Travelers 2009 Annual Report Download - page 3

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To Our Shareholders:
For Travelers, 2009 proved to be a defining year. We
delivered exceptional financial results including net
income per diluted share of $6.33, the second highest
in the company’s history and just below our all-time high
in 2007. We also posted an operating return on equity of
14.0 percent for the year. We are very pleased with these
results, particularly in light of the continued substantial
disruption in the financial markets and challenging
investment conditions.
We continue to leverage our competitive advantages
to execute successfully in the insurance marketplace,
generating attractive returns and returning excess capital
to our shareholders. During the year, we announced a
10 percent increase in our dividend per share, and we
continued our share repurchase program, repurchasing
69.4 million common shares for $3.3 billion. At year
end, all of our financial strength indicators were at,
or better than, target levels.
In 2009, we continued to distinguish our company,
disproving a common assumption that one insurer is as
good as another. The value that we deliver to our agents
and brokers and to our customers through the quality,
expertise and responsive service of our people has been a
key driver of our ability to outperform in a difficult market.
The company’s standing as a leader has never been more
apparent. One indication of that was the selection in June
of Travelers as one of the 30 stocks comprising the Dow
Jones Industrial Average, one of the best known stock
market indices in the world.
Given our strong performance this year, particularly relative
to many other financial services companies, let me share
with you my thoughts on two questions that we have asked
of ourselves: Why do we believe Travelers has performed
so well? What does Travelers’ success mean for our
stakeholders in 2010?
“ We are disciplined about the use of our
shareholders’ capital. We manage it with
a view that we should be appropriately
compensated for the risks that we assume.
We will not deploy capital in either our
insurance or investment operation if the
expected risk-adjusted return is not
consistent with our strategy. Some
critics might call this ‘conservative,’
but we firmly believe it is appropriate.
To do otherwise would be foolish.”
Jay S. Fishman
Chairman and Chief Executive Officer