit loss model (current expected credit losses or CECL) for determining credit-related impairments for financial instruments measured at amortized cost (e.g. reinsurance recoverables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, will be recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheet at the amount expected to be collected.

The updated guidance also amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value.  In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists.

The updated guidance is effective for reporting periods beginning after December 15, 2019.  Early adoption is permitted for reporting periods beginning after December 15, 2018.  The Company will not be able to determine the impact that the updated guidance will have on its results of operations, financial position or liquidity until the updated guidance is adopted.

Additional Accounting Standards Not Yet Adopted

For information regarding additional accounting standards that the Company has not yet adopted, see the “Other Accounting Standards Not Yet Adopted” section of note 1 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Nature of Operations

The Company is organized into three reportable business segments: Business and International Insurance; Bond & Specialty Insurance; and Personal Insurance. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of products and services based on type of customer, how the business is marketed and the manner in which risks are underwritten.  For more information regarding the Company’s nature of operations, see the “Nature of Operations” section of note 1 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Information disclosure

Segment Information disclosure [Text Block]

2. SEGMENT INFORMATION

The following tables summarize the components of the Company’s operating revenues, operating income and total assets by reportable business segments:

(for the three months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	3,631	$	518	$	1,918	$	6,067
Net investment income	420		51		78		549
Fee income	115		—		4		119
Other revenues	8		6		14		28
Total operating revenues (1)	$	4,174	$	575	$	2,014	$	6,763
Operating income (1)	$	393	$	202	$	116	$	711
2015
Premiums	$	3,609	$	524	$	1,798	$	5,931
Net investment income	487		57		88		632
Fee income	111		—		4		115
Other revenues	5		5		12		22
Total operating revenues (1)	$	4,212	$	586	$	1,902	$	6,700
Operating income (1)	$	543	$	151	$	174	$	868

(1) Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

(for the six months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty  Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	7,230	$	1,026	$	3,792	$	12,048
Net investment income	835		103		155		1,093
Fee income	229		—		7		236
Other revenues	41		9		28		78
Total operating revenues (1)	$	8,335	$	1,138	$	3,982	$	13,455
Operating income (1)	$	869	$	346	$	255	$	1,470
2015
Premiums	$	7,229	$	1,028	$	3,562	$	11,819
Net investment income	941		113		170		1,224
Fee income	222		—		7		229
Other revenues	13		10		24		47
Total operating revenues (1)	$	8,405	$	1,151	$	3,763	$	13,319
Operating income (1)	$	1,058	$	275	$	426	$	1,759

(1) Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

Business Segment Reconciliations

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Revenue reconciliation
Earned premiums
Business and International Insurance:
Domestic:
Workers’ compensation	$	987		$	957		$	1,968		$	1,919
Commercial automobile	503			477			994			945
Commercial property	442			440			879			880
General liability	485			469			967			937
Commercial multi-peril	786			779			1,568			1,553
Other	9			10			14			20
Total Domestic	3,212			3,132			6,390			6,254
International	419			477			840			975
Total Business and International Insurance	3,631			3,609			7,230			7,229
Bond & Specialty Insurance:
Fidelity and surety	239			240			469			465
General liability	235			240			469			476
Other	44			44			88			87
Total Bond & Specialty Insurance	518			524			1,026			1,028
Personal Insurance:
Automobile	974			863			1,910			1,699
Homeowners and Other	944			935			1,882			1,863
Total Personal Insurance	1,918			1,798			3,792			3,562
Total earned premiums	6,067			5,931			12,048			11,819
Net investment income	549			632			1,093			1,224
Fee income	119			115			236			229
Other revenues	28			22			78			47
Total operating revenues for reportable segments	6,763			6,700			13,455			13,319
Other revenues	3			—			6			—
Net realized investment gains	19			10			10			20
Total consolidated revenues	$	6,785		$	6,710		$	13,471		$	13,339
Income reconciliation, net of tax
Total operating income for reportable segments	$	711		$	868		$	1,470		$	1,759
Interest Expense and Other (1)	(62		)	(62		)	(123		)	(126		)
Total operating income	649			806			1,347			1,633
Net realized investment gains	15			6			8			12
Total consolidated net income	$	664		$	812		$	1,355		$	1,645

(1) The primary component of Interest Expense and Other was after-tax interest expense of $60 million in each of the three months ended June 30, 2016 and 2015, and $120 million in each of the six months ended June 30, 2016 and 2015.

(in millions)	June 30, 2016		December 31, 2015
Asset reconciliation:
Business and International Insurance	$	81,214	$	79,692
Bond & Specialty Insurance	7,745		7,360
Personal Insurance	13,109		12,748
Total assets for reportable segments	102,068		99,800
Other assets (1)	378		384
Total consolidated assets	$	102,446	$	100,184

(1) The primary component of other assets at June 30, 2016 was other intangible assets and the primary components at December 31, 2015 were other intangible assets and deferred taxes.

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Investments

6 Months Ended

Jun. 30, 2016

Investments disclosure

Investments disclsoure [Text Block]

3. INVESTMENTS

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:

	Amortized		Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,038	$	36	$	1	$	2,073
Obligations of states, municipalities and political subdivisions:
Local general obligation	13,816		954		1		14,769
Revenue	10,270		787		—		11,057
State general obligation	1,958		124		—		2,082
Pre-refunded	5,490		234		—		5,724
Total obligations of states, municipalities and political subdivisions	31,534		2,099		1		33,632
Debt securities issued by foreign governments	1,745		56		—		1,801
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,702		132		1		1,833
All other corporate bonds	22,858		1,062		52		23,868
Redeemable preferred stock	98		6		—		104
Total	$	59,975	$	3,391	$	55	$	63,311

	Amortized		Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,202	$	8	$	16	$	2,194
Obligations of states, municipalities and political subdivisions:
Local general obligation	12,744		577		3		13,318
Revenue	9,492		472		4		9,960
State general obligation	1,978		97		2		2,073
Pre-refunded	5,813		247		—		6,060
Total obligations of states, municipalities and political subdivisions	30,027		1,393		9		31,411
Debt securities issued by foreign governments	1,829		45		1		1,873
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,863		124		6		1,981
All other corporate bonds	22,854		523		288		23,089
Redeemable preferred stock	103		7		—		110
Total	$	58,878	$	2,100	$	320	$	60,658

Pre-refunded bonds of $5.72 billion and $6.06 billion at June 30, 2016 and December 31, 2015, respectively, were bonds for which states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities, which were created to satisfy their responsibility for payments of principal and interest.

Proceeds from sales of fixed maturities classified as available for sale were $739 million and $1.23 billion during the six months ended June 30, 2016 and 2015, respectively. Gross gains of $46 million and $40 million and gross losses of $8 million and $3 million were realized on those sales during the six months ended June 30, 2016 and 2015, respectively.

Equity Securities

The cost and fair value of investments in equity securities were as follows:

			Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	214	$	3	$	597
Non-redeemable preferred stock	139		23		7		155
Total	$	525	$	237	$	10	$	752

			Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	164	$	7	$	543
Non-redeemable preferred stock	142		26		6		162
Total	$	528	$	190	$	13	$	705

Proceeds from sales of equity securities classified as available for sale were $38 million and $28 million during the six months ended June 30, 2016 and 2015, respectively.  Gross gains of $8 million and $5 million and gross losses of $2 million and $3 million were realized on those sales during the six months ended June 30, 2016 and 2015, respectively.

Unrealized Investment Losses

The following tables summarize, for all investments in an unrealized loss position at June 30, 2016 and December 31, 2015, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position.  The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

	Less than 12 months				12 months or longer				Total
(at June 30, 2016, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	37	$	—	$	10	$	1	$	47	$	1
Obligations of states, municipalities and political subdivisions	639		1		14		—		653		1
Debt securities issued by foreign governments	3		—		—		—		3		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	42		—		37		1		79		1
All other corporate bonds	779		12		720		40		1,499		52
Redeemable preferred stock	7		—		—		—		7		—
Total fixed maturities	1,507		13		781		42		2,288		55
Equity securities
Public common stock	24		2		34		1		58		3
Non-redeemable preferred stock	30		1		58		6		88		7
Total equity securities	54		3		92		7		146		10
Total	$	1,561	$	16	$	873	$	49	$	2,434	$	65

	Less than 12 months				12 months or longer				Total
(at December 31, 2015, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	1,820	$	15	$	28	$	1	$	1,848	$	16
Obligations of states, municipalities and political subdivisions	928		7		142		2		1,070		9
Debt securities issued by foreign governments	172		1		—		—		172		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	473		4		57		2		530		6
All other corporate bonds	7,725		197		710		91		8,435		288
Redeemable preferred stock	8		—		—		—		8		—
Total fixed maturities	11,126		224		937		96		12,063		320
Equity securities
Public common stock	48		6		33		1		81		7
Non-redeemable preferred stock	47		3		38		3		85		6
Total equity securities	95		9		71		4		166		13
Total	$	11,221	$	233	$	1,008	$	100	$	12,229	$	333

Unrealized losses for all fixed maturities and equity securities reported at fair value for which fair value is less than 80% of amortized cost at June 30, 2016 totaled $11 million, representing less than 1% of the combined fixed maturity and equity security portfolios on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis.

Impairment Charges

Impairment charges included in net realized investment gains in the consolidated statement of income were $4 million and $6 million for the three months ended June 30, 2016 and 2015, respectively, and $22 million and $9 million for the six months ended June 30, 2016 and 2015, respectively.

For fixed maturities held at June 30, 2016 and 2015, the cumulative amount of credit losses recognized in the consolidated statement of income from other-than-temporary impairments (OTTI) was $88 million at both dates, on investments for which a portion of the OTTI was recognized in other comprehensive income (loss).  These credit losses represent less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis at both dates.  There were no significant changes in the credit component of OTTI during the six months ended June 30, 2016 and 2015 from that disclosed in note 3 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Derivative Financial Instruments

From time to time, the Company enters into U.S. Treasury note futures contracts to modify the effective duration of specific assets within the investment portfolio.  U.S. Treasury futures contracts require a daily mark-to-market and settlement with the broker.  At both June 30, 2016 and December 31, 2015, the Company had $400 million notional value of open U.S. Treasury futures contracts.  Net realized investment gains and losses related to U.S. Treasury futures contracts in the three months and six months ended June 30, 2016 and 2015 were not significant.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Measurements disclosure

Fair Value Measurements disclosure [Text Block]

4. FAIR VALUE MEASUREMENTS

The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance.  The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available.  The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable.  In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions.  The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.  The three levels of the hierarchy are as follows:

· Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.

· Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.

· Level 3 - Valuations based on models where significant inputs are not observable.  The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use.

Valuation of Investments Reported at Fair Value in Financial Statements

The Company utilized a pricing service to estimate fair value measurements for approximately 98% of its fixed maturities at both June 30, 2016 and December 31, 2015.

While the vast majority of the Company’s fixed maturities are included in Level 2, the Company holds a number of municipal bonds and corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using an internal pricing matrix with some unobservable inputs that are significant to the valuation.  Due to the limited amount of observable market information, the Company includes the fair value estimates for these particular bonds in Level 3.  The fair value of the fixed maturities for which the Company used an internal pricing matrix was $96 million and $101 million at June 30, 2016 and December 31, 2015, respectively.  Additionally, the Company holds a small amount of other fixed maturity investments that have characteristics that make them unsuitable for matrix pricing.  For these fixed maturities, the Company obtains a quote from a broker (primarily the market maker).  The fair value of the fixed maturities for which the Company received a broker quote was $87 million and $117 million at June 30, 2016 and December 31, 2015, respectively.  Due to the disclaimers on the quotes that indicate that the price is indicative only, the Company includes these fair value estimates in Level 3.

For more information regarding the valuation of the Company’s fixed maturities, equity securities and other investments, see note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

Fair Value Hierarchy

The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis at June 30, 2016 and December 31, 2015.  An investment transferred between levels during a period is transferred at its fair value as of the beginning of that period.

(at June 30, 2016, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,073	$	2,073	$	—	$	—
Obligations of states, municipalities and political subdivisions	33,632		11		33,608		13
Debt securities issued by foreign governments	1,801		—		1,801		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,833		—		1,833		—
All other corporate bonds	23,868		3		23,702		163
Redeemable preferred stock	104		3		94		7
Total fixed maturities	63,311		2,090		61,038		183
Equity securities
Public common stock	597		597		—		—
Non-redeemable preferred stock	155		66		89		—
Total equity securities	752		663		89		—
Other investments	61		17		—		44
Total	$	64,124	$	2,770	$	61,127	$	227

(at December 31, 2015, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,194	$	2,194	$	—	$	—
Obligations of states, municipalities and political subdivisions	31,411		—		31,398		13
Debt securities issued by foreign governments	1,873		—		1,873		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,981		—		1,957		24
All other corporate bonds	23,089		—		22,915		174
Redeemable preferred stock	110		3		100		7
Total fixed maturities	60,658		2,197		58,243		218
Equity securities
Public common stock	543		543		—		—
Non-redeemable preferred stock	162		55		107		—
Total equity securities	705		598		107		—
Other investments	56		18		—		38
Total	$	61,419	$	2,813	$	58,350	$	256

During the six months ended June 30, 2016 and the year ended December 31, 2015, the Company’s transfers between Level 1 and Level 2 were not significant.

There was no significant activity in Level 3 of the hierarchy during the six months ended June 30, 2016 or the year ended December 31, 2015.

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following tables present the carrying value and fair value of the Company’s financial assets and financial liabilities disclosed, but not carried, at fair value, and the level within the fair value hierarchy at which such assets and liabilities are categorized.

(at June 30, 2016, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	3,988	$	3,988	$	792	$	3,151	$	45
Financial liabilities:
Debt	$	6,336	$	7,743	$	—	$	7,743	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

(at December 31, 2015, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	4,671	$	4,671	$	1,685	$	2,958	$	28
Financial liabilities:
Debt	$	6,244	$	7,180	$	—	$	7,180	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

The Company utilized a pricing service to estimate fair value for approximately 99% of short-term securities at both June 30, 2016 and December 31, 2015.  For a description of the process and inputs used by the pricing service to estimate fair value, see the “Fixed Maturities” section in note 4 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

The Company utilized a pricing service to estimate fair value for 100% of its debt, including commercial paper, at June 30, 2016 and December 31, 2015.

The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the six months ended June 30, 2016 or twelve months ended December 31, 2015.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Other Intangible Assets disclosure

Goodwill and Other Intangible Assets disclosure [Text Block]

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table presents the carrying amount of the Company’s goodwill by segment at June 30, 2016 and December 31, 2015:

(in millions)	June 30, 2016		December 31,  2015
Business and International Insurance (1)	$	2,454	$	2,439
Bond & Specialty Insurance	496		496
Personal Insurance	612		612
Other	26		26
Total	$	3,588	$	3,573

(1) Includes goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.

Other Intangible Assets

The following tables present a summary of the Company’s other intangible assets by major asset class at June 30, 2016 and December 31, 2015:

(at June 30, 2016, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	153	$	57
Not subject to amortization	217		—		217
Total	$	427	$	153	$	274

(at December 31, 2015, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	148	$	62
Not subject to amortization	217		—		217
Total	$	427	$	148	$	279

(1) Intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract and customer-related intangibles.  The time value of money and the risk adjustment (cost of capital) components of the intangible asset run off at different rates, and, as such, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.

Amortization expense of intangible assets was $2 million and $9 million for the three months ended June 30, 2016 and 2015, respectively, and $5 million and $20 million for the six months ended June 30, 2016 and 2015, respectively.  Intangible asset amortization expense is estimated to be $5 million for the remainder of 2016, $9 million in 2017, $8 million in 2018, $7 million in 2019 and $5 million in 2020.

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Other Comprehensive Income and Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2016

Other Comprehensive Income and Accumulated Other Comprehensive Income disclosure

Other Comprehensive Income and Accumulated Other Comprehensive Income disclosure [Text Block]

6. OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the changes in the Company’s accumulated other comprehensive income (AOCI) for the six months ended June 30, 2016.

(in millions)	Changes in Net  Unrealized Gains on Investment  Securities Having No Credit Losses  Recognized in the  Consolidated  Statement of Income			Changes in Net  Unrealized Gains on Investment  Securities Having  Credit Losses  Recognized in the  Consolidated  Statement of Income		Net Benefit Plan  Assets and  Obligations  Recognized in  Shareholders’ Equity			Net Unrealized  Foreign Currency  Translation			Total Accumulated Other  Comprehensive  Income (Loss)
Balance, December 31, 2015	$	1,100		$	189	$	(713	)	$	(733	)	$	(157	)
Other comprehensive income (OCI) before reclassifications	1,064			3		3			47			1,117
Amounts reclassified from AOCI	(23		)	8		20			—			5
Net OCI, current period	1,041			11		23			47			1,122
Balance, June 30, 2016	$	2,141		$	200	$	(690	)	$	(686	)	$	965

The following table presents the pretax components of the Company’s other comprehensive income (loss) and the related income tax expense (benefit) for the three months and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,						Six Months Ended June 30,
( in millions)	2016			2015			2016		2015
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	$	879		$	(1,065	)	$	1,593	$	(896	)
Income tax expense (benefit)	305			(368		)	552		(312		)
Net of taxes	574			(697		)	1,041		(584		)
Having credit losses recognized in the consolidated statement of income	12			(5		)	17		(10		)
Income tax expense (benefit)	4			(2		)	6		(4		)
Net of taxes	8			(3		)	11		(6		)
Net changes in benefit plan assets and obligations	18			23			34		47
Income tax expense	6			8			11		16
Net of taxes	12			15			23		31
Net changes in unrealized foreign currency translation	(35		)	94			68		(180		)
Income tax expense (benefit)	8			9			21		(28		)
Net of taxes	(43		)	85			47		(152		)
Total other comprehensive income (loss)	874			(953		)	1,712		(1,039		)
Total income tax expense (benefit)	323			(353		)	590		(328		)
Total other comprehensive income (loss), net of taxes	$	551		$	(600	)	$	1,122	$	(711	)

The following table presents the pre-tax and related income tax (expense) benefit components of the amounts reclassified from the Company’s AOCI to the Company’s consolidated statement of income for the three months and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Reclassification adjustments related to unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income (1)	$	(24	)	$	(17	)	$	(35	)	$	(35	)
Income tax expense (2)	(8		)	(6		)	(12		)	(12		)
Net of taxes	(16		)	(11		)	(23		)	(23		)
Having credit losses recognized in the consolidated statement of income (1)	1			2			12			2
Income tax benefit (2)	—			—			4			—
Net of taxes	1			2			8			2
Reclassification adjustment related to benefit plan assets and obligations (3)	15			24			31			47
Income tax benefit (2)	6			9			11			17
Net of taxes	9			15			20			30
Reclassification adjustment related to foreign currency translation (1)	—			—			—			—
Income tax benefit (2)	—			—			—			—
Net of taxes	—			—			—			—
Total reclassifications	(8		)	9			8			14
Total income tax (expense) benefit	(2		)	3			3			5
Total reclassifications, net of taxes	$	(6	)	$	6		$	5		$	9

(1) (Increases) decreases net realized investment gains on the consolidated statement of income.

(2) (Increases) decreases income tax expense on the consolidated statement of income.

(3) Increases (decreases) general and administrative expenses on the consolidated statement of income.

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Debt

6 Months Ended

Jun. 30, 2016

Debt disclosure

Debt disclosure [Text Block]

7. DEBT

Debt Issuance.  On May 11, 2016, the Company issued $500 million aggregate principal amount of 3.75% senior notes that will mature on May 15, 2046.  The net proceeds of the issuance, after the deduction of underwriting and other expenses, totaled approximately $491 million.  Interest on the senior notes is payable semi-annually in arrears on May 15 and November 15, commencing on November 15, 2016.  Prior to November 15, 2045, the senior notes may be redeemed, in whole or in part, at the Company’s option, at any time or from time to time, at a redemption price equal to the greater of (a) 100% of the principal amount of any senior notes to be redeemed or (b) the sum of the present values of the remaining scheduled payments of principal and interest on any senior notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury rate (as defined in the senior notes), plus 20 basis points.  On or after November 15, 2045, the senior notes may be redeemed, in whole or in part, at the Company’s option, at any time or from time to time, at a redemption price equal to 100% of the principal amount of any senior notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Debt Payment.  On June 20, 2016, the Company’s $400 million, 6.25% senior notes matured and were fully paid.

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Common Share Repurchases

6 Months Ended

Jun. 30, 2016

Common Share Repurchases disclosure

Common Share Repurchases disclosure [Text Block]

8. COMMON SHARE REPURCHASES

During the three months and six months ended June 30, 2016, the Company repurchased 4.9 million and 10.0 million shares, respectively, under its share repurchase authorization, for a total cost of $550 million and $1.10 billion, respectively.  The average cost per share repurchased was $112.12 and $110.26, respectively.  At June 30, 2016, the Company had $2.23 billion of capacity remaining under its share repurchase authorization.  In addition, the Company acquired 5,146 and 0.5 million shares for a total cost of $0.6 million and $59 million during the three months and six months ended June 30, 2016, respectively, that were not part of the publicly announced share repurchase authorization.  These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards and shares used by employees to cover the exercise price of certain stock options that were exercised.

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Earnings per Share

6 Months Ended

Jun. 30, 2016

Earnings per Share disclosure

Earnings per Share disclosure [Text Block]

9. EARNINGS PER SHARE

The following is a reconciliation of the net income and share data used in the basic and diluted earnings per share computations for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share amounts)	2016			2015			2016			2015
Basic and Diluted
Net income, as reported	$	664		$	812		$	1,355		$	1,645
Participating share-based awards — allocated income	(5		)	(6		)	(10		)	(12		)
Net income available to common shareholders — basic and diluted	$	659		$	806		$	1,345		$	1,633
Common Shares
Basic
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Diluted
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Weighted average effects of dilutive securities — stock options and performance shares	3.5			3.2			3.5			3.5
Total	293.6			318.0			295.6			321.2
Net Income per Common Share
Basic	$	2.27		$	2.56		$	4.60		$	5.14
Diluted	$	2.24		$	2.53		$	4.55		$	5.08

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Share-Based Incentive Compensation

6 Months Ended

Jun. 30, 2016

Share-Based Incentive Compensation disclosure

Share-Based Incentive Compensation disclosure [Text Block]

10. SHARE-BASED INCENTIVE COMPENSATION

The following information relates to fully vested stock option awards at June 30, 2016:

Stock Options	Number	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining	Aggregate Intrinsic Value ($ in millions)
Vested at end of period (1)	8,006,375	$	78.85	6.5 years	$	322
Exercisable at end of period	4,406,788	$	62.60	4.8 years	$	249

(1) Represents awards for which the requisite service has been rendered, including those that are retirement eligible.

The total compensation cost for all share-based incentive compensation awards recognized in earnings was $32 million and $31 million for the three months ended June 30, 2016 and 2015, respectively, and $82 million and $78 million for the six months ended June 30, 2016 and 2015, respectively.  The related tax benefits recognized in the consolidated statement of income were $11 million and $10 million for the three months ended June 30, 2016 and 2015, respectively, and $28 million and $26 million for the six months ended June 30, 2016 and 2015, respectively.

The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at June 30, 2016 was $184 million, which is expected to be recognized over a weighted-average period of 2.0 years.

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Pension Plans, Retirement Benefits and Savings Plans

6 Months Ended

Jun. 30, 2016

Pension Plans, Retirement Benefits and Savings Plans disclosure

Pension Plans, Retirement Benefits and Savings Plans disclosure [Text Block]

11. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS

The following tables summarize the components of net periodic benefit cost for the Company’s pension and postretirement benefit plans recognized in the consolidated statement of income.

	Pension Plans						Postretirement Benefit Plans
(for the three months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	30		$	32		$	—		$	—
Interest cost on benefit obligation	31			36			2			2
Expected return on plan assets	(58		)	(57		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(1		)	—
Net actuarial loss	16			24			—			—
Net periodic benefit cost	$	20		$	35		$	1		$	2
	Pension Plans						Postretirement Benefit Plans
(for the six months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	59		$	65		$	—		$	—
Interest cost on benefit obligation	61			72			4			5
Expected return on plan assets	(115		)	(115		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(2		)	(1		)
Net actuarial loss	33			48			—			—
Net periodic benefit cost	$	39		$	70		$	2		$	4

In first quarter 2016, the Company began to use a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit costs for its qualified and nonqualified domestic pension plans and its domestic postretirement benefit plans. The full yield curve approach applies the specific spot rates along the yield curve that the Company used to determine its projected benefit obligation at the beginning of the year to the projected cash flows related to service and interest costs.  Previously, the Company estimated these service and interest cost components by applying a single weighted-average discount rate derived from this yield curve.  This change was made to provide a better estimate of the service and interest cost components of net periodic benefit costs, consistent with the methodology used to estimate the projected benefit obligation for each of the benefit plans.

This change did not affect the measurement of the Company’s total benefit obligations, as the change in service cost and interest cost is completely offset in the actuarial (gain) loss reported for the period.  The change reduced the service and interest cost components of net periodic benefit costs by $2 million and $7 million, respectively, for the three months ended June 30, 2016, and by $3 million and $15 million, respectively, for the six months ended June 30, 2016.  The weighted average discount rates that are being used to measure service and interest costs during 2016 are 4.77% and 3.64%, respectively, for the domestic qualified pension plan, 4.53% and 3.47%, respectively, for the domestic nonqualified pension plan and 0.00% and 3.53%, respectively, for the domestic postretirement benefit plan. The discount rate associated with the service cost component of the domestic postretirement benefit plan is zero as it is a closed plan and all participants are fully vested.  Under the Company’s prior estimation approach, the weighted average discount rate for both the service and interest cost components would have been 4.50% for the domestic qualified pension plan, 4.37% for the domestic nonqualified pension plan and 4.35% for the domestic postretirement benefit plan.  The Company accounted for this change as a change in estimate, and accordingly, is recognizing the effect prospectively beginning in 2016.

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Contingencies, Commitments and Guarantees

6 Months Ended

Jun. 30, 2016

Contingencies, Commitments and Guarantees disclosure

Contingencies, Commitments and Guarantees disclosure [Text Block]

12. CONTINGENCIES, COMMITMENTS AND GUARANTEES

Contingencies

The major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or to which any of the Company’s properties is subject are described below.

Asbestos and Environmental Claims and Litigation

In the ordinary course of its insurance business, the Company has received and continues to receive claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos- and environmental-related exposures that are the subject of related coverage litigation.  The Company is defending asbestos- and environmental-related litigation vigorously and believes that it has meritorious defenses; however, the outcomes of these disputes are uncertain.  In this regard, the Company employs dedicated specialists and aggressive resolution strategies to manage asbestos and environmental loss exposure, including settling litigation under appropriate circumstances.  Currently, it is not possible to predict legal outcomes and their impact on the future development of claims and litigation relating to asbestos and environmental claims. Any such development will be affected by future court decisions and interpretations, as well as changes in applicable legislation. Because of these uncertainties, additional liabilities may arise for amounts in excess of the Company’s current reserves. In addition, the Company’s estimate of ultimate claims and claim adjustment expenses may change. These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company’s results of operations in future periods.

Other Proceedings Not Arising Under Insurance Contracts or Reinsurance Agreements

The Company is involved in other lawsuits, including lawsuits alleging extra-contractual damages relating to insurance contracts or reinsurance agreements, that do not arise under insurance contracts or reinsurance agreements.  The legal costs associated with such lawsuits are expensed in the period in which the costs are incurred.  Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Company’s results of operations or would have a material adverse effect on the Company’s financial position or liquidity.

Gain Contingency

On August 17, 2010, in a reinsurance dispute in New York state court captioned United States Fidelity & Guaranty Company v. American Re-Insurance Company, et al., the trial court granted summary judgment for United States Fidelity and Guaranty Company (USF&G), a subsidiary of the Company, and denied summary judgment for American Re-Insurance Company, a subsidiary of Munich Re, and three other reinsurers — two of which are subsidiaries of the same company, while the other has since settled with the Company.  That summary judgment was largely affirmed on appeal, but the Court of Appeals remanded the case for trial on two discrete issues.  On June 3, 2015, the trial court entered orders on pretrial motions filed by all parties and ruled in the Company’s favor that the issues for trial will be limited to the two discrete issues remanded by the Court of Appeals.  The reinsurers’ appeals of the trial court’s orders were unsuccessful.  On March 24, 2016, the reinsurers filed a motion to change the venue, which the Company has opposed.  On April 26, 2016, the trial court denied the reinsurers’ motion to change venue, and on June 10, 2016, the reinsurers appealed that decision to the Appellate Division, First Department.  The previously scheduled trial date was postponed by the trial court, and there is presently no scheduled date for trial.  At June 30, 2016, the claim totaled $519 million, comprising $238 million of reinsurance recoverable plus interest amounting to $281 million as of that date.  Interest will continue to accrue at an annual rate of 9% until the claim is paid, though the reinsurers contested that interest is owed in a brief filed on May 25, 2016.  The $238 million of reinsurance recoverable owed to the Company under the terms of the disputed reinsurance contract has been reported as part of reinsurance recoverables in the Company’s consolidated balance sheet.  The interest that would be owed as part of any judgment ultimately entered in favor of the Company is treated for accounting purposes as a gain contingency in accordance with FASB Topic 450, Contingencies, and accordingly has not been recognized in the Company’s consolidated financial statements.

Other Commitments and Guarantees

Commitments

Investment Commitments — The Company has unfunded commitments to private equity limited partnerships and real estate partnerships in which it invests.  These commitments totaled $1.69 billion and $1.71 billion at June 30, 2016 and December 31, 2015, respectively.

Guarantees

The maximum amount of the Company’s contingent obligation for indemnifications related to the sale of businesses that are quantifiable was $391 million at June 30, 2016, of which $2 million was recognized on the balance sheet at that date.

The maximum amount of the Company’s obligation for guarantees of certain investments and third-party loans related to certain investments that are quantifiable was $150 million at June 30, 2016, approximately $75 million of which is indemnified by a third party.  The maximum amount of the Company’s obligation related to the guarantee of certain insurance policy obligations of a former insurance subsidiary was $480 million at June 30, 2016, all of which is indemnified by a third party.  For more information regarding Company guarantees, see note 16 of notes to the consolidated financial statements in the Company’s 2015 Annual Report.

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Consolidating Financial Statements (Unaudited)

6 Months Ended

Jun. 30, 2016

Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries (Unaudited) disclosure

Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries (Unaudited) disclosure [Text Block]

13. CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

The following consolidating financial statements of the Company have been prepared pursuant to Rule 3-10 of Regulation S-X. These consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies, Inc. (excluding its subsidiaries, TRV) has fully and unconditionally guaranteed certain debt obligations of Travelers Property Casualty Corp. (TPC), which totaled $700 million at June 30, 2016.

Prior to the merger of TPC and The St. Paul Companies, Inc. in 2004, TPC fully and unconditionally guaranteed the payment of all principal, premiums, if any, and interest on certain debt obligations of its wholly-owned subsidiary, Travelers Insurance Group Holdings, Inc. (TIGHI). Concurrent with the merger, TRV fully and unconditionally assumed such guarantee obligations of TPC. TPC is deemed to have no assets or operations independent of TIGHI. Consolidating financial information for TIGHI has not been presented herein because such financial information would be substantially the same as the financial information provided for TPC.

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,161		$	1,906	$	—		$	—		$	6,067
Net investment income	377			168		4			—			549
Fee income	119			—		—			—			119
Net realized investment gains (losses) (1)	(1		)	20		—			—			19
Other revenues	33			1		—			(3		)	31
Total revenues	4,689			2,095		4			(3		)	6,785
Claims and expenses
Claims and claim adjustment expenses	2,575			1,187		—			—			3,762
Amortization of deferred acquisition costs	666			323		—			—			989
General and administrative expenses	743			313		1			(3		)	1,054
Interest expense	12			—		81			—			93
Total claims and expenses	3,996			1,823		82			(3		)	5,898
Income (loss) before income taxes	693			272		(78		)	—			887
Income tax expense (benefit)	191			69		(37		)	—			223
Net income of subsidiaries	—			—		705			(705		)	—
Net income	$	502		$	203	$	664		$	(705	)	$	664

(1) Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI losses recognized in net realized investment gains (losses)	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI gains (losses) recognized in OCI	$	—		$	—		$	—	$	—	$	—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,044	$	1,887		$	—		$	—		$	5,931
Net investment income	424		206			2			—			632
Fee income	115		—			—			—			115
Net realized investment gains (losses) (1)	17		(7		)	—			—			10
Other revenues	19		3			—			—			22
Total revenues	4,619		2,089			2			—			6,710
Claims and expenses
Claims and claim adjustment expenses	2,409		1,138			—			—			3,547
Amortization of deferred acquisition costs	651		312			—			—			963
General and administrative expenses	721		308			3			—			1,032
Interest expense	12		—			80			—			92
Total claims and expenses	3,793		1,758			83			—			5,634
Income (loss) before income taxes	826		331			(81		)	—			1,076
Income tax expense (benefit)	198		86			(20		)	—			264
Net income of subsidiaries	—		—			873			(873		)	—
Net income	$	628	$	245		$	812		$	(873	)	$	812

(1) Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(7	)	$	(1	)	$	—	$	—	$	(8	)
OTTI losses recognized in net realized investment gains (losses)	$	(5	)	$	(1	)	$	—	$	—	$	(6	)
OTTI losses recognized in OCI	$	(2	)	$	—		$	—	$	—	$	(2	)

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,246		$	3,802	$	—		$	—		$	12,048
Net investment income	753			334		6			—			1,093
Fee income	236			—		—			—			236
Net realized investment gains (losses) (1)	(17		)	27		—			—			10
Other revenues	81			17		—			(14		)	84
Total revenues	9,299			4,180		6			(14		)	13,471
Claims and expenses
Claims and claim adjustment expenses	5,095			2,379		—			—			7,474
Amortization of deferred acquisition costs	1,316			644		—			—			1,960
General and administrative expenses	1,447			611		5			(14		)	2,049
Interest expense	24			—		160			—			184
Total claims and expenses	7,882			3,634		165			(14		)	11,667
Income (loss) before income taxes	1,417			546		(159		)	—			1,804
Income tax expense (benefit)	390			138		(79		)	—			449
Net income of subsidiaries	—			—		1,435			(1,435		)	—
Net income	$	1,027		$	408	$	1,355		$	(1,435	)	$	1,355

(1) Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(17	)	$	(15	)	$	—	$	—	$	(32	)
OTTI losses recognized in net realized investment gains (losses)	$	(12	)	$	(10	)	$	—	$	—	$	(22	)
OTTI losses recognized in OCI	$	(5	)	$	(5	)	$	—	$	—	$	(10	)

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,040	$	3,779	$	—		$	—		$	11,819
Net investment income	835		386		3			—			1,224
Fee income	229		—		—			—			229
Net realized investment gains (1)	19		—		1			—			20
Other revenues	40		7		—			—			47
Total revenues	9,163		4,172		4			—			13,339
Claims and expenses
Claims and claim adjustment expenses	4,718		2,260		—			—			6,978
Amortization of deferred acquisition costs	1,293		633		—			—			1,926
General and administrative expenses	1,419		600		8			—			2,027
Interest expense	24		—		160			—			184
Total claims and expenses	7,454		3,493		168			—			11,115
Income (loss) before income taxes	1,709		679		(164		)	—			2,224
Income tax expense (benefit)	449		179		(49		)	—			579
Net income of subsidiaries	—		—		1,760			(1,760		)	—
Net income	$	1,260	$	500	$	1,645		$	(1,760	)	$	1,645

(1) Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(8	)	$	(4	)	$	—	$	—	$	(12	)
OTTI losses recognized in net realized investment gains	$	(6	)	$	(3	)	$	—	$	—	$	(9	)
OTTI losses recognized in OCI	$	(2	)	$	(1	)	$	—	$	—	$	(3	)

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	502	$	203		$	664		$	(705	)	$	664
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	570		306			3			—			879
Having credit losses recognized in the consolidated statement of income	6		6			—			—			12
Net changes in benefit plan assets and obligations	18		19			(19		)	—			18
Net changes in unrealized foreign currency translation	25		(60		)	—			—			(35		)
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries	619		271			(16		)	—			874
Income tax expense (benefit)	216		113			(6		)	—			323
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	403		158			(10		)	—			551
Other comprehensive income of subsidiaries	—		—			561			(561		)	—
Other comprehensive income	403		158			551			(561		)	551
Comprehensive income	$	905	$	361		$	1,215		$	(1,266	)	$	1,215

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	628		$	245		$	812		$	(873	)	$	812
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(719		)	(345		)	(1		)	—			(1,065		)
Having credit losses recognized in the consolidated statement of income	(5		)	—			—			—			(5		)
Net changes in benefit plan assets and obligations	1			—			22			—			23
Net changes in unrealized foreign currency translation	34			60			—			—			94
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(689		)	(285		)	21			—			(953		)
Income tax expense (benefit)	(246		)	(115		)	8			—			(353		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(443		)	(170		)	13			—			(600		)
Other comprehensive loss of subsidiaries	—			—			(613		)	613			—
Other comprehensive loss	(443		)	(170		)	(600		)	613			(600		)
Comprehensive income	$	185		$	75		$	212		$	(260	)	$	212

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,027	$	408		$	1,355		$	(1,435	)	$	1,355
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	1,055		534			4			—			1,593
Having credit losses recognized in the consolidated statement of income	8		9			—			—			17
Net changes in benefit plan assets and obligations	18		20			(4		)	—			34
Net changes in unrealized foreign currency translation	119		(51		)	—			—			68
Other comprehensive income before income taxes and other comprehensive income of subsidiaries	1,200		512			—			—			1,712
Income tax expense	397		192			1			—			590
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	803		320			(1		)	—			1,122
Other comprehensive income of subsidiaries	—		—			1,123			(1,123		)	—
Other comprehensive income	803		320			1,122			(1,123		)	1,122
Comprehensive income	$	1,830	$	728		$	2,477		$	(2,558	)	$	2,477

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(585		)	(312		)	1			—			(896		)
Having credit losses recognized in the consolidated statement of income	(9		)	(1		)	—			—			(10		)
Net changes in benefit plan assets and obligations	1			1			45			—			47
Net changes in unrealized foreign currency translation	(145		)	(35		)	—			—			(180		)
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(738		)	(347		)	46			—			(1,039		)
Income tax expense (benefit)	(232		)	(112		)	16			—			(328		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(506		)	(235		)	30			—			(711		)
Other comprehensive loss of subsidiaries	—			—			(741		)	741			—
Other comprehensive loss	(506		)	(235		)	(711		)	741			(711		)
Comprehensive income	$	754		$	265		$	934		$	(1,019	)	$	934

CONSOLIDATING BALANCE SHEET (Unaudited)

At June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $59,975)	$	43,859	$	19,403		$	49		$	—		$	63,311
Equity securities, available for sale, at fair value (cost $525)	194		412			146			—			752
Real estate investments	55		874			—			—			929
Short-term securities	1,754		537			1,697			—			3,988
Other investments	2,594		895			1			—			3,490
Total investments	48,456		22,121			1,893			—			72,470
Cash	121		141			3			—			265
Investment income accrued	441		182			4			—			627
Premiums receivable	4,722		2,292			—			—			7,014
Reinsurance recoverables	5,928		2,675			—			—			8,603
Ceded unearned premiums	649		77			—			—			726
Deferred acquisition costs	1,753		201			—			—			1,954
Contractholder receivables	3,570		971			—			—			4,541
Goodwill	2,584		1,004			—			—			3,588
Other intangible assets	203		71			—			—			274
Investment in subsidiaries	—		—			28,755			(28,755		)	—
Other assets	2,106		(52		)	330			—			2,384
Total assets	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446
Liabilities
Claims and claim adjustment expense reserves	$	32,096	$	15,857		$	—		$	—		$	47,953
Unearned premium reserves	8,708		3,812			—			—			12,520
Contractholder payables	3,570		971			—			—			4,541
Payables for reinsurance premiums	227		174			—			—			401
Deferred taxes	330		118			(78		)	—			370
Debt	693		—			5,743			—			6,436
Other liabilities	4,188		707			616			—			5,511
Total liabilities	49,812		21,639			6,281			—			77,732
Shareholders’ equity
Common stock (1,750.0 shares authorized; 288.3 shares issued and outstanding)	—		390			22,349			(390		)	22,349
Additional paid-in capital	11,634		6,499			—			(18,133		)	—
Retained earnings	7,890		744			30,911			(8,624		)	30,921
Accumulated other comprehensive income	1,197		411			965			(1,608		)	965
Treasury stock, at cost (478.1 shares)	—		—			(29,521		)	—			(29,521		)
Total shareholders’ equity	20,721		8,044			24,704			(28,755		)	24,714
Total liabilities and shareholders’ equity	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446

CONSOLIDATING BALANCE SHEET (Unaudited)

At December 31, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $58,878)	$	42,289	$	18,323	$	46		$	—		$	60,658
Equity securities, available for sale, at fair value (cost $528)	189		375		141			—			705
Real estate investments	56		933		—			—			989
Short-term securities	1,947		1,178		1,546			—			4,671
Other investments	2,516		930		1			—			3,447
Total investments	46,997		21,739		1,734			—			70,470
Cash	225		153		2			—			380
Investment income accrued	453		185		4			—			642
Premiums receivable	4,336		2,101		—			—			6,437
Reinsurance recoverables	5,849		3,061		—			—			8,910
Ceded unearned premiums	610		46		—			—			656
Deferred acquisition costs	1,660		189		—			—			1,849
Deferred taxes	178		83		35			—			296
Contractholder receivables	3,387		987		—			—			4,374
Goodwill	2,573		1,000		—			—			3,573
Other intangible assets	203		76		—			—			279
Investment in subsidiaries	—		—		27,573			(27,573		)	—
Other assets	1,958		344		16			—			2,318
Total assets	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184
Liabilities
Claims and claim adjustment expense reserves	$	31,965	$	16,330	$	—		$	—		$	48,295
Unearned premium reserves	8,335		3,636		—			—			11,971
Contractholder payables	3,387		987		—			—			4,374
Payables for reinsurance premiums	175		121		—			—			296
Debt	693		—		5,651			—			6,344
Other liabilities	3,958		1,221		127			—			5,306
Total liabilities	48,513		22,295		5,778			—			76,586
Shareholders’ equity
Common stock (1,750.0 shares authorized; 295.9 shares issued and outstanding)	—		390		22,172			(390		)	22,172
Additional paid-in capital	11,634		6,499		—			(18,133		)	—
Retained earnings	7,888		688		29,933			(8,564		)	29,945
Accumulated other comprehensive income (loss)	394		92		(157		)	(486		)	(157		)
Treasury stock, at cost (467.6 shares)	—		—		(28,362		)	—			(28,362		)
Total shareholders’ equity	19,916		7,669		23,586			(27,573		)	23,598
Total liabilities and shareholders’ equity	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,027		$	408		$	1,355		$	(1,435	)	$	1,355
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(17		)	(222		)	116			61			(62		)
Net cash provided by operating activities	1,010			186			1,471			(1,374		)	1,293
Cash flows from investing activities
Proceeds from maturities of fixed maturities	2,728			1,040			5			—			3,773
Proceeds from sales of investments:
Fixed maturities	385			352			2			—			739
Equity securities	10			28			—			—			38
Real estate investments	—			69			—			—			69
Other investments	233			110			—			—			343
Purchases of investments:
Fixed maturities	(3,588		)	(2,108		)	(9		)	—			(5,705		)
Equity securities	(5		)	(19		)	(2		)	—			(26		)
Real estate investments	—			(20		)	—			—			(20		)
Other investments	(221		)	(69		)	—			—			(290		)
Net (purchases) sales of short-term securities	193			639			(151		)	—			681
Securities transactions in course of settlement	325			137			(1		)	—			461
Other	(151		)	(3		)	—			—			(154		)
Net cash provided by (used in) investing activities	(91		)	156			(156		)	—			(91		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,100		)	—			(1,100		)
Treasury stock acquired — net employee share-based compensation	—			—			(59		)	—			(59		)
Dividends paid to shareholders	—			—			(375		)	—			(375		)
Payment of debt	—			—			(400		)	—			(400		)
Issuance of debt	—			—			491			—			491
Issuance of common stock — employee share options	—			—			129			—			129
Dividends paid to parent company	(1,025		)	(349		)	—			1,374			—
Net cash used in financing activities	(1,025		)	(349		)	(1,314		)	1,374			(1,314		)
Effect of exchange rate changes on cash	2			(5		)	—			—			(3		)
Net increase (decrease) in cash	(104		)	(12		)	1			—			(115		)
Cash at beginning of year	225			153			2			—			380
Cash at end of period	$	121		$	141		$	3		$	—		$	265
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	398		$	142		$	(73	)	$	—		$	467
Interest paid	$	24		$	—		$	156		$	—		$	180

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(410		)	(520		)	182			(22		)	(770		)
Net cash provided by (used in) operating activities	850			(20		)	1,827			(1,782		)	875
Cash flows from investing activities
Proceeds from maturities of fixed maturities	3,604			1,707			3			—			5,314
Proceeds from sales of investments:
Fixed maturities	710			516			—			—			1,226
Equity securities	11			17			—			—			28
Real estate investments	—			10			—			—			10
Other investments	244			110			—			—			354
Purchases of investments:
Fixed maturities	(4,352		)	(1,869		)	(18		)	—			(6,239		)
Equity securities	(2		)	(19		)	(1		)	—			(22		)
Real estate investments	—			(69		)	—			—			(69		)
Other investments	(222		)	(53		)	—			—			(275		)
Net (purchases) sales of short-term securities	327			224			(118		)	—			433
Securities transactions in course of settlement	190			(7		)	—			—			183
Other	(175		)	(3		)	—			—			(178		)
Net cash provided by (used in) investing activities	335			564			(134		)	—			765
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,400		)	—			(1,400		)
Treasury stock acquired — net employee share-based compensation	—			—			(72		)	—			(72		)
Dividends paid to shareholders	—			—			(369		)	—			(369		)
Issuance of common stock — employee share options	—			—			117			—			117
Excess tax benefits from share-based payment arrangements	—			—			31			—			31
Dividends paid to parent company	(1,222		)	(560		)	—			1,782			—
Net cash used in financing activities	(1,222		)	(560		)	(1,693		)	1,782			(1,693		)
Effect of exchange rate changes on cash	—			(4		)	—			—			(4		)
Net decrease in cash	(37		)	(20		)	—			—			(57		)
Cash at beginning of year	221			151			2			—			374
Cash at end of period	$	184		$	131		$	2		$	—		$	317
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	534		$	197		$	(134	)	$	—		$	597
Interest paid	$	24		$	—		$	159		$	—		$	183

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Basis of Presentation and Accounting Policies (policies)

6 Months Ended

Jun. 30, 2016

Basis of Presentation and Accounting Policies disclosure

Accounting Policies, Basis of Presentation [Policy Text Block]

Basis of Presentation

The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited.  In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected.  Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted.  All material intercompany transactions and balances have been eliminated.  The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the Company’s 2015 Annual Report).

The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.  Actual results could differ from those estimates.  Certain reclassifications have been made to the 2015 financial statements to conform to the 2016 presentation.

Accounting Policies, Adoption of Accounting Standards [Policy Text Block]

Adoption of Accounting Standards

Compensation — Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

In June 2014, the Financial Accounting Standards Board (FASB) issued updated guidance to resolve diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period.  The updated guidance requires that a performance target that affects vesting and that can be achieved after the requisite service period be treated as a performance condition. As such, the performance target that affects vesting should not be reflected in estimating the fair value of the award at the grant date. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which service has been rendered. If the performance target becomes probable of being achieved before the end of the service period, the remaining unrecognized compensation cost for which requisite service has not yet been rendered is recognized prospectively over the remaining service period. The total amount of compensation cost recognized during and after the service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Derivatives and Hedging: Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity

In November 2014, the FASB issued updated guidance to clarify when the separation of certain embedded derivative features in a hybrid financial instrument that is issued in the form of a share is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The updated guidance was effective for reporting periods beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Consolidation: Amendments to the Consolidation Analysis

In February 2015, the FASB issued updated guidance that makes targeted amendments to the current consolidation accounting guidance. The update is in response to accounting complexity concerns, particularly from the asset management industry. The guidance simplifies consolidation accounting by reducing the number of approaches to consolidation, provides a scope exception to registered money market funds and similar unregistered money market funds and ends the indefinite deferral granted to investment companies from applying the variable interest entity guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015. The adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Interest — Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs

In April 2015, the FASB issued updated guidance to clarify the required presentation of debt issuance costs.  The amended guidance requires that debt issuance costs be presented in the balance sheet as a direct reduction from the carrying amount of the recognized debt liability, consistent with the treatment of debt discounts.  Amortization of debt issuance costs is to be reported as interest expense.  The recognition and measurement guidance for debt issuance costs are not affected by the updated guidance.  The updated guidance was effective for reporting periods beginning after December 15, 2015.  The updated guidance is consistent with the Company’s accounting policy and its adoption did not have any effect on the Company’s results of operations, financial position or liquidity.

Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments

In September 2015, the FASB issued updated guidance regarding business combinations that requires an acquirer to recognize post-close measurement adjustments for provisional amounts in the period the adjustment amounts are determined rather than retrospectively.  The acquirer is also required to recognize, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the provisional amount, calculated as if the accounting had been completed at the acquisition date.  The updated guidance is to be applied prospectively effective for reporting periods beginning after December 15, 2015.  In connection with business combinations which have already been completed, the adoption of this guidance did not have a material effect on the Company’s results of operations, financial position or liquidity.

Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued updated guidance to simplify several aspects of accounting for share-based payment transactions as follows:

Accounting for Income Taxes

Under current accounting guidance, if the deduction for a share-based payment award for tax purposes exceeds, or is less than, the compensation cost recognized for financial reporting purposes, the resulting excess tax benefit, or tax deficiency, is reported as part of additional paid-in capital.  Under the updated guidance, these excess tax benefits, or tax deficiencies, are reported as part of income tax expense or benefit in the income statement.  The updated guidance also removes the requirement to delay recognition of any excess tax benefit when there are no current taxes payable to which the benefit would be applied.  The tax-related cash flows resulting from share-based payments are to be included with other income tax cash flows as an operating activity rather than being reported separately as a financing activity.

Forfeitures

The updated guidance permits an entity to make an accounting policy election to either account for forfeitures when they occur or continue to apply the current method of accruing the compensation cost based on the number of awards that are expected to vest.

Minimum Statutory Tax Withholding Requirements

The updated guidance changes the threshold amount an entity can withhold for taxes when settling an equity award and still qualify for equity classification. A company can withhold up to the maximum statutory tax rates in the employees’ applicable jurisdiction rather than withholding up to the employers’ minimum statutory withholding requirement. The update also clarifies that all cash payments made to taxing authorities on behalf of employees for withheld shares are to be presented in financing activities on the statement of cash flows.

Transition

The updated guidance is effective for reporting periods beginning after December 15, 2016.  Early adoption is permitted in any interim period; if early adoption is elected, the entity must adopt all of the amendments in the same reporting period and reflect any adjustments as of the beginning of the fiscal year.

The Company adopted the updated guidance effective January 1, 2016.  With respect to the forfeiture accounting policy election, the Company elected to retain its policy of accruing the compensation cost based on the number of awards that are expected to vest. The adoption did not result in any cumulative effect adjustments or restatement and did not have a material effect on the Company’s results of operations, financial position or liquidity.

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Segment Information (tables)

6 Months Ended

Jun. 30, 2016

Segment Information disclosure

Company's operating revenues and operating income by segment [Table Text Block]

(for the three months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	3,631	$	518	$	1,918	$	6,067
Net investment income	420		51		78		549
Fee income	115		—		4		119
Other revenues	8		6		14		28
Total operating revenues (1)	$	4,174	$	575	$	2,014	$	6,763
Operating income (1)	$	393	$	202	$	116	$	711
2015
Premiums	$	3,609	$	524	$	1,798	$	5,931
Net investment income	487		57		88		632
Fee income	111		—		4		115
Other revenues	5		5		12		22
Total operating revenues (1)	$	4,212	$	586	$	1,902	$	6,700
Operating income (1)	$	543	$	151	$	174	$	868

(1) Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

(for the six months ended June 30, in millions)	Business and  International Insurance		Bond & Specialty  Insurance		Personal Insurance		Total Reportable Segments
2016
Premiums	$	7,230	$	1,026	$	3,792	$	12,048
Net investment income	835		103		155		1,093
Fee income	229		—		7		236
Other revenues	41		9		28		78
Total operating revenues (1)	$	8,335	$	1,138	$	3,982	$	13,455
Operating income (1)	$	869	$	346	$	255	$	1,470
2015
Premiums	$	7,229	$	1,028	$	3,562	$	11,819
Net investment income	941		113		170		1,224
Fee income	222		—		7		229
Other revenues	13		10		24		47
Total operating revenues (1)	$	8,405	$	1,151	$	3,763	$	13,319
Operating income (1)	$	1,058	$	275	$	426	$	1,759

(1) Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses).

Business segment reconciliations of revenue and income, net of tax [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Revenue reconciliation
Earned premiums
Business and International Insurance:
Domestic:
Workers’ compensation	$	987		$	957		$	1,968		$	1,919
Commercial automobile	503			477			994			945
Commercial property	442			440			879			880
General liability	485			469			967			937
Commercial multi-peril	786			779			1,568			1,553
Other	9			10			14			20
Total Domestic	3,212			3,132			6,390			6,254
International	419			477			840			975
Total Business and International Insurance	3,631			3,609			7,230			7,229
Bond & Specialty Insurance:
Fidelity and surety	239			240			469			465
General liability	235			240			469			476
Other	44			44			88			87
Total Bond & Specialty Insurance	518			524			1,026			1,028
Personal Insurance:
Automobile	974			863			1,910			1,699
Homeowners and Other	944			935			1,882			1,863
Total Personal Insurance	1,918			1,798			3,792			3,562
Total earned premiums	6,067			5,931			12,048			11,819
Net investment income	549			632			1,093			1,224
Fee income	119			115			236			229
Other revenues	28			22			78			47
Total operating revenues for reportable segments	6,763			6,700			13,455			13,319
Other revenues	3			—			6			—
Net realized investment gains	19			10			10			20
Total consolidated revenues	$	6,785		$	6,710		$	13,471		$	13,339
Income reconciliation, net of tax
Total operating income for reportable segments	$	711		$	868		$	1,470		$	1,759
Interest Expense and Other (1)	(62		)	(62		)	(123		)	(126		)
Total operating income	649			806			1,347			1,633
Net realized investment gains	15			6			8			12
Total consolidated net income	$	664		$	812		$	1,355		$	1,645

(1) The primary component of Interest Expense and Other was after-tax interest expense of $60 million in each of the three months ended June 30, 2016 and 2015, and $120 million in each of the six months ended June 30, 2016 and 2015.

Asset reconciliation [Table Text Block]

(in millions)	June 30, 2016		December 31, 2015
Asset reconciliation:
Business and International Insurance	$	81,214	$	79,692
Bond & Specialty Insurance	7,745		7,360
Personal Insurance	13,109		12,748
Total assets for reportable segments	102,068		99,800
Other assets (1)	378		384
Total consolidated assets	$	102,446	$	100,184

(1) The primary component of other assets at June 30, 2016 was other intangible assets and the primary components at December 31, 2015 were other intangible assets and deferred taxes.

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Investments (tables)

6 Months Ended

Jun. 30, 2016

Investments disclosure

Amortized cost and fair value of investments in fixed maturities [Table Text Block]

	Amortized		Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,038	$	36	$	1	$	2,073
Obligations of states, municipalities and political subdivisions:
Local general obligation	13,816		954		1		14,769
Revenue	10,270		787		—		11,057
State general obligation	1,958		124		—		2,082
Pre-refunded	5,490		234		—		5,724
Total obligations of states, municipalities and political subdivisions	31,534		2,099		1		33,632
Debt securities issued by foreign governments	1,745		56		—		1,801
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,702		132		1		1,833
All other corporate bonds	22,858		1,062		52		23,868
Redeemable preferred stock	98		6		—		104
Total	$	59,975	$	3,391	$	55	$	63,311

	Amortized		Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,202	$	8	$	16	$	2,194
Obligations of states, municipalities and political subdivisions:
Local general obligation	12,744		577		3		13,318
Revenue	9,492		472		4		9,960
State general obligation	1,978		97		2		2,073
Pre-refunded	5,813		247		—		6,060
Total obligations of states, municipalities and political subdivisions	30,027		1,393		9		31,411
Debt securities issued by foreign governments	1,829		45		1		1,873
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,863		124		6		1,981
All other corporate bonds	22,854		523		288		23,089
Redeemable preferred stock	103		7		—		110
Total	$	58,878	$	2,100	$	320	$	60,658

Cost and fair value of investments in equity securities [Table Text Block]

			Gross Unrealized				Fair
(at June 30, 2016, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	214	$	3	$	597
Non-redeemable preferred stock	139		23		7		155
Total	$	525	$	237	$	10	$	752

			Gross Unrealized				Fair
(at December 31, 2015, in millions)	Cost		Gains		Losses		Value
Public common stock	$	386	$	164	$	7	$	543
Non-redeemable preferred stock	142		26		6		162
Total	$	528	$	190	$	13	$	705

Unrealized investment losses [Table Text Block]

	Less than 12 months				12 months or longer				Total
(at June 30, 2016, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	37	$	—	$	10	$	1	$	47	$	1
Obligations of states, municipalities and political subdivisions	639		1		14		—		653		1
Debt securities issued by foreign governments	3		—		—		—		3		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	42		—		37		1		79		1
All other corporate bonds	779		12		720		40		1,499		52
Redeemable preferred stock	7		—		—		—		7		—
Total fixed maturities	1,507		13		781		42		2,288		55
Equity securities
Public common stock	24		2		34		1		58		3
Non-redeemable preferred stock	30		1		58		6		88		7
Total equity securities	54		3		92		7		146		10
Total	$	1,561	$	16	$	873	$	49	$	2,434	$	65

	Less than 12 months				12 months or longer				Total
(at December 31, 2015, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	1,820	$	15	$	28	$	1	$	1,848	$	16
Obligations of states, municipalities and political subdivisions	928		7		142		2		1,070		9
Debt securities issued by foreign governments	172		1		—		—		172		1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	473		4		57		2		530		6
All other corporate bonds	7,725		197		710		91		8,435		288
Redeemable preferred stock	8		—		—		—		8		—
Total fixed maturities	11,126		224		937		96		12,063		320
Equity securities
Public common stock	48		6		33		1		81		7
Non-redeemable preferred stock	47		3		38		3		85		6
Total equity securities	95		9		71		4		166		13
Total	$	11,221	$	233	$	1,008	$	100	$	12,229	$	333

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Fair Value Measurements (tables)

6 Months Ended

Jun. 30, 2016

Fair Value Measurements disclosure

Level within the fair value hierarchy at which the Company's financial assets and financial liabilities reported at fair value are measured [Table Text Block]

(at June 30, 2016, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,073	$	2,073	$	—	$	—
Obligations of states, municipalities and political subdivisions	33,632		11		33,608		13
Debt securities issued by foreign governments	1,801		—		1,801		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,833		—		1,833		—
All other corporate bonds	23,868		3		23,702		163
Redeemable preferred stock	104		3		94		7
Total fixed maturities	63,311		2,090		61,038		183
Equity securities
Public common stock	597		597		—		—
Non-redeemable preferred stock	155		66		89		—
Total equity securities	752		663		89		—
Other investments	61		17		—		44
Total	$	64,124	$	2,770	$	61,127	$	227

(at December 31, 2015, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,194	$	2,194	$	—	$	—
Obligations of states, municipalities and political subdivisions	31,411		—		31,398		13
Debt securities issued by foreign governments	1,873		—		1,873		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	1,981		—		1,957		24
All other corporate bonds	23,089		—		22,915		174
Redeemable preferred stock	110		3		100		7
Total fixed maturities	60,658		2,197		58,243		218
Equity securities
Public common stock	543		543		—		—
Non-redeemable preferred stock	162		55		107		—
Total equity securities	705		598		107		—
Other investments	56		18		—		38
Total	$	61,419	$	2,813	$	58,350	$	256

Carrying value and fair value of financial instruments disclosed, but not carried, at fair value and the level within the fair value hierarchy at which such financial instruments are categorized [Table Text Block]

(at June 30, 2016, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	3,988	$	3,988	$	792	$	3,151	$	45
Financial liabilities:
Debt	$	6,336	$	7,743	$	—	$	7,743	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

(at December 31, 2015, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Short-term securities	$	4,671	$	4,671	$	1,685	$	2,958	$	28
Financial liabilities:
Debt	$	6,244	$	7,180	$	—	$	7,180	$	—
Commercial paper	$	100	$	100	$	—	$	100	$	—

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Goodwill and Other Intangible Assets (tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Other Intangible Assets disclosure

Goodwill by segment [Table Text Block]

(in millions)	June 30, 2016		December 31,  2015
Business and International Insurance (1)	$	2,454	$	2,439
Bond & Specialty Insurance	496		496
Personal Insurance	612		612
Other	26		26
Total	$	3,588	$	3,573

(1) Includes goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.

Other intangible assets [Table Text Block]

(at June 30, 2016, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	153	$	57
Not subject to amortization	217		—		217
Total	$	427	$	153	$	274

(at December 31, 2015, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization (1)	$	210	$	148	$	62
Not subject to amortization	217		—		217
Total	$	427	$	148	$	279

(1) Intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves, reinsurance recoverables and other contract and customer-related intangibles.  The time value of money and the risk adjustment (cost of capital) components of the intangible asset run off at different rates, and, as such, the amount recognized in income may be a net benefit in some periods and a net expense in other periods.

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Other Comprehensive Income and Accumulated Other Comprehensive Income (tables)

6 Months Ended

Jun. 30, 2016

Other Comprehensive Income and Accumulated Other Comprehensive Income disclosure

Changes in accumulated other comprehensive income (AOCI) [Table Text Block]

(in millions)	Changes in Net  Unrealized Gains on Investment  Securities Having No Credit Losses  Recognized in the  Consolidated  Statement of Income			Changes in Net  Unrealized Gains on Investment  Securities Having  Credit Losses  Recognized in the  Consolidated  Statement of Income		Net Benefit Plan  Assets and  Obligations  Recognized in  Shareholders’ Equity			Net Unrealized  Foreign Currency  Translation			Total Accumulated Other  Comprehensive  Income (Loss)
Balance, December 31, 2015	$	1,100		$	189	$	(713	)	$	(733	)	$	(157	)
Other comprehensive income (OCI) before reclassifications	1,064			3		3			47			1,117
Amounts reclassified from AOCI	(23		)	8		20			—			5
Net OCI, current period	1,041			11		23			47			1,122
Balance, June 30, 2016	$	2,141		$	200	$	(690	)	$	(686	)	$	965

Pretax components of other comprehensive income (loss) and the related income tax expense (benefit) for each component [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
( in millions)	2016			2015			2016		2015
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	$	879		$	(1,065	)	$	1,593	$	(896	)
Income tax expense (benefit)	305			(368		)	552		(312		)
Net of taxes	574			(697		)	1,041		(584		)
Having credit losses recognized in the consolidated statement of income	12			(5		)	17		(10		)
Income tax expense (benefit)	4			(2		)	6		(4		)
Net of taxes	8			(3		)	11		(6		)
Net changes in benefit plan assets and obligations	18			23			34		47
Income tax expense	6			8			11		16
Net of taxes	12			15			23		31
Net changes in unrealized foreign currency translation	(35		)	94			68		(180		)
Income tax expense (benefit)	8			9			21		(28		)
Net of taxes	(43		)	85			47		(152		)
Total other comprehensive income (loss)	874			(953		)	1,712		(1,039		)
Total income tax expense (benefit)	323			(353		)	590		(328		)
Total other comprehensive income (loss), net of taxes	$	551		$	(600	)	$	1,122	$	(711	)

Pretax components of the amounts reclassified from accumulated other comprehensive income and the related income tax (expense) benefit for each component [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Reclassification adjustments related to unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income (1)	$	(24	)	$	(17	)	$	(35	)	$	(35	)
Income tax expense (2)	(8		)	(6		)	(12		)	(12		)
Net of taxes	(16		)	(11		)	(23		)	(23		)
Having credit losses recognized in the consolidated statement of income (1)	1			2			12			2
Income tax benefit (2)	—			—			4			—
Net of taxes	1			2			8			2
Reclassification adjustment related to benefit plan assets and obligations (3)	15			24			31			47
Income tax benefit (2)	6			9			11			17
Net of taxes	9			15			20			30
Reclassification adjustment related to foreign currency translation (1)	—			—			—			—
Income tax benefit (2)	—			—			—			—
Net of taxes	—			—			—			—
Total reclassifications	(8		)	9			8			14
Total income tax (expense) benefit	(2		)	3			3			5
Total reclassifications, net of taxes	$	(6	)	$	6		$	5		$	9

(1) (Increases) decreases net realized investment gains on the consolidated statement of income.

(2) (Increases) decreases income tax expense on the consolidated statement of income.

(3) Increases (decreases) general and administrative expenses on the consolidated statement of income.

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Earnings per Share (table)

6 Months Ended

Jun. 30, 2016

Earnings per Share disclosure

Earnings per share reconciliation [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share amounts)	2016			2015			2016			2015
Basic and Diluted
Net income, as reported	$	664		$	812		$	1,355		$	1,645
Participating share-based awards — allocated income	(5		)	(6		)	(10		)	(12		)
Net income available to common shareholders — basic and diluted	$	659		$	806		$	1,345		$	1,633
Common Shares
Basic
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Diluted
Weighted average shares outstanding	290.1			314.8			292.1			317.7
Weighted average effects of dilutive securities — stock options and performance shares	3.5			3.2			3.5			3.5
Total	293.6			318.0			295.6			321.2
Net Income per Common Share
Basic	$	2.27		$	2.56		$	4.60		$	5.14
Diluted	$	2.24		$	2.53		$	4.55		$	5.08

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Share-Based Incentive Compensation (table)

6 Months Ended

Jun. 30, 2016

Share-Based Incentive Compensation disclosure

Information for fully vested stock option awards [Table Text Block]

Stock Options	Number	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining	Aggregate Intrinsic Value ($ in millions)
Vested at end of period (1)	8,006,375	$	78.85	6.5 years	$	322
Exercisable at end of period	4,406,788	$	62.60	4.8 years	$	249

(1) Represents awards for which the requisite service has been rendered, including those that are retirement eligible.

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Pension Plans, Retirement Benefits and Savings Plans (table)

6 Months Ended

Jun. 30, 2016

Pension Plans, Retirement Benefits and Savings Plans disclosure

Summary of the components of net periodic benefit cost for the Company's pension and postretirement benefit plans recognized in the consolidated statement of income [Table Text Block]

	Pension Plans						Postretirement Benefit Plans
(for the three months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	30		$	32		$	—		$	—
Interest cost on benefit obligation	31			36			2			2
Expected return on plan assets	(58		)	(57		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(1		)	—
Net actuarial loss	16			24			—			—
Net periodic benefit cost	$	20		$	35		$	1		$	2
	Pension Plans						Postretirement Benefit Plans
(for the six months ended June 30, in millions)	2016			2015			2016			2015
Net Periodic Benefit Cost:
Service cost	$	59		$	65		$	—		$	—
Interest cost on benefit obligation	61			72			4			5
Expected return on plan assets	(115		)	(115		)	—			—
Settlement	1			—			—			—
Amortization of unrecognized:
Prior service benefit	—			—			(2		)	(1		)
Net actuarial loss	33			48			—			—
Net periodic benefit cost	$	39		$	70		$	2		$	4

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Consolidating Financial Statements (Unaudited) (tables)

6 Months Ended

Jun. 30, 2016

Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries (Unaudited) disclosure

Consolidating Statement of Income (Unaudited) [Table Text Block]

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,161		$	1,906	$	—		$	—		$	6,067
Net investment income	377			168		4			—			549
Fee income	119			—		—			—			119
Net realized investment gains (losses) (1)	(1		)	20		—			—			19
Other revenues	33			1		—			(3		)	31
Total revenues	4,689			2,095		4			(3		)	6,785
Claims and expenses
Claims and claim adjustment expenses	2,575			1,187		—			—			3,762
Amortization of deferred acquisition costs	666			323		—			—			989
General and administrative expenses	743			313		1			(3		)	1,054
Interest expense	12			—		81			—			93
Total claims and expenses	3,996			1,823		82			(3		)	5,898
Income (loss) before income taxes	693			272		(78		)	—			887
Income tax expense (benefit)	191			69		(37		)	—			223
Net income of subsidiaries	—			—		705			(705		)	—
Net income	$	502		$	203	$	664		$	(705	)	$	664

(1) Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI losses recognized in net realized investment gains (losses)	$	(3	)	$	(1	)	$	—	$	—	$	(4	)
OTTI gains (losses) recognized in OCI	$	—		$	—		$	—	$	—	$	—

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Revenues
Premiums	$	4,044	$	1,887		$	—		$	—		$	5,931
Net investment income	424		206			2			—			632
Fee income	115		—			—			—			115
Net realized investment gains (losses) (1)	17		(7		)	—			—			10
Other revenues	19		3			—			—			22
Total revenues	4,619		2,089			2			—			6,710
Claims and expenses
Claims and claim adjustment expenses	2,409		1,138			—			—			3,547
Amortization of deferred acquisition costs	651		312			—			—			963
General and administrative expenses	721		308			3			—			1,032
Interest expense	12		—			80			—			92
Total claims and expenses	3,793		1,758			83			—			5,634
Income (loss) before income taxes	826		331			(81		)	—			1,076
Income tax expense (benefit)	198		86			(20		)	—			264
Net income of subsidiaries	—		—			873			(873		)	—
Net income	$	628	$	245		$	812		$	(873	)	$	812

(1) Total other-than-temporary impairment (OTTI) for the three months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(7	)	$	(1	)	$	—	$	—	$	(8	)
OTTI losses recognized in net realized investment gains (losses)	$	(5	)	$	(1	)	$	—	$	—	$	(6	)
OTTI losses recognized in OCI	$	(2	)	$	—		$	—	$	—	$	(2	)

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,246		$	3,802	$	—		$	—		$	12,048
Net investment income	753			334		6			—			1,093
Fee income	236			—		—			—			236
Net realized investment gains (losses) (1)	(17		)	27		—			—			10
Other revenues	81			17		—			(14		)	84
Total revenues	9,299			4,180		6			(14		)	13,471
Claims and expenses
Claims and claim adjustment expenses	5,095			2,379		—			—			7,474
Amortization of deferred acquisition costs	1,316			644		—			—			1,960
General and administrative expenses	1,447			611		5			(14		)	2,049
Interest expense	24			—		160			—			184
Total claims and expenses	7,882			3,634		165			(14		)	11,667
Income (loss) before income taxes	1,417			546		(159		)	—			1,804
Income tax expense (benefit)	390			138		(79		)	—			449
Net income of subsidiaries	—			—		1,435			(1,435		)	—
Net income	$	1,027		$	408	$	1,355		$	(1,435	)	$	1,355

(1) Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2016, and the amounts comprising total OTTI that were recognized in net realized investment gains (losses) and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(17	)	$	(15	)	$	—	$	—	$	(32	)
OTTI losses recognized in net realized investment gains (losses)	$	(12	)	$	(10	)	$	—	$	—	$	(22	)
OTTI losses recognized in OCI	$	(5	)	$	(5	)	$	—	$	—	$	(10	)

CONSOLIDATING STATEMENT OF INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Revenues
Premiums	$	8,040	$	3,779	$	—		$	—		$	11,819
Net investment income	835		386		3			—			1,224
Fee income	229		—		—			—			229
Net realized investment gains (1)	19		—		1			—			20
Other revenues	40		7		—			—			47
Total revenues	9,163		4,172		4			—			13,339
Claims and expenses
Claims and claim adjustment expenses	4,718		2,260		—			—			6,978
Amortization of deferred acquisition costs	1,293		633		—			—			1,926
General and administrative expenses	1,419		600		8			—			2,027
Interest expense	24		—		160			—			184
Total claims and expenses	7,454		3,493		168			—			11,115
Income (loss) before income taxes	1,709		679		(164		)	—			2,224
Income tax expense (benefit)	449		179		(49		)	—			579
Net income of subsidiaries	—		—		1,760			(1,760		)	—
Net income	$	1,260	$	500	$	1,645		$	(1,760	)	$	1,645

(1) Total other-than-temporary impairment (OTTI) for the six months ended June 30, 2015, and the amounts comprising total OTTI that were recognized in net realized investment gains and in other comprehensive income (OCI) were as follows:

(in millions)	TPC			Other Subsidiaries			TRV		Eliminations		Consolidated
Total OTTI losses	$	(8	)	$	(4	)	$	—	$	—	$	(12	)
OTTI losses recognized in net realized investment gains	$	(6	)	$	(3	)	$	—	$	—	$	(9	)
OTTI losses recognized in OCI	$	(2	)	$	(1	)	$	—	$	—	$	(3	)

Consolidating Statement of Comprehensive Income (Unaudited) [Table Text Block]

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	502	$	203		$	664		$	(705	)	$	664
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	570		306			3			—			879
Having credit losses recognized in the consolidated statement of income	6		6			—			—			12
Net changes in benefit plan assets and obligations	18		19			(19		)	—			18
Net changes in unrealized foreign currency translation	25		(60		)	—			—			(35		)
Other comprehensive income (loss) before income taxes and other comprehensive income of subsidiaries	619		271			(16		)	—			874
Income tax expense (benefit)	216		113			(6		)	—			323
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	403		158			(10		)	—			551
Other comprehensive income of subsidiaries	—		—			561			(561		)	—
Other comprehensive income	403		158			551			(561		)	551
Comprehensive income	$	905	$	361		$	1,215		$	(1,266	)	$	1,215

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the three months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	628		$	245		$	812		$	(873	)	$	812
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(719		)	(345		)	(1		)	—			(1,065		)
Having credit losses recognized in the consolidated statement of income	(5		)	—			—			—			(5		)
Net changes in benefit plan assets and obligations	1			—			22			—			23
Net changes in unrealized foreign currency translation	34			60			—			—			94
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(689		)	(285		)	21			—			(953		)
Income tax expense (benefit)	(246		)	(115		)	8			—			(353		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(443		)	(170		)	13			—			(600		)
Other comprehensive loss of subsidiaries	—			—			(613		)	613			—
Other comprehensive loss	(443		)	(170		)	(600		)	613			(600		)
Comprehensive income	$	185		$	75		$	212		$	(260	)	$	212

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,027	$	408		$	1,355		$	(1,435	)	$	1,355
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	1,055		534			4			—			1,593
Having credit losses recognized in the consolidated statement of income	8		9			—			—			17
Net changes in benefit plan assets and obligations	18		20			(4		)	—			34
Net changes in unrealized foreign currency translation	119		(51		)	—			—			68
Other comprehensive income before income taxes and other comprehensive income of subsidiaries	1,200		512			—			—			1,712
Income tax expense	397		192			1			—			590
Other comprehensive income (loss), net of taxes, before other comprehensive income of subsidiaries	803		320			(1		)	—			1,122
Other comprehensive income of subsidiaries	—		—			1,123			(1,123		)	—
Other comprehensive income	803		320			1,122			(1,123		)	1,122
Comprehensive income	$	1,830	$	728		$	2,477		$	(2,558	)	$	2,477

CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Other comprehensive income (loss):
Changes in net unrealized gains on investment securities:
Having no credit losses recognized in the consolidated statement of income	(585		)	(312		)	1			—			(896		)
Having credit losses recognized in the consolidated statement of income	(9		)	(1		)	—			—			(10		)
Net changes in benefit plan assets and obligations	1			1			45			—			47
Net changes in unrealized foreign currency translation	(145		)	(35		)	—			—			(180		)
Other comprehensive income (loss) before income taxes and other comprehensive loss of subsidiaries	(738		)	(347		)	46			—			(1,039		)
Income tax expense (benefit)	(232		)	(112		)	16			—			(328		)
Other comprehensive income (loss), net of taxes, before other comprehensive loss of subsidiaries	(506		)	(235		)	30			—			(711		)
Other comprehensive loss of subsidiaries	—			—			(741		)	741			—
Other comprehensive loss	(506		)	(235		)	(711		)	741			(711		)
Comprehensive income	$	754		$	265		$	934		$	(1,019	)	$	934

Consolidating Balance Sheet (Unaudited) [Table Text Block]

CONSOLIDATING BALANCE SHEET (Unaudited)

At June 30, 2016

(in millions)	TPC		Other Subsidiaries			TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $59,975)	$	43,859	$	19,403		$	49		$	—		$	63,311
Equity securities, available for sale, at fair value (cost $525)	194		412			146			—			752
Real estate investments	55		874			—			—			929
Short-term securities	1,754		537			1,697			—			3,988
Other investments	2,594		895			1			—			3,490
Total investments	48,456		22,121			1,893			—			72,470
Cash	121		141			3			—			265
Investment income accrued	441		182			4			—			627
Premiums receivable	4,722		2,292			—			—			7,014
Reinsurance recoverables	5,928		2,675			—			—			8,603
Ceded unearned premiums	649		77			—			—			726
Deferred acquisition costs	1,753		201			—			—			1,954
Contractholder receivables	3,570		971			—			—			4,541
Goodwill	2,584		1,004			—			—			3,588
Other intangible assets	203		71			—			—			274
Investment in subsidiaries	—		—			28,755			(28,755		)	—
Other assets	2,106		(52		)	330			—			2,384
Total assets	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446
Liabilities
Claims and claim adjustment expense reserves	$	32,096	$	15,857		$	—		$	—		$	47,953
Unearned premium reserves	8,708		3,812			—			—			12,520
Contractholder payables	3,570		971			—			—			4,541
Payables for reinsurance premiums	227		174			—			—			401
Deferred taxes	330		118			(78		)	—			370
Debt	693		—			5,743			—			6,436
Other liabilities	4,188		707			616			—			5,511
Total liabilities	49,812		21,639			6,281			—			77,732
Shareholders’ equity
Common stock (1,750.0 shares authorized; 288.3 shares issued and outstanding)	—		390			22,349			(390		)	22,349
Additional paid-in capital	11,634		6,499			—			(18,133		)	—
Retained earnings	7,890		744			30,911			(8,624		)	30,921
Accumulated other comprehensive income	1,197		411			965			(1,608		)	965
Treasury stock, at cost (478.1 shares)	—		—			(29,521		)	—			(29,521		)
Total shareholders’ equity	20,721		8,044			24,704			(28,755		)	24,714
Total liabilities and shareholders’ equity	$	70,533	$	29,683		$	30,985		$	(28,755	)	$	102,446

CONSOLIDATING BALANCE SHEET (Unaudited)

At December 31, 2015

(in millions)	TPC		Other Subsidiaries		TRV			Eliminations			Consolidated
Assets
Fixed maturities, available for sale, at fair value (amortized cost $58,878)	$	42,289	$	18,323	$	46		$	—		$	60,658
Equity securities, available for sale, at fair value (cost $528)	189		375		141			—			705
Real estate investments	56		933		—			—			989
Short-term securities	1,947		1,178		1,546			—			4,671
Other investments	2,516		930		1			—			3,447
Total investments	46,997		21,739		1,734			—			70,470
Cash	225		153		2			—			380
Investment income accrued	453		185		4			—			642
Premiums receivable	4,336		2,101		—			—			6,437
Reinsurance recoverables	5,849		3,061		—			—			8,910
Ceded unearned premiums	610		46		—			—			656
Deferred acquisition costs	1,660		189		—			—			1,849
Deferred taxes	178		83		35			—			296
Contractholder receivables	3,387		987		—			—			4,374
Goodwill	2,573		1,000		—			—			3,573
Other intangible assets	203		76		—			—			279
Investment in subsidiaries	—		—		27,573			(27,573		)	—
Other assets	1,958		344		16			—			2,318
Total assets	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184
Liabilities
Claims and claim adjustment expense reserves	$	31,965	$	16,330	$	—		$	—		$	48,295
Unearned premium reserves	8,335		3,636		—			—			11,971
Contractholder payables	3,387		987		—			—			4,374
Payables for reinsurance premiums	175		121		—			—			296
Debt	693		—		5,651			—			6,344
Other liabilities	3,958		1,221		127			—			5,306
Total liabilities	48,513		22,295		5,778			—			76,586
Shareholders’ equity
Common stock (1,750.0 shares authorized; 295.9 shares issued and outstanding)	—		390		22,172			(390		)	22,172
Additional paid-in capital	11,634		6,499		—			(18,133		)	—
Retained earnings	7,888		688		29,933			(8,564		)	29,945
Accumulated other comprehensive income (loss)	394		92		(157		)	(486		)	(157		)
Treasury stock, at cost (467.6 shares)	—		—		(28,362		)	—			(28,362		)
Total shareholders’ equity	19,916		7,669		23,586			(27,573		)	23,598
Total liabilities and shareholders’ equity	$	68,429	$	29,964	$	29,364		$	(27,573	)	$	100,184

Consolidating Statement of Cash Flows (Unaudited) [Table Text Block]

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2016

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,027		$	408		$	1,355		$	(1,435	)	$	1,355
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(17		)	(222		)	116			61			(62		)
Net cash provided by operating activities	1,010			186			1,471			(1,374		)	1,293
Cash flows from investing activities
Proceeds from maturities of fixed maturities	2,728			1,040			5			—			3,773
Proceeds from sales of investments:
Fixed maturities	385			352			2			—			739
Equity securities	10			28			—			—			38
Real estate investments	—			69			—			—			69
Other investments	233			110			—			—			343
Purchases of investments:
Fixed maturities	(3,588		)	(2,108		)	(9		)	—			(5,705		)
Equity securities	(5		)	(19		)	(2		)	—			(26		)
Real estate investments	—			(20		)	—			—			(20		)
Other investments	(221		)	(69		)	—			—			(290		)
Net (purchases) sales of short-term securities	193			639			(151		)	—			681
Securities transactions in course of settlement	325			137			(1		)	—			461
Other	(151		)	(3		)	—			—			(154		)
Net cash provided by (used in) investing activities	(91		)	156			(156		)	—			(91		)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,100		)	—			(1,100		)
Treasury stock acquired — net employee share-based compensation	—			—			(59		)	—			(59		)
Dividends paid to shareholders	—			—			(375		)	—			(375		)
Payment of debt	—			—			(400		)	—			(400		)
Issuance of debt	—			—			491			—			491
Issuance of common stock — employee share options	—			—			129			—			129
Dividends paid to parent company	(1,025		)	(349		)	—			1,374			—
Net cash used in financing activities	(1,025		)	(349		)	(1,314		)	1,374			(1,314		)
Effect of exchange rate changes on cash	2			(5		)	—			—			(3		)
Net increase (decrease) in cash	(104		)	(12		)	1			—			(115		)
Cash at beginning of year	225			153			2			—			380
Cash at end of period	$	121		$	141		$	3		$	—		$	265
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	398		$	142		$	(73	)	$	—		$	467
Interest paid	$	24		$	—		$	156		$	—		$	180

CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited)

For the six months ended June 30, 2015

(in millions)	TPC			Other Subsidiaries			TRV			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	1,260		$	500		$	1,645		$	(1,760	)	$	1,645
Net adjustments to reconcile net income to net cash provided by (used in) operating activities	(410		)	(520		)	182			(22		)	(770		)
Net cash provided by (used in) operating activities	850			(20		)	1,827			(1,782		)	875
Cash flows from investing activities
Proceeds from maturities of fixed maturities	3,604			1,707			3			—			5,314
Proceeds from sales of investments:
Fixed maturities	710			516			—			—			1,226
Equity securities	11			17			—			—			28
Real estate investments	—			10			—			—			10
Other investments	244			110			—			—			354
Purchases of investments:
Fixed maturities	(4,352		)	(1,869		)	(18		)	—			(6,239		)
Equity securities	(2		)	(19		)	(1		)	—			(22		)
Real estate investments	—			(69		)	—			—			(69		)
Other investments	(222		)	(53		)	—			—			(275		)
Net (purchases) sales of short-term securities	327			224			(118		)	—			433
Securities transactions in course of settlement	190			(7		)	—			—			183
Other	(175		)	(3		)	—			—			(178		)
Net cash provided by (used in) investing activities	335			564			(134		)	—			765
Cash flows from financing activities
Treasury stock acquired — share repurchase authorization	—			—			(1,400		)	—			(1,400		)
Treasury stock acquired — net employee share-based compensation	—			—			(72		)	—			(72		)
Dividends paid to shareholders	—			—			(369		)	—			(369		)
Issuance of common stock — employee share options	—			—			117			—			117
Excess tax benefits from share-based payment arrangements	—			—			31			—			31
Dividends paid to parent company	(1,222		)	(560		)	—			1,782			—
Net cash used in financing activities	(1,222		)	(560		)	(1,693		)	1,782			(1,693		)
Effect of exchange rate changes on cash	—			(4		)	—			—			(4		)
Net decrease in cash	(37		)	(20		)	—			—			(57		)
Cash at beginning of year	221			151			2			—			374
Cash at end of period	$	184		$	131		$	2		$	—		$	317
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	534		$	197		$	(134	)	$	—		$	597
Interest paid	$	24		$	—		$	159		$	—		$	183

XML

Basis of Presentation and Accounting Policies (details)	6 Months Ended
	Jun. 30, 2016 item
Basis of Presentation and Accounting Policies disclosure
Number of reportable business segments	3

XML

Segment Information (details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment reporting information
Premiums		$ 6,067	$ 5,931	$ 12,048	$ 11,819
Net investment income		549	632	1,093	1,224
Fee income		119	115	236	229
Other revenues		31	22	84	47
Operating income (loss)		649	806	1,347	1,633
Net realized investment gains	[1]	19	10	10	20
Total revenues		6,785	6,710	13,471	13,339
Net realized investment gains, net of tax		15	6	8	12
Net income		664	812	1,355	1,645
Reportable Segments [Member]
Segment reporting information
Premiums		6,067	5,931	12,048	11,819
Net investment income		549	632	1,093	1,224
Fee income		119	115	236	229
Other revenues		28	22	78	47
Total operating revenues		6,763	6,700	13,455	13,319
Operating income (loss)		711	868	1,470	1,759
Reportable Segments [Member] | Business and International Insurance [Member]
Segment reporting information
Premiums		3,631	3,609	7,230	7,229
Net investment income		420	487	835	941
Fee income		115	111	229	222
Other revenues		8	5	41	13
Total operating revenues		4,174	4,212	8,335	8,405
Operating income (loss)		393	543	869	1,058
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member]
Segment reporting information
Premiums		3,212	3,132	6,390	6,254
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | Workers' compensation [Member]
Segment reporting information
Premiums		987	957	1,968	1,919
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | Automobile [Member]
Segment reporting information
Premiums		503	477	994	945
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | Commercial Property [Member]
Segment reporting information
Premiums		442	440	879	880
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | General Liability [Member]
Segment reporting information
Premiums		485	469	967	937
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | Commercial multi-peril [Member]
Segment reporting information
Premiums		786	779	1,568	1,553
Reportable Segments [Member] | Business and International Insurance [Member] | Domestic [Member] | Other [Member]
Segment reporting information
Premiums		9	10	14	20
Reportable Segments [Member] | Business and International Insurance [Member] | International [Member]
Segment reporting information
Premiums		419	477	840	975
Reportable Segments [Member] | Bond & Specialty Insurance [Member]
Segment reporting information
Premiums		518	524	1,026	1,028
Net investment income		51	57	103	113
Other revenues		6	5	9	10
Total operating revenues		575	586	1,138	1,151
Operating income (loss)		202	151	346	275
Reportable Segments [Member] | Bond & Specialty Insurance [Member] | General Liability [Member]
Segment reporting information
Premiums		235	240	469	476
Reportable Segments [Member] | Bond & Specialty Insurance [Member] | Fidelity and surety [Member]
Segment reporting information
Premiums		239	240	469	465
Reportable Segments [Member] | Bond & Specialty Insurance [Member] | Other [Member]
Segment reporting information
Premiums		44	44	88	87
Reportable Segments [Member] | Personal Insurance [Member]
Segment reporting information
Premiums		1,918	1,798	3,792	3,562
Net investment income		78	88	155	170
Fee income		4	4	7	7
Other revenues		14	12	28	24
Total operating revenues		2,014	1,902	3,982	3,763
Operating income (loss)		116	174	255	426
Reportable Segments [Member] | Personal Insurance [Member] | Automobile [Member]
Segment reporting information
Premiums		974	863	1,910	1,699
Reportable Segments [Member] | Personal Insurance [Member] | Homeowners and other [Member]
Segment reporting information
Premiums		944	935	1,882	1,863
Other [Member]
Segment reporting information
Other revenues		3		6
Operating income (loss)		(62)	(62)	(123)	(126)
After-tax interest expense		$ 60	$ 60	$ 120	$ 120

[1] Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively. Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains. In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

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Segment Information (details) - Assets by Segment - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Assets by segment
Total assets	$ 102,446	$ 100,184
Reportable Segments [Member]
Assets by segment
Total assets	102,068	99,800
Reportable Segments [Member] | Business and International Insurance [Member]
Assets by segment
Total assets	81,214	79,692
Reportable Segments [Member] | Bond & Specialty Insurance [Member]
Assets by segment
Total assets	7,745	7,360
Reportable Segments [Member] | Personal Insurance [Member]
Assets by segment
Total assets	13,109	12,748
Other assets [Member]
Assets by segment
Total assets	$ 378	$ 384

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Investments (details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Investments disclosure
Proceeds from sales of fixed maturities classified as available for sale	$ 739	$ 1,226
Proceeds from sales of equity securities classified as available for sale	$ 38	$ 28

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Investments (details) - Investment Information - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investment disclosure details
Fixed maturities, amortized cost	$ 59,975		$ 59,975		$ 58,878
Gross unrealized gains	3,391		3,391		2,100
Gross unrealized losses	55		55		320
Fixed maturities, at fair value	63,311		63,311		60,658
Equity securities, cost	525		525		528
Gross unrealized gains	237		237		190
Gross unrealized losses	10		10		13
Equity securities, at fair value	752		752		705
Continuous unrealized loss position less than 12 months, fair value	1,561		1,561		11,221
Continuous unrealized loss position less than 12 months, gross unrealized losses	16		16		233
Continuous unrealized loss position 12 months or longer, fair value	873		873		1,008
Continuous unrealized loss position 12 months or longer, gross unrealized losses	49		49		100
Continuous unrealized loss position, total, fair value	2,434		2,434		12,229
Continuous unrealized loss position, total, gross unrealized losses	65		65		333
Unrealized losses for available-for-sale securities for which fair value is less than 80% of amortized cost, total	11		11
Impairment charges	$ 4	$ 6	$ 22	$ 9
Maxiumum [Member]
Investment disclosure details
Unrealized investment losses for securities for which fair value is less than 80% of amortized cost, as a percentage of the combined fixed maturity and equity security portfolios on a pretax basis	1.00%		1.00%
Unrealized investment losses for securities for which fair value is less than 80% of amortized cost, as a percentage of shareholders' equity on an after-tax basis	1.00%		1.00%
Fixed maturities [Member]
Investment disclosure details
Gross realized gains			$ 46	40
Gross realized losses			8	3
Continuous unrealized loss position less than 12 months, fair value	$ 1,507		1,507		11,126
Continuous unrealized loss position less than 12 months, gross unrealized losses	13		13		224
Continuous unrealized loss position 12 months or longer, fair value	781		781		937
Continuous unrealized loss position 12 months or longer, gross unrealized losses	42		42		96
Continuous unrealized loss position, total, fair value	2,288		2,288		12,063
Continuous unrealized loss position, total, gross unrealized losses	55		55		320
Cumulative OTTI credit losses recognized for securities held	$ 88	$ 88	$ 88	$ 88
Fixed maturities [Member] | Maxiumum [Member]
Investment disclosure details
Cumulative credit component of other-than-temporary impairments (OTTI) on fixed maturities recognized in the consolidated statement of income for which a portion of the OTTI was recognized in other comprehensive income (loss) for fixed maturities held, as a percentage of the fixed maturity portfolio on a pretax basis	1.00%	1.00%	1.00%	1.00%
Cumulative credit component of other-than-temporary impairments (OTTI) on fixed maturities recognized in the consolidated statement of income for which a portion of the OTTI was recognized in other comprehensive income (loss) for fixed maturities held, as a percentage of shareholders' equity on an after-tax basis	1.00%	1.00%	1.00%	1.00%
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities [Member]
Investment disclosure details
Fixed maturities, amortized cost	$ 2,038		$ 2,038		2,202
Gross unrealized gains	36		36		8
Gross unrealized losses	1		1		16
Fixed maturities, at fair value	2,073		2,073		2,194
Continuous unrealized loss position less than 12 months, fair value	37		37		1,820
Continuous unrealized loss position less than 12 months, gross unrealized losses					15
Continuous unrealized loss position 12 months or longer, fair value	10		10		28
Continuous unrealized loss position 12 months or longer, gross unrealized losses	1		1		1
Continuous unrealized loss position, total, fair value	47		47		1,848
Continuous unrealized loss position, total, gross unrealized losses	1		1		16
Obligations of states, municipalities and political subdivisions [Member]
Investment disclosure details
Fixed maturities, amortized cost	31,534		31,534		30,027
Gross unrealized gains	2,099		2,099		1,393
Gross unrealized losses	1		1		9
Fixed maturities, at fair value	33,632		33,632		31,411
Continuous unrealized loss position less than 12 months, fair value	639		639		928
Continuous unrealized loss position less than 12 months, gross unrealized losses	1		1		7
Continuous unrealized loss position 12 months or longer, fair value	14		14		142
Continuous unrealized loss position 12 months or longer, gross unrealized losses					2
Continuous unrealized loss position, total, fair value	653		653		1,070
Continuous unrealized loss position, total, gross unrealized losses	1		1		9
Obligations of states, municipalities and political subdivisions, local general obligation [Member]
Investment disclosure details
Fixed maturities, amortized cost	13,816		13,816		12,744
Gross unrealized gains	954		954		577
Gross unrealized losses	1		1		3
Fixed maturities, at fair value	14,769		14,769		13,318
Obligations of states, municipalities and political subdivisions, revenue [Member]
Investment disclosure details
Fixed maturities, amortized cost	10,270		10,270		9,492
Gross unrealized gains	787		787		472
Gross unrealized losses					4
Fixed maturities, at fair value	11,057		11,057		9,960
Obligations of states, municipalities and political subdivisions, state general obligation [Member]
Investment disclosure details
Fixed maturities, amortized cost	1,958		1,958		1,978
Gross unrealized gains	124		124		97
Gross unrealized losses					2
Fixed maturities, at fair value	2,082		2,082		2,073
Obligations of states, municipalities and political subdivisions, pre-refunded [Member]
Investment disclosure details
Fixed maturities, amortized cost	5,490		5,490		5,813
Gross unrealized gains	234		234		247
Fixed maturities, at fair value	5,724		5,724		6,060
Debt securities issued by foreign governments [Member]
Investment disclosure details
Fixed maturities, amortized cost	1,745		1,745		1,829
Gross unrealized gains	56		56		45
Gross unrealized losses					1
Fixed maturities, at fair value	1,801		1,801		1,873
Continuous unrealized loss position less than 12 months, fair value	3		3		172
Continuous unrealized loss position less than 12 months, gross unrealized losses					1
Continuous unrealized loss position, total, fair value	3		3		172
Continuous unrealized loss position, total, gross unrealized losses					1
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities [Member]
Investment disclosure details
Fixed maturities, amortized cost	1,702		1,702		1,863
Gross unrealized gains	132		132		124
Gross unrealized losses	1		1		6
Fixed maturities, at fair value	1,833		1,833		1,981
Continuous unrealized loss position less than 12 months, fair value	42		42		473
Continuous unrealized loss position less than 12 months, gross unrealized losses					4
Continuous unrealized loss position 12 months or longer, fair value	37		37		57
Continuous unrealized loss position 12 months or longer, gross unrealized losses	1		1		2
Continuous unrealized loss position, total, fair value	79		79		530
Continuous unrealized loss position, total, gross unrealized losses	1		1		6
All other corporate bonds [Member]
Investment disclosure details
Fixed maturities, amortized cost	22,858		22,858		22,854
Gross unrealized gains	1,062		1,062		523
Gross unrealized losses	52		52		288
Fixed maturities, at fair value	23,868		23,868		23,089
Continuous unrealized loss position less than 12 months, fair value	779		779		7,725
Continuous unrealized loss position less than 12 months, gross unrealized losses	12		12		197
Continuous unrealized loss position 12 months or longer, fair value	720		720		710
Continuous unrealized loss position 12 months or longer, gross unrealized losses	40		40		91
Continuous unrealized loss position, total, fair value	1,499		1,499		8,435
Continuous unrealized loss position, total, gross unrealized losses	52		52		288
Redeemable preferred stock [Member]
Investment disclosure details
Fixed maturities, amortized cost	98		98		103
Gross unrealized gains	6		6		7
Fixed maturities, at fair value	104		104		110
Continuous unrealized loss position less than 12 months, fair value	7		7		8
Continuous unrealized loss position, total, fair value	7		7		8
Equity securities [Member]
Investment disclosure details
Gross realized gains			8	$ 5
Gross realized losses			2	$ 3
Continuous unrealized loss position less than 12 months, fair value	54		54		95
Continuous unrealized loss position less than 12 months, gross unrealized losses	3		3		9
Continuous unrealized loss position 12 months or longer, fair value	92		92		71
Continuous unrealized loss position 12 months or longer, gross unrealized losses	7		7		4
Continuous unrealized loss position, total, fair value	146		146		166
Continuous unrealized loss position, total, gross unrealized losses	10		10		13
Public common stock [Member]
Investment disclosure details
Equity securities, cost	386		386		386
Gross unrealized gains	214		214		164
Gross unrealized losses	3		3		7
Equity securities, at fair value	597		597		543
Continuous unrealized loss position less than 12 months, fair value	24		24		48
Continuous unrealized loss position less than 12 months, gross unrealized losses	2		2		6
Continuous unrealized loss position 12 months or longer, fair value	34		34		33
Continuous unrealized loss position 12 months or longer, gross unrealized losses	1		1		1
Continuous unrealized loss position, total, fair value	58		58		81
Continuous unrealized loss position, total, gross unrealized losses	3		3		7
Non-redeemable preferred stock [Member]
Investment disclosure details
Equity securities, cost	139		139		142
Gross unrealized gains	23		23		26
Gross unrealized losses	7		7		6
Equity securities, at fair value	155		155		162
Continuous unrealized loss position less than 12 months, fair value	30		30		47
Continuous unrealized loss position less than 12 months, gross unrealized losses	1		1		3
Continuous unrealized loss position 12 months or longer, fair value	58		58		38
Continuous unrealized loss position 12 months or longer, gross unrealized losses	6		6		3
Continuous unrealized loss position, total, fair value	88		88		85
Continuous unrealized loss position, total, gross unrealized losses	$ 7		$ 7		$ 6

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Investments (details) - Derivatives - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Futures [Member] | U.S. Treasury notes contracts [Member]
Derivatives
Notional value of open contracts	$ 400	$ 400

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Fair Value Measurements (details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value Measurements disclosure
Percent of fixed maturities for which a pricing service estimates fair value	98.00%	98.00%
Fair value of the fixed maturities for which the Company used an internal pricing matrix	$ 96	$ 101
Fair value of the fixed maturities for which the Company received a broker quote	$ 87	$ 117
Percent of short-term securities for which a pricing service estimates fair value	99.00%	99.00%
Percent of debt, including commercial paper, for which a pricing service estimates fair value	100.00%	100.00%

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Fair Value Measurements (details) - Fair Value Hierarchy - Recurring basis [Member] - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	$ 64,124	$ 61,419
Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	2,770	2,813
Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	61,127	58,350
Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	227	256
Fixed maturities [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	63,311	60,658
Fixed maturities [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	2,090	2,197
Fixed maturities [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	61,038	58,243
Fixed maturities [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	183	218
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	2,073	2,194
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	2,073	2,194
Obligations of states, municipalities and political subdivisions [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	33,632	31,411
Obligations of states, municipalities and political subdivisions [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	11
Obligations of states, municipalities and political subdivisions [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	33,608	31,398
Obligations of states, municipalities and political subdivisions [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	13	13
Debt securities issued by foreign governments [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	1,801	1,873
Debt securities issued by foreign governments [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	1,801	1,873
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	1,833	1,981
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	1,833	1,957
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis		24
All other corporate bonds [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	23,868	23,089
All other corporate bonds [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	3
All other corporate bonds [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	23,702	22,915
All other corporate bonds [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	163	174
Redeemable preferred stock [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	104	110
Redeemable preferred stock [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	3	3
Redeemable preferred stock [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	94	100
Redeemable preferred stock [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	7	7
Equity securities [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	752	705
Equity securities [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	663	598
Equity securities [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	89	107
Public common stock [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	597	543
Public common stock [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	597	543
Non-redeemable preferred stock [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	155	162
Non-redeemable preferred stock [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	66	55
Non-redeemable preferred stock [Member] | Level 2 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	89	107
Other investments [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	61	56
Other investments [Member] | Level 1 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	17	18
Other investments [Member] | Level 3 [Member]
Level within the fair value hierarchy at which the Company's financial assets are measured
Total invested assets measured on a recurring basis	$ 44	$ 38

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Fair Value Measurements Footnote (details) - Financial Instruments - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Financial Instruments
Short-term securities	$ 3,988	$ 4,671
Fair Value [Member]
Financial Instruments
Short-term securities	3,988	4,671
Debt	7,743	7,180
Commercial paper amount	100	100
Fair Value [Member] | Level 1 [Member]
Financial Instruments
Short-term securities	792	1,685
Fair Value [Member] | Level 2 [Member]
Financial Instruments
Short-term securities	3,151	2,958
Debt	7,743	7,180
Commercial paper amount	100	100
Fair Value [Member] | Level 3 [Member]
Financial Instruments
Short-term securities	45	28
Carrying Value [Member]
Financial Instruments
Short-term securities	3,988	4,671
Debt	6,336	6,244
Commercial paper amount	$ 100	$ 100

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Goodwill (details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Goodwill by segment
Goodwill	$ 3,588	$ 3,573
Reportable Segments [Member] | Business and International Insurance [Member]
Goodwill by segment
Goodwill	2,454	2,439
Reportable Segments [Member] | Bond & Specialty Insurance [Member]
Goodwill by segment
Goodwill	496	496
Reportable Segments [Member] | Personal Insurance [Member]
Goodwill by segment
Goodwill	612	612
Other [Member]
Goodwill by segment
Goodwill	$ 26	$ 26

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Goodwill (details) - Other Intangible Assets - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Goodwill and Other Intangible Assets disclosure
Intangible assets subject to amortization, gross carrying amount	$ 210		$ 210		$ 210
Intangible assets subject to amortization, accumulated amortization	153		153		148
Intangible assets subject to amortization, net	57		57		62
Intangible assets not subject to amortization	217		217		217
Total other intangible assets, gross carrying amount	427		427		427
Total other intangible assets, net	274		274		$ 279
Amortization expense of intangible assets	2	$ 9	5	$ 20
Estimated intangible asset amortization expense, remainder of 2016	5		5
Estimated intangible asset amortization expense, 2017	9		9
Estimated intangible asset amortization expense, 2018	8		8
Estimated intangible asset amortization expense, 2019	7		7
Estimated intangible asset amortization expense, 2020	$ 5		$ 5

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Other Comprehensive Income and Accumulated Other Comprehensive Income (details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			$ 23,598
Other comprehensive income (loss), net of taxes	$ 551	$ (600)	1,122	$ (711)
Shareholders' equity, end of period	24,714	24,121	24,714	24,121
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	874	(953)	1,712	(1,039)
Income tax expense (benefit), other comprehensive income (loss)	323	(353)	590	(328)
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			(157)	880
Other comprehensive income before reclassifications			1,117
Amounts reclassified from accumulated other comprehensive income			5
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Shareholders' equity, end of period	965	169	965	169
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	874	(953)	1,712	(1,039)
Income tax expense (benefit), other comprehensive income (loss)	323	(353)	590	(328)
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Changes in Net Unrealized Gains on Investment Securities Having No Credit Losses Recognized in the Consolidated Statement of Income [Member]
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			1,100
Other comprehensive income before reclassifications			1,064
Amounts reclassified from accumulated other comprehensive income			(23)
Other comprehensive income (loss), net of taxes	574	(697)	1,041	(584)
Shareholders' equity, end of period	2,141		2,141
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	879	(1,065)	1,593	(896)
Income tax expense (benefit), other comprehensive income (loss)	305	(368)	552	(312)
Other comprehensive income (loss), net of taxes	574	(697)	1,041	(584)
Changes in Net Unrealized Gains on Investment Securities Having Credit Losses Recognized in the Consolidated Statement of Income [Member]
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			189
Other comprehensive income before reclassifications			3
Amounts reclassified from accumulated other comprehensive income			8
Other comprehensive income (loss), net of taxes	8	(3)	11	(6)
Shareholders' equity, end of period	200		200
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	12	(5)	17	(10)
Income tax expense (benefit), other comprehensive income (loss)	4	(2)	6	(4)
Other comprehensive income (loss), net of taxes	8	(3)	11	(6)
Net Benefit Plan Assets and Obligations Recognized in Shareholders' Equity [Member]
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			(713)
Other comprehensive income before reclassifications			3
Amounts reclassified from accumulated other comprehensive income			20
Other comprehensive income (loss), net of taxes	12	15	23	31
Shareholders' equity, end of period	(690)		(690)
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	18	23	34	47
Income tax expense (benefit), other comprehensive income (loss)	6	8	11	16
Other comprehensive income (loss), net of taxes	12	15	23	31
Net Unrealized Foreign Currency Translation [Member]
Accumulated other comprehensive income [Roll Forward]
Shareholders' equity, beginning of year			(733)
Other comprehensive income before reclassifications			47
Other comprehensive income (loss), net of taxes	(43)	85	47	(152)
Shareholders' equity, end of period	(686)		(686)
Pretax components of other comprehensive income (loss) and related tax expense (benefit)
Other comprehensive income (loss) before income taxes	(35)	94	68	(180)
Income tax expense (benefit), other comprehensive income (loss)	8	9	21	(28)
Other comprehensive income (loss), net of taxes	$ (43)	$ 85	$ 47	$ (152)

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Other Comprehensive Income and Accumulated Other Comprehensive Income (details) - Reclassifications - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Reclassification adjustment impacting net realized investment gains on the income statement	[1]	$ (19)	$ (10)	$ (10)	$ (20)
Reclassification adjustment impacting general and administrative expense on the income statement		1,054	1,032	2,049	2,027
Total reclassifications		(887)	(1,076)	(1,804)	(2,224)
Income tax (expense) benefit		(223)	(264)	(449)	(579)
Amounts reclassified from accumulated other comprehensive income, net of taxes		(664)	(812)	(1,355)	(1,645)
Accumulated Other Comprehensive Income (Loss) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Total reclassifications		(8)	9	8	14
Income tax (expense) benefit		(2)	3	3	5
Amounts reclassified from accumulated other comprehensive income, net of taxes		(6)	6	5	9
Changes in Net Unrealized Gains on Investment Securities Having No Credit Losses Recognized in the Consolidated Statement of Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Reclassification adjustment impacting net realized investment gains on the income statement		(24)	(17)	(35)	(35)
Income tax (expense) benefit		(8)	(6)	(12)	(12)
Amounts reclassified from accumulated other comprehensive income, net of taxes		(16)	(11)	(23)	(23)
Changes in Net Unrealized Gains on Investment Securities Having Credit Losses Recognized in the Consolidated Statement of Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Reclassification adjustment impacting net realized investment gains on the income statement		1	2	12	2
Income tax (expense) benefit				4
Amounts reclassified from accumulated other comprehensive income, net of taxes		1	2	8	2
Net Benefit Plan Assets and Obligations Recognized in Shareholders' Equity [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Reclassification adjustment impacting general and administrative expense on the income statement		15	24	31	47
Income tax (expense) benefit		6	9	11	17
Amounts reclassified from accumulated other comprehensive income, net of taxes		$ 9	$ 15	$ 20	$ 30

[1] Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively. Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains. In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

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Debt (details) - USD ($) $ in Millions		6 Months Ended
	May 11, 2016	Jun. 30, 2016
Debt Instrument
Net proceeds of issuance, after the deduction of underwriting and other expenses		$ 491
Senior notes [Member]
Debt Instrument
Debt, principal amount	$ 500
Interest rate (percent)	3.75%
Net proceeds of issuance, after the deduction of underwriting and other expenses	$ 491
Percentage of principal amount at which redemption price may be set	100.00%
Basis points added to current treasury rate used in calculation of alternative redemption price	0.20%

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Debt (details) - Payment - USD ($) $ in Millions		6 Months Ended
	Jun. 20, 2016	Jun. 30, 2016
Debt Instrument
Debt, principal amount repaid		$ 400
6.25% Senior notes due June 20, 2016 [Member]
Debt Instrument
Debt, principal amount repaid	$ 400
Interest rate (percent)	6.25%

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Common Share Repurchases (details) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2016 USD ($) $ / shares shares
Common Share Repurchases disclosure
Number of shares repurchased (in shares) | shares	4,900,000	10,000,000
Cost of shares repurchased	$ 550.0	$ 1,100.0
Average cost per share repurchased | $ / shares	$ 112.12	$ 110.26
Remaining capacity under share repurchase authorization	$ 2,230.0	$ 2,230.0
Number of shares acquired to cover tax withholding costs and exercise costs (in shares) | shares	5,146	500,000
Cost of shares acquired to cover tax withholding costs and exercise costs	$ 0.6	$ 59.0

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Earnings per Share (details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per Share disclosure
Net income	$ 664	$ 812	$ 1,355	$ 1,645
Participating share-based awards - allocated income	(5)	(6)	(10)	(12)
Net income available to common shareholders -- basic	659	806	1,345	1,633
Net income available to common shareholders -- diluted	$ 659	$ 806	$ 1,345	$ 1,633
Weighted average shares outstanding, basic	290.1	314.8	292.1	317.7
Weighted average effects of dilutive securities, stock options and performance shares (in shares)	3.5	3.2	3.5	3.5
Weighted average shares outstanding, diluted	293.6	318.0	295.6	321.2
Net income per common share, basic	$ 2.27	$ 2.56	$ 4.60	$ 5.14
Net income per common share, diluted	$ 2.24	$ 2.53	$ 4.55	$ 5.08

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Share-Based Incentive Compensation (details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-Based Incentive Compensation disclosure
Stock options vested at end of period, number (in shares)	8,006,375		8,006,375
Stock options vested at end of period, weighted average exercise price (per share)	$ 78.85		$ 78.85
Stock options vested at end of period, weighted average contractual life remaining			6 years 6 months
Stock options vested at end of period, aggregate intrinsic value	$ 322		$ 322
Stock options exercisable at end of period, number (in shares)	4,406,788		4,406,788
Stock options exercisable at end of period, weighted average exercise price (per share)	$ 62.60		$ 62.60
Stock options exercisable at end of period, weighted average contractual life remaining			4 years 9 months 18 days
Stock options exercisable at end of period, aggregate intrinsic value	$ 249		$ 249
Total compensation cost recognized in earnings for all share-based incentive compensation awards	32	$ 31	82	$ 78
Tax benefit recognized in earnings related to compensation costs	11	$ 10	28	$ 26
Total unrecognized compensation cost related to all nonvested share-based incentive compensation awards	$ 184		$ 184
Weighted-average period of recognition for unrecognized compensation cost (in years)			2 years

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Pension Plans, Retirement Benefits and Savings Plans (details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Plans [Member]
Defined benefit plan disclosure
Service cost	$ 30	$ 32	$ 59	$ 65
Interest cost on benefit obligation	31	36	61	72
Expected return on plan assets	(58)	(57)	(115)	(115)
Net periodic benefit cost, settlement	1		1
Net periodic benefit cost, amortization of unrecognized net actuarial loss	16	24	33	48
Net periodic benefit cost	20	35	39	70
Postretirement Benefit Plans [Member]
Defined benefit plan disclosure
Interest cost on benefit obligation	2	2	4	5
Net periodic benefit cost, amortization of unrecognized prior service benefit	(1)		(2)	(1)
Net periodic benefit cost	$ 1	$ 2	$ 2	$ 4

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Pension Plans, Retirement Benefits and Savings Plans (details) - Additional Pension Disclosures - Change in Assumptions for Pension Plans and Postretirement Benefit Plans [Member] $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Impact of Change in Estimation Approach [Member]
Change in Accounting Estimate
Reduction to service cost	$ 2	$ 3
Reduction to interest cost	$ 7	$ 15
Current Estimation Approach [Member] | Qualified Domestic Pension Plan [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	4.77%	4.77%
Weighted average discount rate used to measure interest cost (percent)	3.64%	3.64%
Current Estimation Approach [Member] | Nonqualified Domestic Pension Plan [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	4.53%	4.53%
Weighted average discount rate used to measure interest cost (percent)	3.47%	3.47%
Current Estimation Approach [Member] | Domestic Postretirement Benefit Plans [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	0.00%	0.00%
Weighted average discount rate used to measure interest cost (percent)	3.53%	3.53%
Prior Estimation Approach [Member] | Qualified Domestic Pension Plan [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	4.50%	4.50%
Weighted average discount rate used to measure interest cost (percent)	4.50%	4.50%
Prior Estimation Approach [Member] | Nonqualified Domestic Pension Plan [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	4.37%	4.37%
Weighted average discount rate used to measure interest cost (percent)	4.37%	4.37%
Prior Estimation Approach [Member] | Domestic Postretirement Benefit Plans [Member]
Change in Accounting Estimate
Weighted average discount rate used to measure service cost (percent)	4.35%	4.35%
Weighted average discount rate used to measure interest cost (percent)	4.35%	4.35%

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Contingencies, Commitments and Guarantees (details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Contingencies and Commitments disclosure
Unfunded commitments to private equity limited partnerships and real estate partnerships	$ 1,690	$ 1,710

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Contingencies, Commitments and Guarantees (details) - Gain Contingencies - United States Fidelity & Guaranty Company v. American Re-Insurance Company, et al. [Member] $ in Millions	70 Months Ended
	Jun. 30, 2016 USD ($) item	Aug. 17, 2010 item
Gain Contingencies
Number of other reinsurers beside American Re against which judgment was entered in a reinsurance dispute | item		3
Number of reinsurers against which judgment was entered in a reinsurance dispute who are subsidiaries of the same company | item		2
Number of discrete issues for which the Court of Appeals remanded the case for trial | item	2
Total settlement amount | $	$ 519
Settlement amount, reinsurance recoverables | $	238
Interest related to settlement award | $	$ 281
Annual interest rate accruing on judgment not yet paid	9.00%

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Contingencies, Commitments and Guarantees (details) - Guarantees $ in Millions	Jun. 30, 2016 USD ($)
Indemnifications related to the sale of businesses [Member]
Guarantor obligations
Maximum amount of contingent obligation	$ 391
Amount recognized on balance sheet for contingent obligation	2
Guarantees of certain investments and third-party loans [Member]
Guarantor obligations
Maximum amount of contingent obligation	150
Amount indemnified by a third party	75
Guarantees of certain insurance policy obligations [Member]
Guarantor obligations
Maximum amount of contingent obligation	480
Amount indemnified by a third party	$ 480

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Consolidating Financial Statements (Unaudited) (details) $ in Millions	Jun. 30, 2016 USD ($)
Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries (Unaudited) disclosure
Amount of certain debt obligations of TPC that are unconditionally guaranteed by The Travelers Companies, Inc.	$ 700

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Consolidating Financial Statements (details) - Consolidating Statement of Income (Unaudited) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidating Statement of Income
Premiums		$ 6,067	$ 5,931	$ 12,048	$ 11,819
Net investment income		549	632	1,093	1,224
Fee income		119	115	236	229
Net realized investment gains (losses)	[1]	19	10	10	20
Other revenues		31	22	84	47
Total revenues		6,785	6,710	13,471	13,339
Claims and claim adjustment expenses		3,762	3,547	7,474	6,978
Amortization of deferred acquisition costs		989	963	1,960	1,926
General and administrative expenses		1,054	1,032	2,049	2,027
Interest expense		93	92	184	184
Total claims and expenses		5,898	5,634	11,667	11,115
Income before income taxes		887	1,076	1,804	2,224
Income tax expense (benefit)		223	264	449	579
Net income		664	812	1,355	1,645
Total other-than-temporary impairment losses		(4)	(8)	(32)	(12)
Other-than-temporary impairment losses recognized in net realized investment gains (losses)		(4)	(6)	(22)	(9)
Other-than-temporary impairment gains (losses) recognized in other comprehensive income		0	(2)	(10)	(3)
TPC [Member]
Consolidating Statement of Income
Premiums		4,161	4,044	8,246	8,040
Net investment income		377	424	753	835
Fee income		119	115	236	229
Net realized investment gains (losses)		(1)	17	(17)	19
Other revenues		33	19	81	40
Total revenues		4,689	4,619	9,299	9,163
Claims and claim adjustment expenses		2,575	2,409	5,095	4,718
Amortization of deferred acquisition costs		666	651	1,316	1,293
General and administrative expenses		743	721	1,447	1,419
Interest expense		12	12	24	24
Total claims and expenses		3,996	3,793	7,882	7,454
Income before income taxes		693	826	1,417	1,709
Income tax expense (benefit)		191	198	390	449
Net income		502	628	1,027	1,260
Total other-than-temporary impairment losses		(3)	(7)	(17)	(8)
Other-than-temporary impairment losses recognized in net realized investment gains (losses)		(3)	(5)	(12)	(6)
Other-than-temporary impairment gains (losses) recognized in other comprehensive income			(2)	(5)	(2)
Other Subsidiaries [Member]
Consolidating Statement of Income
Premiums		1,906	1,887	3,802	3,779
Net investment income		168	206	334	386
Net realized investment gains (losses)		20	(7)	27
Other revenues		1	3	17	7
Total revenues		2,095	2,089	4,180	4,172
Claims and claim adjustment expenses		1,187	1,138	2,379	2,260
Amortization of deferred acquisition costs		323	312	644	633
General and administrative expenses		313	308	611	600
Total claims and expenses		1,823	1,758	3,634	3,493
Income before income taxes		272	331	546	679
Income tax expense (benefit)		69	86	138	179
Net income		203	245	408	500
Total other-than-temporary impairment losses		(1)	(1)	(15)	(4)
Other-than-temporary impairment losses recognized in net realized investment gains (losses)		(1)	(1)	(10)	(3)
Other-than-temporary impairment gains (losses) recognized in other comprehensive income				(5)	(1)
TRV [Member]
Consolidating Statement of Income
Net investment income		4	2	6	3
Net realized investment gains (losses)					1
Total revenues		4	2	6	4
General and administrative expenses		1	3	5	8
Interest expense		81	80	160	160
Total claims and expenses		82	83	165	168
Income before income taxes		(78)	(81)	(159)	(164)
Income tax expense (benefit)		(37)	(20)	(79)	(49)
Net income of subsidiaries		705	873	1,435	1,760
Net income		664	812	1,355	1,645
Eliminations [Member]
Consolidating Statement of Income
Other revenues		(3)		(14)
Total revenues		(3)		(14)
General and administrative expenses		(3)		(14)
Total claims and expenses		(3)		(14)
Net income of subsidiaries		(705)	(873)	(1,435)	(1,760)
Net income		$ (705)	$ (873)	$ (1,435)	$ (1,760)

[1] Total other-than-temporary impairment (OTTI) losses were $(4) million and $(8) million for the three months ended June 30, 2016 and 2015, respectively, and $(32) million and $(12) million for the six months ended June 30, 2016 and 2015, respectively. Of total OTTI, credit losses of $(4) million and $(6) million for the three months ended June 30, 2016 and 2015, respectively, and $(22) million and $(9) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in net realized investment gains. In addition, unrealized gains (losses) from other changes in total OTTI of $0 million and $(2) million for the three months ended June 30, 2016 and 2015, respectively, and $(10) million and $(3) million for the six months ended June 30, 2016 and 2015, respectively, were recognized in other comprehensive income (loss) as part of changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income.

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Consolidating Financial Statements (details) - Consolidating Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidating Statement of Comprehensive Income
Net income	$ 664	$ 812	$ 1,355	$ 1,645
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income	879	(1,065)	1,593	(896)
Changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income	12	(5)	17	(10)
Net changes in benefit plan assets and obligations	18	23	34	47
Net changes in unrealized foreign currency translation	(35)	94	68	(180)
Other comprehensive income (loss) before income taxes	874	(953)	1,712	(1,039)
Income tax expense (benefit)	323	(353)	590	(328)
Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries	551	(600)	1,122	(711)
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Comprehensive income	1,215	212	2,477	934
TPC [Member]
Consolidating Statement of Comprehensive Income
Net income	502	628	1,027	1,260
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income	570	(719)	1,055	(585)
Changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income	6	(5)	8	(9)
Net changes in benefit plan assets and obligations	18	1	18	1
Net changes in unrealized foreign currency translation	25	34	119	(145)
Other comprehensive income (loss) before income taxes	619	(689)	1,200	(738)
Income tax expense (benefit)	216	(246)	397	(232)
Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries	403	(443)	803	(506)
Other comprehensive income (loss), net of taxes	403	(443)	803	(506)
Comprehensive income	905	185	1,830	754
Other Subsidiaries [Member]
Consolidating Statement of Comprehensive Income
Net income	203	245	408	500
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income	306	(345)	534	(312)
Changes in net unrealized gains on investment securities having credit losses recognized in the consolidated statement of income	6		9	(1)
Net changes in benefit plan assets and obligations	19		20	1
Net changes in unrealized foreign currency translation	(60)	60	(51)	(35)
Other comprehensive income (loss) before income taxes	271	(285)	512	(347)
Income tax expense (benefit)	113	(115)	192	(112)
Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries	158	(170)	320	(235)
Other comprehensive income (loss), net of taxes	158	(170)	320	(235)
Comprehensive income	361	75	728	265
TRV [Member]
Consolidating Statement of Comprehensive Income
Net income	664	812	1,355	1,645
Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income	3	(1)	4	1
Net changes in benefit plan assets and obligations	(19)	22	(4)	45
Other comprehensive income (loss) before income taxes	(16)	21		46
Income tax expense (benefit)	(6)	8	1	16
Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries	(10)	13	(1)	30
Other comprehensive income (loss) of subsidiaries	561	(613)	1,123	(741)
Other comprehensive income (loss), net of taxes	551	(600)	1,122	(711)
Comprehensive income	1,215	212	2,477	934
Eliminations [Member]
Consolidating Statement of Comprehensive Income
Net income	(705)	(873)	(1,435)	(1,760)
Other comprehensive income (loss) of subsidiaries	(561)	613	(1,123)	741
Other comprehensive income (loss), net of taxes	(561)	613	(1,123)	741
Comprehensive income	$ (1,266)	$ (260)	$ (2,558)	$ (1,019)

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Consolidating Financial Statements (details) - Consolidating Balance Sheet (Unaudited) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Consolidating Balance Sheet
Fixed maturities, available for sale, at fair value	$ 63,311	$ 60,658
Equity securities, available for sale, at fair value	752	705
Real estate investments	929	989
Short-term securities	3,988	4,671
Other investments	3,490	3,447
Total investments	72,470	70,470
Cash	265	380	$ 317	$ 374
Investment income accrued	627	642
Premiums receivable	7,014	6,437
Reinsurance recoverables	8,603	8,910
Ceded unearned premiums	726	656
Deferred acquisition costs	1,954	1,849
Deferred taxes		296
Contractholder receivables	4,541	4,374
Goodwill	3,588	3,573
Other intangible assets	274	279
Other assets	2,384	2,318
Total assets	102,446	100,184
Claims and claim adjustment expense reserves	47,953	48,295
Unearned premium reserves	12,520	11,971
Contractholder payables	4,541	4,374
Payables for reinsurance premiums	401	296
Deferred taxes	370
Debt	6,436	6,344
Other liabilities	5,511	5,306
Total liabilities	77,732	76,586
Common stock	22,349	22,172
Retained earnings	30,921	29,945
Accumulated other comprehensive income (loss)	965	(157)
Treasury stock, at cost	(29,521)	(28,362)
Total shareholders' equity	24,714	23,598	24,121
Total liabilities and shareholders' equity	102,446	100,184
Fixed maturities, available for sale, amortized cost	59,975	58,878
Equity securities, available for sale, cost	$ 525	$ 528
Common stock, shares authorized	1,750.0	1,750.0
Common stock, shares issued	288.3	295.9
Common stock, shares outstanding	288.3	295.9
Treasury stock, at cost, shares	478.1	467.6
TPC [Member]
Consolidating Balance Sheet
Fixed maturities, available for sale, at fair value	$ 43,859	$ 42,289
Equity securities, available for sale, at fair value	194	189
Real estate investments	55	56
Short-term securities	1,754	1,947
Other investments	2,594	2,516
Total investments	48,456	46,997
Cash	121	225	184	221
Investment income accrued	441	453
Premiums receivable	4,722	4,336
Reinsurance recoverables	5,928	5,849
Ceded unearned premiums	649	610
Deferred acquisition costs	1,753	1,660
Deferred taxes		178
Contractholder receivables	3,570	3,387
Goodwill	2,584	2,573
Other intangible assets	203	203
Other assets	2,106	1,958
Total assets	70,533	68,429
Claims and claim adjustment expense reserves	32,096	31,965
Unearned premium reserves	8,708	8,335
Contractholder payables	3,570	3,387
Payables for reinsurance premiums	227	175
Deferred taxes	330
Debt	693	693
Other liabilities	4,188	3,958
Total liabilities	49,812	48,513
Additional paid-in capital	11,634	11,634
Retained earnings	7,890	7,888
Accumulated other comprehensive income (loss)	1,197	394
Total shareholders' equity	20,721	19,916
Total liabilities and shareholders' equity	70,533	68,429
Other Subsidiaries [Member]
Consolidating Balance Sheet
Fixed maturities, available for sale, at fair value	19,403	18,323
Equity securities, available for sale, at fair value	412	375
Real estate investments	874	933
Short-term securities	537	1,178
Other investments	895	930
Total investments	22,121	21,739
Cash	141	153	131	151
Investment income accrued	182	185
Premiums receivable	2,292	2,101
Reinsurance recoverables	2,675	3,061
Ceded unearned premiums	77	46
Deferred acquisition costs	201	189
Deferred taxes		83
Contractholder receivables	971	987
Goodwill	1,004	1,000
Other intangible assets	71	76
Other assets	(52)	344
Total assets	29,683	29,964
Claims and claim adjustment expense reserves	15,857	16,330
Unearned premium reserves	3,812	3,636
Contractholder payables	971	987
Payables for reinsurance premiums	174	121
Deferred taxes	118
Other liabilities	707	1,221
Total liabilities	21,639	22,295
Common stock	390	390
Additional paid-in capital	6,499	6,499
Retained earnings	744	688
Accumulated other comprehensive income (loss)	411	92
Total shareholders' equity	8,044	7,669
Total liabilities and shareholders' equity	29,683	29,964
TRV [Member]
Consolidating Balance Sheet
Fixed maturities, available for sale, at fair value	49	46
Equity securities, available for sale, at fair value	146	141
Short-term securities	1,697	1,546
Other investments	1	1
Total investments	1,893	1,734
Cash	3	2	$ 2	$ 2
Investment income accrued	4	4
Deferred taxes		35
Investment in subsidiaries	28,755	27,573
Other assets	330	16
Total assets	30,985	29,364
Deferred taxes	(78)
Debt	5,743	5,651
Other liabilities	616	127
Total liabilities	6,281	5,778
Common stock	22,349	22,172
Retained earnings	30,911	29,933
Accumulated other comprehensive income (loss)	965	(157)
Treasury stock, at cost	(29,521)	(28,362)
Total shareholders' equity	24,704	23,586
Total liabilities and shareholders' equity	30,985	29,364
Eliminations [Member]
Consolidating Balance Sheet
Investment in subsidiaries	(28,755)	(27,573)
Total assets	(28,755)	(27,573)
Common stock	(390)	(390)
Additional paid-in capital	(18,133)	(18,133)
Retained earnings	(8,624)	(8,564)
Accumulated other comprehensive income (loss)	(1,608)	(486)
Total shareholders' equity	(28,755)	(27,573)
Total liabilities and shareholders' equity	$ (28,755)	$ (27,573)

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Consolidating Financial Statements (details) - Consolidating Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidating Statement of Cash Flows
Net income	$ 664	$ 812	$ 1,355	$ 1,645
Net adjustments to reconcile net income to net cash provided by (used in) operating activities			(62)	(770)
Net cash provided by operating activities			1,293	875
Proceeds from maturities of fixed maturities			3,773	5,314
Proceeds from sales of investments, fixed maturities			739	1,226
Proceeds from sales of investments, equity securities			38	28
Proceeds from sales of investments, real estate investments			69	10
Proceeds from sales of investments, other investments			343	354
Purchases of investments, fixed maturities			(5,705)	(6,239)
Purchases of investments, equity securities			(26)	(22)
Purchases of investments, real estate investments			(20)	(69)
Purchases of investments, other investments			(290)	(275)
Net (purchases) sales of short-term securities			681	433
Securities transactions in course of settlement			461	183
Other investing activities			(154)	(178)
Net cash provided by (used in) investing activities			(91)	765
Treasury stock acquired - share repurchase authorization			(1,100)	(1,400)
Treasury stock acquired - net employee share-based compensation			(59)	(72)
Dividends paid to shareholders			(375)	(369)
Payment of debt			(400)
Issuance of debt			491
Issuance of common stock - employee share options			129	117
Excess tax benefits from share-based payment arrangements				31
Net cash used in financing activities			(1,314)	(1,693)
Effect of exchange rate changes on cash			(3)	(4)
Net decrease in cash			(115)	(57)
Cash at beginning of year			380	374
Cash at end of period	265	317	265	317
Income taxes paid (received)			467	597
Interest paid			180	183
TPC [Member]
Consolidating Statement of Cash Flows
Net income	502	628	1,027	1,260
Net adjustments to reconcile net income to net cash provided by (used in) operating activities			(17)	(410)
Net cash provided by operating activities			1,010	850
Proceeds from maturities of fixed maturities			2,728	3,604
Proceeds from sales of investments, fixed maturities			385	710
Proceeds from sales of investments, equity securities			10	11
Proceeds from sales of investments, other investments			233	244
Purchases of investments, fixed maturities			(3,588)	(4,352)
Purchases of investments, equity securities			(5)	(2)
Purchases of investments, other investments			(221)	(222)
Net (purchases) sales of short-term securities			193	327
Securities transactions in course of settlement			325	190
Other investing activities			(151)	(175)
Net cash provided by (used in) investing activities			(91)	335
Dividends paid to parent company			(1,025)	(1,222)
Net cash used in financing activities			(1,025)	(1,222)
Effect of exchange rate changes on cash			2
Net decrease in cash			(104)	(37)
Cash at beginning of year			225	221
Cash at end of period	121	184	121	184
Income taxes paid (received)			398	534
Interest paid			24	24
Other Subsidiaries [Member]
Consolidating Statement of Cash Flows
Net income	203	245	408	500
Net adjustments to reconcile net income to net cash provided by (used in) operating activities			(222)	(520)
Net cash provided by operating activities			186	(20)
Proceeds from maturities of fixed maturities			1,040	1,707
Proceeds from sales of investments, fixed maturities			352	516
Proceeds from sales of investments, equity securities			28	17
Proceeds from sales of investments, real estate investments			69	10
Proceeds from sales of investments, other investments			110	110
Purchases of investments, fixed maturities			(2,108)	(1,869)
Purchases of investments, equity securities			(19)	(19)
Purchases of investments, real estate investments			(20)	(69)
Purchases of investments, other investments			(69)	(53)
Net (purchases) sales of short-term securities			639	224
Securities transactions in course of settlement			137	(7)
Other investing activities			(3)	(3)
Net cash provided by (used in) investing activities			156	564
Dividends paid to parent company			(349)	(560)
Net cash used in financing activities			(349)	(560)
Effect of exchange rate changes on cash			(5)	(4)
Net decrease in cash			(12)	(20)
Cash at beginning of year			153	151
Cash at end of period	141	131	141	131
Income taxes paid (received)			142	197
TRV [Member]
Consolidating Statement of Cash Flows
Net income	664	812	1,355	1,645
Net adjustments to reconcile net income to net cash provided by (used in) operating activities			116	182
Net cash provided by operating activities			1,471	1,827
Proceeds from maturities of fixed maturities			5	3
Proceeds from sales of investments, fixed maturities			2
Purchases of investments, fixed maturities			(9)	(18)
Purchases of investments, equity securities			(2)	(1)
Net (purchases) sales of short-term securities			(151)	(118)
Securities transactions in course of settlement			(1)
Net cash provided by (used in) investing activities			(156)	(134)
Treasury stock acquired - share repurchase authorization			(1,100)	(1,400)
Treasury stock acquired - net employee share-based compensation			(59)	(72)
Dividends paid to shareholders			(375)	(369)
Payment of debt			(400)
Issuance of debt			491
Issuance of common stock - employee share options			129	117
Excess tax benefits from share-based payment arrangements				31
Net cash used in financing activities			(1,314)	(1,693)
Net decrease in cash			1
Cash at beginning of year			2	2
Cash at end of period	3	2	3	2
Income taxes paid (received)			(73)	(134)
Interest paid			156	159
Eliminations [Member]
Consolidating Statement of Cash Flows
Net income	$ (705)	$ (873)	(1,435)	(1,760)
Net adjustments to reconcile net income to net cash provided by (used in) operating activities			61	(22)
Net cash provided by operating activities			(1,374)	(1,782)
Dividends paid to parent company			1,374	1,782
Net cash used in financing activities			$ 1,374	$ 1,782