Travelers 2010 Annual Report Download

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2010 Annual Report and Form 10-K
It’s better under
the umbrella

Table of contents

  • Page 1
    It's better under the umbrella 2010 Annual Report and Form 10-K

  • Page 2
    ...of property and casualty insurance for auto, home and business. The company's diverse business lines offer customers a wide range of coverage predominantly through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and operations...

  • Page 3
    ...analysis of risk and reward. Great credit goes to our entire investment team. They continue to execute in a manner consistent with Travelers' long-standing philosophy: we are an insurance company supported by our investment operation, not an investment company funded by an insurance operation. To be...

  • Page 4
    ... small business market overall declined due to the challenging economic environment. And in National Accounts, we meet the needs of our largest customers by offering ï¬,exible program design and risk management services to better manage their total cost of risk. Dividend Yield 2.58% COMMON SHARE...

  • Page 5
    ... pricing and risk management, focused product delivery, superior claim performance and strong agency relationships. In our new direct-to-consumer business, we have made significant progress in our infrastructure and technology, positioning us to offer auto and homeowners products and services...

  • Page 6
    ... our customers with sound property and casualty insurance protection from the ever-changing risks they face. We are confident in our position and approach for 2011, leading us to say, "It's better under the umbrella." Jay S. Fishman Chairman and Chief Executive Officer 6 2010 ANNUAL REPORT

  • Page 7
    ...exposures; and National Accounts provides highly customized insurance and risk management services to large companies. In addition, business units in the Target Risk Underwriting group provide insurance products and services to address large property, inland marine, ocean marine, equipment breakdown...

  • Page 8
    ... worldwide coverage for technology companies. The claim operations in both the United Kingdom and Ireland introduced the Secure, Respected & Cared For approach to service which has improved the customer experience. In Ireland, Travelers has continued to develop its personal lines insurance products...

  • Page 9
    ... Financial Officer - Business Insurance Irwin R. Ettinger* + Vice Chairman Jay S. Fishman* + Chairman & Chief Executive Officer Matthew S. Furman+ Senior Vice President, Corporate Secretary & Group General Counsel - Corporate & Governance Marlyss J. Gage+ Senior Vice President & Chief Underwriting...

  • Page 10
    ... Shield of Massachusetts, Inc. Director since 2007 CEO, Leadership for International Finance, LLC Director since 2004 Retired Chairman of the Executive Board & CEO, AEGON N.V. Director since 2009 Former Executive Partner, New Profit, Inc. Director since 2004 *Lead Director 10 2010 ANNUAL REPORT

  • Page 11
    ..., New York, NY 10017 (Address of principal executive offices) (Zip Code) (917) 778-6000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common stock, without par value New...

  • Page 12
    ... Shareholder Matters and Issuer Purchases of Equity Securities ...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition and Results of Operations ...Quantitative and Qualitative Disclosures About Market Risk ...Financial Statements and Supplementary Data ...Changes...

  • Page 13
    ... Company's revenues, operating income and total assets by reportable business segments, see note 2 of notes to the Company's consolidated financial statements. PROPERTY AND CASUALTY INSURANCE OPERATIONS The property and casualty insurance industry is highly competitive in the areas of price, service...

  • Page 14
    Pricing and Underwriting Pricing of the Company's property and casualty insurance products is generally developed based upon an estimation of expected losses, the expenses of producing, issuing and servicing business and managing claims, the time value of money associated with such loss and expense ...

  • Page 15
    ...products include property, commercial auto, general liability, workers' compensation, umbrella, internet liability, technology errors and omissions coverages and global companion products. • Public Sector Services provides insurance products and services to public entities including municipalities...

  • Page 16
    ... and related operations, offering property and liability coverages other than workers' compensation. • Target Risk Underwriting. The following units serve commercial businesses requiring specialized product underwriting, claims handling and risk management services: • National Property provides...

  • Page 17
    ... the Company's operating and marketing plans. Once an agency or broker is appointed, Business Insurance carefully monitors its performance. The majority of products offered by the Select Accounts, Commercial Accounts, IndustryFocused Underwriting and Target-Risk Underwriting groups are distributed...

  • Page 18
    ...$65 million in fee income in 2010. Workers' compensation accounted for approximately 76% of sales to National Accounts customers during 2010, based on direct written premiums and fees. Industry-Focused Underwriting markets property and casualty insurance products and services through a large network...

  • Page 19
    ... insured risks. Business Insurance continually monitors the credit exposure on individual accounts and the adequacy of collateral. Product Lines Workers' Compensation provides coverage for employers for specified benefits payable under state or federal law for workplace injuries to employees. There...

  • Page 20
    ... liability policies may also include coverage for directors' and officers' liability arising in their official capacities, employment practices liability insurance, fiduciary liability for trustees and sponsors of pension, health and welfare, and other employee benefit plans, errors and omissions...

  • Page 21
    ... brokers and direct writers. Both national and regional property and casualty insurance companies compete in the Select Accounts market which generally comprises lower-hazard, ''Main Street'' business customers. Risks are underwritten and priced using standard industry practices and a combination...

  • Page 22
    ...member of Lloyd's. The segment includes the following groups: • Bond & Financial Products provides a wide range of customers with bond and insurance products and risk management services. The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction...

  • Page 23
    ... United States. Bond & Financial Products, in conjunction with the Business Insurance segment, continues to make investments in enhanced technology utilizing internet-based applications to provide real-time interface capabilities with its independent agencies and brokers. Bond & Financial Products...

  • Page 24
    ... to workers' compensation coverage in the United States), public and product liability (the equivalent of general liability), professional indemnity (similar to professional liability coverage), motor (similar to automobile coverage in the United States), property, surety, marine, aviation, personal...

  • Page 25
    ...write most classes of business using traditional products and pricing and, to a lesser extent, regional insurance companies and companies that have developed niche programs for specific industry segments. Bond & Financial Products underwrites and markets its products to national, mid-sized and small...

  • Page 26
    ... organizations such as employee and affinity groups, joint marketing arrangements with other insurers, and direct marketing. Selected Product and Distribution Channel Information The following table sets forth net written premiums for the Personal Insurance segment's business by product line for the...

  • Page 27
    ... and other affinity groups that make available Personal Insurance's product offerings to their members. In addition, since 1995, the Company has had a marketing agreement with GEICO to underwrite homeowners business for their auto customers. This agreement has added profitable business and helped to...

  • Page 28
    ... who work with Company management on business plan development, marketing and overall growth and profitability. Channel-specific production and claim information is used to analyze results and identify problems and opportunities. Product Lines The primary coverages in Personal Insurance are personal...

  • Page 29
    ... accounted for 3.0% or more of the total direct written premiums written in 2010 by the Personal Insurance segment. Competition Personal lines insurance is written by hundreds of insurance companies of varying sizes. Although national companies write the majority of the business, Personal Insurance...

  • Page 30
    ... it is also managed by the Company's U.S. Claims Services organization to leverage that knowledge base and to share best practices. An integral part of the Company's strategy to benefit customers and shareholders is its continuing industry leadership in the fight against insurance fraud through its...

  • Page 31
    ... and reviews its reinsurance arrangements periodically. Reinsurers are selected based on their financial condition, business practices, the price of their product offerings and the value of collateral provided. After reinsurance is purchased, the Company has limited ability to manage the credit risk...

  • Page 32
    ... percentages to insured industry losses in each state in the covered area as reported by a third-party service provider. The reinsurance agreements meet the requirements to be accounted for as reinsurance in accordance with the guidance for reinsurance contracts. Amounts payable to the Company under...

  • Page 33
    ...with Longpoint Re II, the Company evaluated the applicability of the accounting guidance that addresses variable interest entities or VIEs. Under this guidance, an entity that is formed for business purposes is considered a VIE if: (a) the equity investors lack the direct or indirect ability through...

  • Page 34
    ... liability (other than directors and officers'), surety, burglary and theft, and farm-owners multi-peril. In the case of a war declared by Congress, only workers' compensation losses are covered by the Program. All commercial property and casualty insurers licensed in the United States are generally...

  • Page 35
    ... and annuity claim payments, primarily arising from workers' compensation insurance and workers' compensation excess insurance policies, were discounted to the present value of estimated future payments using a rate of 5% at both December 31, 2010 and 2009. These discounted reserves totaled $2.09...

  • Page 36
    ...use of retrospectively rated insurance policies. For example, reserves for long-term disability and annuity claim payments (tabular reserves), primarily arising from workers' compensation insurance and workers' compensation excess insurance policies, are discounted to reflect the time value of money...

  • Page 37
    ... 2008, the Company completed the sale of Unionamerica Holdings Limited (Unionamerica), which comprised its United Kingdom (U.K.)-based runoff insurance and reinsurance businesses. (Unionamerica was acquired in 2004 as part of the Merger.) Immediately before the sale, the claims and claim adjustment...

  • Page 38
    ...), Moody's Investors Service (Moody's) and Standard & Poor's Corp. (S&P). Rating agencies typically issue two types of ratings for insurance companies: claims-paying (or financial strength) ratings which reflect the rating agency's assessment of an insurer's ability to meet its financial obligations...

  • Page 39
    ... Commercial Insurance Company, Travelers Casualty Company of Connecticut, Travelers Property Casualty Insurance Company, Travelers Personal Security Insurance Company, Travelers Personal Insurance Company, Travelers Excess and Surplus Lines Company, St. Paul Fire and Marine Insurance Company, St...

  • Page 40
    ... Company, American Equity Insurance Company, Select Insurance Company, St. Paul Fire and Casualty Insurance Company, The Travelers Lloyds Insurance Company and Travelers Lloyds of Texas Insurance Company. Debt Ratings The following table summarizes the current debt, preferred stock and commercial...

  • Page 41
    ... policies and the large amount of high quality liquid bonds, contributes to the Company's ability to fund claim payments without having to sell illiquid assets or access credit facilities. The primary goals of the Company's asset-liability management process are to satisfy the insurance liabilities...

  • Page 42
    .... The applicable laws and regulations are used by states to establish standards to ensure that rates are not excessive, inadequate, unfairly discriminatory or used to engage in unfair price competition. An insurer's ability to increase rates and the relative timing of the process are dependent...

  • Page 43
    ...Item 1A-''Risk Factors.'' Insurance Regulatory Information System. The National Association of Insurance Commissioners (NAIC) developed the Insurance Regulatory Information System (IRIS) to help state regulators identify companies that may require special attention. Financial examiners review annual...

  • Page 44
    ... TRV subsidiary, TCI Global Services, Inc., has a liaison office in India. Insurance business in India is regulated by the Insurance Regulatory and Development Authority. In addition, TRV's Lloyd's managing agency has a service company in Singapore, the underwriting operations of which are regulated...

  • Page 45
    ... subsidiaries are admitted to transact business. Two of TRV's insurance subsidiaries and its operations at Lloyd's are domiciled in the United Kingdom. Insurers in the United Kingdom are subject to change of control restrictions in the Financial Services and Markets Act of 2000 including approval...

  • Page 46
    ... Market Risk,'' and ''Item 8-Financial Statements and Supplementary Data.'' OTHER INFORMATION Customer Concentration In the opinion of the Company's management, no material part of the business of the Company and its subsidiaries is dependent upon a single customer or group of customers, the loss...

  • Page 47
    ... Securities Exchange Act of 1934, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to the Company's website, then click on ''SEC Filings'' under the ''Investors'' heading. From time to time, the Company may use...

  • Page 48
    ... year/product line component. If the paid-to-date losses are then subtracted from the estimated ultimate losses, the result is an indication of the outstanding losses. Adjusted unassigned surplus ... Admitted insurer ...Annuity ... Assigned risk pools ... Assumed reinsurance ...Average value...

  • Page 49
    ...whose primary purpose is to provide insurance coverage to the company's owners or their affiliates. An actuarial method to estimate ultimate losses for a given cohort of claims such as an accident year/product line component. If the paid-to-date losses are then subtracted from the estimated ultimate...

  • Page 50
    ... property insurance losses but can be written to cover casualty insurance losses such as from workers' compensation policies. When an insurer reinsures its liability with another insurer or a ''cession,'' it ''cedes'' business and is referred to as the ''ceding company.'' Insurance risks transferred...

  • Page 51
    ... used in the pricing of an insurance product. The change in exposure is the amount of change in premium on policies that renew attributable to the change in portfolio risk. Deficiency ... Demand surge ... Direct written premiums ... Earned premiums or premiums earned ... Excess liability ...Excess...

  • Page 52
    ... risks in that state. For more information, see ''residual market (involuntary business).'' Fidelity insurance coverage protects an insured for loss due to embezzlement or misappropriation of funds by an employee. Surety is a three-party agreement in which the insurer agrees to pay a third party...

  • Page 53
    ... marketable securities held by the holding company. Reserves for estimated losses and LAE that have been incurred but not yet reported to the insurer. This includes amounts for unreported claims, development on known cases, and re-opened claims. A broad type of insurance generally covering articles...

  • Page 54
    ...to-age link ratios for future periods are assumed to be 1.0 (i.e., the age at which cumulative losses are assumed to have stopped growing). Net written premiums ...New business volume ...Operating income (loss) ... Operating income (loss) per share ...Operating return on equity ... Paid development...

  • Page 55
    ... insurance company. Insurance that provides coverage to a person or business with an insurable interest in tangible property for that person's or business's property loss, damage or loss of use. Reinsurance wherein the insurer cedes an agreed-upon fixed percentage of liabilities, premiums and losses...

  • Page 56
    ... case of workers' compensation. The costs of the residual market are usually charged back to the direct insurance carriers in proportion to the carriers' voluntary market shares for the type of coverage involved. The amount of exposure a policyholder company retains on any one risk or group of risks...

  • Page 57
    ... life, typically in settlement of a claim under a liability policy, usually funded through the purchase of an annuity. A principle of law incorporated in insurance policies, which enables an insurance company, after paying a claim under a policy, to recover the amount of the loss from another person...

  • Page 58
    ...to charge an appropriate premium for each accepted risk. The underwriter is expected to select business that will produce an average risk of loss no greater than that anticipated for the class of business. The insurer's or reinsurer's process of reviewing applications for insurance coverage, and the...

  • Page 59
    ... losses could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance. Our property and casualty insurance operations expose us to claims...

  • Page 60
    ... Terrorism Risk Insurance Program Reauthorization Act of 2007 (the Act) provides benefits in the event of certain acts of terrorism, those benefits are subject to a deductible and other limitations. Under this law, once our losses exceed 20% of our commercial property and casualty insurance premium...

  • Page 61
    ... reserves, emerging claim and coverage issues, the competitive environment, regulatory developments and the impact of rating agency actions. You should also refer to ''Item 7- Management's Discussion and Analysis of Financial Condition and Results of Operation'', particularly the ''Outlook'' section...

  • Page 62
    ... in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties or increased frequency of small claims. We continually refine our loss reserve estimates in a regular, ongoing process as historical loss experience develops, additional claims are reported and settled...

  • Page 63
    ...portion of our assets in equity securities, private equity limited partnerships, hedge funds, and real estate partnerships, all of which are subject to greater volatility in their investment returns than fixed maturity investments. General economic conditions, changes in applicable tax laws and many...

  • Page 64
    ... net investment income and we could experience realized and/or unrealized investment losses, which could materially and adversely affect our results of operations, financial position and/or liquidity. Our business could be harmed because of our potential exposure to asbestos and environmental claims...

  • Page 65
    ... of any umbrella or excess policies we have issued, the resolution or adjudication of disputes pertaining to the amount of available coverage for asbestos and environmental claims in a manner inconsistent with our previous assessment of these claims, the number and outcome of direct actions against...

  • Page 66
    ... claims under directors' & officers' insurance policies relating to: losses from involvement in financial market activities, such as mortgage or financial product origination, distribution, structuring or servicing and foreclosure procedures; fraud, including those related to investment management...

  • Page 67
    ..., including customer demand for direct distribution channels. See ''Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operation-Outlook.'' In recent years, many independent personal insurance agents have begun to utilize price comparison rating technology, sometimes...

  • Page 68
    ... us in the future at commercially reasonable rates or at all, and/or life insurance companies may fail to make required annuity payments, and thus our results of operations could be materially and adversely affected. We are exposed to credit risk in certain of our business operations. In addition to...

  • Page 69
    ..., capital and surplus requirements, limitations on the types and amounts of certain investments, underwriting limitations, transactions with affiliates, dividend limitations, changes in control, premium rates and a variety of other financial and non-financial components of an insurer's business. In...

  • Page 70
    ...state tax laws that specifically impact the insurance industry, such as premium taxes or other taxes, may be enacted or changed by states to raise revenues. As a U.S.-based SEC reporting company, we are currently required to prepare our financial statements in accordance with U.S. Generally Accepted...

  • Page 71
    ... impact our ability to access the capital markets and increase our borrowing costs. Claims-paying and financial strength ratings are important to an insurer's competitive position. Rating agencies review insurers' ratings periodically, and change their ratings criteria periodically, and therefore...

  • Page 72
    ...create enhanced risks. A number of our recent and planned business initiatives involve developing new products or expanding existing products in targeted markets. This includes the following efforts, from time to time, to protect or grow market share: • We may develop products that insure risks we...

  • Page 73
    .... The profitability of our property and casualty business substantially depends on the extent to which our actual claims experience is consistent with the assumptions we use in pricing our policies. We utilize models to help us price business in a manner that is intended to be consistent, over time...

  • Page 74
    ...in conducting such business we are subject to a number of significant risks, particularly in emerging economies. These risks include restrictions such as price controls, capital controls, currency exchange limits, ownership limits and other restrictive or anti-competitive governmental actions, which...

  • Page 75
    ... of our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions. Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems...

  • Page 76
    ...'s operations in the United Kingdom. The Company, through its subsidiaries, owns an investment portfolio of income-producing properties and real estate funds. Included in this portfolio are four office buildings in which the Company holds a 50% ownership interest located in New York, New York, which...

  • Page 77
    ... Company's executive officers is incorporated by reference from Part III, Item 10 of this annual report. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is traded on the New York Stock Exchange...

  • Page 78
    ...2010 The Travelers Companies, Inc. (2) S&P 500 Index S&P 500 Property & Casualty Insurance (3) 11FEB201120113730 (1) The cumulative return to shareholders is a concept used to compare the performance of a company's stock over time and is the ratio of the net stock price change plus the cumulative...

  • Page 79
    ... withholding taxes in connection with the vesting of restricted stock awards and exercises of stock options, and shares used by employees to cover the exercise price of certain stock options that were exercised. Information relating to compensation plans under which the Company's equity securities...

  • Page 80
    ...December 31, 2009 2008 2007 (in millions, except per share amounts) 2006 Total revenues ...Net income ...Total investments ...Total assets ...Claims and claim adjustment expense reserves Total long-term debt ...Total liabilities ...Total shareholders' equity ... $ 25,112 $ 3,216 $ 72,722 105,181 51...

  • Page 81
    ....9% excluding net unrealized investment gains (losses), net of tax) • Repurchased 95.7 million common shares for total cost of $5.00 billion under share repurchase authorization • Shareholders' equity of $25.48 billion; book value per common share of $58.47 • Holding company liquidity of $3.61...

  • Page 82
    ... acquisition costs General and administrative expenses ...Interest expense ... Total claims and expenses ...Income before income taxes ...Income tax expense ...Net income ...Net income per share Basic ...Diluted ...GAAP combined ratio Loss and loss adjustment expense ratio ...Underwriting expense...

  • Page 83
    ... non-catastrophe weather-related losses and fewer large property losses, partially offset by reductions in underwriting margins related to pricing and loss cost trends, a decline in net favorable prior year reserve development and lower fee income. Catastrophe losses in 2009 totaled $457 million...

  • Page 84
    ...short-term interest rates, a lower average level of long-term fixed maturity invested assets and the unfavorable impact of foreign currency exchange rates. Those factors were largely offset by improved returns from non-fixed maturity investments, which generated negative net investment income of $40...

  • Page 85
    ... realized investment gains related to equity securities. These gains were partially offset by $30 million of net realized investment losses related to U.S. Treasury futures contracts, which require a daily mark-to-market settlement and are used to shorten the duration of the Company's fixed maturity...

  • Page 86
    ... in the Personal Insurance segment resulting from the Company's direct to consumer initiative and in the Financial, Professional & International Insurance segment due to employee- and technology-related costs to enhance operations and support future business growth. General and administrative...

  • Page 87
    ... of continued investments to support business growth and product development, including the Company's direct to consumer initiative in the Personal Insurance segment, partially offset by the favorable impact of changes in foreign currency exchange rates on expenses in the Financial, Professional...

  • Page 88
    ... of continued investments to support business growth and product development, including the Company's direct to consumer initiative in the Personal Insurance segment, as well as salary increases in the normal course of business. Written Premiums Consolidated gross and net written premiums were as...

  • Page 89
    ... Insurance and Personal Insurance segments. RESULTS OF OPERATIONS BY SEGMENT Business Insurance Results of the Company's Business Insurance segment were as follows: (for the year ended December 31, in millions) 2010 2009 2008 Revenues: Earned premiums ...Net investment income Fee income...

  • Page 90
    ... Accounts is the primary source of fee income due to its service businesses, which include claim and loss prevention services to large companies that choose to self-insure a portion of their insurance risks, as well as claims and policy management services to workers' compensation residual market...

  • Page 91
    ... risk control, underwriting and claim process initiatives. The commercial property product line improvement occurred primarily in the 2007 accident year as a result of better than expected loss development for certain large national property, national programs, and ocean marine claim exposures...

  • Page 92
    Company's corporate advertising expense allocated to this segment resulting from a change in focus to the Personal Insurance segment's direct to consumer initiative in 2010. General and administrative expenses in 2009 totaled $1.97 billion, $113 million lower than the comparable 2008 total of $2.08 ...

  • Page 93
    ... Core ...Business Insurance Other ...Total Business Insurance ... (for the year ended December 31, in millions) Net Written Premiums 2010 2009 2008 Select Accounts ...Commercial Accounts ...National Accounts ...Industry-Focused Underwriting . Target Risk Underwriting ...Specialized Distribution...

  • Page 94
    ... the impact of general economic conditions, and lower premium volume from property and workers' compensation involuntary residual markets. Despite the impact of the loss of a large account, business retention rates remained high in 2009. Industry-Focused Underwriting. Net written premiums of $2.30...

  • Page 95
    ...of changes in the structure of the Company's reinsurance during the first quarter of 2010 that modestly increased retentions to directionally align retentions in the Company's International business with its U.S. practices, and the favorable impact of foreign currency exchange rates. Earned premiums...

  • Page 96
    ...United Kingdom and Canada. In addition, the Aviation and Property lines of business at Lloyd's experienced net favorable prior year reserve development in 2009. In Bond & Financial Products, better than expected loss development for the contract surety business within the fidelity and surety product...

  • Page 97
    relating to 2007 flood losses. In Bond & Financial Products, better than expected loss development for the contract surety business within the fidelity and surety product line, resulting from favorable settlements on large claims (primarily from accident years prior to 2005), resulted in net ...

  • Page 98
    ...Net written premiums for Bond & Financial Products in 2010 declined 3% from 2009, primarily reflecting the impact of underwriting actions taken and competitive market conditions in the Professional Liability and Public Company Liability business units. In addition, construction and commercial surety...

  • Page 99
    ... than in 2008. In International, business retention rates in 2009 declined from 2008, primarily due to underwriting actions taken in the United Kingdom, Ireland and at the Company's operations at Lloyd's. Renewal premium changes improved over 2008 and new business levels declined when compared with...

  • Page 100
    ... rates and renewal premium increases, and growth in new business volume during the preceding twelve months. Net Investment Income Refer to the ''Net Investment Income'' section of ''Consolidated Results of Operations'' herein for a discussion of the change in the Company's net investment income...

  • Page 101
    ... volume and continued costs supporting business growth and product development, including the Company's direct to consumer initiative. In 2009, general and administrative expenses of $784 million were $45 million lower than the comparable 2008 total of $829 million. The decrease resulted from...

  • Page 102
    ... written premiums in the Agency Homeowners and Other line of business grew 5% over 2008, driven by increases in renewal premium changes. New business volume was consistent with 2008 and business retention rates remained strong and consistent with 2008. For its Agency business, the Personal Insurance...

  • Page 103
    .... After-tax interest expense in 2009 totaled $248 million, compared with $239 million in 2008. ASBESTOS CLAIMS AND LITIGATION The Company believes that the property and casualty insurance industry has suffered from court decisions and other trends that have attempted to expand insurance coverage for...

  • Page 104
    ... certain jurisdictions. Travelers Property Casualty Corp. (TPC), a wholly-owned subsidiary of the Company, had entered into settlement agreements, which are subject to a number of contingencies, in connection with a number of these direct action claims. These settlement agreements had been approved...

  • Page 105
    ... average asbestos defense or indemnity payment. As in prior years, the annual claim review considered active policyholders and litigation cases for potential product and ''non-product'' liability. Compared with the prior year period, the Home Office and Field Office categories, which account...

  • Page 106
    ... asbestos coverage matters, the Company has established a reserve for further adverse development related to existing policyholders, new claims from policyholders reporting claims for the first time and policyholders for which there is, or may be, litigation and direct actions against the Company...

  • Page 107
    ... injury claims. Under the agreement in principle, the Company has the option to make a series of payments over the next 20 years totaling approximately $620 million to the Trust to be created under the Amended Plan, or it may elect to make a one-time discounted payment, which, as of March 31, 2011...

  • Page 108
    ... claims or potential non-environmental claims in any resolution process; and the applicable law in each jurisdiction. Conventional actuarial techniques are not used to estimate these reserves. In its review of environmental reserves, the Company considers: past settlement payments; changing...

  • Page 109
    ... development; the potential for additional new claims beyond previous expectations; and the potential higher costs for new settlements. The duration of the Company's investigation and review of these claims and the extent of time necessary to determine an appropriate estimate, if any, of the value...

  • Page 110
    ...outcome of direct actions against the Company, future developments pertaining to the Company's ability to recover reinsurance for asbestos and environmental claims and the unavailability of other insurance sources potentially available to policyholders, whether through exhaustion of policy limits or...

  • Page 111
    ..., 2010 totaled $72.72 billion, of which 94% was invested in fixed maturity and short-term investments, 1% in equity securities, 1% in real estate and 4% in other investments. Because the primary purpose of the investment portfolio is to fund future claims payments, the Company employs a conservative...

  • Page 112
    ... corporate bonds and redeemable preferred Financial: Bank ...Insurance ...Finance/leasing ...Brokerage and asset management ...Industrial ...Public utility ...Sovereign corporate securities(2) ...Canadian municipal securities ...Commercial mortgage-backed securities Asset-backed and other ...stock...

  • Page 113
    ... corporate bonds and redeemable preferred Financial: Bank ...Insurance ...Finance/leasing ...Brokerage and asset management ...Industrial ...Public utility ...Sovereign corporate securities(2) ...Canadian municipal securities ...Commercial mortgage-backed securities Asset-backed and other ...stock...

  • Page 114
    ... to fund the remaining payments of principal and interest. Such escrow accounts are verified as to their sufficiency by an external auditor and are almost exclusively comprised of U.S. Treasury securities. Moody's Investors Service has assigned a negative outlook to municipal securities issued...

  • Page 115
    ...or the insurer in the case of securities enhanced by third-party insurance for the payment of principal and interest in the event of issuer default. (2) No other single state accounted for 2.5% or more of the total pre-refunded municipal bonds. The Company bases its investment decision on the credit...

  • Page 116
    ... table shows the geographic distribution of the Company's investments in debt securities issued by foreign governments at December 31, 2010. (at December 31, 2010, in millions) Carrying Value Average Credit Quality(1) Foreign Government: Canada ...United Kingdom . . Germany ...Australia ...All...

  • Page 117
    ... direct ownership and limited partnerships) and trading securities, which are subject to more volatility than the Company's fixed maturity investments. These asset classes have historically provided a higher return than fixed maturities but are subject to more volatility. Net investment income...

  • Page 118
    ... Company's portfolio of such securities. In addition, in 2009 credit spreads narrowed on other non-municipal fixed maturity securities which also resulted in an increase in the market value of those securities. The following table summarizes, for all fixed maturities and equity securities reported...

  • Page 119
    ... preferred stock ...Total equity securities ...Other investments ...Total ... For the year ended December 31, 2010, the Company recognized the following other-than-temporary impairments: • $13 million in the fixed maturities portfolio, consisting of $5 million related to the deteriorated financial...

  • Page 120
    ... millions) Loss Fair Value Fixed maturities ...Equity securities ...Other ...Total ... $11 - 1 $12 $345 8 1 $354 Purchases and sales of investments are based on cash requirements, the characteristics of the insurance liabilities and current market conditions. The Company identifies investments to...

  • Page 121
    ...would materially change the estimated threshold loss amounts. This information in the tables is based on the Company's in-force portfolio and catastrophic reinsurance program as of December 31, 2010. Catastrophe modeling relies upon inputs based on experience, science, engineering and history. These...

  • Page 122
    ... amount of insurable assets and businesses. The Company regularly reviews emerging issues, such as changing climate conditions, to consider potential changes to its modeling and the use of such modeling, as well as to help determine the need for new underwriting strategies, coverage modifications or...

  • Page 123
    ... ongoing basis and reviews its reinsurance arrangements periodically. Reinsurers are selected based on their financial condition, business practices and the price of their product offerings. After reinsurance is purchased, the Company has limited ability to manage the credit risk to a reinsurer. In...

  • Page 124
    ...is well-positioned to capitalize on new business opportunities as agents, brokers and customers seek to place business with high-quality carriers. In addition, the Company launched a new distribution channel in 2009 that markets personal insurance products directly to consumers, which is expected to...

  • Page 125
    ... in 2011, the Company could also experience a reduction in net investment income and/or significant realized investment losses, including impairments. The Company expects its fixed income assets, including its municipal portfolio, to provide adequate risk-adjusted returns and support its insurance...

  • Page 126
    ...of the Company's business have been met primarily by funds generated from operations, asset maturities and income received on investments. Cash provided from these sources is used primarily for claims and claim adjustment expense payments and operating expenses, and in recent years, for common share...

  • Page 127
    ... expected present value of the net insurance liabilities, as well as the positive cash flow from newly sold policies and the large amount of high quality liquid bonds, contributes to the Company's ability to fund claim payments without having to sell illiquid assets or access credit facilities. 115

  • Page 128
    ... other expenses, totaled approximately $494 million. Interest on the senior notes is payable semi-annually in arrears on June 2 and December 2 of each year. The senior notes are redeemable in whole at any time or in part from time to time, at the Company's option, at a redemption price equal to the...

  • Page 129
    ... applicable to the Company. Share Repurchases. The Company's board of directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities...

  • Page 130
    ... payroll withholding taxes related to the vesting of restricted stock awards and exercises of stock options. Capital Resources Capital resources reflect the overall financial strength of the Company and its ability to borrow funds at competitive rates and raise new capital to meet its needs. The...

  • Page 131
    ... the Company's commercial paper program. Shelf Registration. In December 2008, the Company filed with the Securities and Exchange Commission a universal shelf registration statement for the potential offering and sale of securities. The Company may offer these securities from time to time at prices...

  • Page 132
    ...,605 - $27,426 Total estimated claims and claim-related payments ...Liabilities related to unrecognized tax benefits(12) . . Total ... (1) See note 8 of notes to the Company's consolidated financial statements for a further discussion of outstanding indebtedness. Because the amounts reported in the...

  • Page 133
    ...'s consolidated financial statements.) (8) Workers' compensation large deductible policies provide third party coverage in which the Company typically is responsible for paying the entire loss under such policies and then seeks reimbursement from the insured for the deductible amount. ''Claims from...

  • Page 134
    ... discounted using deposit accounting. (11) The amounts in ''Payout from ceded funds withheld'' represent estimated payments for losses and return of funds held related to certain reinsurance arrangements whereby the Company holds a portion of the premium due to the reinsurer and is allowed to pay...

  • Page 135
    ... guarantees related to letters of credit, issuance of debt securities, certain investments, third-party loans related to certain investments and various indemnifications, including those related to the sale of business entities. See note 15 of notes to the Company's consolidated financial statements...

  • Page 136
    ... and when it is actually reported to the insurer). Informed judgment is applied throughout the process, including the application of various individual experiences and expertise to multiple sets of data and analyses. The Company continually refines its loss reserve estimates in a regular ongoing...

  • Page 137
    ... Gross claims and claim adjustment expense reserves by product line were as follows: (at December 31, in millions) Case 2010 IBNR Total Case 2009 IBNR Total General liability ...Property ...Commercial multi-peril ...Commercial automobile ...Workers' compensation ...Fidelity and surety ...Personal...

  • Page 138
    ... product lines make the aggregation of individual ranges a highly judgmental and inexact process. Property-casualty insurance policies are either written on a claims-made or on an occurrence basis. Claims-made policies generally cover, subject to requirements in individual policies, claims reported...

  • Page 139
    ...the reporting of the claim to the insurer, makes estimating IBNR inherently more uncertain. In addition, the greater the reporting lag, the greater the proportion of IBNR to the total claim liability for the product line. Writing new products with material reporting lags can result in adding several...

  • Page 140
    ... The principal estimation and analysis methods utilized by the Company's actuaries are the paid development method, the case incurred development method, the Bornhuetter-Ferguson (BF) method, and average value analysis combined with the reported claim development method. The BF method is usually...

  • Page 141
    ... the change should be reflected in the Company's estimated claim liabilities. The final estimate selected by management in a reporting period is based on these various detailed analyses of past data, adjusted to reflect any new actionable information. The Audit Committee of the Board of Directors is...

  • Page 142
    ... speed of claim reporting and claim settlement is a function of the specific coverage provided, the jurisdiction and specific policy provisions such as self-insured retentions. There are numerous components underlying the general liability product line. Some of these have relatively moderate payment...

  • Page 143
    ... data) Changes in settlement patterns (e.g., medical malpractice) General liability book of business risk factors Changes in policy provisions (e.g., deductibles, policy limits, endorsements) Changes in underwriting standards Product mix (e.g., size of account, industries insured, jurisdiction mix...

  • Page 144
    ... properties. The claim reporting and settlement process for property coverage claim reserves is generally restricted to the insured and the insurer. Overall, the claim liabilities for this line create a low estimation risk, except possibly for catastrophes and business interruption claims. Property...

  • Page 145
    ... single losses. The reserving risk for this line differs from that of the general liability product line and the property product line due to the nature of the customer. Commercial multi-peril is generally sold to smaller-sized accounts, while the customer profile for general liability and property...

  • Page 146
    ... included in the general discussion section) include: Bodily injury and property damage liability risk factors Trends in jury awards Changes in the underlying court system Changes in case law Litigation trends Frequency of claims with payment capped by policy limits Change in average severity of...

  • Page 147
    ..., high severity claims providing lifetime coverage for medical expense arising from a worker's injury. Overall, the claim liabilities for this line create a somewhat greater than moderate estimation risk. Workers' compensation reserves are typically analyzed in three components: indemnity losses...

  • Page 148
    ... surety losses is generally related to the type of business performed by the insured, the type of bonded obligation, the amount of limit exposed to loss and the amount of assets available to the insurer to mitigate losses, such as unbilled contract funds, collateral, first and third party indemnity...

  • Page 149
    ...Type of business insured Type of obligation insured Cumulative limits of liability for insured Assets available to mitigate loss Defective workmanship/latent defects Financial strategy of insured Changes in statutory obligations Geographic spread of business Fidelity and Surety book of business risk...

  • Page 150
    ... claims. Reporting lags are relatively short and the claim settlement process for personal automobile liability generally is the least complex of the liability products. It is generally viewed as a high frequency, low to moderate severity product line. Overall, the claim liabilities for this line...

  • Page 151
    ... practices as well as initiatives to fight fraud. Homeowners and Personal Lines Other Homeowners is generally considered a short tail coverage. Most payments are related to the property portion of the policy, where the claim reporting and settlement process is generally restricted to the insured...

  • Page 152
    ...tail (e.g., U.S. excess liabilities reinsured through the London market, and several underwriting pools in runoff). The speed of claim reporting and claim settlement is a function of the specific coverage provided, the jurisdiction, the distribution system (e.g., underwriting pool versus direct) and...

  • Page 153
    ...and other book of business risk factors Changes in policy provisions (e.g., deductibles, policy limits, endorsements, ''claims-made'' language) Changes in underwriting standards Product mix (e.g., size of account, industries insured, jurisdiction mix) Unanticipated changes in risk factors can affect...

  • Page 154
    ...to mandatory pools and associations relate primarily to workers' compensation service business. These recoverables are supported by the participating insurance companies' obligation to pay a pro rata share based on each company's voluntary market share of written premium in each state in which it is...

  • Page 155
    ... its fixed maturities. The pricing service utilizes market quotations for fixed maturity securities that have quoted prices in active markets. Since fixed maturities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing service prepares estimates of fair value 143

  • Page 156
    ... each asset class based on relevant market information, relevant credit information, perceived market movements and sector news. The market inputs utilized in the pricing evaluation, listed in the approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer...

  • Page 157
    ... Company's ability and intent to retain the investment for a reasonable period of time sufficient to allow for an anticipated recovery in value; (3) the likelihood of the recoverability of principal and interest for fixed maturity securities (i.e., whether there is a credit loss), or cost for equity...

  • Page 158
    ..., and the Company may also make forward-looking statements about, among other things: • its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating income, investment income and performance, return on equity, and expected...

  • Page 159
    ... Company's exposure to equity price risk is not significant. The Company has no direct commodity risk and is not a party to any credit default swaps. The primary market risks to the investment portfolio are interest rate risk and credit risk associated with investments in fixed maturity securities...

  • Page 160
    ... municipal securities issued by local governments within the United States were assigned a negative outlook by Moody's Investors Service. Notwithstanding the relatively low historical rates of default on many of these obligations and notwithstanding that the Company typically seeks to invest in high...

  • Page 161
    ... these investments primarily to fund insurance reserves and other liabilities denominated in the same currency, effectively reducing its foreign currency exchange rate exposure. Invested assets denominated in the British Pound Sterling comprised approximately 2.5% of the total invested assets at...

  • Page 162
    ... on the fair value of the Company's financial instruments. Foreign Currency Exchange Rate Risk The Company uses fair values of investment securities to measure its potential loss from foreign denominated investments. A hypothetical 10% reduction in value of foreign denominated investments is used to...

  • Page 163
    ... FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm ...Consolidated Statement of Income for the years ended December 31, 2010, 2009 and 2008 ...Consolidated Balance Sheet at December 31, 2010 and 2009 ...Consolidated Statement of Changes in Shareholders' Equity...

  • Page 164
    ..., the Company changed its method of accounting for other-than-temporary impairments of debt securities as of April 1, 2009 due to the adoption of new FASB guidance. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Travelers...

  • Page 165
    ... ...Income tax expense ...Net income ...Net income per share Basic ...Diluted ...Weighted average number of common shares outstanding Basic ...Diluted ...For the year ended December 31, Net Realized Investment Gains (Losses) Other-than-temporary impairment losses: Total gains (losses) ...Non-credit...

  • Page 166
    ... 82,145 Total investments ... Total assets ...Liabilities Claims and claim adjustment expense reserves . Unearned premium reserves ...Contractholder payables ...Payables for reinsurance premiums ...Debt ...Other liabilities ... Total liabilities ...Shareholders' equity Preferred Stock Savings Plan...

  • Page 167
    ...(loss) on investment securities: Having no credit losses recognized in the consolidated statement of income . Having credit losses recognized in the consolidated statement of income ...Net change in benefit plan assets and obligations recognized in equity ...Net change in unrealized foreign currency...

  • Page 168
    ... ...Dividends paid to shareholders ...Issuance of common stock-employee share options ...Treasury stock acquired-share repurchase authorization ...Treasury stock acquired-net employee share-based compensation Excess tax benefits from share-based payment arrangements ... Net cash used in financing...

  • Page 169
    ..., the Company). The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and...

  • Page 170
    ... by a slight decrease in net investment income and, accordingly, net income, of less than $0.01 per share (basic and diluted) due to a decrease in the accretion of the non-credit loss component of impaired securities to the Company's projection of expected value for the twelve months ended December...

  • Page 171
    ...sale with changes in fair value, net of income tax, charged or credited directly to accumulated other changes in equity from nonowner sources. Real Estate The Company's real estate investments include warehouses, office buildings and other commercial land and properties that are directly owned. Real...

  • Page 172
    ... Funds and Real Estate Partnerships The Company uses the equity method of accounting for private equity limited partnerships, hedge funds and real estate partnerships. The partnerships and the hedge funds generally report investments on their balance sheet at fair value. The financial statements...

  • Page 173
    ..., hedge funds, real estate partnerships and joint ventures are accounted for using the equity method of accounting, whereby the Company's share of the investee's earnings or losses in the fund is reported in net investment income. Trading securities are marked to market with the change in fair value...

  • Page 174
    ... basis to net investment income over the remaining expected life of the investment. Determination of Credit Loss The Company determines the credit loss component of fixed maturity investments by utilizing discounted cash flow modeling to determine the present value of the security and comparing the...

  • Page 175
    ... in other investments are private equity limited partnerships, hedge funds and real estate partnerships that generally report investments on their balance sheet at fair value and are accounted for by the Company using the equity method of accounting. The Company reviews these investments 163

  • Page 176
    ...In estimating fair value, the Company uses interest rates reflecting the current real estate financing market returns. Securities Lending The Company has engaged in securities lending activities from which it generates net investment income by lending certain of its investments to other institutions...

  • Page 177
    ... reserves discounted to the present value of estimated future payments. The liabilities for losses for most long-term disability and annuity claim payments, primarily arising from workers' compensation insurance and workers' compensation excess insurance policies, were discounted using a rate of...

  • Page 178
    ... at both dates. The liability for such assessments and the related recoverables are not discounted for the time value of money. The loss-based assessments are expected to be paid over a period ranging from one year to the life expectancy of certain workers' compensation claimants and the recoveries...

  • Page 179
    ... value of money. Accordingly, there is no gain or loss at the time the assets and liabilities are acquired and recognized by the subsequent year of account. In addition, there is no impact on reported premiums and losses as a result of an RITC transaction. Fee Income Fee income includes servicing...

  • Page 180
    ... into the following six groups, which collectively comprise Business Insurance Core operations: • Select Accounts provides small businesses with property and casualty products, including commercial multi-peril, property, general liability, commercial auto and workers' compensation insurance. 168

  • Page 181
    ...products include property, commercial auto, general liability, workers' compensation, umbrella, internet liability, technology errors and omissions coverages and global companion products. • Public Sector Services provides insurance products and services to public entities including municipalities...

  • Page 182
    ... property and casualty carriers that do not have in-house expertise with reinsurance, underwriting, engineering, claim handling and risk management services for this type of coverage. • Global Accounts provides insurance to U.S. companies with foreign property and liability exposures (home-foreign...

  • Page 183
    ... basis through Lloyd's. The segment includes the following groups: • Bond & Financial Products provides a wide range of customers with bond and insurance products and risk management services. The range of coverages includes performance, payment and commercial surety and fidelity bonds for...

  • Page 184
    ... as well as coverage for liability arising from ownership or occupancy. 2. SEGMENT INFORMATION The Company is organized into three reportable business segments: Business Insurance; Financial, Professional & International Insurance; and Personal Insurance. The accounting policies used to generate the...

  • Page 185
    ...Company's revenues, operating income and total assets by reportable business segments: Financial, Professional & International Insurance Total Reportable Segments (for the year ended December 31, in millions) Business Insurance Personal Insurance 2010 Premiums ...Net investment income Fee income...

  • Page 186
    ... INFORMATION (Continued) Net written premiums by market were as follows: (for the year ended December 31, in millions) 2010 2009 2008 Business Insurance: Select Accounts ...Commercial Accounts ...National Accounts ...Industry-Focused Underwriting Target Risk Underwriting ...Specialized Distribution...

  • Page 187
    ...& International Insurance: Fidelity and surety ...General liability ...International ...Other ... Total Financial, Professional & International Insurance ...Personal Insurance: Automobile ...Homeowners and Other ...Total Personal Insurance ...Total earned premiums Net investment income ...Fee income...

  • Page 188
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2. SEGMENT INFORMATION (Continued) (at December 31, in millions) 2010 2009 Asset reconciliation: Business Insurance ...Financial, Professional & International Insurance ...Personal Insurance ...Total...

  • Page 189
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. INVESTMENTS Fixed Maturities The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows: (at December 31, 2010, in millions) Amortized ...

  • Page 190
    ... for sale with a fair value of $2.07 billion and $2.58 billion, respectively. Approximately 38% and 37% of the Company's CMO holdings were guaranteed by or fully collateralized by securities issued by GNMA, FNMA or FHLMC at December 31, 2010 and 2009, respectively. The average credit rating of...

  • Page 191
    ... and 2009 totaled $115 million and $184 million, respectively. Gross gains realized on those sales were $103 million and $159 million, respectively. Real Estate The Company's real estate investments include warehouses, office buildings and other commercial land and properties that are directly owned...

  • Page 192
    ... by third party VIEs. These include certain of the Company's investments in private equity limited partnerships, hedge funds and real estate partnerships where the Company is not related to the general partner. These investments are generally accounted for under the equity method and reported in the...

  • Page 193
    ..., the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4. The Company also relies upon estimates...

  • Page 194
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. INVESTMENTS (Continued) Less than 12 months(1) Gross Fair Unrealized Value Losses 12 months or longer(2) Gross Fair Unrealized Value Losses Total Fair Value Gross Unrealized Losses (at ...

  • Page 195
    ... 1% of the combined fixed maturity and equity security portfolios on a pretax basis and less than 1% of shareholders' equity on an after-tax basis. Impairment Charges Impairment charges included in net realized investment gains (losses) in the consolidated statement of income were as follows: (for...

  • Page 196
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. INVESTMENTS (Continued) In the second quarter of 2009, the Company adopted updated accounting guidance that changed the reporting of other-than-temporary impairments (OTTI). As a result, the credit...

  • Page 197
    ... securities and obligations of U.S. Government and government agencies and authorities, the Company was not exposed to any concentration of credit risk of a single issuer greater than 5% of shareholders' equity of the Company. Included in fixed maturities are below investment grade assets totaling...

  • Page 198
    ... Platinum Underwriters Holdings, Ltd., a publicly-held company. These warrants were not designated and did not qualify for hedge accounting, and, as such, the mark-to-market changes in fair value were reflected in net realized investment gains (losses). In October 2010, the Company sold these stock...

  • Page 199
    ... receives the quoted market prices from a third party, nationally recognized pricing service (pricing service). When quoted market prices are unavailable, the Company utilizes a pricing service to determine an estimate of fair value, which is mainly used for its fixed maturity investments. The fair...

  • Page 200
    ... fixed maturity securities that have quoted prices in active markets. Since fixed maturities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing service prepares estimates of fair value measurements for these securities using its proprietary pricing applications...

  • Page 201
    ... investments in non-public common and preferred equity securities, with fair value estimates of $57 million and $60 million, respectively, reported in other investments, where the fair value estimate is determined either internally or by an external fund manager based on recent filings, operating...

  • Page 202
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. FAIR VALUE MEASUREMENTS (Continued) option pricing model with observable market inputs. Since these warrants were not market traded and information concerning market participants was not ...

  • Page 203
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. FAIR VALUE MEASUREMENTS (Continued) (at December 31, 2009, in millions) Total Level 1 Level 2 Level 3 Invested assets: Fixed maturities U.S. Treasury securities and obligations of U.S. ...

  • Page 204
    ...December 31, 2009 ...Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date ... $ - $ 7 $ 7 (1) Includes impairments on investments held at the end of...

  • Page 205
    ... transfer resulting from a private common stock holding undergoing an initial public offering. The new public security has transfer restrictions and is reported in Level 2. The Company had no financial assets or financial liabilities that were measured at fair value on a non-recurring basis during...

  • Page 206
    ... it writes such residual market business directly, then cedes 100% of this business to the mandatory pool. Such servicing arrangements are arranged to mitigate credit risk to the Company, as any ceded balances are jointly backed by all the pool members. The Company utilizes a general catastrophe...

  • Page 207
    ...of shared public and private compensation for certain insured losses resulting from acts of terrorism or war committed by or on behalf of a foreign interest. The Program has been authorized through 2014. In order for a loss to be covered under the Program (subject losses), the loss must meet certain...

  • Page 208
    ... liability (other than directors and officers'), surety, burglary and theft, and farm-owners multi-peril. In the case of a war declared by Congress, only workers' compensation losses are covered by the Program. All commercial property and casualty insurers licensed in the United States are generally...

  • Page 209
    ... of The St. Paul Companies, Inc. and Travelers Property Casualty Corp. in 2004 and was based on management's estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables (after adjusting for conformity with the acquirer's accounting policy on discounting of workers...

  • Page 210
    ...$69 million in 2011, $52 million in 2012, $45 million in 2013, $43 million in 2014 and $23 million in 2015. 7. INSURANCE CLAIM RESERVES Claims and claim adjustment expense reserves were as follows: (at December 31, in millions) 2010 2009 Property-casualty ...Accident and health ...Total ... $51,062...

  • Page 211
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) The table below is a reconciliation of beginning and ending property casualty reserve balances for claims and claim adjustment expenses. (at and for the year...

  • Page 212
    ...& International Insurance. Net favorable prior year reserve development totaled $259 million in 2010. In Bond & Financial Products, net favorable prior year reserve development in 2010 was driven by better than expected loss development in the surety and management liability lines of business due to...

  • Page 213
    ... United Kingdom and Canada. In addition, the Aviation and Property lines of business at Lloyd's experienced net favorable prior year loss development in 2009. In Bond & Financial Products, better than expected loss development for the contract surety business within the fidelity and surety product...

  • Page 214
    ... loss development in the United Kingdom, in part due to favorable claim activity relating to 2007 flood losses. In Bond & Financial Products, better than expected loss development for the contract surety business within the fidelity and surety product line, resulting from favorable settlements...

  • Page 215
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) Asbestos Reserves. Because each policyholder presents different liability and coverage issues, the Company generally reviews the exposure presented by each ...

  • Page 216
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) Net asbestos losses paid in 2010, 2009 and 2008 were $350 million, $341 million and $658 million, respectively. (Asbestos payments in 2008 included the Company...

  • Page 217
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) Asbestos and Environmental Reserves. As a result of the processes and procedures described above, management believes that the reserves carried for asbestos ...

  • Page 218
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) that are heavily populated. The Company generally seeks to mitigate its exposure to catastrophes through individual risk selection and the purchase of ...

  • Page 219
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. DEBT Debt outstanding was as follows: (at December 31, in millions) 2010 2009 Short-term: Commercial paper ...7.22% Real estate non-recourse debt due September 1, 2011 ...8.125% Senior notes ...

  • Page 220
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. DEBT (Continued) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury rate (as defined) plus 15 ...

  • Page 221
    ...an annual rate equal to the annual interest rate then applicable to the debentures. The debentures have a final maturity date of March 15, 2067 and a scheduled maturity date of March 15, 2037. The Company can redeem the debentures at its option any time (as described above) using any source of funds...

  • Page 222
    ... the Company's commercial paper program. Shelf Registration In December 2008, the Company filed with the Securities and Exchange Commission a universal shelf registration statement for the potential offering and sale of securities. The Company may offer these securities from time to time at prices...

  • Page 223
    ... its Savings Plan. Treasury Stock The Company's board of directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act...

  • Page 224
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. SHAREHOLDERS' EQUITY AND DIVIDEND AVAILABILITY (Continued) In January 2011, the board of directors approved a share repurchase authorization that added an additional $5 billion of repurchase ...

  • Page 225
    ... Sources, Net of Tax Changes in each component of Accumulated Other Changes in Equity from Nonowner Sources were as follows: Net Unrealized Gains (Losses) on Investment Securities Net Benefit Plan Assets and Obligations Recognized in Equity Accumulated Other Changes in Equity from Nonowner Sources...

  • Page 226
    ...$2,909 Net income available to common shareholders-diluted ...Common Shares Basic Weighted average shares outstanding ...Diluted Weighted average shares outstanding ...Weighted average effects of dilutive securities: Convertible preferred stock ...Stock options and performance shares ...Zero coupon...

  • Page 227
    ...benefit) ...Total income tax expense included in consolidated statement of income ...Composition of income tax included in common shareholders' equity Expense (benefit) relating to stock-based compensation, the change in unrealized appreciation on investments, unrealized loss on foreign exchange and...

  • Page 228
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 11. INCOME TAXES (Continued) The net deferred tax asset comprises the tax effects of temporary differences related to the following assets and liabilities: (at December 31, in millions) 2010 2009 ...

  • Page 229
    ... U.S. income tax returns for 2007 and 2008. The Company does not expect any significant changes to its liability for unrecognized tax benefits during the next twelve months. 12. SHARE-BASED INCENTIVE COMPENSATION The Company has a share-based incentive compensation plan, The Travelers Companies, Inc...

  • Page 230
    ... the issuance of shares of common stock, in whole or in part; (ii) shares that are used to pay the exercise price of stock options and shares used to pay withholding taxes on awards generally; and (iii) shares purchased by the Company on the open market using cash option exercise proceeds; provided...

  • Page 231
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. SHARE-BASED INCENTIVE COMPENSATION (Continued) The fair value of each option award is estimated on the date of grant by application of a variation of the Black-Scholes option pricing model using...

  • Page 232
    ... average grant-date fair value of options granted (per share) ...Total intrinsic value of options exercised during the year (in millions) ... $9.56 $ 33 $5.80 $ 1 On February 1, 2011, the Company, under the 2004 Stock Incentive Plan, granted 2,346,767 stock option awards with an exercise price...

  • Page 233
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. SHARE-BASED INCENTIVE COMPENSATION (Continued) Restricted Stock, Restricted Stock Units, Deferred Stock and Performance Share Award Programs The Company, commencing with equity grants on or ...

  • Page 234
    ... TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. SHARE-BASED INCENTIVE COMPENSATION (Continued) On February 1, 2011, the Company, under the 2004 Stock Incentive Plan, granted 1,662,334 common stock awards in the form of restricted stock units, deferred stock and performance share awards to...

  • Page 235
    ... ...Amounts recognized in the statement of financial position consist of: Accrued under-funded benefit plan liabilities ...Amounts recognized in accumulated other changes in equity from nonowner sources consist of: Prior service benefit ...Net actuarial loss ...Total ... $ (57) $ (34) $ (90) $ (95...

  • Page 236
    ...244) $(234) $(244) Fair value of plan assets at end of year ...Funded status of plan at end of year ...Amounts recognized in the statement of financial position consist of: Accrued under-funded benefit plan liability ...Amounts recognized in accumulated other changes in equity from nonowner sources...

  • Page 237
    ...COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) The following table summarizes the components of net periodic benefit cost and other amounts recognized in accumulated other changes in equity...

  • Page 238
    ...of return on plan assets, the Company's Pension Plan Investment Committee considered the historical returns of equity and fixed maturity markets in conjunction with today's economic and financial market conditions. As an indicator of sensitivity, increasing the assumed health care cost trend rate by...

  • Page 239
    ... of asset types, fund strategies and fund managers. The current target allocations for plan assets are 55% to 65% equity securities and 20% to 40% fixed income securities. Equity securities primarily include investments in large, medium and small-cap companies primarily located in the United States...

  • Page 240
    ...211 $355 18 - - - - $18 Total fixed maturities ...Mutual funds Equity mutual funds ...Bond mutual funds ...Total mutual funds ...Equity securities ...Other investments(1) ...Cash and short-term securities U.S. Treasury securities ...Money market mutual funds ...Other ...Total cash and short-term...

  • Page 241
    ...Bond mutual funds ...Total mutual funds ...Equity index commingled trust funds Growth index trusts ...Value index trusts ...Total equity index commingled trust funds ...Equity securities ...Other investments(1) ...Cash and short-term securities U.S. Treasury securities ...Money market mutual funds...

  • Page 242
    ...% to 65% of investments for long-term growth and 35% to 60% for near-term insurance payments with a wide diversification of asset types, fund strategies and fund managers. The current target allocations for plan assets are 0% to 10% equity securities and 20% to 60% fixed income securities, with the...

  • Page 243
    ...COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) primarily short-term securities and corporate bonds, and categorized as level 2 in the fair value hierarchy. Estimated Future Benefit Payments...

  • Page 244
    ...loss exposure, including settling litigation under appropriate circumstances. Asbestos Direct Action Litigation-In October 2001 and April 2002, two purported class action suits (Wise v. Travelers and Meninger v. Travelers) were filed against Travelers Property Casualty Corp. (TPC) and other insurers...

  • Page 245
    ...and Hawaii Actions and substantially all Common Law Claims pending against TPC (''the Clarifying Order''). The Clarifying Order also applies to similar direct action claims that may be filed in the future. On March 29, 2006, the U.S. District Court for the Southern District of New York substantially...

  • Page 246
    ... District of New York from the bankruptcy court's January 20, 2011 judgment. SPC, which is not covered by the Manville bankruptcy court rulings or the settlements described above, is a party to pending direct action cases in Texas state court asserting common law claims. All such cases that are...

  • Page 247
    ... operations, either as a liability insurer defending third-party claims brought against policyholders or as an insurer defending claims brought against it relating to coverage or the Company's business practices. In addition, from time to time, the Company is involved in proceedings addressing...

  • Page 248
    ... 2011. Guarantees The Company has contingent obligations for guarantees related to letters of credit, issuance of debt securities, certain investments, third-party loans related to certain investments and various indemnifications, including those related to the sale of business entities. The Company...

  • Page 249
    ... have been prepared from the Company's financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies, Inc. has fully and unconditionally guaranteed certain debt obligations of TPC, its wholly-owned subsidiary, which totaled $1.20 billion at...

  • Page 250
    ...Total claims and expenses ...Income (loss) before income taxes ...Income tax expense (benefit) ...Equity in net income of subsidiaries ...Net income ... (371) (90) 3,497 $3,216 - - (3,497) $(3,497) (in millions) TPC Travelers(1) Eliminations Consolidated Net Realized Investment Gains (Losses...

  • Page 251
    ... tax expense (benefit) ...Equity in net income of subsidiaries ...Net income ... (156) (95) 3,683 $3,622 - - (3,683) $(3,683) (in millions) TPC Travelers(1) Eliminations Consolidated Net Realized Investment Gains (Losses) Other-than-temporary impairment losses: Total losses ...Non-credit...

  • Page 252
    ... taxes ...Income tax expense ...Equity in net income of subsidiaries ...Net income ... (245) 13 3,182 $2,924 - - (3,182) $(3,182) (in millions) TPC Travelers(1) Eliminations Consolidated Net Realized Investment Gains (Losses) Other-than-temporary impairment losses: Total losses ...Non-credit...

  • Page 253
    ... assets ...Liabilities Claims and claim adjustment expense reserves Unearned premium reserves ...Contractholder payables ...Payables for reinsurance premiums ...Debt ...Other liabilities ... $ 31,231 $ - - - - 5,460 298 5,758 Total liabilities ...Shareholders' equity Preferred Stock Savings Plan...

  • Page 254
    ...assets ...Liabilities Claims and claim adjustment expense reserves Unearned premium reserves ...Contractholder payables ...Payables for reinsurance premiums ...Debt ...Other liabilities ... Total liabilities ...Shareholders' equity Preferred Stock Savings Plan-convertible preferred stock (0.2 shares...

  • Page 255
    ...Dividends paid to shareholders ...Issuance of common stock-employee share options Treasury shares acquired-share repurchase authorization ...Treasury shares acquired-net employee sharebased compensation ...Excess tax benefits from share-based payment arrangements ...Dividends paid to parent company...

  • Page 256
    ...Dividends paid to shareholders ...Issuance of common stock-employee share options Treasury shares acquired-share repurchase authorization ...Treasury shares acquired-net employee sharebased compensation ...Excess tax benefits from share-based payment arrangements ...Dividends paid to parent company...

  • Page 257
    ...Dividends paid to shareholders ...Issuance of common stock-employee share options Treasury shares acquired-share repurchase authorization ...Treasury shares acquired-net employee sharebased compensation ...Excess tax benefits from share-based payment arrangements ...Dividends paid to parent company...

  • Page 258
    THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 18. SELECTED QUARTERLY FINANCIAL DATA (Unaudited) 2010 (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Total Total revenues ...Total expenses ......

  • Page 259
    ... is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as...

  • Page 260
    ...of the Company's management and directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over...

  • Page 261
    ... 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, 2010 and 2009, and the related consolidated statements of income, changes in shareholders' equity, and cash...

  • Page 262
    ... Vice President and Chief Administrative Officer Executive Vice President and General Counsel Executive Vice President-Personal Insurance and Claim Services Executive Vice President-Treasurer Executive Vice President-Business Insurance Executive Vice President-Human Resources Jay S. Fishman...

  • Page 263
    ... a managing director of Smith Barney. Alan D. Schnitzer, 45, has been Vice Chairman and Chief Legal Officer since joining the Company in April 2007 and Executive Vice President-Financial, Professional and International Insurance since May 2008. Prior to that time, he was a partner at the law firm of...

  • Page 264
    ... President-Claim Services. Prior to that, she was President and Chief Executive Officer of Bond operations for the Company since the Merger and, before that, for TPC since June 2002. From 1994 to May 2002, she managed the TPC Bond claim operation and served as General Counsel of that business unit...

  • Page 265
    ... and ''Non-Employee Director Compensation.'' Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The ''Share Ownership Information'' section of the Company's Proxy Statement relating to its Annual Meeting of Shareholders to be held May 26, 2011 is...

  • Page 266
    ...the issuance of shares; (ii) shares that are used to pay the exercise price of stock options and shares used to pay withholding taxes on equity awards generally; and (iii) shares purchased by the Company on the open market using cash from option exercises, as limited by the 2004 Incentive Plan. 254

  • Page 267
    ... Public Accounting Firm-Audit and Non-Audit Fees'' section of the Company's Proxy Statement relating to its Annual Meeting of Shareholders to be held May 26, 2011 is incorporated herein by reference. PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Documents filed as a part of the report...

  • Page 268
    ... Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of The Travelers Companies, Inc. and in the capacities and on the dates indicated. Date By /s/ JAY S. FISHMAN Jay S. Fishman Director, Chairman and Chief Executive Officer (Principal Executive...

  • Page 269
    ... By * Thomas R. Hodgson Director February 17, 2011 By * Cleve L. Killingsworth, Jr. Director February 17, 2011 By * Blythe J. McGarvie Director February 17, 2011 By * Donald J. Shepard Director February 17, 2011 By * Laurie J. Thomsen Director February 17, 2011 *By /s/ MATTHEW...

  • Page 270
    ... AND SCHEDULES Page Report of Independent Registered Public Accounting Firm ...Consolidated Statement of Income for the years ended December 31, 2010, 2009 and 2008 ...Consolidated Balance Sheet at December 31, 2010 and 2009 ...Consolidated Statement of Changes in Shareholders' Equity for the years...

  • Page 271
    ... Accounting Firm The Board of Directors and Stockholders The Travelers Companies, Inc.: Under date of February 17, 2011, we reported on the consolidated balance sheet of The Travelers Companies, Inc. and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income...

  • Page 272
    ... II THE TRAVELERS COMPANIES, INC. (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT (in millions) CONDENSED STATEMENT OF INCOME For the year ended December 31, 2010 2009 2008 Revenues Net investment income ...Net realized investment gains ...Other revenues ...Total revenues...

  • Page 273
    ... 30,608 197 Total assets ...Liabilities Debt ...Other liabilities ...Total liabilities ...Shareholders' equity Preferred Stock Savings Plan-convertible preferred stock (0.2 issued and outstanding) ...Common stock (1,748.6 shares authorized, 434.6 and 520.3 shares issued and outstanding) ...Retained...

  • Page 274
    ... Issuance of debt ...Payment of debt ...Dividends paid to shareholders ...Treasury stock acquired-share repurchase authorization ...Treasury stock acquired-net employee share-based compensation Issuance of common stock-employee share options ...Other ... Net cash used in financing activities...

  • Page 275
    ... guarantees. These guarantees include contingent obligations for guarantees related to letters of credit, subsidiary debt obligations, issuance of debt securities, certain investments, and various indemnifications, including those related to the sale of business entities. TRV also provides standard...

  • Page 276
    ... Business Insurance ...Financial, Professional & International Insurance ...Personal Insurance ... Total-Reportable Segments ...Other ... Consolidated ... (a) See note 2 to the consolidated financial statements for discussion of the method used to allocate net investment income and invested assets...

  • Page 277
    ...- $ 58 $ 4 $ 95 $116 $ 37 $523 $130 $ 66 $688 $61 $ (4) $- $ 2 $ - $176 $ 63 $ 13 $246 $130 $ 49 $618 $138 $ 57 $41 $13 $ - $ - $ 49 $ 4 $130 $ 66 (1) Charged to claims and claim adjustment expenses in the consolidated statement of income. (2) Credited to the related asset account. 265

  • Page 278
    ... Paid Claims of Deferred and Claim Net Acquisition Adjustment Written Costs Expenses Premiums $3,802 $3,813 $3,880 $13,697 $12,918 $13,117 $21,635 $21,336 $21,683 2010 ...2009 ...2008 ... (1) Excludes accident and health insurance business. (2) Consolidated property-casualty insurance operations...

  • Page 279
    ... 10.2 to the Company's quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2005, and is incorporated herein by reference. The St. Paul Companies, Inc. (''SPC'') Deferred Stock Plan for Non-Employee Directors was filed as Exhibit 10(a) to the Company's annual report on Form 10-K for...

  • Page 280
    ... and Citigroup Inc., was filed as Exhibit 10.2 to TPC's quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2002, and is incorporated herein by reference. 10.21* Form of Non-Solicitation and Non-Disclosure Agreement for Executive Officers, amending The St. Paul Travelers Companies...

  • Page 281
    ...29†* Form of Performance Share Award Notification and Agreement for Jay S. Fishman (2011) is filed herewith. 10.30†* Form of Non-Employee Director Annual Deferred Stock Award Notification and Agreement is filed herewith. 10.31* Fifth Amendment to the Travelers Severance Plan was filed as Exhibit...

  • Page 282
    .... 32.2†Certification of Jay S. Benet, Vice Chairman and Chief Financial Officer of the Company, as required by Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith. 101.1†The following financial information from The Travelers Companies, Inc.'s Annual Report on Form 10-K for the year...

  • Page 283
    ... Income before income taxes ...Interest ...Portion of rentals deemed to be interest ...Income available for fixed charges ...Fixed charges: Interest ...Portion of rentals deemed to be interest ...Total fixed charges ...Preferred stock dividend requirements ...Total fixed charges and preferred stock...

  • Page 284
    ... process, summarize and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. By: /s/ JAY S. FISHMAN Jay S. Fishman Chairman and Chief Executive Officer...

  • Page 285
    ...process, summarize and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. By: /s/ JAY S. BENET Jay S. Benet Vice Chairman and Chief Financial Officer...

  • Page 286
    ... or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 17, 2011 By: /s/ JAY S. FISHMAN Name: Jay S. Fishman Title: Chairman and Chief Executive Officer

  • Page 287
    ... or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 17, 2011 By: /s/ JAY S. BENET Name: Jay S. Benet Title: Vice Chairman and Chief Financial Officer

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    ....5102 Outside U.S. and Canada: 651.450.4064 wellsfargo.com/shareownerservices Stock Price and Dividend Rate Our common stock is traded on The New York Stock Exchange (NYSE) under the symbol "TRV". The following tables set forth the high and low closing sales prices of Travelers common stock and the...

  • Page 292
    NYSE: TRV The Travelers Companies, Inc. 485 Lexington Avenue New York, NY 10017-2630 800.328.2189 travelers.com