Travelers 2006 Annual Report Download - page 258

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REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
The Travelers Companies, Inc.:
We have audited management’s assessment, included in the accompanying Management’s Report on
Internal Control Over Financial Reporting, that The Travelers Companies, Inc. and subsidiaries
maintained effective internal control over financial reporting as of December 31, 2006, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).The Travelers Companies, Inc. and subsidiaries
management is responsible for maintainingeffective internal control over financial reporting andfor its
assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express
an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining anunderstanding of internal control over financial
reporting,evaluating management’s assessment, testing and evaluating the design and operating
effectiveness of internal control, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of thecompany are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, management’s assessment that The Travelers Companies, Inc. andsubsidiaries
maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in
all material respects, based on criteria established inInternal Control—Integrated Framework issued by
the Committee ofSponsoring Organizations of the Treadway Commission (COSO).Also, in our opinion,
The Travelers Companies, Inc. and subsidiaries maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2006, based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated balance sheet of The Travelers Companies, Inc. and subsidiaries
as of December 31, 2006 and 2005, and the related consolidatedstatement of income, changes in
shareholders’ equity, and cash flows for each of the years in the three-year period endedDecember 31,
2006, and our report dated February 23, 2007 expressed an unqualified opinion on those consolidated
financial statements.
/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
February 23, 2007