TRAVELERS COMPANIES, INC. - FORM 8-K - EX-99.2 - July 23, 2020

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EX-99.1 - EX-99.1 - TRAVELERS COMPANIES, INC.a991pressrelease63020.htm
8-K - 8-K - TRAVELERS COMPANIES, INC.trv-20200723.htm
The Travelers Companies, Inc.            image31.gif
Financial Supplement - Second Quarter 2020            


Page Number
Consolidated Results
Financial Highlights1
Reconciliation to Net Income (Loss) and Earnings Per Share2
Statement of Income (Loss)3
Net Income (Loss) by Major Component and Combined Ratio4
Core Income (Loss)5
Selected Statistics - Property and Casualty Operations6
Written and Earned Premiums - Property and Casualty Operations7
Business Insurance
Segment Income (Loss)8
Segment Income (Loss) by Major Component and Combined Ratio9
Selected Statistics10
Net Written Premiums11
Bond & Specialty Insurance
Segment Income12
Segment Income by Major Component and Combined Ratio13
Selected Statistics14
Net Written Premiums15
Personal Insurance
Segment Income 16
Segment Income by Major Component and Combined Ratio17
Selected Statistics18
Net Written Premiums19
Selected Statistics - Domestic Agency Automobile20
Selected Statistics - Domestic Agency Homeowners and Other21
Supplemental Detail
Interest Expense and Other22
Consolidated Balance Sheet23
Investment Portfolio24
Investment Portfolio - Fixed Maturities Data25
Investment Income26
Net Realized and Unrealized Investment Gains (Losses) included in Shareholders’ Equity27
Reinsurance Recoverables28
Net Reserves for Losses and Loss Adjustment Expense29
Asbestos and Environmental Reserves30
Capitalization31
Statutory Capital and Surplus to GAAP Shareholders’ Equity Reconciliation32
Statement of Cash Flows33
Statement of Cash Flows (continued)34
Glossary of Financial Measures and Description of Reportable Business Segments35-36
 The information included in the Financial Supplement is unaudited.  This document should be read in conjunction with the Company’s Form 10-Q which will be filed with the Securities and Exchange Commission.
Index
The Travelers Companies, Inc.             image31.gif
Financial Highlights

($ and shares in millions, except for per share data)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net income (loss)$796  $557  $396  $873  $600  $(40) $1,353  $560  
Net income (loss) per share:
Basic$3.01  $2.11  $1.52  $3.37  $2.34  $(0.16) $5.12  $2.19  
Diluted$2.99  $2.10  $1.50  $3.35  $2.33  $(0.16) $5.08  $2.19  
Core income (loss)$755  $537  $378  $867  $676  $(50) $1,292  $626  
Core income (loss) per share:
Basic$2.85  $2.04  $1.45  $3.35  $2.64  $(0.20) $4.89  $2.45  
Diluted$2.83  $2.02  $1.43  $3.32  $2.62  $(0.20) $4.85  $2.44  
Return on equity13.5 %9.0 %6.2 %13.5 %9.4 %(0.6)%11.2 %4.3 %
Core return on equity13.0 %9.2 %6.5 %14.8 %11.5 %(0.8)%11.1 %5.3 %
Total assets, at period end$107,246  $108,572  $110,241  $110,122  $109,436  $113,337  $108,572  $113,337  
Total equity, at period end$24,340  $25,321  $25,607  $25,943  $25,204  $26,943  $25,321  $26,943  
Book value per share, at period end$92.94  $97.26  $99.21  $101.55  $99.69  $106.42  $97.26  $106.42  
Less: Net unrealized investment gains, net of tax3.85  7.21  9.12  8.79  7.06  14.41  7.21  14.41  
Adjusted book value per share, at period end$89.09  $90.05  $90.09  $92.76  $92.63  $92.01  $90.05  $92.01  
Weighted average number of common shares outstanding (basic)262.9  261.3  259.2  256.8  254.4  251.6  262.1  253.6  
Weighted average number of common shares outstanding and common stock equivalents (diluted)264.8  263.7  261.8  259.0  255.9  251.6  264.2  254.7  
Common shares outstanding at period end261.9  260.3  258.1  255.5  252.8  253.2  260.3  253.2  
Common stock dividends declared$204  $217  $215  $212  $210  $218  $421  $428  
Common stock repurchased:
Under Board of Directors authorization
Shares2.9  2.6  2.5  2.8  3.5  —  5.5  3.5  
Cost$375  $375  $375  $375  $425  $—  $750  $425  
Other
Shares0.3  —  —  0.1  0.3  —  0.3  0.3  
Cost$46  $1  $—  $1  $46  $—  $47  $46  




See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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The Travelers Companies, Inc.             image31.gif
Reconciliation to Net Income (Loss) and Earnings per Share


($ and shares in millions, except earnings per share)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net income (loss)
Net income (loss)$796  $557  $396  $873  $600  $(40) $1,353  $560  
Adjustments:
Net realized investment (gains) losses, after-tax(41) (20) (18) (6) 76  (10) (61) 66  
Core income (loss)$755  $537  $378  $867  $676  $(50) $1,292  $626  
Basic earnings per share
Net income (loss)$3.01  $2.11  $1.52  $3.37  $2.34  $(0.16) $5.12  $2.19  
Adjustments:
Net realized investment (gains) losses, after-tax(0.16) (0.07) (0.07) (0.02) 0.30  (0.04) (0.23) 0.26  
Core income (loss)$2.85  $2.04  $1.45  $3.35  $2.64  $(0.20) $4.89  $2.45  
Diluted earnings per share
Net income (loss)$2.99  $2.10  $1.50  $3.35  $2.33  $(0.16) $5.08  $2.19  
Adjustments:
Net realized investment (gains) losses, after-tax(0.16) (0.08) (0.07) (0.03) 0.29  (0.04) (0.23) 0.25  
Core income (loss)$2.83  $2.02  $1.43  $3.32  $2.62  $(0.20) $4.85  $2.44  
Adjustments to net income (loss) and weighted average shares for net income (loss) EPS calculations: (1)
Basic and Diluted1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net income (loss), as reported$796  $557  $396  $873  $600  $(40) $1,353  $560  
Participating share-based awards - allocated income(5) (4) (3) (7) (5) (1) (10) (3) 
Net income (loss) available to common shareholders - basic and diluted$791  $553  $393  $866  $595  $(41) $1,343  $557  
Common Shares
Basic
Weighted average shares outstanding262.9  261.3  259.2  256.8  254.4  251.6  262.1  253.6  
Diluted
Weighted average shares outstanding262.9  261.3  259.2  256.8  254.4  251.6  262.1  253.6  
Weighted average effects of dilutive securities - stock options and performance shares1.9  2.4  2.6  2.2  1.5  —  2.1  1.1  
Diluted weighted average shares outstanding264.8  263.7  261.8  259.0  255.9  251.6  264.2  254.7  

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



See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
2
The Travelers Companies, Inc.             image31.gif
Statement of Income (Loss) - Consolidated


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Premiums$6,855  $6,988  $7,179  $7,250  $7,229  $6,955  $13,843  $14,184  
Net investment income582  648  622  616  611  268  1,230  879  
Fee income109  116  121  113  108  114  225  222  
Net realized investment gains (losses)53  25  23  12  (98) 13  78  (85) 
Other revenues72  57  68  72  58  51  129  109  
Total revenues7,671  7,834  8,013  8,063  7,908  7,401  15,505  15,309  
Claims and expenses
Claims and claim adjustment expenses4,442  4,821  5,230  4,640  4,789  5,107  9,263  9,896  
Amortization of deferred acquisition costs1,117  1,134  1,169  1,181  1,178  1,173  2,251  2,351  
General and administrative expenses1,057  1,125  1,098  1,085  1,137  1,121  2,182  2,258  
Interest expense88  89  84  83  84  85  177  169  
Total claims and expenses6,704  7,169  7,581  6,989  7,188  7,486  13,873  14,674  
Income (loss) before income taxes967  665  432  1,074  720  (85) 1,632  635  
Income tax expense (benefit)171  108  36  201  120  (45) 279  75  
Net income (loss)$796  $557  $396  $873  $600  $(40) $1,353  $560  
Investment impairments
Total investment impairments$(1) $(1) $—  $(1) $(16) $(46) $(2) $(62) 
Credit losses recognized in net realized investment gains (losses)$(1) $(1) $—  $(2) $(16) $(46) $(2) $(62) 
Non-credit losses recognized in other comprehensive income$—  $—  $—  $1  $—  $—  $—  $—  
Other statistics
Effective tax rate on net investment income14.7 %15.4 %15.2 %14.8 %15.1 %6.2 %15.1 %12.4 %
Net investment income (after-tax)$496  $548  $528  $525  $519  $251  $1,044  $770  
Catastrophes, net of reinsurance:
Pre-tax$193  $367  $241  $85  $333  $854  $560  $1,187  
After-tax$152  $290  $190  $67  $263  $673  $442  $936  
Prior year reserve development - favorable (unfavorable):
Pre-tax$51  $123  $(294) $60  $27  $2  $174  $29  
After-tax$41  $99  $(232) $45  $21  $1  $140  $22  
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
3
The Travelers Companies, Inc.             image31.gif
Net Income (Loss) by Major Component and Combined Ratio - Consolidated


($ in millions, net of tax)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Underwriting gain (loss)$307  $52  $(101) $396  $220  $(232) $359  $(12) 
Net investment income496  548  528  525  519  251  1,044  770  
Other income (expense), including interest expense(48) (63) (49) (54) (63) (69) (111) (132) 
Core income (loss)755  537  378  867  676  (50) 1,292  626  
Net realized investment gains (losses)41  20  18  6  (76) 10  61  (66) 
Net income (loss)$796  $557  $396  $873  $600  $(40) $1,353  $560  
Combined ratio (1) (2)
Loss and loss adjustment expense ratio64.0 %68.2 %72.0 %63.3 %65.5 %72.7 %66.2 %69.0 %
Underwriting expense ratio29.7 %30.2 %29.5 %29.1 %30.0 %31.0 %29.9 %30.5 %
Combined ratio93.7 %98.4 %101.5 %92.4 %95.5 %103.7 %96.1 %99.5 %
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development(0.7)%(1.8)%4.1 %(0.8)%(0.4)%— %(1.3)%(0.2)%
Catastrophes, net of reinsurance2.8 %5.3 %3.3 %1.1 %4.6 %12.3 %4.1 %8.4 %
Underlying combined ratio91.6 %94.9 %94.1 %92.1 %91.3 %91.4 %93.3 %91.3 %
 
(1)  Before policyholder dividends.
(2)  Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses.  In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses.  In addition, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio.  See following: 
($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Billing and policy fees and other$27  $26  $28  $27  $28  $17  $53  $45  
Fee income:
Loss and loss adjustment expenses$40  $45  $47  $42  $41  $44  $85  $85  
Underwriting expenses69  71  74  71  67  70  140  137  
Total fee income$109  $116  $121  $113  $108  $114  $225  $222  
Non-insurance general and administrative expenses$47  $50  $48  $56  $55  $52  $97  $107  
 






See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
4
The Travelers Companies, Inc.             image31.gif
Core Income (Loss) - Consolidated


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Premiums$6,855  $6,988  $7,179  $7,250  $7,229  $6,955  $13,843  $14,184  
Net investment income582  648  622  616  611  268  1,230  879  
Fee income109  116  121  113  108  114  225  222  
Other revenues72  57  68  72  58  51  129  109  
Total revenues
7,618  7,809  7,990  8,051  8,006  7,388  15,427  15,394  
Claims and expenses
Claims and claim adjustment expenses4,442  4,821  5,230  4,640  4,789  5,107  9,263  9,896  
Amortization of deferred acquisition costs1,117  1,134  1,169  1,181  1,178  1,173  2,251  2,351  
General and administrative expenses1,057  1,125  1,098  1,085  1,137  1,121  2,182  2,258  
Interest expense88  89  84  83  84  85  177  169  
Total claims and expenses
6,704  7,169  7,581  6,989  7,188  7,486  13,873  14,674  
Core income (loss) before income taxes914  640  409  1,062  818  (98) 1,554  720  
Income tax expense (benefit)159  103  31  195  142  (48) 262  94  
Core income (loss)$755  $537  $378  $867  $676  $(50) $1,292  $626  
Other statistics
Effective tax rate on net investment income14.7 %15.4 %15.2 %14.8 %15.1 %6.2 %15.1 %12.4 %
Net investment income (after-tax)$496  $548  $528  $525  $519  $251  $1,044  $770  
Catastrophes, net of reinsurance:
Pre-tax$193  $367  $241  $85  $333  $854  $560  $1,187  
After-tax$152  $290  $190  $67  $263  $673  $442  $936  
Prior year reserve development - favorable (unfavorable):
Pre-tax$51  $123  $(294) $60  $27  $2  $174  $29  
After-tax$41  $99  $(232) $45  $21  $1  $140  $22  









See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

5
The Travelers Companies, Inc.           image31.gif 
Selected Statistics - Property and Casualty Operations


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting
Gross written premiums$7,839  $7,824  $8,022  $7,378  $8,152  $7,751  $15,663  $15,903  
Net written premiums$7,057  $7,450  $7,569  $7,075  $7,346  $7,346  $14,507  $14,692  
Net earned premiums$6,855  $6,988  $7,179  $7,250  $7,229  $6,955  $13,843  $14,184  
Losses and loss adjustment expenses4,389  4,764  5,166  4,578  4,733  5,053  9,153  9,786  
Underwriting expenses2,116  2,217  2,179  2,072  2,193  2,212  4,333  4,405  
Statutory underwriting gain (loss)350  7  (166) 600  303  (310) 357  (7) 
Policyholder dividends13  9  15  10  12  8  22  20  
Statutory underwriting gain (loss) after policyholder dividends$337  $(2) $(181) $590  $291  $(318) $335  $(27) 
Other statutory statistics
Reserves for losses and loss adjustment expenses$42,581  $42,979  $43,624  $43,743  $43,913  $45,112  $42,979  $45,112  
Increase in reserves$172  $398  $645  $119  $170  $1,199  $570  $1,369  
Statutory capital and surplus$21,074  $21,080  $20,780  $21,330  $20,808  $20,607  $21,080  $20,607  
Net written premiums/surplus (1)1.33:11.34:11.38:11.37:11.41:1 1.42:1 1.34:11.42:1

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

















See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

6
The Travelers Companies, Inc.             image31.gif
Written and Earned Premiums - Property and Casualty Operations

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Written premiums
Gross$7,839  $7,824  $8,022  $7,378  $8,152  $7,751  $15,663  $15,903  
Ceded(782) (374) (453) (303) (806) (405) (1,156) (1,211) 
Net$7,057  $7,450  $7,569  $7,075  $7,346  $7,346  $14,507  $14,692  
Earned premiums
Gross$7,282  $7,429  $7,636  $7,723  $7,683  $7,446  $14,711  $15,129  
Ceded(427) (441) (457) (473) (454) (491) (868) (945) 
Net$6,855  $6,988  $7,179  $7,250  $7,229  $6,955  $13,843  $14,184  






























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

7
The Travelers Companies, Inc.             image31.gif
Segment Income (Loss) - Business Insurance

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Premiums$3,742  $3,783  $3,882  $3,893  $3,864  $3,735  $7,525  $7,599  
Net investment income427  481  457  451  453  180  908  633  
Fee income104  111  114  108  102  108  215  210  
Other revenues43  30  39  43  31  36  73  67  
Total revenues
4,316  4,405  4,492  4,495  4,450  4,059  8,721  8,509  
Claims and expenses
Claims and claim adjustment expenses2,580  2,686  3,028  2,669  2,791  2,880  5,266  5,671  
Amortization of deferred acquisition costs615  618  634  636  636  622  1,233  1,258  
General and administrative expenses632  686  657  652  685  656  1,318  1,341  
Total claims and expenses
3,827  3,990  4,319  3,957  4,112  4,158  7,817  8,270  
Segment income (loss) before income taxes489  415  173  538  338  (99) 904  239  
Income tax expense (benefit)75  64  (6) 90  49  (41) 139  8  
Segment income (loss)$414  $351  $179  $448  $289  $(58) $765  $231  
Other statistics
Effective tax rate on net investment income14.6 %15.3 %15.1 %14.8 %15.0 %6.3 %15.0 %12.5 %
Net investment income (after-tax)$365  $407  $389  $384  $385  $169  $772  $554  
Catastrophes, net of reinsurance:
Pre-tax$95  $211  $116  $48  $195  $377  $306  $572  
After-tax$75  $167  $91  $37  $154  $298  $242  $452  
Prior year reserve development - favorable (unfavorable):
Pre-tax$(21) $71  $(316) $8  $5  $—  $50  $5  
After-tax$(16) $57  $(249) $5  $3  $—  $41  $3  












See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
8
The Travelers Companies, Inc.             image31.gif
Segment Income (Loss) by Major Component and Combined Ratio - Business Insurance



($ in millions, net of tax)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Underwriting gain (loss)$44  $(48) $(210) $65  $(84) $(221) $(4) $(305) 
Net investment income365  407  389  384  385  169  772  554  
Other income (expense)5  (8) —  (1) (12) (6) (3) (18) 
Segment income (loss)$414  $351  $179  $448  $289  $(58) $765  $231  
Combined ratio (1) (2)
Loss and loss adjustment expense ratio67.6 %69.6 %76.6 %67.3 %70.9 %75.8 %68.6 %73.3 %
Underwriting expense ratio30.5 %31.5 %30.4 %30.2 %31.3 %31.3 %31.0 %31.3 %
Combined ratio98.1 %101.1 %107.0 %97.5 %102.2 %107.1 %99.6 %104.6 %
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development0.6 %(1.9)%8.1 %(0.2)%(0.1)%— %(0.7)%— %
Catastrophes, net of reinsurance2.5 %5.6 %3.0 %1.3 %5.0 %10.1 %4.1 %7.5 %
Underlying combined ratio95.0 %97.4 %95.9 %96.4 %97.3 %97.0 %96.2 %97.1 %
 
(1)  Before policyholder dividends.
(2)  Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses.  In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses.  In addition, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio.  See following:
 
($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Billing and policy fees and other$4  $3  $5  $4  $4  $3  $7  $7  
Fee income:
Loss and loss adjustment expenses$40  $45  $47  $42  $41  $44  $85  $85  
Underwriting expenses64  66  67  66  61  64  130  125  
Total fee income$104  $111  $114  $108  $102  $108  $215  $210  
Non-insurance general and administrative expenses$38  $41  $39  $43  $47  $42  $79  $89  
 






See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

9
The Travelers Companies, Inc.             image31.gif
Selected Statistics - Business Insurance

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting
Gross written premiums$4,730  $4,193  $4,271  $3,957  $4,794  $4,127  $8,923  $8,921  
Net written premiums$4,163  $3,874  $3,889  $3,703  $4,190  $3,777  $8,037  $7,967  
Net earned premiums$3,742  $3,783  $3,882  $3,893  $3,864  $3,735  $7,525  $7,599  
Losses and loss adjustment expenses2,529  2,631  2,969  2,608  2,737  2,828  5,160  5,565  
Underwriting expenses1,226  1,226  1,164  1,133  1,247  1,167  2,452  2,414  
Statutory underwriting gain (loss)(13) (74) (251) 152  (120) (260) (87) (380) 
Policyholder dividends11  7  11  7  10  6  18  16  
Statutory underwriting gain (loss) after policyholder dividends$(24) $(81) $(262) $145  $(130) $(266) $(105) $(396) 





























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

10
The Travelers Companies, Inc.             image31.gif
Net Written Premiums - Business Insurance


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net written premiums by market      
Domestic      
Select Accounts$785  $756  $695  $675  $799  $734  $1,541  $1,533  
Middle Market2,410  2,009  2,150  2,061  2,408  1,960  4,419  4,368  
National Accounts304  223  273  251  301  215  527  516  
National Property and Other387  588  553  437  428  585  975  1,013  
Total Domestic3,886  3,576  3,671  3,424  3,936  3,494  7,462  7,430  
International277  298  218  279  254  283  575  537  
Total$4,163  $3,874  $3,889  $3,703  $4,190  $3,777  $8,037  $7,967  
Net written premiums by product line      
Domestic      
Workers’ compensation$1,191  $893  $905  $817  $1,096  $780  $2,084  $1,876  
Commercial automobile719  677  674  666  755  667  1,396  1,422  
Commercial property389  583  568  474  433  620  972  1,053  
General liability678  548  611  579  683  531  1,226  1,214  
Commercial multi-peril902  871  885  884  956  892  1,773  1,848  
Other7  4  28  4  13  4  11  17  
Total Domestic3,886  3,576  3,671  3,424  3,936  3,494  7,462  7,430  
International277  298  218  279  254  283  575  537  
Total$4,163  $3,874  $3,889  $3,703  $4,190  $3,777  $8,037  $7,967  














See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

11
The Travelers Companies, Inc.             image31.gif
Segment Income - Bond & Specialty Insurance


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Premiums$606  $632  $653  $674  $667  $693  $1,238  $1,360  
Net investment income56  58  59  60  55  42  114  97  
Other revenues6  6  7  7  5  5  12  10  
Total revenues668  696  719  741  727  740  1,364  1,467  
Claims and expenses
Claims and claim adjustment expenses266  238  303  287  327  403  504  730  
Amortization of deferred acquisition costs112  118  123  125  124  128  230  252  
General and administrative expenses117  120  124  122  125  123  237  248  
Total claims and expenses495  476  550  534  576  654  971  1,230  
Segment income before income taxes173  220  169  207  151  86  393  237  
Income tax expense35  46  30  40  29  14  81  43  
Segment income$138  $174  $139  $167  $122  $72  $312  $194  
Other statistics
Effective tax rate on net investment income14.4 %14.8 %14.9 %13.2 %14.7 %3.0 %14.6 %9.7 %
Net investment income (after-tax)$47  $50  $50  $52  $47  $41  $97  $88  
Catastrophes, net of reinsurance:
Pre-tax$3  $—  $1  $1  $1  $7  $3  $8  
After-tax$2  $—  $1  $1  $1  $5  $2  $6  
Prior year reserve development - favorable (unfavorable):
Pre-tax$3  $39  $3  $20  $—  $(33) $42  $(33) 
After-tax$2  $31  $2  $16  $—  $(26) $33  $(26) 












See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

12
The Travelers Companies, Inc.            image31.gif
Segment Income by Major Component and Combined Ratio - Bond & Specialty Insurance

($ in millions, net of tax)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Underwriting gain$86  $120  $85  $111  $72  $29  $206  $101  
Net investment income47  50  50  52  47  41  97  88  
Other income5  4  4  4  3  2  9  5  
Segment income$138  $174  $139  $167  $122  $72  $312  $194  
Combined ratio (1)
Loss and loss adjustment expense ratio43.5 %37.4 %45.7 %42.4 %48.8 %57.8 %40.3 %53.4 %
Underwriting expense ratio37.6 %37.5 %37.6 %36.2 %37.1 %36.0 %37.6 %36.5 %
Combined ratio81.1 %74.9 %83.3 %78.6 %85.9 %93.8 %77.9 %89.9 %
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development(0.5)%(6.2)%(0.5)%(2.9)%— %4.7 %(3.4)%2.4 %
Catastrophes, net of reinsurance0.5 %0.1 %0.2 %0.2 %0.2 %1.0 %0.2 %0.6 %
Underlying combined ratio81.1 %81.0 %83.6 %81.3 %85.7 %88.1 %81.1 %86.9 %


(1) General and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. See following:



($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Non-insurance general and administrative expenses$1  $1  $1  $2  $1  $1  $2  $2  














See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

13
The Travelers Companies, Inc.             image31.gif
Selected Statistics - Bond & Specialty Insurance

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting      
Gross written premiums$662  $747  $770  $752  $750  $770  $1,409  $1,520  
Net written premiums$587  $710  $728  $714  $663  $734  $1,297  $1,397  
Net earned premiums$606  $632  $653  $674  $667  $693  $1,238  $1,360  
Losses and loss adjustment expenses264  236  298  286  325  401  500  726  
Underwriting expenses233  251  261  242  254  253  484  507  
Statutory underwriting gain109  145  94  146  88  39  254  127  
Policyholder dividends2  2  4  3  2  2  4  4  
Statutory underwriting gain after policyholder dividends$107  $143  $90  $143  $86  $37  $250  $123  
 




























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

14
The Travelers Companies, Inc.             image31.gif
Net Written Premiums - Bond & Specialty Insurance

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net written premiums by market
Domestic
Management Liability$367  $403  $424  $411  $401  $438  $770  $839  
Surety184  244  232  206  215  220  428  435  
Total Domestic551  647  656  617  616  658  1,198  1,274  
International36  63  72  97  47  76  99  123  
Total$587  $710  $728  $714  $663  $734  $1,297  $1,397  
Net written premiums by product line
Domestic
Fidelity & surety$239  $298  $292  $260  $272  $274  $537  $546  
General liability262  292  293  301  289  326  554  615  
Other50  57  71  56  55  58  107  113  
Total Domestic551  647  656  617  616  658  1,198  1,274  
International36  63  72  97  47  76  99  123  
Total$587  $710  $728  $714  $663  $734  $1,297  $1,397  



















See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

15
The Travelers Companies, Inc.             image31.gif
Segment Income - Personal Insurance


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Premiums$2,507  $2,573  $2,644  $2,683  $2,698  $2,527  $5,080  $5,225  
Net investment income99  109  106  105  103  46  208  149  
Fee income5  5  7  5  6  6  10  12  
Other revenues22  21  22  22  22  10  43  32  
Total revenues2,633  2,708  2,779  2,815  2,829  2,589  5,341  5,418  
Claims and expenses
Claims and claim adjustment expenses1,596  1,897  1,899  1,684  1,671  1,824  3,493  3,495  
Amortization of deferred acquisition costs390  398  412  420  418  423  788  841  
General and administrative expenses300  311  309  300  320  333  611  653  
Total claims and expenses2,286  2,606  2,620  2,404  2,409  2,580  4,892  4,989  
Segment income before income taxes347  102  159  411  420  9  449  429  
Income tax expense (benefit)69  14  28  84  84  (1) 83  83  
Segment income$278  $88  $131  $327  $336  $10  $366  $346  
Other statistics
Effective tax rate on net investment income15.4 %16.1 %15.8 %15.6 %15.8 %9.1 %15.8 %13.7 %
Net investment income (after-tax)$84  $91  $89  $89  $87  $41  $175  $128  
Catastrophes, net of reinsurance:
Pre-tax$95  $156  $124  $36  $137  $470  $251  $607  
After-tax$75  $123  $98  $29  $108  $370  $198  $478  
Prior year reserve development - favorable:
Pre-tax$69  $13  $19  $32  $22  $35  $82  $57  
After-tax$55  $11  $15  $24  $18  $27  $66  $45  












See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
16
The Travelers Companies, Inc.             image31.gif
Segment Income by Major Component and Combined Ratio - Personal Insurance


($ in millions, net of tax)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Underwriting gain (loss)$177  $(20) $24  $220  $232  $(40) $157  $192  
Net investment income84  91  89  89  87  41  175  128  
Other income17  17  18  18  17  9  34  26  
Segment income$278  $88  $131  $327  $336  $10  $366  $346  
Combined ratio (1)
Loss and loss adjustment expense ratio63.7 %73.7 %71.8 %62.8 %61.9 %72.2 %68.8 %66.9 %
Underwriting expense ratio26.4 %26.5 %26.2 %25.7 %26.3 %29.1 %26.4 %27.6 %
Combined ratio90.1 %100.2 %98.0 %88.5 %88.2 %101.3 %95.2 %94.5 %
Domestic Agency combined ratio88.9 %98.8 %97.2 %88.2 %86.9 %100.4 %93.9 %93.5 %
Impact on combined ratio:
Net favorable prior year reserve development(2.8)%(0.5)%(0.7)%(1.2)%(0.8)%(1.3)%(1.6)%(1.1)%
Catastrophes, net of reinsurance3.8 %6.1 %4.7 %1.3 %5.0 %18.6 %4.9 %11.6 %
Underlying combined ratio89.1 %94.6 %94.0 %88.4 %84.0 %84.0 %91.9 %84.0 %

(1)  Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
 
($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Billing and policy fees and other$23  $23  $23  $23  $24  $14  $46  $38  
Fee income$5  $5  $7  $5  $6  $6  $10  $12  















See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

17
The Travelers Companies, Inc.             image31.gif
Selected Statistics - Personal Insurance


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting
Gross written premiums$2,447  $2,884  $2,981  $2,669  $2,608  $2,854  $5,331  $5,462  
Net written premiums$2,307  $2,866  $2,952  $2,658  $2,493  $2,835  $5,173  $5,328  
Net earned premiums$2,507  $2,573  $2,644  $2,683  $2,698  $2,527  $5,080  $5,225  
Losses and loss adjustment expenses1,596  1,897  1,899  1,684  1,671  1,824  3,493  3,495  
Underwriting expenses657  740  754  697  692  792  1,397  1,484  
Statutory underwriting gain (loss)$254  $(64) $(9) $302  $335  $(89) $190  $246  
Policies in force (in thousands)
Automobile2,981  2,980  2,979  2,973  2,970  2,993  2,980  2,993  
Homeowners and Other5,163  5,263  5,361  5,444  5,534  5,679  5,263  5,679  




























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

18
The Travelers Companies, Inc.             image31.gif
Net Written Premiums - Personal Insurance

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net written premiums by market
Domestic
Agency
Automobile$1,224  $1,300  $1,347  $1,253  $1,260  $1,141  $2,524  $2,401  
Homeowners and Other837  1,258  1,300  1,145  990  1,419  2,095  2,409  
Total Agency2,061  2,558  2,647  2,398  2,250  2,560  4,619  4,810  
Direct-to-Consumer95  103  115  99  100  102  198  202  
Total Domestic2,156  2,661  2,762  2,497  2,350  2,662  4,817  5,012  
International151  205  190  161  143  173  356  316  
Total$2,307  $2,866  $2,952  $2,658  $2,493  $2,835  $5,173  $5,328  




























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
19
The Travelers Companies, Inc.             image31.gif
Selected Statistics - Personal Insurance - Domestic Agency Automobile (1)

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting
Gross written premiums$1,240  $1,304  $1,352  $1,258  $1,272  $1,145  $2,544  $2,417  
Net written premiums$1,224  $1,300  $1,347  $1,253  $1,260  $1,141  $2,524  $2,401  
Net earned premiums$1,228  $1,249  $1,271  $1,276  $1,279  $1,091  $2,477  $2,370  
Losses and loss adjustment expenses810  876  891  971  842  627  1,686  1,469  
Underwriting expenses296  312  310  299  301  317  608  618  
Statutory underwriting gain$122  $61  $70  $6  $136  $147  $183  $283  
Other statistics
Combined ratio (2):
Loss and loss adjustment expense ratio66.0 %70.1 %70.1 %76.1 %65.9 %57.5 %68.0 %62.0 %
Underwriting expense ratio23.4 %23.9 %22.9 %23.1 %23.5 %28.2 %23.7 %25.7 %
Combined ratio89.4 %94.0 %93.0 %99.2 %89.4 %85.7 %91.7 %87.7 %
Impact on combined ratio:
Net favorable prior year reserve development(3.4)%(1.1)%(0.5)%(0.5)%(0.4)%(1.0)%(2.2)%(0.7)%
Catastrophes, net of reinsurance0.7 %1.3 %0.8 %0.1 %0.6 %2.5 %1.0 %1.5 %
Underlying combined ratio92.1 %93.8 %92.7 %99.6 %89.2 %84.2 %92.9 %86.9 %
Catastrophe losses, net of reinsurance:
Pre-tax$9  $16  $11  $1  $7  $27  $25  $34  
After-tax$7  $13  $8  $1  $6  $21  $20  $27  
Prior year reserve development - favorable:
Pre-tax$42  $13  $5  $6  $6  $11  $55  $17  
After-tax$33  $10  $5  $4  $5  $9  $43  $14  
Policies in force (in thousands)2,516  2,517  2,524  2,532  2,540  2,570  
Change from prior year quarter(0.1)%— %0.2 %0.6 %1.0 %2.1 %
Change from prior quarter(0.1)%— %0.3 %0.3 %0.3 %1.2 %
(1)  Represents Automobile policies sold through agents, brokers and other intermediaries, and excludes direct to consumer.
(2)  Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Billing and policy fees and other$12  $12  $12  $11  $12  $7  $24  $19  
Fee income$3  $3  $4  $3  $3  $4  $6  $7  
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
20
The Travelers Companies, Inc.             image31.gif
Selected Statistics - Personal Insurance - Domestic Agency Homeowners and Other (1)

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory underwriting
Gross written premiums$954  $1,268  $1,316  $1,147  $1,086  $1,432  $2,222  $2,518  
Net written premiums$837  $1,258  $1,300  $1,145  $990  $1,419  $2,095  $2,409  
Net earned premiums$1,011  $1,050  $1,089  $1,125  $1,145  $1,188  $2,061  $2,333  
Losses and loss adjustment expenses604  801  801  542  642  1,010  1,405  1,652  
Underwriting expenses277  335  349  314  310  385  612  695  
Statutory underwriting gain (loss)$130  $(86) $(61) $269  $193  $(207) $44  $(14) 
Other statistics
Combined ratio (2):
Loss and loss adjustment expense ratio59.8 %76.3 %73.6 %48.2 %56.1 %85.0 %68.2 %70.8 %
Underwriting expense ratio28.4 %28.2 %28.4 %27.6 %28.1 %28.9 %28.3 %28.5 %
Combined ratio88.2 %104.5 %102.0 %75.8 %84.2 %113.9 %96.5 %99.3 %
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development(2.4)%(1.3)%(1.4)%(0.8)%(1.5)%(1.7)%(1.9)%(1.6)%
Catastrophes, net of reinsurance8.0 %12.9 %9.9 %3.0 %10.8 %34.2 %10.5 %22.7 %
Underlying combined ratio82.6 %92.9 %93.5 %73.6 %74.9 %81.4 %87.9 %78.2 %
Catastrophe losses, net of reinsurance:
Pre-tax$80  $136  $107  $34  $123  $407  $216  $530  
After-tax$63  $107  $85  $27  $97  $322  $170  $419  
Prior year reserve development - favorable (unfavorable):
Pre-tax$25  $13  $15  $9  $17  $21  $38  $38  
After-tax$19  $11  $12  $7  $14  $16  $30  $30  
Policies in force (in thousands)4,726  4,825  4,927  5,016  5,111  5,255  
Change from prior year quarter6.1 %6.5 %7.1 %7.8 %8.1 %8.9 %
Change from prior quarter1.6 %2.1 %2.1 %1.8 %1.9 %2.8 %
(1)  Represents Homeowners and Other Lines sold through agents, brokers and other intermediaries, and excludes direct to consumer.
(2)  Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Billing and policy fees and other$8  $8  $8  $8  $8  $5  $16  $13  
Fee income$2  $2  $3  $2  $2  $3  $4  $5  
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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Interest Expense and Other

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Revenues
Other revenues$1  $—  $—  $—  $—  $—  $1  $—  
Claims and expenses
Interest expense88  89  84  83  84  85  177  169  
General and administrative expenses8  8  8  11  7  9  16  16  
Total claims and expenses96  97  92  94  91  94  193  185  
Loss before income tax benefit(95) (97) (92) (94) (91) (94) (192) (185) 
Income tax benefit(20) (21) (21) (19) (20) (20) (41) (40) 
Loss$(75) $(76) $(71) $(75) $(71) $(74) $(151) $(145) 




























See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

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Consolidated Balance Sheet

($ in millions)June 30,
2020		December 31,
2019
Assets
Fixed maturities, available for sale, at fair value (amortized cost $65,430 and $65,281; allowance for expected credit losses of $8 at June 30, 2020)
$70,054  $68,134  
Equity securities, at fair value (cost $378 and $376)
390  425  
Real estate investments962  963  
Short-term securities6,087  4,943  
Other investments3,108  3,419  
Total investments80,601  77,884  
Cash623  494  
Investment income accrued596  618  
Premiums receivable (net of allowance for expected credit losses of $94 at June 30, 2020)
8,459  7,909  
Reinsurance recoverables (net of allowance for estimated uncollectible reinsurance of $156 at June 30, 2020)
8,093  8,235  
Ceded unearned premiums945  689  
Deferred acquisition costs2,367  2,273  
Contractholder receivables (net of allowance for expected credit losses of $22 at June 30, 2020)
4,314  4,599  
Goodwill3,925  3,961  
Other intangible assets319  330  
Other assets3,095  3,130  
Total assets$113,337  $110,122  
Liabilities
Claims and claim adjustment expense reserves$53,109  $51,849  
Unearned premium reserves15,198  14,604  
Contractholder payables4,336  4,619  
Payables for reinsurance premiums567  363  
Deferred taxes409  137  
Debt7,049  6,558  
Other liabilities5,726  6,049  
Total liabilities86,394  84,179  
Shareholders’ equity
Common stock (1,750.0 shares authorized; 253.2 and 255.5 shares issued and outstanding)
23,606  23,469  
Retained earnings37,069  36,977  
Accumulated other comprehensive income1,882  640  
Treasury stock, at cost (525.9 and 522.1 shares)
(35,614) (35,143) 
Total shareholders’ equity26,943  25,943  
Total liabilities and shareholders’ equity$113,337  $110,122  
Note: Certain reclassifications have been made to the 2019 consolidated balance sheet to conform to the 2020 presentation.

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Investment Portfolio

(at carrying value, $ in millions)June 30,
2020		Pre-tax Book
Yield (1)		December 31,
2019		Pre-tax Book
Yield (1)
Investment portfolio
Taxable fixed maturities (including redeemable preferred stock)$38,696  3.11 %$38,570  3.17 %
Tax-exempt fixed maturities31,358  3.01 %29,564  3.12 %
Total fixed maturities70,054  3.07 %68,134  3.15 %
Non-redeemable preferred stocks39  5.07 %42  5.04 %
Public common stocks351  383  
Total equity securities390  425  
Real estate investments962  963  
Short-term securities6,087  0.54 %4,943  1.82 %
Private equities2,055  2,236  
Hedge funds175  186  
Real estate partnerships683  658  
Other investments195  339  
Total other investments3,108  3,419  
Total investments$80,601  $77,884  
Net unrealized investment gains, net of tax, included in shareholders’ equity$3,646  $2,246  

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


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Investment Portfolio - Fixed Maturities Data

(at carrying value, $ in millions)June 30,
2020		December 31,
2019
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies$2,095  $2,095  
Obligations of states and political subdivisions:
Pre-refunded2,461  2,056  
All other29,607  27,861  
Total32,068  29,917  
Debt securities issued by foreign governments1,051  1,173  
Mortgage-backed securities - principally obligations of U.S. Government agencies3,084  3,280  
Corporates (including redeemable preferreds)31,756  31,669  
Total fixed maturities$70,054  $68,134  
 
Fixed Maturities
Quality Characteristics (1)
 
 June 30, 2020December 31, 2019
 Amount% of TotalAmount% of Total
Quality Ratings
Aaa$29,950  42.8 %$29,164  42.9 %
Aa16,400  23.4  15,819  23.2  
A12,673  18.1  12,148  17.8  
Baa9,541  13.6  9,541  14.0  
Total investment grade68,564  97.9  66,672  97.9  
Ba918  1.3  846  1.2  
B454  0.6  511  0.7  
Caa and lower118  0.2  105  0.2  
Total below investment grade1,490  2.1  1,462  2.1  
Total fixed maturities$70,054  100.0 %$68,134  100.0 %
Average weighted quality Aa2, AA Aa2, AA
Weighted average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases3.8  4.0  

(1)  Rated using external rating agencies or by Travelers when a public rating does not exist.  Below investment grade assets refer to securities rated “Ba” or below.
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Investment Income

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Gross investment income
Fixed maturities$511  $514  $520  $525  $511  $498  $1,025  $1,009  
Short-term securities28  27  26  24  22  13  55  35  
Other53  118  85  77  88  (234) 171  (146) 
592  659  631  626  621  277  1,251  898  
Investment expenses10  11  9  10  10  9  21  19  
Net investment income, pre-tax582  648  622  616  611  268  1,230  879  
Income taxes86  100  94  91  92  17  186  109  
Net investment income, after-tax$496  $548  $528  $525  $519  $251  $1,044  $770  
Effective tax rate14.7 %15.4 %15.2 %14.8 %15.1 %6.2 %15.1 %12.4 %
Average invested assets (1)$74,040$74,370$74,910$75,996$76,191$76,635$74,197$76,508
Average yield pre-tax (1)3.1 %3.5 %3.3 %3.2 %3.2 %1.4 %3.3 %2.3 %
Average yield after-tax2.7 %2.9 %2.8 %2.8 %2.7 %1.3 %2.8 %2.0 %

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

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Net Realized and Unrealized Investment Gains (Losses) included in Shareholders' Equity

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Net realized investment gains (losses)
Fixed maturities$16  $13  $14  $12  $(2) $10  $29  $8  
Equity securities 41  10  8  14  (88) 43  51  (45) 
Other (1)(4) 2  1  (14) (8) (40) (2) (48) 
Realized investment gains (losses) before tax53  25  23  12  (98) 13  78  (85) 
Related taxes12  5  5  6  (22) 3  17  (19) 
Net realized investment gains (losses)$41  $20  $18  $6  $(76) $10  $61  $(66) 
Gross investment gains (1)$65  $31  $30  $32  $31  $69  $96  $100  
Gross investment losses before impairments (1)(11) (5) (7) (18) (113) (10) (16) (123) 
Net investment gains (losses) before impairments54  26  23  14  (82) 59  80  (23) 
Credit impairment losses(1) (1) —  (2) (16) (46) (2) (62) 
Net realized investment gains (losses) before tax53  25  23  12  (98) 13  78  (85) 
Related taxes12  5  5  6  (22) 3  17  (19) 
Net realized investment gains (losses)$41  $20  $18  $6  $(76) $10  $61  $(66) 
($ in millions)March 31,
2019		June 30,
2019		September 30,
2019		December 31,
2019		March 31,
2020		June 30,
2020
Net unrealized investment gains, net of tax, included in shareholders’ equity, by asset type
Fixed maturities$1,284  $2,388  $2,990  $2,853  $2,271  $4,632  
Equity securities & other—  1  1  —  2  2  
Unrealized investment gains before tax1,284  2,389  2,991  2,853  2,273  4,634  
Related taxes 277  511  637  607  488  988  
Balance, end of period$1,007  $1,878  $2,354  $2,246  $1,785  $3,646  
(1)  Includes the following gross investment gains and gross investment losses related to U.S. Treasury futures, which are settled daily:
Gross investment Treasury future gains$1  $—  $—  $—  $5  $—  $1  $5  
Gross investment Treasury future losses$1  $—  $—  $—  $12  $—  $1  $12  
The Company entered into these arrangements as part of its strategy to manage the duration of its fixed maturity portfolio.  In a changing interest rate environment, the change in the value of the futures contracts can be expected to partially offset changes in the value of the fixed maturity portfolio.
 

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Reinsurance Recoverables

($ in millions)June 30, 2020December 31, 2019
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses (1)$3,404  $3,476  
Gross structured settlements (2)2,940  2,965  
Mandatory pools and associations (3) 1,905  1,886  
Gross reinsurance recoverables (4)8,249  8,327  
Allowance for estimated uncollectible reinsurance (5)(156) (92) 
Net reinsurance recoverables$8,093  $8,235  
(1)  The Company’s top five reinsurer groups, including retroactive reinsurance, included in gross reinsurance recoverables is as follows:
ReinsurerA.M. Best Rating of Group's Predominant ReinsurerJune 30, 2020
Swiss Re Group A+ second highest of 16 ratings$516  
Berkshire HathawayA++ highest of 16 ratings331  
Munich Re GroupA+ second highest of 16 ratings278  
Axa Group A+ second highest of 16 ratings165  
Alleghany Group A+ second highest of 16 ratings136  
The gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and incurred but not reported claims.  The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves.  Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.

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

The Company’s top five groups included in gross structured settlements is as follows:
GroupA.M. Best Rating of Group's Predominant InsurerJune 30, 2020
Fidelity & Guaranty Life Group (a) A- fourth highest of 16 ratings$786  
Genworth Financial Group (b) B seventh highest of 16 ratings338  
John Hancock Group A+ second highest of 16 ratings261  
Brighthouse Financial, Inc. A third highest of 16 ratings245  
Symetra Financial Corporation A third highest of 16 ratings236  
(a) On June 1, 2020, Fidelity National Financial, Inc. completed its acquisition of FGL Holdings (Fidelity & Guaranty Life Group).
 
(b) On October 23, 2016, Genworth Financial (Genworth) announced that they have entered into a definitive agreement under which China Oceanwide Holdings Group Co., Ltd. (China Oceanwide) agreed to acquire all of the outstanding shares of Genworth. China Oceanwide is a privately held, family-owned international financial holding group headquartered in Beijing, China. On March 7, 2017, Genworth stockholders adopted the merger agreement, and the acquisition is pending the receipt of required regulatory approvals. On June 30, 2020, the parties agreed to extend the closing deadline for the transaction until September 30, 2020.

(3)  The mandatory pools and associations represent various involuntary assigned risk pools that the Company is required to participate in.  These pools principally involve workers’ compensation and automobile insurance, which provide various insurance coverages to insureds that otherwise are unable to purchase coverage in the open market.  The costs of these mandatory pools in most states are usually charged back to the participating members in proportion to voluntary writings of related business in that state.  In the event that a member of the pool becomes insolvent, the remaining members assume an additional pro rata share of the pool’s liabilities. 

(4) Of the total reinsurance recoverables at June 30, 2020, after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance, $5.54 billion, or 87%, were rated by A.M. Best Company.  The Company utilizes updated A.M. Best credit ratings on a quarterly basis when determining the allowance. Of the total rated by A.M. Best Company, 93% were rated A- or better.  The remaining 13% of reinsurance recoverables were comprised of the following:  6% related to captive insurance companies, 2% related to the Company’s participation in voluntary pools and 5% were balances from other companies not rated by A.M. Best Company.  Certain of the Company's reinsurance recoverables are collateralized by letters of credit, funds held or trust agreements.

(5) The Company reports its reinsurance recoverables net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses and other relevant factors.  For structured settlements, the allowance is also based upon the Company’s ongoing review of life insurers’ creditworthiness and estimated amounts of coverage that would be available from state guaranty funds if a life insurer defaults. A probability-of-default methodology which reflects current and forecasted economic conditions is used to estimate the amount of uncollectible reinsurance due to credit-related factors and the estimate is reported in an allowance for estimated uncollectible reinsurance. The allowance also includes estimated uncollectible amounts related to dispute risk with reinsurers. The Company adopted updated guidance for the accounting for credit losses for financial instruments for the quarter ending March 31, 2020 which resulted in the recognition of an allowance for expected credit losses on structured settlements of $53 million, pre-tax, with an offsetting after-tax cumulative effect adjustment to retained earnings as of January 1, 2020.
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Net Reserves for Losses and Loss Adjustment Expense

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Statutory Reserves for Losses and Loss Adjustment Expenses
Business Insurance
Beginning of period$33,857  $34,086  $34,377  $34,963  $35,142  $35,415  $33,857  $35,142  
Incurred2,529  2,631  2,969  2,608  2,737  2,828  5,160  5,565  
Paid(2,320) (2,345) (2,354) (2,482) (2,364) (2,067) (4,665) (4,431) 
Foreign exchange and other20  5  (29) 53  (100) 34  25  (66) 
End of period$34,086  $34,377  $34,963  $35,142  $35,415  $36,210  $34,377  $36,210  
Bond & Specialty Insurance
Beginning of period$2,987  $3,068  $3,042  $3,074  $3,094  $3,085  $2,987  $3,094  
Incurred264  236  298  286  325  401  500  726  
Paid(189) (260) (256) (290) (300) (216) (449) (516) 
Foreign exchange and other6  (2) (10) 24  (34) 6  4  (28) 
End of period$3,068  $3,042  $3,074  $3,094  $3,085  $3,276  $3,042  $3,276  
Personal Insurance
Beginning of period$5,565  $5,427  $5,560  $5,587  $5,507  $5,413  $5,565  $5,507  
Incurred1,596  1,897  1,899  1,684  1,671  1,824  3,493  3,495  
Paid(1,751) (1,781) (1,862) (1,782) (1,693) (1,644) (3,532) (3,337) 
Foreign exchange and other17  17  (10) 18  (72) 33  34  (39) 
End of period$5,427  $5,560  $5,587  $5,507  $5,413  $5,626  $5,560  $5,626  
Total
Beginning of period$42,409  $42,581  $42,979  $43,624  $43,743  $43,913  $42,409  $43,743  
Incurred4,389  4,764  5,166  4,578  4,733  5,053  9,153  9,786  
Paid(4,260) (4,386) (4,472) (4,554) (4,357) (3,927) (8,646) (8,284) 
Foreign exchange and other43  20  (49) 95  (206) 73  63  (133) 
End of period$42,581  $42,979  $43,624  $43,743  $43,913  $45,112  $42,979  $45,112  
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos$—  $—  $220  $—  $—  $—  $—  $—  
Environmental—  60  8  8  17  17  60  34  
All other21  (131) 88  (16) (22) (17) (110) (39) 
Total Business Insurance (1)21  (71) 316  (8) (5) —  (50) (5) 
Bond & Specialty Insurance(3) (39) (3) (20) —  33  (42) 33  
Personal Insurance(69) (13) (19) (32) (22) (35) (82) (57) 
Total$(51) $(123) $294  $(60) $(27) $(2) $(174) $(29) 
(1)  Excludes accretion of discount.

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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Asbestos and Environmental Reserves

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Asbestos reserves
Beginning reserves:
Gross$1,608  $1,564  $1,474  $1,685  $1,601  $1,530  $1,608  $1,601  
Ceded(327) (321) (295) (334) (322) (316) (327) (322) 
Net1,281  1,243  1,179  1,351  1,279  1,214  1,281  1,279  
Incurred losses and loss expenses:
Gross—  —  268  —  —  —  —  —  
Ceded—  —  (48) —  —  —  —  —  
Paid loss and loss expenses:
Gross44  90  57  86  69  60  134  129  
Ceded(6) (26) (9) (12) (6) (15) (32) (21) 
Foreign exchange and other:
Gross—  —  —  2  (2) —  —  (2) 
Ceded—  —  —  —  —  —  —  —  
Ending reserves:
Gross1,564  1,474  1,685  1,601  1,530  1,470  1,474  1,470  
Ceded(321) (295) (334) (322) (316) (301) (295) (301) 
Net$1,243  $1,179  $1,351  $1,279  $1,214  $1,169  $1,179  $1,169  
Environmental reserves
Beginning reserves:
Gross$358  $338  $388  $374  $350  $350  $358  $350  
Ceded(24) (24) (29) (29) (29) (27) (24) (29) 
Net334  314  359  345  321  323  334  321  
Incurred losses and loss expenses:
Gross—  67  8  9  19  17  67  36  
Ceded—  (7) —  (1) (2) —  (7) (2) 
Paid loss and loss expenses:
Gross20  16  22  34  18  11  36  29  
Ceded—  (1) —  (1) (4) (1) (1) (5) 
Foreign exchange and other:
Gross—  (1) —  1  (1) —  (1) (1) 
Ceded—  1  —  —  —  —  1  —  
Ending reserves:
Gross338  388  374  350  350  356  388  356  
Ceded(24) (29) (29) (29) (27) (26) (29) (26) 
Net$314  $359  $345  $321  $323  $330  $359  $330  
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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Capitalization

($ in millions)June 30,
2020		December 31,
2019
Debt
Short-term debt
Commercial paper$100  $100  
3.90% Senior notes due November 1, 2020 (1)500  500  
Total short-term debt600  600  
Long-term debt
7.75% Senior notes due April 15, 2026200  200  
7.625% Junior subordinated debentures due December 15, 2027125  125  
6.375% Senior notes due March 15, 2033 (1)500  500  
6.75% Senior notes due June 20, 2036 (1)400  400  
6.25% Senior notes due June 15, 2037 (1)800  800  
5.35% Senior notes due November 1, 2040 (1)750  750  
4.60% Senior notes due August 1, 2043 (1)500  500  
4.30% Senior notes due August 25, 2045 (1)400  400  
8.50% Junior subordinated debentures due December 15, 204556  56  
3.75% Senior notes due May 15, 2046 (1)500  500  
8.312% Junior subordinated debentures due July 1, 204673  73  
4.00% Senior notes due May 30, 2047 (1)700  700  
4.05% Senior notes due March 7, 2048 (1)500  500  
4.10% Senior notes due March 4, 2049 (1)500  500  
2.55% Senior notes due April 27, 2050 (1)500  —  
Total long-term debt6,504  6,004  
Unamortized fair value adjustment42  43  
Unamortized debt issuance costs(97) (89) 
6,449  5,958  
Total debt7,049  6,558  
Common equity (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)23,297  23,697  
Total capital (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)$30,346  $30,255  
Total debt to capital (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)23.2 %21.7 %
(1)  Redeemable anytime with “make-whole” premium. 


See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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Statutory Capital and Surplus to GAAP Shareholders' Equity Reconciliation

($ in millions)June 30,
2020 (1)		December 31,
2019
Statutory capital and surplus$20,607  $21,330  
GAAP adjustments  
Goodwill and intangible assets3,573  3,589  
Investments4,839  3,130  
Noninsurance companies(4,055) (4,111) 
Deferred acquisition costs2,367  2,273  
Deferred federal income tax(1,398) (1,144) 
Current federal income tax(42) (29) 
Reinsurance recoverables47  47  
Furniture, equipment & software696  676  
Agents balances180  212  
Other129  (30) 
Total GAAP adjustments6,336  4,613  
GAAP shareholders’ equity$26,943  $25,943  

(1) Estimated and Preliminary
 




















See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
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The Travelers Companies, Inc.             image31.gif
Statement of Cash Flows


($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Cash flows from operating activities
Net income (loss)$796  $557  $396  $873  $600  $(40) $1,353  $560  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment (gains) losses(53) (25) (23) (12) 98  (13) (78) 85  
Depreciation and amortization211  190  180  182  203  188  401  391  
Deferred federal income tax expense (benefit)32  (22) (20) (23) 6  (77) 10  (71) 
Amortization of deferred acquisition costs1,117  1,134  1,169  1,181  1,178  1,173  2,251  2,351  
Equity in (income) loss from other investments(34) (98) (64) (55) (67) 253  (132) 186  
Premiums receivable(434) (345) 168  227  (326) (245) (779) (571) 
Reinsurance recoverables98  53  61  (55) (15) 75  151  60  
Deferred acquisition costs(1,185) (1,223) (1,211) (1,128) (1,215) (1,238) (2,408) (2,453) 
Claims and claim adjustment expense reserves(2) 331  598  120  388  1,067  329  1,455  
Unearned premium reserves551  407  392  (342) 414  229  958  643  
Other(458) 194  355  444  (636) 292  (264) (344) 
Net cash provided by operating activities639  1,153  2,001  1,412  628  1,664  1,792  2,292  
Cash flows from investing activities
Proceeds from maturities of fixed maturities1,556  1,482  1,857  1,950  1,461  1,610  3,038  3,071  
Proceeds from sales of investments:
Fixed maturities769  726  306  386  388  832  1,495  1,220  
Equity securities39  32  28  41  33  21  71  54  
Other investments105  135  106  113  64  75  240  139  
Purchases of investments:
Fixed maturities(2,914) (2,794) (2,526) (2,477) (2,630) (2,160) (5,708) (4,790) 
Equity securities(22) (19) (21) (32) (35) (24) (41) (59) 
Real estate investments(77) (8) (10) (12) (16) (8) (85) (24) 
Other investments(146) (116) (107) (128) (103) (125) (262) (228) 
Net sales (purchases) of short-term securities(109) 606  (1,114) (340) 906  (2,053) 497  (1,147) 
Securities transactions in course of settlement295  (72) 209  (274) 85  9  223  94  
Other(82) (87) (74) (82) (69) (75) (169) (144) 
Net cash provided by (used in) investing activities(586) (115) (1,346) (855) 84  (1,898) (701) (1,814) 

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The Travelers Companies, Inc.             image31.gif
Statement of Cash Flows (Continued)

($ in millions)1Q20192Q20193Q20194Q20191Q20202Q2020YTD 2Q2019YTD 2Q2020
Cash flows from financing activities
Treasury stock acquired - share repurchase authorization(375) (375) (375) (375) (425) —  (750) (425) 
Treasury stock acquired - net employee share-based compensation(46) (1) —  (1) (46) —  (47) (46) 
Dividends paid to shareholders(205) (214) (214) (211) (210) (216) (419) (426) 
Payment of debt—  (500) —  —  —  —  (500) —  
Issuance of debt492  —  —  —  —  490  492  490  
Issuance of common stock - employee share options63  111  32  7  31  34  174  65  
Net cash provided by (used in) financing activities(71) (979) (557) (580) (650) 308  (1,050) (342) 
Effect of exchange rate changes on cash2  —  (6) 9  (12) 5  2  (7) 
Net increase (decrease) in cash(16) 59  92  (14) 50  79  43  129  
Cash at beginning of period373  357  416  508  494  544  373  494  
Cash at end of period$357  $416  $508  $494  $544  $623  $416  $623  
Income taxes paid$5  $320  $42  $61  $15  $2  $325  $17  
Interest paid$50  $121  $60  $107  $60  $106  $171  $166  

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The Travelers Companies, Inc.             image31.gif
Glossary of Financial Measures and Description of Reportable Business Segments
The following measures are used by the Company’s management to evaluate financial performance against historical results, to establish performance targets on a consolidated basis, and for other reasons as discussed below.  In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated financial statements or are not required to be disclosed in the notes to financial statements or, in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure.
 
In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance. 
 
Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, included in shareholders’ equity, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.
 
Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.
 
Core income (loss) is consolidated net income (loss) excluding the after-tax impact of net realized investment gains (losses), discontinued operations, the effect of a change in tax laws and tax rates at enactment, and cumulative effect of changes in accounting principles when applicable.  Segment income (loss) is determined in the same manner as core income (loss) on a segment basis.  Management uses segment income (loss) to analyze each segment’s performance and as a tool in making business decisions.  Financial statement users also consider core income (loss) when analyzing the results and trends of insurance companies.  Core income (loss) per share is core income (loss) on a per common share basis.
 
Average shareholders’ equity is (a) the sum of total shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.  Adjusted shareholders’ equity is shareholders’ equity excluding net realized investment gains (losses), net of tax, net unrealized investment gains (losses), net of tax, included in shareholders’ equity for the periods presented and the effect of a change in tax laws and tax rates at enactment (excluding the portion related to net unrealized investment gains (losses)).  Adjusted average shareholders’ equity is (a) the sum of total adjusted shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
 
Return on equity is the ratio of annualized net income (loss) to average shareholders’ equity for the periods presented.  Core return on equity is the ratio of annualized core income (loss) to adjusted average shareholders’ equity for the periods presented.  In the opinion of the Company’s management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.
 
Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses.  In the opinion of the Company’s management, it is important to measure the profitability of each segment excluding the results of investing activities, which are managed separately from the insurance business.  This measure is used to assess each segment’s business performance and as a tool in making business decisions.
 
A catastrophe is a severe loss designated a catastrophe by internationally recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada.  Catastrophes can be caused by various natural events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis, volcanic eruptions and other naturally-occurring events, such as solar flares. Catastrophes can also be man-made, such as terrorist attacks and other intentionally destructive acts including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure.  Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount.  Their effects are included in net and core income and claims and claim adjustment expense reserves upon occurrence.  A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools.  The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is exceeded and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company.  Additionally, an aggregate threshold is applied for international business across all reportable segments. The threshold for 2020 ranges from approximately $20 million to $30 million of losses before reinsurance and taxes.
 
Net favorable (unfavorable) prior year loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims, which may be related to one or more prior years.  In the opinion of the Company’s management, a discussion of loss reserve development is meaningful to users of the financial statements as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and core income (loss), and changes in claims and claim adjustment expense reserve levels from period to period.
 
Combined ratio  For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators.  The combined ratio, as used in this financial supplement, is the equivalent of, and is calculated in the same manner as, the SAP combined ratio except that the SAP underwriting expense ratio is based on net written premiums and the underwriting expense ratio as used in this financial supplement is based on net earned premiums.  For SAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses less certain administrative services fee income to net earned premiums as defined in the statutory financial statements required by insurance regulators. The loss and LAE ratio as used in this financial supplement is calculated in the same manner as the SAP ratio.  For SAP, the underwriting expense ratio is the ratio of underwriting expenses incurred (including commissions paid), less certain administrative services fee income and billing and policy fees and other, to net written premiums as defined in the statutory financial statements required by insurance regulators. The underwriting expense ratio as used in this financial supplement, is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income and billing and policy fees, to net earned premiums.  Underlying combined ratio is the combined ratio adjusted to exclude the impact of prior year reserve development and catastrophes, net of reinsurance.
 
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The Travelers Companies, Inc.             image31.gif
Glossary of Financial Measures and Description of Reportable Business Segments
The combined ratio, loss and LAE ratio, and underwriting expense ratio are used as indicators of the Company’s underwriting discipline, efficiency in acquiring and servicing its business and overall underwriting profitability. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
 
Other companies’ method of computing similarly titled measures may not be comparable to the Company’s method of computing these ratios.
 
Gross written premiums reflect the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the insurance contract.  Net written premiums reflect gross written premiums less premiums ceded to reinsurers.
 
Book value per share is total common shareholders’ equity divided by the number of common shares outstanding.  Adjusted book value per share is total common shareholders’ equity excluding net unrealized investment gains and losses, net of tax, included in shareholders’ equity, divided by the number of common shares outstanding. In the opinion of the Company’s management, adjusted book value per share is useful in an analysis of a property casualty company’s book value per share as it removes the effect of changing prices on invested assets, (i.e., net unrealized investment gains (losses), net of tax) which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves.
 
Total capital is the sum of total shareholders’ equity and debt.  Debt-to-capital ratio excluding net unrealized gain (loss) on investments, net of tax, included in shareholders’ equity is the ratio of debt to total capital excluding net unrealized investment gains and losses, net of tax, included in shareholders’ equity.  In the opinion of the Company’s management, the debt to capital ratio is useful in an analysis of the Company’s financial leverage.
 
Statutory capital and surplus represents the excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.
 
Travelers has organized its businesses into the following reportable business segments:
 
Business Insurance - Business Insurance offers a broad array of property and casualty insurance and insurance-related services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyd’s.  Business Insurance is organized as follows:  Select Accounts; Middle Market including Commercial Accounts, Construction, Technology, Public Sector Services, Oil & Gas, Excess Casualty, Inland Marine, Ocean Marine, and Boiler & Machinery; National Accounts; National Property and Other including National Property, Northland Transportation, Northfield, National Programs, and Agribusiness; and International including Global Services.  Business Insurance also includes Simply Business, a leading provider of small business insurance policies primarily in the United Kingdom that was acquired in August 2017, as well as Business Insurance Other, which primarily comprises the Company’s asbestos and environmental liabilities, and the assumed reinsurance and certain other runoff operations.
 
Bond & Specialty Insurance - Bond & Specialty Insurance provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers in the United States and certain specialty insurance products in Canada, the United Kingdom, the Republic of Ireland and Brazil (through a joint venture as described below), utilizing various degrees of financially-based underwriting approaches.  The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction and general commercial enterprises; management liability coverages including directors’ and officers’ liability, employee dishonesty, employment practices liability, fiduciary liability and cyber risk for public corporations, private companies, not-for-profit organizations and financial institutions; professional liability coverage for a variety of professionals including, among others, lawyers and design professionals; and in the United States only, property, workers’ compensation, auto and general liability for financial institutions.
 
Bond & Specialty Insurance surety business in Brazil and Colombia is conducted through Junto Holding Brasil S.A. (Junto) and Junto Holding Latam S.A. in Brazil. The Company owns 49.5% of both Junto, a market leader in surety coverages in Brazil, and Junto Holding Latam S.A., a Colombian start-up surety provider. These joint venture investments are accounted for using the equity method and are included in “other investments” on the consolidated balance sheet.
 
Personal Insurance - Personal Insurance writes a broad range of property and casualty insurance covering individuals’ personal risks, primarily in the United States, as well as in Canada. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.

36

TRAVELERS COMPANIES, INC. Reports