TRAVELERS COMPANIES, INC. - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - 8-K - TRAVELERS COMPANIES, INC.	a15-15653_18k.htm
EX-99.1 - EX-99.1 - TRAVELERS COMPANIES, INC.	a15-15653_1ex99d1.htm

Exhibit 99.2

The Travelers Companies, Inc.

Financial Supplement - Second Quarter 2015

	Page Number

Consolidated Results
Financial Highlights	1
Reconciliation to Net Income and Earnings Per Share	2
Statement of Income	3
Net Income by Major Component and Combined Ratio	4
Operating Income	5
Selected Statistics - Property and Casualty Operations	6
Written and Earned Premiums - Property and Casualty Operations	7

Business and International Insurance
Operating Income	8
Operating Income by Major Component and Combined Ratio	9
Selected Statistics	10
Net Written Premiums	11

Bond & Specialty Insurance
Operating Income	12
Operating Income by Major Component and Combined Ratio	13
Selected Statistics	14
Net Written Premiums	15

Personal Insurance
Operating Income	16
Operating Income by Major Component and Combined Ratio	17
Selected Statistics	18
Selected Statistics - Agency Automobile	19
Selected Statistics - Agency Homeowners and Other	20
Selected Statistics - Direct to Consumer	21

Supplemental Detail
Interest Expense and Other	22
Consolidated Balance Sheet	23
Investment Portfolio	24
Investment Portfolio - Fixed Maturities Data	25
Investment Income	26
Net Realized and Unrealized Investment Gains	27
Reinsurance Recoverables	28
Net Reserves for Losses and Loss Adjustment Expense	29
Asbestos and Environmental Reserves	30
Capitalization	31
Statutory Capital and Surplus to GAAP Shareholders’ Equity Reconciliation	32
Statement of Cash Flows	33
Statement of Cash Flows (continued)	34

Glossary of Financial Measures and Description of Reportable Business Segments	35

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

Index

The Travelers Companies, Inc.

Financial Highlights

($ and shares in millions, except per share data)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Net income	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645
Net income per share:
Basic	$	2.98		$	1.98		$	2.72		$	3.15		$	2.58		$	2.56		$	4.97		$	5.14
Diluted	$	2.95		$	1.95		$	2.69		$	3.11		$	2.55		$	2.53		$	4.91		$	5.08

Operating income	$	1,052		$	673		$	893		$	1,023		$	827		$	806		$	1,725		$	1,633
Operating income per share:
Basic	$	2.98		$	1.95		$	2.64		$	3.11		$	2.56		$	2.54		$	4.94		$	5.10
Diluted	$	2.95		$	1.93		$	2.61		$	3.07		$	2.53		$	2.52		$	4.89		$	5.05

Return on equity	16.8		%	10.7		%	14.5		%	16.6		%	13.4		%	13.3		%	13.7		%	13.3		%
Operating return on equity	17.8		%	11.4		%	15.2		%	17.7		%	14.5		%	14.2		%	14.6		%	14.3		%

Total assets, at period end	$	104,134		$	104,811		$	104,522		$	103,078		$	102,691		$	101,664		$	104,811		$	101,664
Total equity, at period end	$	25,387		$	25,532		$	25,321		$	24,836		$	24,847		$	24,121		$	25,532		$	24,121

Book value per share, at period end	$	73.06		$	75.32		$	76.42		$	77.08		$	77.96		$	77.51		$	75.32		$	77.51
Less: Net unrealized investment gains, net of tax	4.81			5.94			5.78			6.10			6.51			4.42			5.94			4.42
Adjusted book value per share, at period end	$	68.25		$	69.38		$	70.64		$	70.98		$	71.45		$	73.09		$	69.38		$	73.09

Weighted average number of common shares outstanding (basic)	350.9			343.0			335.1			326.8			320.8			314.8			346.9			317.7
Weighted average number of common shares outstanding and common stock equivalents (diluted)	354.6			346.7			338.9			331.0			324.5			318.0			350.5			321.2
Common shares outstanding at period end	347.5			339.0			331.4			322.2			318.7			311.2			339.0			311.2

Common stock dividends declared	$	177		$	190		$	186		$	182		$	178		$	194		$	367		$	372

Common stock repurchased:
Under Board of Directors authorization
Shares	7.8			9.5			8.1			9.7			5.6			7.9			17.3			13.5
Cost	$	650		$	875		$	750		$	1,000		$	600		$	800		$	1,525		$	1,400
Other
Shares	0.7			—			—			—			0.7			—			0.7			0.7
Cost	$	55		$	1		$	1		$	1		$	72		$	1		$	56		$	73

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

The Travelers Companies, Inc.

Reconciliation to Net Income and Earnings Per Share

($ and shares in millions, except earnings per share)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015
Net income
Operating income	$	1,052		$	673		$	893		$	1,023		$	827		$	806		$	1,725		$	1,633
Net realized investment gains, after-tax	—			10			26			15			6			6			10			12
Net income	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645

Basic earnings per share
Operating income	$	2.98		$	1.95		$	2.64		$	3.11		$	2.56		$	2.54		$	4.94		$	5.10
Net realized investment gains, after-tax	—			0.03			0.08			0.04			0.02			0.02			0.03			0.04
Net income	$	2.98		$	1.98		$	2.72		$	3.15		$	2.58		$	2.56		$	4.97		$	5.14

Diluted earnings per share
Operating income	$	2.95		$	1.93		$	2.61		$	3.07		$	2.53		$	2.52		$	4.89		$	5.05
Net realized investment gains, after-tax	—			0.02			0.08			0.04			0.02			0.01			0.02			0.03
Net income	$	2.95		$	1.95		$	2.69		$	3.11		$	2.55		$	2.53		$	4.91		$	5.08

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015
Basic and Diluted
Net income, as reported	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645
Participating share-based awards - allocated income	(7		)	(5		)	(7		)	(8		)	(6		)	(6		)	(12		)	(12		)
Net income available to common shareholders - basic and diluted	$	1,045		$	678		$	912		$	1,030		$	827		$	806		$	1,723		$	1,633

Common Shares
Basic
Weighted average shares outstanding	350.9			343.0			335.1			326.8			320.8			314.8			346.9			317.7

Diluted
Weighted average shares outstanding	350.9			343.0			335.1			326.8			320.8			314.8			346.9			317.7
Weighted average effects of dilutive securities - stock options and performance shares	3.7			3.7			3.8			4.2			3.7			3.2			3.6			3.5
Diluted weighted average shares outstanding	354.6			346.7			338.9			331.0			324.5			318.0			350.5			321.2

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

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

The Travelers Companies, Inc.

Statement of Income - Consolidated

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Premiums	$	5,823		$	5,928		$	5,983		$	5,979		$	5,888		$	5,931		$	11,751		$	11,819
Net investment income	736			695			719			637			592			632			1,431			1,224
Fee income	107			112			110			109			111			111			219			222
Net realized investment gains	1			16			40			22			10			10			17			20
Other revenues	41			34			34			36			25			22			75			47
Total revenues	6,708			6,785			6,886			6,783			6,626			6,706			13,493			13,332

Claims and expenses
Claims and claim adjustment expenses	3,315			3,826			3,520			3,209			3,431			3,547			7,141			6,978
Amortization of deferred acquisition costs	950			965			984			983			963			963			1,915			1,926
General and administrative expenses	881			1,001			1,031			1,039			992			1,028			1,882			2,020
Interest expense	92			92			93			92			92			92			184			184
Total claims and expenses	5,238			5,884			5,628			5,323			5,478			5,630			11,122			11,108

Income before income taxes	1,470			901			1,258			1,460			1,148			1,076			2,371			2,224
Income tax expense	418			218			339			422			315			264			636			579
Net income	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645

Other-than-temporary impairments (OTTI)
Total OTTI losses	$	(7	)	$	(1	)	$	(8	)	$	(6	)	$	(4	)	$	(8	)	$	(8	)	$	(12	)
OTTI losses recognized in net realized investment gains	$	(9	)	$	(1	)	$	(10	)	$	(6	)	$	(3	)	$	(6	)	$	(10	)	$	(9	)
OTTI gains (losses) recognized in other comprehensive income	$	2		$	—		$	2		$	—		$	(1	)	$	(2	)	$	2		$	(3	)

Other statistics
Effective tax rate on net investment income	21.0		%	20.5		%	20.9		%	19.6		%	19.3		%	20.5		%	20.7		%	19.9		%
Net investment income (after-tax)	$	582		$	553		$	568		$	513		$	478		$	503		$	1,135		$	981

Catastrophes, net of reinsurance:
Pre-tax	$	149		$	436		$	83		$	41		$	162		$	221		$	585		$	383
After-tax	$	97		$	284		$	54		$	27		$	106		$	143		$	381		$	249

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	294		$	183		$	113		$	351		$	243		$	207		$	477		$	450
After-tax	$	190		$	122		$	74		$	230		$	158		$	133		$	312		$	291

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

The Travelers Companies, Inc.

Net Income by Major Component and Combined Ratio - Consolidated

($ in millions, net of tax)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Underwriting gain	$	507		$	162		$	364		$	551		$	395		$	353		$	669		$	748
Net investment income	582			553			568			513			478			503			1,135			981
Other income (expense), including interest expense	(37		)	(42		)	(39		)	(41		)	(46		)	(50		)	(79		)	(96		)
Operating income	1,052			673			893			1,023			827			806			1,725			1,633
Net realized investment gains	—			10			26			15			6			6			10			12
Net income	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645

Combined ratio (1) (2)
Loss and loss adjustment expense ratio	56.0		%	63.6		%	58.0		%	52.8		%	57.4		%	58.9		%	59.9		%	58.2		%
Underwriting expense ratio	29.7		%	31.5		%	32.0		%	32.2		%	31.5		%	31.9		%	30.6		%	31.7		%
Combined ratio	85.7		%	95.1		%	90.0		%	85.0		%	88.9		%	90.8		%	90.5		%	89.9		%
Combined ratio excluding incremental impact of direct to consumer initiative	85.3		%	94.6		%	89.4		%	84.4		%	88.5		%	90.3		%	90.0		%	89.4		%

Impact of catastrophes on combined ratio	2.6		%	7.3		%	1.4		%	0.7		%	2.7		%	3.7		%	5.0		%	3.3		%
Impact of prior year reserve development on combined ratio	-5.1		%	-3.1		%	-1.9		%	-5.9		%	-4.1		%	-3.5		%	-4.1		%	-3.8		%

(1) Before policyholder dividends.

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

expenses and underwriting expenses as follows:

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015
Billing and policy fees and other	$	30	$	25	$	25	$	23	$	23	$	22	$	55	$	45
Fee income:
Loss and loss adjustment expenses	$	43	$	46	$	43	$	40	$	42	$	43	$	89	$	85
Underwriting expenses	64		66		67		69		69		68		130		137
Total fee income	$	107	$	112	$	110	$	109	$	111	$	111	$	219	$	222

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

The Travelers Companies, Inc.

Operating Income - Consolidated

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Premiums	$	5,823		$	5,928		$	5,983		$	5,979		$	5,888		$	5,931		$	11,751		$	11,819
Net investment income	736			695			719			637			592			632			1,431			1,224
Fee income	107			112			110			109			111			111			219			222
Other revenues	41			34			34			36			25			22			75			47
Total revenues	6,707			6,769			6,846			6,761			6,616			6,696			13,476			13,312

Claims and expenses
Claims and claim adjustment expenses	3,315			3,826			3,520			3,209			3,431			3,547			7,141			6,978
Amortization of deferred acquisition costs	950			965			984			983			963			963			1,915			1,926
General and administrative expenses	881			1,001			1,031			1,039			992			1,028			1,882			2,020
Interest expense	92			92			93			92			92			92			184			184
Total claims and expenses	5,238			5,884			5,628			5,323			5,478			5,630			11,122			11,108

Operating income before income taxes	1,469			885			1,218			1,438			1,138			1,066			2,354			2,204
Income tax expense	417			212			325			415			311			260			629			571
Operating income	$	1,052		$	673		$	893		$	1,023		$	827		$	806		$	1,725		$	1,633

Other statistics
Effective tax rate on net investment income	21.0		%	20.5		%	20.9		%	19.6		%	19.3		%	20.5		%	20.7		%	19.9		%
Net investment income (after-tax)	$	582		$	553		$	568		$	513		$	478		$	503		$	1,135		$	981

Catastrophes, net of reinsurance:
Pre-tax	$	149		$	436		$	83		$	41		$	162		$	221		$	585		$	383
After-tax	$	97		$	284		$	54		$	27		$	106		$	143		$	381		$	249

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	294		$	183		$	113		$	351		$	243		$	207		$	477		$	450
After-tax	$	190		$	122		$	74		$	230		$	158		$	133		$	312		$	291

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

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

																		YTD		YTD
	1Q			2Q		3Q			4Q			1Q			2Q			2Q		2Q
	2014			2014		2014			2014			2015			2015			2014		2015
Statutory underwriting
Gross written premiums	$	6,401		$	6,525	$	6,578		$	6,134		$	6,474		$	6,542		$	12,926	$	13,016
Net written premiums	$	5,873		$	6,168	$	6,033		$	5,836		$	5,897		$	6,169		$	12,041	$	12,066

Net earned premiums	$	5,823		$	5,934	$	5,983		$	5,979		$	5,888		$	5,931		$	11,757	$	11,819
Losses and loss adjustment expenses	3,267			3,766		3,468			3,157			3,379			3,495			7,033		6,874
Underwriting expenses	1,783			1,918		1,946			1,885			1,890			1,949			3,701		3,839
Statutory underwriting gain	773			250		569			937			619			487			1,023		1,106
Policyholder dividends	11			7		9			11			9			10			18		19
Statutory underwriting gain after policyholder dividends	$	762		$	243	$	560		$	926		$	610		$	477		$	1,005	$	1,087

Other statutory statistics
Reserves for losses and loss adjustment expenses	$	41,383		$	41,715	$	41,525		$	41,007		$	40,296		$	40,273		$	41,715	$	40,273
Increase (decrease) in reserves	$	(185	)	$	332	$	(190	)	$	(518	)	$	(711	)	$	(23	)	$	147	$	(734	)
Statutory capital and surplus	$	21,440		$	21,036	$	21,005		$	21,049		$	20,944		$	20,851		$	21,036	$	20,851
Net written premiums/surplus (1)	1.07:1			1.11:1		1.13:1			1.14:1			1.14:1			1.15:1			1.11:1		1.15:1

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

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

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015
Written premiums
Gross	$	6,401		$	6,519		$	6,578		$	6,134		$	6,474		$	6,542		$	12,920		$	13,016
Ceded	(528		)	(357		)	(545		)	(298		)	(577		)	(373		)	(885		)	(950		)
Net	$	5,873		$	6,162		$	6,033		$	5,836		$	5,897		$	6,169		$	12,035		$	12,066

Earned premiums
Gross	$	6,295		$	6,378		$	6,437		$	6,443		$	6,308		$	6,356		$	12,673		$	12,664
Ceded	(472		)	(450		)	(454		)	(464		)	(420		)	(425		)	(922		)	(845		)
Net	$	5,823		$	5,928		$	5,983		$	5,979		$	5,888		$	5,931		$	11,751		$	11,819

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

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Premiums	$	3,558		$	3,631		$	3,660		$	3,663		$	3,620		$	3,609		$	7,189		$	7,229
Net investment income	570			539			557			490			454			487			1,109			941
Fee income	107			112			110			109			111			111			219			222
Other revenues	12			10			10			14			8			5			22			13
Total revenues	4,247			4,292			4,337			4,276			4,193			4,212			8,539			8,405

Claims and expenses
Claims and claim adjustment expenses	2,177			2,455			2,360			2,153			2,265			2,238			4,632			4,503
Amortization of deferred acquisition costs	565			580			589			587			584			578			1,145			1,162
General and administrative expenses	554			653			661			673			654			674			1,207			1,328
Total claims and expenses	3,296			3,688			3,610			3,413			3,503			3,490			6,984			6,993

Operating income before income taxes	951			604			727			863			690			722			1,555			1,412
Income tax expense	257			133			175			233			175			179			390			354
Operating income	$	694		$	471		$	552		$	630		$	515		$	543		$	1,165		$	1,058

Other statistics
Effective tax rate on net investment income	21.1		%	20.6		%	21.0		%	19.6		%	19.4		%	20.7		%	20.9		%	20.0		%
Net investment income (after-tax)	$	450		$	427		$	440		$	394		$	366		$	386		$	877		$	752

Catastrophes, net of reinsurance:
Pre-tax	$	83		$	242		$	31		$	11		$	99		$	108		$	325		$	207
After-tax	$	55		$	158		$	19		$	7		$	65		$	70		$	213		$	135

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	95		$	47		$	21		$	159		$	77		$	103		$	142		$	180
After-tax	$	61		$	33		$	14		$	106		$	50		$	65		$	94		$	115

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

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Underwriting gain	$	236		$	37		$	104		$	227		$	142		$	155		$	273		$	297
Net investment income	450			427			440			394			366			386			877			752
Other income (expense)	8			7			8			9			7			2			15			9
Operating income	$	694		$	471		$	552		$	630		$	515		$	543		$	1,165		$	1,058

Combined ratio (1) (2)
Loss and loss adjustment expense ratio	59.8		%	66.2		%	63.1		%	57.4		%	61.2		%	60.6		%	63.0		%	60.9		%
Underwriting expense ratio	29.4		%	31.9		%	32.1		%	32.4		%	32.1		%	32.6		%	30.7		%	32.4		%
Combined ratio	89.2		%	98.1		%	95.2		%	89.8		%	93.3		%	93.2		%	93.7		%	93.3		%

Impact of catastrophes on combined ratio	2.4		%	6.6		%	0.9		%	0.2		%	2.7		%	2.9		%	4.5		%	2.9		%
Impact of prior year reserve development on combined ratio	-2.7		%	-1.3		%	-0.6		%	-4.3		%	-2.1		%	-2.8		%	-2.0		%	-2.5		%

(1) Before policyholder dividends.

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015
Billing and policy fees and other	$	8	$	7	$	7	$	7	$	7	$	6	$	15	$	13
Fee income:
Loss and loss adjustment expenses	$	43	$	46	$	43	$	40	$	42	$	43	$	89	$	85
Underwriting expenses	64		66		67		69		69		68		130		137
Total fee income	$	107	$	112	$	110	$	109	$	111	$	111	$	219	$	222

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

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015

Statutory underwriting
Gross written premiums	$	4,224	$	4,067	$	4,057	$	3,860	$	4,276	$	4,027	$	8,291	$	8,303
Net written premiums	$	3,772	$	3,735	$	3,560	$	3,575	$	3,797	$	3,679	$	7,507	$	7,476

Net earned premiums	$	3,558	$	3,637	$	3,660	$	3,663	$	3,620	$	3,609	$	7,195	$	7,229
Losses and loss adjustment expenses	2,132		2,397		2,310		2,103		2,216		2,187		4,529		4,403
Underwriting expenses	1,105		1,178		1,169		1,156		1,206		1,192		2,283		2,398
Statutory underwriting gain	321		62		181		404		198		230		383		428
Policyholder dividends	8		5		7		9		7		8		13		15
Statutory underwriting gain after policyholder dividends	$	313	$	57	$	174	$	395	$	191	$	222	$	370	$	413

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

The Travelers Companies, Inc.

Net Written Premiums - Business and International Insurance

($ in millions)

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015

Net written premiums by market
Domestic
Select Accounts	$	718	$	705	$	654	$	630	$	722	$	709	$	1,423	$	1,431
Middle Market	1,632		1,420		1,545		1,511		1,733		1,456		3,052		3,189
National Accounts	300		243		249		255		299		228		543		527
First Party	387		450		369		373		340		452		837		792
Specialized Distribution	267		283		262		262		268		300		550		568
Total Domestic	3,304		3,101		3,079		3,031		3,362		3,145		6,405		6,507
International	468		628		481		544		435		534		1,096		969
Total	$	3,772	$	3,729	$	3,560	$	3,575	$	3,797	$	3,679	$	7,501	$	7,476

Net written premiums by product line
Workers’ compensation	$	1,076	$	904	$	921	$	893	$	1,142	$	906	$	1,980	$	2,048
Commercial automobile	490		456		484		462		503		487		946		990
Commercial property	440		505		415		433		392		507		945		899
General liability	469		477		478		467		494		474		946		968
Commercial multi-peril	821		750		759		773		824		765		1,571		1,589
International	468		628		481		544		435		534		1,096		969
Other	8		9		22		3		7		6		17		13
Total	$	3,772	$	3,729	$	3,560	$	3,575	$	3,797	$	3,679	$	7,501	$	7,476

National Accounts
Additions to claim volume under administration (1)	$	727	$	511	$	546	$	616	$	761	$	536	$	1,238	$	1,297
Written fees	$	111	$	87	$	95	$	86	$	114	$	92	$	198	$	206

(1) Includes new and renewal business.

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

The Travelers Companies, Inc.

Operating Income - Bond & Specialty Insurance

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Premiums	$	503		$	524		$	527		$	522		$	504		$	524		$	1,027		$	1,028
Net investment income	66			62			64			60			56			57			128			113
Other revenues	4			6			5			4			5			5			10			10
Total revenues	573			592			596			586			565			586			1,165			1,151

Claims and expenses
Claims and claim adjustment expenses	159			110			152			60			192			192			269			384
Amortization of deferred acquisition costs	93			95			101			99			94			97			188			191
General and administrative expenses	97			102			101			103			100			99			199			199
Total claims and expenses	349			307			354			262			386			388			656			774

Operating income before income taxes	224			285			242			324			179			198			509			377
Income tax expense	70			93			77			108			55			47			163			102
Operating income	$	154		$	192		$	165		$	216		$	124		$	151		$	346		$	275

Other statistics
Effective tax rate on net investment income	18.9		%	18.4		%	19.0		%	18.1		%	18.3		%	18.6		%	18.7		%	18.4		%
Net investment income (after-tax)	$	53		$	52		$	51		$	49		$	46		$	47		$	105		$	93

Catastrophes, net of reinsurance:
Pre-tax	$	1		$	4		$	1		$	—		$	1		$	1		$	5		$	2
After-tax	$	—		$	3		$	1		$	—		$	—		$	1		$	3		$	1

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	67		$	124		$	79		$	180		$	35		$	40		$	191		$	75
After-tax	$	43		$	81		$	52		$	116		$	23		$	26		$	124		$	49

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

The Travelers Companies, Inc.

Operating Income by Major Component and Combined Ratio - Bond & Specialty Insurance

($ in millions, net of tax)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Underwriting gain	$	99		$	136		$	110		$	164		$	75		$	101		$	235		$	176
Net investment income	53			52			51			49			46			47			105			93
Other income (expense)	2			4			4			3			3			3			6			6
Operating income	$	154		$	192		$	165		$	216		$	124		$	151		$	346		$	275

Combined ratio
Loss and loss adjustment expense ratio	31.0		%	20.5		%	28.7		%	11.1		%	37.6		%	36.3		%	25.7		%	36.9		%
Underwriting expense ratio	37.6		%	37.9		%	38.2		%	38.6		%	38.5		%	37.4		%	37.7		%	38.0		%
Combined ratio	68.6		%	58.4		%	66.9		%	49.7		%	76.1		%	73.7		%	63.4		%	74.9		%

Impact of catastrophes on combined ratio	0.2		%	0.9		%	0.2		%	0.0		%	0.1		%	0.3		%	0.6		%	0.2		%
Impact of prior year reserve development on combined ratio	-13.2		%	-23.7		%	-15.0		%	-34.4		%	-6.9		%	-7.7		%	-18.6		%	-7.3		%

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

The Travelers Companies, Inc.

Selected Statistics - Bond & Specialty Insurance

($ in millions)

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015

Statutory underwriting
Gross written premiums	$	528	$	542	$	562	$	533	$	522	$	537	$	1,070	$	1,059
Net written premiums	$	482	$	540	$	556	$	525	$	478	$	534	$	1,022	$	1,012

Net earned premiums	$	503	$	524	$	527	$	522	$	504	$	524	$	1,027	$	1,028
Losses and loss adjustment expenses	155		108		152		58		189		191		263		380
Underwriting expenses	197		201		205		198		196		199		398		395
Statutory underwriting gain	151		215		170		266		119		134		366		253
Policyholder dividends	3		2		2		2		2		2		5		4
Statutory underwriting gain after policyholder dividends	$	148	$	213	$	168	$	264	$	117	$	132	$	361	$	249

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

The Travelers Companies, Inc.

Net Written Premiums - Bond & Specialty Insurance

($ in millions)

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015

Net written premiums by product line
Fidelity & surety	$	211	$	257	$	260	$	235	$	206	$	259	$	468	$	465
General liability	223		239		247		252		226		236		462		462
Other	48		44		49		38		46		39		92		85
Total	$	482	$	540	$	556	$	525	$	478	$	534	$	1,022	$	1,012

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

The Travelers Companies, Inc.

Operating Income - Personal Insurance

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Premiums	$	1,762		$	1,773		$	1,796		$	1,794		$	1,764		$	1,798		$	3,535		$	3,562
Net investment income	100			94			98			87			82			88			194			170
Other revenues	26			17			19			18			12			12			43			24
Total revenues	1,888			1,884			1,913			1,899			1,858			1,898			3,772			3,756

Claims and expenses
Claims and claim adjustment expenses	979			1,261			1,008			996			974			1,117			2,240			2,091
Amortization of deferred acquisition costs	292			290			294			297			285			288			582			573
General and administrative expenses	223			237			263			254			231			248			460			479
Total claims and expenses	1,494			1,788			1,565			1,547			1,490			1,653			3,282			3,143

Operating income before income taxes	394			96			348			352			368			245			490			613
Income tax expense	126			21			109			110			116			71			147			187
Operating income	$	268		$	75		$	239		$	242		$	252		$	174		$	343		$	426

Other statistics
Effective tax rate on net investment income	21.3		%	20.7		%	21.8		%	20.2		%	19.6		%	20.8		%	21.0		%	20.2		%
Net investment income (after-tax)	$	79		$	74		$	77		$	70		$	66		$	70		$	153		$	136

Catastrophes, net of reinsurance:
Pre-tax	$	65		$	190		$	51		$	30		$	62		$	112		$	255		$	174
After-tax	$	42		$	123		$	34		$	20		$	41		$	72		$	165		$	113

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	132		$	12		$	13		$	12		$	131		$	64		$	144		$	195
After-tax	$	86		$	8		$	8		$	8		$	85		$	42		$	94		$	127

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

The Travelers Companies, Inc.

Operating Income by Major Component and Combined Ratio - Personal Insurance

($ in millions, net of tax)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Underwriting gain (loss)	$	172		$	(11	)	$	150		$	160		$	178		$	97		$	161		$	275
Net investment income	79			74			77			70			66			70			153			136
Other income (expense)	17			12			12			12			8			7			29			15
Operating income	$	268		$	75		$	239		$	242		$	252		$	174		$	343		$	426

Combined ratio (1)
Loss and loss adjustment expense ratio	55.6		%	71.1		%	56.0		%	55.5		%	55.2		%	62.2		%	63.4		%	58.7		%
Underwriting expense ratio	28.0		%	28.7		%	30.1		%	29.8		%	28.3		%	28.9		%	28.3		%	28.6		%
Combined ratio	83.6		%	99.8		%	86.1		%	85.3		%	83.5		%	91.1		%	91.7		%	87.3		%
Combined ratio excluding incremental impact of direct to consumer initiative	82.0		%	98.3		%	84.2		%	83.5		%	81.8		%	89.4		%	90.1		%	85.6		%

Impact of catastrophes on combined ratio	3.7		%	10.7		%	2.8		%	1.7		%	3.5		%	6.2		%	7.2		%	4.9		%
Impact of prior year reserve development on combined ratio	-7.5		%	-0.7		%	-0.7		%	-0.7		%	-7.5		%	-3.5		%	-4.1		%	-5.5		%

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015
Billing and policy fees and other	$	22	$	18	$	18	$	16	$	16	$	16	$	40	$	32

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

The Travelers Companies, Inc.

Selected Statistics - Personal Insurance

($ in millions)

														YTD		YTD
	1Q		2Q			3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014			2014		2014		2015		2015		2014		2015

Statutory underwriting
Gross written premiums	$	1,649	$	1,916		$	1,959	$	1,741	$	1,676	$	1,978	$	3,565	$	3,654
Net written premiums	$	1,619	$	1,893		$	1,917	$	1,736	$	1,622	$	1,956	$	3,512	$	3,578

Net earned premiums	$	1,762	$	1,773		$	1,796	$	1,794	$	1,764	$	1,798	$	3,535	$	3,562
Losses and loss adjustment expenses	980		1,261			1,006		996		974		1,117		2,241		2,091
Underwriting expenses	481		539			572		531		488		558		1,020		1,046
Statutory underwriting gain (loss)	$	301	$	(27	)	$	218	$	267	$	302	$	123	$	274	$	425

Policies in force (in thousands)
Automobile	2,068		2,068			2,083		2,097		2,125		2,166		2,068		2,166
Homeowners and other	4,232		4,199			4,164		4,128		4,107		4,121		4,199		4,121

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

The Travelers Companies, Inc.

Selected Statistics - Personal Insurance (Agency Automobile) (1)

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Statutory underwriting

Gross written premiums	$	795		$	834		$	852		$	797		$	828		$	893		$	1,629		$	1,721
Net written premiums	$	788		$	831		$	849		$	792		$	822		$	890		$	1,619		$	1,712

Net earned premiums	$	787		$	792		$	804		$	812		$	802		$	827		$	1,579		$	1,629
Losses and loss adjustment expenses	533			588			564			583			516			582			1,121			1,098
Underwriting expenses	208			221			224			215			215			230			429			445
Statutory underwriting gain (loss)	$	46		$	(17	)	$	16		$	14		$	71		$	15		$	29		$	86

Other statistics
Combined ratio (2):
Loss and loss adjustment expense ratio	67.7		%	74.3		%	70.1		%	71.7		%	64.4		%	70.4		%	71.0		%	67.4		%
Underwriting expense ratio	25.6		%	26.5		%	26.6		%	26.2		%	25.8		%	26.1		%	26.1		%	26.0		%
Combined ratio	93.3		%	100.8		%	96.7		%	97.9		%	90.2		%	96.5		%	97.1		%	93.4		%

Impact of catastrophes on combined ratio	0.0		%	4.6		%	0.6		%	0.0		%	0.0		%	2.1		%	2.3		%	1.1		%
Impact of prior year reserve development on combined ratio	0.0		%	0.0		%	0.0		%	0.0		%	-2.8		%	-2.5		%	0.0		%	-2.7		%

Catastrophe losses, net of reinsurance:
Pre-tax	$	—		$	36		$	5		$	—		$	—		$	18		$	36		$	18
After-tax	$	—		$	23		$	4		$	—		$	—		$	12		$	23		$	12

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	—		$	—		$	—		$	—		$	22		$	21		$	—		$	43
After-tax	$	—		$	—		$	—		$	—		$	15		$	14		$	—		$	29

Policies in force (in thousands)	1,985			1,981			1,990			2,000			2,021			2,057
Change from prior year quarter	-9.4		%	-6.7		%	-3.3		%	-0.5		%	1.8		%	3.8		%
Change from prior quarter	-1.3		%	-0.2		%	0.5		%	0.5		%	1.1		%	1.8		%

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

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015
Billing and policy fees and other	$	9	$	8	$	9	$	8	$	9	$	8	$	17	$	17

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

The Travelers Companies, Inc.

Selected Statistics - Personal Insurance (Agency Homeowners and Other) (1)

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Statutory underwriting

Gross written premiums	$	811		$	1,036		$	1,055		$	898		$	795		$	1,029		$	1,847		$	1,824
Net written premiums	$	788		$	1,016		$	1,017		$	897		$	748		$	1,010		$	1,804		$	1,758

Net earned premiums	$	935		$	938		$	948		$	935		$	914		$	920		$	1,873		$	1,834
Losses and loss adjustment expenses	419			639			414			381			425			498			1,058			923
Underwriting expenses	240			283			303			276			236			289			523			525
Statutory underwriting gain	$	276		$	16		$	231		$	278		$	253		$	133		$	292		$	386

Other statistics
Combined ratio (2):
Loss and loss adjustment expense ratio	44.8		%	68.1		%	43.6		%	40.8		%	46.5		%	54.2		%	56.5		%	50.3		%
Underwriting expense ratio	27.6		%	28.0		%	29.9		%	30.2		%	27.9		%	28.8		%	27.8		%	28.4		%
Combined ratio	72.4		%	96.1		%	73.5		%	71.0		%	74.4		%	83.0		%	84.3		%	78.7		%

Impact of catastrophes on combined ratio	6.8		%	15.9		%	4.8		%	3.1		%	6.7		%	10.1		%	11.4		%	8.4		%
Impact of prior year reserve development on combined ratio	-14.1		%	-1.3		%	-1.4		%	-1.1		%	-11.8		%	-4.6		%	-7.7		%	-8.2		%

Catastrophe losses, net of reinsurance:
Pre-tax	$	64		$	150		$	46		$	29		$	61		$	93		$	214		$	154
After-tax	$	41		$	98		$	30		$	19		$	40		$	60		$	139		$	100

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	132		$	12		$	13		$	10		$	108		$	43		$	144		$	151
After-tax	$	86		$	8		$	8		$	7		$	70		$	28		$	94		$	98

Policies in force (in thousands)	4,146			4,110			4,072			4,032			4,008			4,017
Change from prior year quarter	-7.5		%	-6.5		%	-5.4		%	-4.2		%	-3.3		%	-2.3		%
Change from prior quarter	-1.5		%	-0.9		%	-0.9		%	-1.0		%	-0.6		%	0.2		%

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

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

													YTD		YTD
	1Q		2Q		3Q		4Q		1Q		2Q		2Q		2Q
	2014		2014		2014		2014		2015		2015		2014		2015
Billing and policy fees and other	$	13	$	9	$	9	$	7	$	7	$	7	$	22	$	14

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

The Travelers Companies, Inc.

Selected Statistics - Direct to Consumer (1)

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Net written premiums
Automobile	$	31		$	31		$	36		$	32		$	38		$	38		$	62		$	76
Homeowners and other	12			15			15			15			14			18			27			32
Total net written premiums	$	43		$	46		$	51		$	47		$	52		$	56		$	89		$	108

Revenues
Premiums	$	40		$	43		$	44		$	47		$	48		$	51		$	83		$	99
Other revenues	—			—			1			—			—			1			—			1
Total revenues	40			43			45			47			48			52			83			100

Claims and expenses
Claims and claim adjustment expenses	28			33			29			32			32			39			61			71
Amortization of deferred acquisition costs	1			1			1			1			1			1			2			2
General and administrative expenses	33			35			43			39			37			38			68			75
Total claims and expenses	62			69			73			72			70			78			131			148

Operating loss before income taxes	(22		)	(26		)	(28		)	(25		)	(22		)	(26		)	(48		)	(48		)
Income taxes	(8		)	(9		)	(10		)	(8		)	(8		)	(9		)	(17		)	(17		)
Operating loss	$	(14	)	$	(17	)	$	(18	)	$	(17	)	$	(14	)	$	(17	)	$	(31	)	$	(31	)

Other statistics
Policies in force (in thousands)
Automobile	83			87			93			97			104			109
Homeowners and other	86			89			92			96			99			104

Catastrophes, net of reinsurance:
Pre-tax	$	1		$	4		$	—		$	1		$	1		$	1		$	5		$	2
After-tax	$	1		$	2		$	—		$	1		$	1		$	—		$	3		$	1

Prior year reserve development - favorable (unfavorable)
Pre-tax	$	—		$	—		$	—		$	2		$	1		$	—		$	—		$	1
After-tax	$	—		$	—		$	—		$	1		$	—		$	—		$	—		$	—

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

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

The Travelers Companies, Inc.

Interest Expense and Other

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Revenues
Other revenues	$	(1	)	$	1		$	—		$	—		$	—		$	—		$	—		$	—

Claims and expenses
Interest expense	92			92			93			92			92			92			184			184
General and administrative expenses	7			9			6			9			7			7			16			14
Total claims and expenses	99			101			99			101			99			99			200			198

Operating loss before income tax benefit	(100		)	(100		)	(99		)	(101		)	(99		)	(99		)	(200		)	(198		)
Income taxes	(36		)	(35		)	(36		)	(36		)	(35		)	(37		)	(71		)	(72		)
Operating loss	$	(64	)	$	(65	)	$	(63	)	$	(65	)	$	(64	)	$	(62	)	$	(129	)	$	(126	)

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

The Travelers Companies, Inc.

Consolidated Balance Sheet

(in millions)

	June 30,		December 31,
	2015		2014

Assets
Fixed maturities, available for sale, at fair value (amortized cost $60,103 and $60,801)	$	61,933	$	63,474
Equity securities, available for sale, at fair value (cost $573 and $579)	828		899
Real estate investments	980		938
Short-term securities	3,924		4,364
Other investments	3,565		3,586
Total investments	71,230		73,261

Cash	317		374
Investment income accrued	655		685
Premiums receivable	6,764		6,298
Reinsurance recoverables	8,965		9,260
Ceded unearned premiums	782		678
Deferred acquisition costs	1,891		1,835
Deferred taxes	216		33
Contractholder receivables	4,473		4,362
Goodwill	3,594		3,611
Other intangible assets	284		304
Other assets	2,493		2,377
Total assets	$	101,664	$	103,078

	June 30,			December 31,
	2015			2014

Liabilities
Claims and claim adjustment expense reserves	$	48,833		$	49,850
Unearned premium reserves	12,153			11,839
Contractholder payables	4,473			4,362
Payables for reinsurance premiums	428			336
Debt	6,350			6,349
Other liabilities	5,306			5,506
Total liabilities	77,543			78,242

Shareholders’ equity
Common stock (1,750.0 shares authorized; 311.2 and 322.2 shares issued and outstanding)	22,039			21,843
Retained earnings	28,524			27,251
Accumulated other comprehensive income	169			880
Treasury stock, at cost (451.5 and 437.3 shares)	(26,611		)	(25,138		)
Total shareholders’ equity	24,121			24,836
Total liabilities and shareholders’ equity	$	101,664		$	103,078

The Travelers Companies, Inc.

Investment Portfolio

(at carrying value, $ in millions)

	June 30,		Pre-tax Book		December 31,		Pre-tax Book
	2015		Yield (1)		2014		Yield (1)
Investment portfolio

Taxable fixed maturities (including redeemable preferred stock)	$	29,586	3.36	%	$	30,283	3.42	%
Tax-exempt fixed maturities	32,347		3.67	%	33,191		3.72	%
Total fixed maturities	61,933		3.52	%	63,474		3.58	%

Non-redeemable preferred stocks	189		5.65	%	208		5.60	%
Public common stocks	639				691
Total equity securities	828				899

Real estate investments	980				938

Short-term securities	3,924		0.20	%	4,364		0.17	%

Private equities	2,062				2,090
Hedge funds	442				414
Real estate partnerships	617				593
Other investments	444				489
Total other investments	3,565				3,586

Total investments	$	71,230			$	73,261

Net unrealized investment gains, net of tax, included in shareholders’ equity	$	1,376			$	1,966



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

The Travelers Companies, Inc.

Investment Portfolio - Fixed Maturities Data

(at carrying value, $ in millions)

	June 30,		December 31,
	2015		2014
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	2,046	$	2,053
Obligations of states and political subdivisions:
Pre-refunded	7,271		7,561
All other	25,439		26,012
Total	32,710		33,573
Debt securities issued by foreign governments	2,100		2,368
Mortgage-backed securities - principally obligations of U.S. Government agencies	2,046		2,213
Corporates (including redeemable preferreds)	23,031		23,267
Total fixed maturities	$	61,933	$	63,474

Fixed Maturities

Quality Characteristics (1)

	June 30, 2015
	Amount		% of Total
Quality Ratings
Aaa	$	25,932	41.9	%
Aa	18,195		29.4
A	9,445		15.2
Baa	6,535		10.6
Total investment grade	60,107		97.1
Ba	1,087		1.7
B	393		0.6
Caa and lower	346		0.6
Total below investment grade	1,826		2.9
Total fixed maturities	$	61,933	100.0	%
Average weighted quality	Aa2, AA
Average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases	3.9

(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.

The Travelers Companies, Inc.

Investment Income

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Gross investment income
Fixed maturities	$	580		$	562		$	552		$	550		$	531		$	526		$	1,142		$	1,057
Short-term securities	2			2			2			3			2			3			4			5
Other	163			140			174			96			69			113			303			182
	745			704			728			649			602			642			1,449			1,244
Investment expenses	9			9			9			12			10			10			18			20
Net investment income, pre-tax	736			695			719			637			592			632			1,431			1,224
Income taxes	154			142			151			124			114			129			296			243
Net investment income, after-tax	$	582		$	553		$	568		$	513		$	478		$	503		$	1,135		$	981

Effective tax rate	21.0		%	20.5		%	20.9		%	19.6		%	19.3		%	20.5		%	20.7		%	19.9		%

Average invested assets (1)	$	72,112		$	71,880		$	72,062		$	72,071		$	70,722		$	70,291		$	72,010		$	70,548

Average yield pre-tax (1)	4.1		%	3.9		%	4.0		%	3.5		%	3.3		%	3.6		%	4.0		%	3.5		%
Average yield after-tax	3.2		%	3.1		%	3.2		%	2.8		%	2.7		%	2.9		%	3.2		%	2.8		%

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

The Travelers Companies, Inc.

Net Realized and Unrealized Investment Gains

($ in millions)

																				YTD			YTD
		1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
		2014			2014			2014			2014			2015			2015			2014			2015

Net realized investment gains (losses)
Fixed maturities		$	6		$	9		$	—		$	1		$	17		$	14		$	15		$	31
Equity securities		(4		)	15			—			4			—			(1		)	11			(1		)
Other (1)		(1		)	(8		)	40			17			(7		)	(3		)	(9		)	(10		)
Realized investment gains before tax		1			16			40			22			10			10			17			20
Related taxes		1			6			14			7			4			4			7			8
Net realized investment gains		$	—		$	10		$	26		$	15		$	6		$	6		$	10		$	12

Gross investment gains (1)		$	59		$	46		$	101		$	93		$	71		$	102		$	105		$	173
Gross investment losses before impairments (1)		(49		)	(29		)	(51		)	(65		)	(58		)	(86		)	(78		)	(144		)
Net investment gains before impairments		10			17			50			28			13			16			27			29
Other-than-temporary impairment losses		(9		)	(1		)	(10		)	(6		)	(3		)	(6		)	(10		)	(9		)
Net realized investment gains before tax		1			16			40			22			10			10			17			20
Related taxes		1			6			14			7			4			4			7			8
Net realized investment gains		$	—		$	10		$	26		$	15		$	6		$	6		$	10		$	12

		March 31,			June 30,			September 30,			December 31,			March 31,			June 30,
		2014			2014			2014			2014			2015			2015

Net unrealized investment gains, net of tax, by asset type
Fixed maturities		$	2,276		$	2,742		$	2,579		$	2,673		$	2,853		$	1,830
Equity securities & other		293			346			356			335			319			274
Unrealized investment gains before tax		2,569			3,088			2,935			3,008			3,172			2,104
Related taxes		895			1,075			1,021			1,042			1,096			728

Balance, end of period		$	1,674		$	2,013		$	1,914		$	1,966		$	2,076		$	1,376


(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	$	4		$	4		$	6		$	28		$	44		$	56		$	8		$	100
	Gross investment Treasury future losses	$	3		$	5		$	6		$	29		$	54		$	47		$	8		$	101

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.

The Travelers Companies, Inc.

Reinsurance Recoverables

($ in millions)

	June 30,			December 31,
	2015			2014
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses	$	4,013		$	4,270
Allowance for uncollectible reinsurance	(194		)	(203		)
Net reinsurance recoverables (i)	3,819			4,067
Mandatory pools and associations (ii)	1,947			1,909
Structured settlements (iii)	3,199			3,284
Total reinsurance recoverables	$	8,965		$	9,260

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

	A.M. Best Rating of Group’s	June 30,
Reinsurer	Predominant Reinsurer	2015
Swiss Re Group	A+ second highest of 16 ratings	$	436
Munich Re Group	A+ second highest of 16 ratings	404
Berkshire Hathaway	A++ highest of 16 ratings	267
Sompo Japan Nipponkoa Group	A+ second highest of 16 ratings	246
XL Capital Group	A third highest of 16 ratings	198

On January 25, 2015, AXIS Capital Holdings Limited and PartnerRe Ltd. announced that they had signed a definitive amalgamation agreement. The Company’s aggregated reinsurance recoverables from these entities at June 30, 2015 totaled approximately $221 million. The A.M. Best ratings for each entity at July 20, 2015 was “A+” (second highest of 16 ratings). A.M. Best has placed the ratings of each entity under review with negative implications. Subsequent to January 25, 2015, another organization has expressed interest in acquiring PartnerRe Ltd.

The gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and incurred but not reported claims. The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves. Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.

The net reinsurance recoverables reflect an allowance for uncollectible reinsurance that is based upon the Company’s ongoing review of amounts outstanding, reinsurer solvency, the Company’s experience, current economic conditions, and other relevant factors. Of the total net recoverables due from reinsurers at June 30, 2015, after deducting mandatory pools and associations and structured settlement balances, $3.1 billion, or 82%, were rated by A.M. Best Company. Of the total rated by A.M. Best Company, 99% were rated A- or better. The remaining 18% of net recoverables from reinsurers were comprised of the following: 6% related to the Company’s participation in voluntary pools, 9% related to recoverables from captive insurance companies and 3% were balances from other companies not rated by A.M. Best Company. In addition, $1.2 billion of the net recoverables were collateralized by letters of credit, funds held or trust agreements at June 30, 2015.

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

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

The Company’s top five groups by structured settlement is as follows:

	A.M. Best Rating of Group’s	June 30,
Group	Predominant Insurer	2015
Fidelity and Guaranty Life	B++ fifth highest of 16 ratings	$	922
Metlife	A+ second highest of 16 ratings	419
Genworth Financial Group	A- fourth highest of 16 ratings	387
John Hancock Group	A+ second highest of 16 ratings	249
Symetra Financial Corporation	A third highest of 16 ratings	235

The Travelers Companies, Inc.

Net Reserves for Losses and Loss Adjustment Expense

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015
Statutory Reserves for Losses and Loss Adjustment Expenses

Business and International Insurance
Beginning of period	$	34,717		$	34,661		$	34,929		$	34,887		$	34,568		$	33,924		$	34,717		$	34,568
Incurred	2,132			2,397			2,310			2,103			2,216			2,187			4,529			4,403
Paid	(2,109		)	(2,231		)	(2,170		)	(2,300		)	(2,616		)	(2,291		)	(4,340		)	(4,907		)
Foreign exchange and other	(79		)	102			(182		)	(122		)	(244		)	85			23			(159		)
End of period	$	34,661		$	34,929		$	34,887		$	34,568		$	33,924		$	33,905		$	34,929		$	33,905

Bond & Specialty Insurance
Beginning of period	$	3,595		$	3,585		$	3,501		$	3,416		$	3,239		$	3,228		$	3,595		$	3,239
Incurred	155			108			152			58			189			191			263			380
Paid	(165		)	(192		)	(237		)	(235		)	(200		)	(207		)	(357		)	(407		)
End of period	$	3,585		$	3,501		$	3,416		$	3,239		$	3,228		$	3,212		$	3,501		$	3,212

Personal Insurance
Beginning of period	$	3,256		$	3,137		$	3,285		$	3,222		$	3,200		$	3,144		$	3,256		$	3,200
Incurred	980			1,261			1,006			996			974			1,117			2,241			2,091
Paid	(1,099		)	(1,113		)	(1,069		)	(1,018		)	(1,030		)	(1,105		)	(2,212		)	(2,135		)
End of period	$	3,137		$	3,285		$	3,222		$	3,200		$	3,144		$	3,156		$	3,285		$	3,156

Total
Beginning of period	$	41,568		$	41,383		$	41,715		$	41,525		$	41,007		$	40,296		$	41,568		$	41,007
Incurred	3,267			3,766			3,468			3,157			3,379			3,495			7,033			6,874
Paid	(3,373		)	(3,536		)	(3,476		)	(3,553		)	(3,846		)	(3,603		)	(6,909		)	(7,449		)
Foreign exchange and other	(79		)	102			(182		)	(122		)	(244		)	85			23			(159		)
End of period	$	41,383		$	41,715		$	41,525		$	41,007		$	40,296		$	40,273		$	41,715		$	40,273

Prior Year Reserve Development: Unfavorable (Favorable)

Business and International Insurance
Asbestos	$	—		$	—		$	250		$	—		$	—		$	—		$	—		$	—
Environmental	—			87			—			—			—			72			87			72
All other	(95		)	(134		)	(271		)	(159		)	(77		)	(175		)	(229		)	(252		)
Total Business and International Insurance (1)	(95		)	(47		)	(21		)	(159		)	(77		)	(103		)	(142		)	(180		)

Bond & Specialty Insurance	(67		)	(124		)	(79		)	(180		)	(35		)	(40		)	(191		)	(75		)

Personal Insurance	(132		)	(12		)	(13		)	(12		)	(131		)	(64		)	(144		)	(195		)
Total	$	(294	)	$	(183	)	$	(113	)	$	(351	)	$	(243	)	$	(207	)	$	(477	)	$	(450	)

(1) Excludes accretion of discount.

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

The Travelers Companies, Inc.

Asbestos and Environmental Reserves

($ in millions)

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Asbestos reserves
Beginning reserves:
Gross	$	2,606		$	2,547		$	2,482		$	2,665		$	2,520		$	1,959		$	2,606		$	2,520
Ceded	(256		)	(242		)	(232		)	(220		)	(163		)	(123		)	(256		)	(163		)
Net	2,350			2,305			2,250			2,445			2,357			1,836			2,350			2,357
Incurred losses and loss expenses:
Gross	—			—			258			—			—			—			—			—
Ceded	—			—			(8		)	—			—			—			—			—
Paid loss and loss expenses:
Gross	59			65			74			145			560			104			124			664
Ceded	(14		)	(10		)	(20		)	(57		)	(40		)	(1		)	(24		)	(41		)
Foreign exchange and other:
Gross	—			—			(1		)	—			(1		)	1			—			—
Ceded	—			—			—			—			—			—			—			—
Ending reserves:
Gross	2,547			2,482			2,665			2,520			1,959			1,856			2,482			1,856
Ceded	(242		)	(232		)	(220		)	(163		)	(123		)	(122		)	(232		)	(122		)
Net	$	2,305		$	2,250		$	2,445		$	2,357		$	1,836		$	1,734		$	2,250		$	1,734

Environmental reserves
Beginning reserves:
Gross	$	355		$	331		$	396		$	375		$	353		$	341		$	355		$	353
Ceded	(11		)	(11		)	(14		)	(11		)	(7		)	(6		)	(11		)	(7		)
Net	344			320			382			364			346			335			344			346
Incurred losses and loss expenses:
Gross	—			94			—			—			—			81			94			81
Ceded	—			(7		)	—			—			—			(9		)	(7		)	(9		)
Paid loss and loss expenses:
Gross	24			29			20			22			11			15			53			26
Ceded	—			(4		)	(3		)	(4		)	(1		)	—			(4		)	(1		)
Acquired reserves, foreign exchange and other:
Gross	—			—			(1		)	—			(1		)	(1		)	—			(2		)
Ceded	—			—			—			—			—			—			—			—
Ending reserves:
Gross	331			396			375			353			341			406			396			406
Ceded	(11		)	(14		)	(11		)	(7		)	(6		)	(15		)	(14		)	(15		)
Net	$	320		$	382		$	364		$	346		$	335		$	391		$	382		$	391

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

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

	June 30,			December 31,
	2015			2014
Debt

Short-term debt
Commercial paper	$	100		$	100
5.50% Senior notes due December 1, 2015 (1)	400			400
6.25% Senior notes due June 20, 2016 (1)	400			—
Total short-term debt	900			500

Long-term debt
6.25% Senior notes due June 20, 2016 (1)	—			400
5.75% Senior notes due December 15, 2017 (1)	450			450
5.80% Senior notes due May 15, 2018 (1)	500			500
5.90% Senior notes due June 2, 2019 (1)	500			500
3.90% Senior notes due November 1, 2020 (1)	500			500
7.75% Senior notes due April 15, 2026	200			200
7.625% Junior subordinated debentures due December 15, 2027	125			125
6.375% Senior notes due March 15, 2033 (1)	500			500
6.75% Senior notes due June 20, 2036 (1)	400			400
6.25% Senior notes due June 15, 2037 (1)	800			800
5.35% Senior notes due November 1, 2040 (1)	750			750
4.60% Senior notes due August 1, 2043 (1)	500			500
8.50% Junior subordinated debentures due December 15, 2045	56			56
8.312% Junior subordinated debentures due July 1, 2046	73			73
6.25% Fixed-to-floating rate junior subordinated debentures due March 15, 2067 (1)	107			107
Total long-term debt	5,461			5,861
Unamortized fair value adjustment	49			50
Unamortized debt issuance costs	(60		)	(62		)
	5,450			5,849
Total debt	6,350			6,349

Common equity (excluding net unrealized investment gains, net of tax)	22,745			22,870

Total capital (excluding net unrealized investment gains, net of tax)	$	29,095		$	29,219

Total debt to capital (excluding net unrealized investment gains, net of tax)	21.8		%	21.7		%

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

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

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

	June 30,			December 31,
	2015 (1)			2014

Statutory capital and surplus	$	20,851		$	21,049

GAAP adjustments

Goodwill and intangible assets	3,712			3,750

Investments	2,381			3,315

Noninsurance companies	(4,526		)	(4,635		)

Deferred acquisition costs	1,891			1,835

Deferred federal income tax	(1,408		)	(1,672		)

Current federal income tax	(18		)	(47		)

Reinsurance recoverables	113			117

Furniture, equipment & software	641			662

Agents balances	152			145

Other	332			317

Total GAAP adjustments	3,270			3,787

GAAP shareholders’ equity	$	24,121		$	24,836

(1) Estimated and Preliminary

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

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Cash flows from operating activities
Net income	$	1,052		$	683		$	919		$	1,038		$	833		$	812		$	1,735		$	1,645
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment gains	(1		)	(16		)	(40		)	(22		)	(10		)	(10		)	(17		)	(20		)
Depreciation and amortization	227			215			211			211			225			204			442			429
Deferred federal income tax expense	153			(22		)	(38		)	28			133			9			131			142
Amortization of deferred acquisition costs	950			965			984			983			963			963			1,915			1,926
Equity in income from other investments	(139		)	(118		)	(155		)	(74		)	(43		)	(91		)	(257		)	(134		)
Premiums receivable	(189		)	(274		)	129			127			(258		)	(228		)	(463		)	(486		)
Reinsurance recoverables	106			100			197			(3		)	69			194			206			263
Deferred acquisition costs	(986		)	(1,003		)	(1,004		)	(933		)	(987		)	(1,004		)	(1,989		)	(1,991		)
Claims and claim adjustment expense reserves	(209		)	149			(238		)	(406		)	(561		)	(265		)	(60		)	(826		)
Unearned premium reserves	94			141			144			(306		)	185			177			235			362
Other	(355		)	(195		)	731			(118		)	(350		)	(85		)	(550		)	(435		)
Net cash provided by operating activities	703			625			1,840			525			199			676			1,328			875

Cash flows from investing activities
Proceeds from maturities of fixed maturities	2,312			2,603			3,060			2,919			2,830			2,484			4,915			5,314
Proceeds from sales of investments:
Fixed maturities	406			379			142			122			906			320			785			1,226
Equity securities	36			59			33			30			11			17			95			28
Real estate investments	1			4			—			10			7			3			5			10
Other investments	167			171			274			243			146			208			338			354
Purchases of investments:
Fixed maturities	(2,715		)	(2,734		)	(2,788		)	(3,088		)	(3,325		)	(2,914		)	(5,449		)	(6,239		)
Equity securities	(18		)	(22		)	(7		)	(5		)	(8		)	(14		)	(40		)	(22		)
Real estate investments	(9		)	(27		)	(5		)	(7		)	(6		)	(63		)	(36		)	(69		)
Other investments	(113		)	(113		)	(180		)	(148		)	(168		)	(107		)	(226		)	(275		)
Net sales (purchases) of short-term securities	(160		)	220			(1,223		)	665			(134		)	567			60			433
Securities transactions in course of settlement	240			(36		)	(85		)	(37		)	305			(122		)	204			183
Acquisition, net of cash acquired	(12		)	—			—			—			—			—			(12		)	—
Other	(60		)	(92		)	(110		)	(96		)	(90		)	(88		)	(152		)	(178		)
Net cash provided by (used in) investing activities	75			412			(889		)	608			474			291			487			765

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

																			YTD			YTD
	1Q			2Q			3Q			4Q			1Q			2Q			2Q			2Q
	2014			2014			2014			2014			2015			2015			2014			2015

Cash flows from financing activities
Treasury stock acquired - share repurchase authorization	(650		)	(875		)	(750		)	(1,000		)	(600		)	(800		)	(1,525		)	(1,400		)
Treasury stock acquired - net employee share-based compensation	(54		)	(1		)	(1		)	(1		)	(71		)	(1		)	(55		)	(72		)
Dividends paid to shareholders	(176		)	(189		)	(184		)	(180		)	(177		)	(192		)	(365		)	(369		)
Issuance of common stock - employee share options	57			65			32			41			90			27			122			117
Excess tax benefits from share-based payment arrangements	13			11			14			19			27			4			24			31
Net cash used in financing activities	(810		)	(989		)	(889		)	(1,121		)	(731		)	(962		)	(1,799		)	(1,693		)

Effect of exchange rate changes on cash	(2		)	3			(6		)	(5		)	(8		)	4			1			(4		)

Net increase (decrease) in cash	(34		)	51			56			7			(66		)	9			17			(57		)
Cash at beginning of period	294			260			311			367			374			308			294			374
Cash at end of period	$	260		$	311		$	367		$	374		$	308		$	317		$	311		$	317

Income taxes paid	$	93		$	634		$	58		$	362		$	126		$	471		$	727		$	597
Interest paid	$	34		$	149		$	34		$	148		$	34		$	149		$	183		$	183

The Travelers Companies, Inc.
Financial Supplement - Second Quarter 2015
Glossary of Financial Measures and Description of Reportable Business Segments

The following measures are used by the Company’s management to evaluate financial performance against historical results and establish targets on a consolidated basis. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated financial statements or are not required to be disclosed in the notes to financial statements or, in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure.

In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance. Internally, the Company’s management uses these measures to evaluate performance against historical results and establish financial targets on a consolidated basis.

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

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

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

Average shareholders’ equity is (a) the sum of total shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two. Adjusted shareholders’ equity is shareholders’ equity excluding net unrealized investment gains (losses), net of tax and net realized investment gains (losses), net of tax, for the period presented. Adjusted average shareholders’ equity is average shareholders’ equity excluding net unrealized investment gains (losses), net of tax, for all quarters included in the calculation and, for each quarterly period included in the calculation that quarter’s net realized investment gains (losses), net of tax.

Return on equity is the ratio of annualized net income (loss) to average shareholders’ equity for the periods presented. Operating return on equity is the ratio of annualized operating income (loss) to adjusted average shareholders’ equity for the periods presented. In the opinion of the Company’s management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.

Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. In the opinion of the Company’s management, it is important to measure the profitability of each segment excluding the results of investing activities, which are managed separately from the insurance business. This measure is used to assess each segment’s business performance and as a tool in making business decisions.

A catastrophe is a severe loss, resulting from a variety of events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis and volcanic eruptions. Catastrophes can also result from a terrorist attack (including those involving nuclear, biological, chemical or radiological events), explosions, infrastructure failures or as a consequence of political instability. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and operating income and claims and claim adjustment expense reserves upon occurrence. A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools. In the opinion of the Company’s management, a discussion of the impact of catastrophes is meaningful to users of the financial statements to understand the Company’s periodic earnings and the variability in periodic earnings caused by the unpredictable nature of catastrophes.

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

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 premium 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, 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.

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.

Combined ratio excluding the incremental impact of the direct to consumer initiative is the combined ratio adjusted to exclude the direct, variable impact of the Company’s direct-to-consumer initiative in Personal Insurance. In the opinion of the Company’s management, this is useful in an analysis of the profitability of the Company’s ongoing agency business.

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

Book value per share is total common shareholders’ equity divided by the number of common shares outstanding. Adjusted book value per share is total common shareholders’ equity excluding the after-tax impact of net unrealized investment gains and losses, divided by the number of common shares outstanding. In the opinion of the Company’s management, adjusted book value 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 is the ratio of debt to total capital excluding the after-tax impact of net unrealized investment gains and losses. In the opinion of the Company’s management, the debt to capital ratio is useful in an analysis of the Company’s financial leverage.

Statutory 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 and International Insurance - The Business and International Insurance segment offers a broad array of property and casualty insurance and insurance related services to its clients, 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 and International Insurance is organized as follows: Select Accounts; Middle Market including Commercial Accounts, Construction, Technology, Public Sector Services, Oil & Gas, Excess Casualty and Global Partner Services; National Accounts; First Party including National Property, Inland Marine, Ocean Marine and Boiler & Machinery; Specialized Distribution including Northland, National Programs, and Agribusiness; and International. In addition, the Company owns 49.5% of the common stock of J. Malucelli Participações em Seguros e Resseguros S.A., its joint venture in Brazil. Business and International Insurance also includes the Special Liability Group (which manages the Company’s asbestos and environmental liabilities) and the assumed reinsurance and certain other runoff operations, which are collectively referred to as Business and International Insurance Other.

Bond & Specialty Insurance - The Bond & Specialty Insurance segment provides surety, crime, management and professional liability coverages and related risk management services to a wide range of primarily domestic customers, 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 for losses caused by the actual or alleged negligence or misconduct of directors and officers or employee dishonesty; employment practices liability coverages and fiduciary coverages for public corporations, private companies and not-for-profit organizations; professional liability coverage for actual or alleged errors and omissions committed in the course of professional conduct or practice for a variety of professionals including, among others, lawyers and design professionals; and professional and management liability, property, workers’ compensation, auto and general liability and fidelity insurance for financial institutions.

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

TRAVELERS COMPANIES, INC. - FORM 8-K - EX-99.2 - July 21, 2015

Attached files

TRAVELERS COMPANIES, INC. Reports