Travelers 2014 Annual Report Download

Download and view the complete annual report

Please find the complete 2014 Travelers annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 366

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259
  • 260
  • 261
  • 262
  • 263
  • 264
  • 265
  • 266
  • 267
  • 268
  • 269
  • 270
  • 271
  • 272
  • 273
  • 274
  • 275
  • 276
  • 277
  • 278
  • 279
  • 280
  • 281
  • 282
  • 283
  • 284
  • 285
  • 286
  • 287
  • 288
  • 289
  • 290
  • 291
  • 292
  • 293
  • 294
  • 295
  • 296
  • 297
  • 298
  • 299
  • 300
  • 301
  • 302
  • 303
  • 304
  • 305
  • 306
  • 307
  • 308
  • 309
  • 310
  • 311
  • 312
  • 313
  • 314
  • 315
  • 316
  • 317
  • 318
  • 319
  • 320
  • 321
  • 322
  • 323
  • 324
  • 325
  • 326
  • 327
  • 328
  • 329
  • 330
  • 331
  • 332
  • 333
  • 334
  • 335
  • 336
  • 337
  • 338
  • 339
  • 340
  • 341
  • 342
  • 343
  • 344
  • 345
  • 346
  • 347
  • 348
  • 349
  • 350
  • 351
  • 352
  • 353
  • 354
  • 355
  • 356
  • 357
  • 358
  • 359
  • 360
  • 361
  • 362
  • 363
  • 364
  • 365
  • 366

Use these links to rapidly review the document
TABLE OF CONTENTS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Commission file number 001
-
10898
The Travelers Companies, Inc.
(Exact name of registrant as specified in its charter)
TRV 10
-K 12/31/2014
Section 1: 10-K (10-K)
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2014
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Minnesota
41
-
0518860
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

Table of contents

  • Page 1
    ... (10-K) Use these links to rapidly review the document TABLE OF CONTENTS ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ý ANNUAL REPORT...

  • Page 2
    ... filer o (Do not check if a smaller reporting company) Accelerated filer o Smaller reporting company o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý As of June 30, 2014, the aggregate market value of the registrant's voting...

  • Page 3
    ... 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 in and Disagreements with Accountants on Accounting and...

  • Page 4
    ..., 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, product offerings...

  • Page 5
    ... to underwriting and risk management that emphasizes product returns and profitable growth over the long-term rather than premium volume or market share. The Company's insurance subsidiaries are subject to state laws and regulations regarding rate and policy form approvals. The applicable state laws...

  • Page 6
    ... insurance. Middle Market provides mid-sized businesses with property and casualty products, including commercial multi-peril, commercial property, general liability, commercial auto and workers' compensation insurance, as well as risk management, claims handling and other services. Middle Market...

  • Page 7
    ... specialty classes of commercial business primarily on an excess and surplus lines basis, through Northland, and tailored property and casualty programs on an admitted basis for customers with common risk characteristics or coverage requirements through National Programs. Specialized Distribution...

  • Page 8
    ...) 2014 2013 2012 By market: Domestic: Select Accounts Middle Market National Accounts First Party Specialized Distribution Total Domestic International Total Business and International Insurance by market By product line: Domestic: Workers' compensation Commercial automobile Commercial property...

  • Page 9
    ... risk market, making the Company one of the largest servicing carriers in the industry. Workers' compensation accounted for approximately 76% of sales to National Accounts customers during 2014, based on direct written premiums and fees. First Party markets commercial property and casualty insurance...

  • Page 10
    ... wholesale excess and surplus lines market, which is characterized by the absence of rate and form regulation, allows for more flexibility to write certain classes of business. In working with agents or program managers on a brokerage basis, Specialized Distribution underwrites the business and sets...

  • Page 11
    ... loss prevention, risk management, and claim and benefit administration services to organizations under service agreements. • • The Company also participates in state assigned risk pools as a servicing carrier and pool participant. • Commercial Automobile. Provides coverage for businesses...

  • Page 12
    ... Company faces in the United States. Net Retention Policy Per Risk The following discussion reflects the Company's retention policy with respect to the Business and International Insurance segment as of January 1, 2015. For third-party liability, Business and International Insurance generally limits...

  • Page 13
    ...National Accounts market, competition is based on price, product offerings, claim and loss prevention services, managed care cost containment, risk management information systems and collateral requirements. National Accounts primarily competes with national property and casualty insurance companies...

  • Page 14
    ...liability coverages and related risk management services to a wide range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction and general...

  • Page 15
    ... third party liability, including but not limited to umbrella liability, professional liability, directors' and officers' liability, and employment practices liability, Bond & Specialty Insurance generally limits net retentions to $25.0 million per policy. For surety protection, where insured limits...

  • Page 16
    ..., the business continues to expand its geographic presence across the United States. See "Competition" below for a discussion of the Company's newest private passenger automobile product, Quantum Auto 2.0. In selecting new independent agencies to distribute its products, Personal Insurance considers...

  • Page 17
    ... homeowners insurance, earthquakes. Insurers writing personal lines property and casualty policies may be unable to increase prices until some time after the costs associated with coverage have increased, primarily because of state insurance rate regulation. The pace at which an insurer can change...

  • Page 18
    ... the costs and benefits of those states' residual markets and guaranty funds, as well as other property and casualty business the Company writes in those states. Product Lines The primary coverages in Personal Insurance are personal automobile and homeowners and other insurance sold to individuals...

  • Page 19
    ... by the Company through a fronting agreement with another insurer. No other single state accounted for 3.0% or more of the Personal Insurance segment's direct written premiums in 2014. (2) Competition Although national companies write the majority of this business, Personal Insurance also faces...

  • Page 20
    ...are reported to and prosecuted by law enforcement agencies. Claims Services uses technology, management information and data analysis to assist the Company in reviewing its claim practices and results in order to evaluate and improve its claims management performance. The Company's claims management...

  • Page 21
    ... statements and "Item 1A-Risk Factors." The Company utilizes a variety of reinsurance agreements to manage its exposure to large property and casualty losses, including: • facultative reinsurance, in which reinsurance is provided for all or a portion of the insurance provided by a single policy...

  • Page 22
    ... as a Class B insurer in the Cayman Islands. The reinsurance agreements expire in June 2015 and May 2016, respectively, and provide coverage to the Company for certain losses from a hurricane in the northeastern United States. Both reinsurance agreements meet the requirements to be accounted for as...

  • Page 23
    ... is limited to specified property coverage written in the Company's Personal Insurance segment, and within Select Accounts and Commercial Accounts in the Company's Business and International Insurance segment. Under the terms of both reinsurance agreements, the Company is obligated to pay annual...

  • Page 24
    ...by Technology, Public Sector Services and Commercial Accounts in the Company's Business and International Insurance segment. Personal Insurance Earthquake Excess-of-Loss Reinsurance Treaty. For the period January 1, 2015 through December 31, 2015, the Company has entered into an earthquake excess-of...

  • Page 25
    ... 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, 2014 and 2013. These discounted reserves totaled $2.01...

  • Page 26
    ...to reflect the time value of money. Apparent deficiencies will continue to occur as the discount on these workers' compensation reserves is accreted at the appropriate interest rates. Also, a portion of National Accounts business is underwritten with retrospectively rated insurance policies in which...

  • Page 27
    ...the Company completed the sale of Unionamerica Holdings Limited (Unionamerica), which comprised its United Kingdom (U.K.)-based runoff insurance and reinsurance businesses. Immediately before the sale, the claims and claim adjustment expense reserves of Unionamerica totaled $790 million. As a result...

  • Page 28
    ...the Company's Special Liability Group, a separate unit staffed by dedicated legal, claim, finance and engineering professionals. For additional information on asbestos and environmental claims, see "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations-Asbestos...

  • Page 29
    ...-Paying Ratings The following table summarizes the current claims-paying (or financial strength) ratings of the Travelers Reinsurance Pool, Travelers C&S Co. of America, Travelers Personal single state companies, Travelers C&S Co. of Europe, Ltd., Travelers Insurance Company of Canada, The Dominion...

  • Page 30
    ... General Insurance Company and Travelers Insurance Company Limited as of February 12, 2015. The table presents the position of each rating in the applicable agency's rating scale. A.M. Best Moody's S&P Fitch Travelers Reinsurance Pool(a)(b) Travelers C&S Co. of America First Floridian Auto and Home...

  • Page 31
    ... 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. The Company also invests much smaller amounts in equity securities, real estate, private equity limited...

  • Page 32
    ... of policy forms and the regulation of market conduct, including the use of credit information in underwriting as well as other underwriting and claims practices. In addition, many states have enacted variations of competitive ratemaking laws, which allow insurers to set certain premium rates for...

  • Page 33
    ... identify companies that may require special attention. Financial examiners review annual statements and key financial ratios based on year-end data. These ratios assist state insurance departments in executing their statutory mandate to oversee the financial condition of insurance companies. Each...

  • Page 34
    ... laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications. At December 31, 2014, the Company...

  • Page 35
    ...of Lloyd's, are subject to the laws and insurance regulation of that jurisdiction. Travelers Underwriting Agency Limited, which as an insurance intermediary is regulated by the FCA, produces insurance business for Travelers Syndicate 5000. A TRV subsidiary, Travelers Casualty and Surety Company, has...

  • Page 36
    ...our results" and "New regulations outside of the United States, including in the European Union, could adversely impact our results of operations and limit our growth." ENTERPRISE RISK MANAGEMENT As a large property and casualty insurance enterprise, the Company is exposed to many risks. These risks...

  • Page 37
    ... of ERM is provided by the Risk Committee of the board of directors, which reviews the strategies, processes and controls pertaining to the Company's insurance operations and oversees the implementation, execution and performance of the Company's ERM program. The Company's ERM efforts build upon the...

  • Page 38
    ... recent statutory annual report reduced by twenty-five percent of that year's unrealized appreciation in value or revaluation of assets or unrealized profits on investments, as defined in that report. A company licensed to transact insurance business within a state. 37 Adjusted unassigned surplus...

  • Page 39
    ...values. Book value per share Bornhuetter-Ferguson method Total common shareholders' equity divided by the number of common shares outstanding. A conventional 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...

  • Page 40
    ... apply to a single risk, a program, a line of business or an entire book of business. Capacity may be constrained by legal restrictions, corporate restrictions or indirect restrictions. A closely-held insurance company whose primary purpose is to provide insurance coverage to the company's owners or...

  • Page 41
    ... the legal liability imposed on the insured resulting therefrom. It includes, but is not limited to, employers' liability, workers' compensation, public liability, automobile liability, personal liability and aviation liability insurance. It excludes certain types of losses that by law or custom are...

  • Page 42
    ... impact of the Company's direct-toconsumer initiative in the Personal Insurance segment. Refers to policies which cover both property and third-party liability exposures. An agreement between a reinsurer and a ceding company whereby the reinsurer pays an agreed-upon amount in exchange for a complete...

  • Page 43
    ...as revenues under both Statutory Accounting Practices (SAP) and GAAP. Insurance for risks not covered by standard insurance due to the unique nature of the risk. Risks could be placed in excess and surplus lines markets due to any number of characteristics, such as loss experience, unique or unusual...

  • Page 44
    ... doing business in those states. Should insolvencies occur, these funds are available to meet some or all of the insolvent insurer's obligations to policyholders. Total cash, short-term invested assets and other readily marketable securities held by the holding company. Reserves for estimated losses...

  • Page 45
    ... re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims. Loss reserve development may be related to prior year or current year development. The total losses sustained by an insurance company under a policy or policies, whether paid or...

  • Page 46
    ...of operating income to average equity excluding net unrealized investment gains and losses and discontinued operations, net of tax. A conventional 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...

  • Page 47
    ...be needed to pay the ultimate settlement value of the related liabilities. Where the redundancy is the result of an estimate, the estimated amount of redundancy (or even the finding of whether or not a redundancy exists) may change as new information becomes available. Additional premiums payable to...

  • Page 48
    ... rated policies. A plan or method which permits adjustment of the final premium or commission on the basis of actual loss experience, subject to certain minimum and maximum limits. The ratio of net income (loss) less preferred dividends to average shareholders' equity. 47 Reported claim...

  • Page 49
    ... inforce policies and a cessation of writing new business, where allowed by law. The amount of money an insurer recovers through the sale of property transferred to the insurer as a result of a loss payment. A mathematical function which depicts an initial slow change, followed by a rapid change and...

  • Page 50
    ... person or survivor for a determined number of years or for 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...

  • Page 51
    ...non-standard, specialty and excess and surplus lines of insurance. The wholesaler does not deal directly with the insurance consumer. The wholesaler deals with the retail agent or broker. A system (established under state and federal laws) under which employers provide insurance for benefit payments...

  • Page 52
    ..." below as well as "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations-Catastrophe Modeling" and "-Changing Climate Conditions." The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the...

  • Page 53
    ... events could also adversely impact the credit of the issuers of securities, such as states or municipalities, in whom we have invested. In addition, coverage in our reinsurance program for terrorism is limited. Although the Terrorism Risk Insurance Program provides benefits in the event of certain...

  • Page 54
    Table of Contents commercial property and casualty insurance premium for the preceding calendar year, the federal government will reimburse us for 85% of our losses attributable to certain acts of terrorism which exceed this deductible up to a total industry program cap of $100 billion. Our ...

  • Page 55
    ... 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 Operations," particularly the "Outlook" section. Many of these risks...

  • Page 56
    ... investments, thereby negatively impacting our book value. During 2014, the net unrealized gain in our fixed income portfolio increased from $1.76 billion to $2.67 billion as interest rates decreased. It is possible that future increases in interest rates (inclusive of credit spreads) could result...

  • Page 57
    ... in times of financial stress. Some issuers may be unwilling to increase tax rates, or to reduce spending, to fund interest or principal payments on their municipal bonds, or may be unable to access the municipal bond market to fund such payments. The risk of widespread defaults may increase if...

  • Page 58
    ...returns than fixed maturity investments. General economic conditions, changes in applicable tax laws and many other factors beyond our control can adversely affect the value of our nonfixed maturity investments and the realization of net investment income, and/or result in realized investment losses...

  • Page 59
    ...our coverage obligations under the policies at issue would be materially increased and bounded only by the applicable per-occurrence limits and the number of asbestos bodily injury claims against the policyholders. Although we have seen a moderation in the overall risk associated with these lawsuits...

  • Page 60
    ...of claims or by mandating changes to our underwriting practices. Examples of emerging claims and coverage issues include, but are not limited to: • • judicial expansion of policy coverage and the impact of new or expanded theories of liability; plaintiffs targeting property and casualty insurers...

  • Page 61
    ... by an employee or a volunteer of an insured; claims that link health issues to particular causes (for example, cumulative traumatic head injury from sports or other causes), resulting in liability or workers' compensation claims; claims alleging that one or more of our underwriting criteria have...

  • Page 62
    ... competition in the future, particularly in the small commercial market). In Personal Insurance, the use of comparative rating technologies has impacted, and may continue to impact, our business as well as the industry as a whole. A substantial amount of the Company's Personal Insurance new business...

  • Page 63
    ... of employees; geographic scope of business; and local presence. We may have difficulty in continuing to compete successfully on any of these bases in the future. If competition limits our ability to retain existing business or write new business at adequate rates, our results of operations...

  • Page 64
    ...the credit risk that we have to our insureds may not be successful. To reduce such credit risk, we require certain insureds to post collateral for some or all of these obligations, often in the form of pledged securities such as money market funds or letters of credit provided by banks, surety bonds...

  • Page 65
    ... require changes in our ERM process or take other regulatory actions that could limit our ability to write additional business or reduce our capital management flexibility. See "Enterprise Risk Management" herein for further discussion of the Company's ERM. The NAIC and state insurance regulators...

  • Page 66
    ... the ability of insurance subsidiaries to make payments to their parent companies or reject rate increases due to the economic environment. The state insurance regulators may also increase the statutory capital and surplus requirements for our insurance subsidiaries. In addition, state tax laws that...

  • Page 67
    ... or make future share repurchases. Our holding company relies on dividends from our U.S. insurance subsidiaries to meet our obligations for payment of interest and principal on outstanding debt, to pay dividends to shareholders, to make contributions to our qualified domestic pension plan, to pay...

  • Page 68
    ...may not be successful and may 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...

  • Page 69
    ...with the assumptions we use in pricing our policies. We utilize third-party and proprietary models to help us price business in a manner that is intended to be consistent, over time, with actual results and return objectives. We incorporate the Company's historical loss experience, external industry...

  • Page 70
    ... employees. If our business continuity plans did not sufficiently address a business interruption, system failure or service denial, this could result in a deterioration of our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or perform...

  • Page 71
    ... efficiencies and may experience operational difficulties, increased costs and a loss of business. Our outsourcing of certain technology and business process functions to third parties may expose us to increased risk related to data security or service disruptions, which could result in monetary and...

  • Page 72
    ... necessary for our global businesses, those businesses and our results of operations may be adversely affected. New regulations outside of the United States, including in the European Union, could adversely impact our results of operations and limit our growth. Insurance laws or regulations that...

  • Page 73
    ... use of credit scoring in underwriting and pricing. A variety of other underwriting criteria used in personal and commercial insurance have been and continue to be criticized by regulators, government agencies, consumer groups or individuals on similar or other grounds. Resulting regulatory actions...

  • Page 74
    ...the insurance industry), and the Board of Directors regularly engages in succession discussions. Each of our Chief Executive Officer, President, Chief Financial Officer and Chief Investment Officer is highly experienced and over 61 years of age, and our Chief Executive Officer announced in 2014 that...

  • Page 75
    ... U.S. financial reporting system, including for companies such as us. In December 2014, the SEC indicated that it plans to explore allowing IFRS financial statements or financial information as supplemental information in SEC filings. The FASB and the International Accounting Standards Board (IASB...

  • Page 76
    Table of Contents other changes in the tax rules that may increase the Company's actual tax expense, could materially and adversely affect our results of operations. Our investment portfolio has benefited from tax exemptions and certain other tax laws, including, but not limited to, those governing ...

  • Page 77
    ... funds to the Company in the form of cash dividends or otherwise, see "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources." Dividends will be paid by the Company only if declared by its board of directors out of funds legally...

  • Page 78
    ... 500 Property & Casualty Insurance Index, which the Company believes is the most appropriate comparative index. COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN TO SHAREHOLDERS(1) (1) The cumulative return to shareholders is a concept used to compare the performance of a company's stock over time...

  • Page 79
    ... 1,876 1,484 1,484 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 of 1934, in...

  • Page 80
    ... SELECTED FINANCIAL DATA At and for the year ended December 31, 2013 2012 2011 (in millions, except per share amounts) 2014 2010 Total revenues Net income Total investments Total assets Claims and claim adjustment expense reserves Total long-term debt Total liabilities Total shareholders' equity...

  • Page 81
    ... of Dominion for an aggregate purchase price of approximately $1.035 billion. The results of operations of the acquired business are reported in the Company's Business and International Insurance segment from the closing date. FINANCIAL HIGHLIGHTS 2014 Consolidated Results of Operations Net income...

  • Page 82
    ...the year ended December 31, in millions except per share amounts) 2014 2013 2012 Revenues Premiums Net investment income Fee income Net realized investment gains Other revenues Total revenues Claims and expenses Claims and claim adjustment expenses Amortization of deferred acquisition costs General...

  • Page 83
    ... earned pricing that exceeded loss cost trends in each of the Company's business segments. Partially offsetting this net pretax increase in income was an increase in income tax expense. The higher effective tax rate in 2013 than in 2012 resulted from interest on municipal bonds, which is effectively...

  • Page 84
    ... by lower returns from the Company's real estate partnership investments. Fee Income The National Accounts market in the Business and International Insurance segment is the primary source of the Company's fee-based business. The $43 million and $72 million increases in fee income in 2014 and 2013...

  • Page 85
    ... to the Company's National Flood Insurance Program business. Claims and Expenses Claims and Claim Adjustment Expenses Claims and claim adjustment expenses in 2014 were $13.87 billion, $563 million or 4% higher than in 2013, primarily reflecting (i) the impact of the acquisition of Dominion, (ii) the...

  • Page 86
    ... by internationally recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada; and the Company's estimates of its ultimate losses before reinsurance and taxes exceed a pre...

  • Page 87
    ... increase in 2014 primarily reflected the impact of the acquisition of Dominion and increases in employee and technology related expenses, partially offset by a reduction in the estimated liability for state assessments primarily related to workers' compensation premiums. General and administrative...

  • Page 88
    ...,992 $ 2,131 7,534 24,657 $ 14,327 2,059 7,923 24,309 (for the year ended December 31, in millions) 2014 Net Written Premiums 2013 2012 Business and International Insurance Bond & Specialty Insurance Personal Insurance Total $ 14,636 $ 2,103 7,165 $ 23,904 $ 13,512 $ 2,030 7,225 22,767 $ 12...

  • Page 89
    ... Company's Business and International Insurance segment were as follows: (for the year ended December 31, in millions) 2014 2013 2012 Revenues: Earned premiums Net investment income Fee income Other revenues Total revenues Total claims and expenses Operating income Loss and loss adjustment expense...

  • Page 90
    ... 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 pools. Fee income in 2014 increased by $43...

  • Page 91
    ...reflecting the impact of the acquisition of Dominion and increases in employee and technology related expenses, partially offset by a reduction in the estimated liability for state assessments primarily related to workers' compensation premiums. General and administrative expenses in 2013 were $2.37...

  • Page 92
    ... follows: Gross Written Premiums (for the year ended December 31, in millions) 2014 2013 2012 Domestic: Select Accounts Middle Market National Accounts First Party Specialized Distribution Total Domestic International Total Business and International Insurance $ 2,754 $ 6,489 1,690 1,846 1,081 13...

  • Page 93
    ... due to lower renewal rate increases. New business premiums in 2013 increased over 2012. Specialized Distribution. Net written premiums of $1.07 billion in 2014 decreased by 1% from 2013, primarily driven by premium decreases in National Programs. Business retention rates in 2014 remained strong and...

  • Page 94
    ... Insurance Results of the Company's Bond & Specialty Insurance segment were as follows: (for the year ended December 31, in millions) 2014 2013 2012 Revenues: Earned premiums Net investment income Other revenues Total revenues Total claims and expenses Operating income Loss and loss adjustment...

  • Page 95
    ... in 2012. Included in the Bond & Specialty Insurance segment are certain legal entities whose invested assets and related net investment income are reported exclusively in this segment and not allocated among all business segments. As a result, reported net investment income in the Bond & Specialty...

  • Page 96
    ... higher than the underwriting expense ratio of 38.6% in 2012. Written Premiums Bond & Specialty Insurance gross and net written premiums were as follows: Gross Written Premiums (for the year ended December 31, in millions) 2014 2013 2012 Total Bond & Specialty Insurance $ 2,165 $ 2,131 $ 2,059...

  • Page 97
    .... Personal Insurance Results of the Company's Personal Insurance segment were as follows: (for the year ended December 31, in millions) 2014 2013 2012 Revenues: Earned premiums Net investment income Other revenues Total revenues Total claims and expenses Operating income Loss and loss adjustment...

  • Page 98
    ... Company's National Flood Insurance Program (NFIP) business. The Company was a participant in the NFIP Write Your Own Program administered by the Federal Emergency Management Agency (FEMA) and the Federal Insurance & Mitigation Administration. Claims and Expenses Claims and Claim Adjustment Expenses...

  • Page 99
    ... of fee income related to the National Flood Insurance Program from general and administrative expenses to a component of acquisition costs to conform to the presentation prescribed by insurance regulators, and (iii) lower fixed-value commission expense due to an increase in the number of agents...

  • Page 100
    ... rate changes. New business premiums in 2014 were significantly higher than in 2013 as a result of the Company's new private passenger automobile product, Quantum Auto 2.0. In 2013 in the Agency Automobile line of business, net written premiums were 8% lower than in 2012. Business retention rates...

  • Page 101
    ... lower renewal rate changes. New business premiums in 2014 were higher than in 2013. In 2013 in the Agency Homeowners and Other line of business, net written premiums were 3% lower than in 2012 as a result of the ongoing underwriting actions described above. Business retention rates remained strong...

  • Page 102
    ... seeking damages arising from alleged asbestos-related bodily injuries. Travelers Property Casualty Corp. (TPC) had previously entered into settlement agreements in connection with a number of these direct action claims (Direct Action Settlements). The Company had been involved in litigation...

  • Page 103
    ... limit and the available coverage, if any, for that claim. In the third quarter of 2014, the Company completed its annual in-depth asbestos claim review, including a review of active policyholders and litigation cases for potential product and "non-product" liability, and noted the continuation...

  • Page 104
    ... limiting the Company's liability. The Company categorizes its asbestos reserves as follows: Number of Policyholders (at and for the year ended December 31, $ in millions) 2014 2013 Net Asbestos Reserves 2014 2013 Total Net Paid 2014 2013 Policyholders with settlement agreements Home office...

  • Page 105
    ...certain asbestos-related bodily 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...

  • Page 106
    ... but not limited to asbestos and other cumulative injury claims. The Company and its policyholders may also agree to settlements which extinguish any liability arising from known specified sites or claims. Where appropriate, these agreements also include indemnities and hold harmless provisions...

  • Page 107
    ... regulatory agencies are willing to accept risk-based site analyses and more efficient clean-up technologies. Over the past several years, the Company has experienced generally favorable trends in the number of new policyholders tendering environmental claims for the first time and in the number of...

  • Page 108
    ... 31, 2014 were $73.26 billion, of which 93% was invested in fixed maturity and short-term investments, 1% in equity securities, 1% in real estate investments and 5% in other investments. Because the primary purpose of the investment portfolio is to fund future claims payments, the Company employs...

  • Page 109
    .... See the "Outlook" section in "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations." The carrying values of investments in fixed maturities classified as available for sale at December 31, 2014 and 2013 were as follows: 2014 Average Credit Quality(1) 2013...

  • Page 110
    ...fixed maturity investment portfolio rated using external ratings agencies or by the Company when a public rating does not exist: Carrying Value Percent of Total Carrying Value (at December 31, 2014, in millions) Quality Rating: Aaa Aa A Baa Total investment grade Below investment grade Total fixed...

  • Page 111
    ...of the rating of the underlying issuer 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. No other single state accounted for 2.5% or more of the total non-pre-refunded municipal bonds. The Company owns...

  • Page 112
    ...insured municipal securities in the Company's investment portfolio at December 31, 2014, approximately 100% were rated at "A3" or above, and approximately 88% were rated at "Aa3" or above, without the benefit of insurance. The Company believes that a loss of the benefit of insurance would not result...

  • Page 113
    ... 31, 2014. Carrying Value Average Credit Quality(1) (at December 31, 2014, in millions) Foreign Government: Canada United Kingdom All Others(2)(3) Total $ 1,439 826 103 $ 2,368 Aaa Aaa/Aa1 Aa1 Aaa/Aa1 (1) (2) Rated using external rating agencies or by the Company when a public rating does not...

  • Page 114
    ... risk for securities and its effect on income cannot be fully controlled, particularly when interest rates move dramatically, the Company's investment strategy generally favors securities that reduce this risk within expected interest rate ranges. Included in the totals at December 31, 2014...

  • Page 115
    ... small size and the underlying credit strength of these securities. Equity Securities Available for Sale, Real Estate and Short-Term Investments See note 1 of notes to the Company's consolidated financial statements for further information about these invested asset classes. Other Investments...

  • Page 116
    ... least 102% of the market value of the loaned securities plus accrued interest. The Company has not incurred any investment losses in its securities lending program for the years ended December 31, 2014, 2013 and 2012. Lloyd's Trust Deposit The Company utilizes a Lloyd's trust deposit, whereby owned...

  • Page 117
    ... (for the year ended December 31, 2014, in millions) Loss Fair Value Fixed maturities Equity securities Total $ 12 $ 3 $ 15 $ 523 115 638 Purchases and sales of investments are based on cash requirements, the characteristics of the insurance liabilities and current market conditions. The Company...

  • Page 118
    ..., recent events, underwriting practices, market share analyses, external scientific analysis and various other factors to account for non-modeled losses to refine its proprietary view of catastrophe risk. These proprietary models are continually updated as new information emerges. The tables...

  • Page 119
    ... U.S. exposures and include property exposures, property residual market exposures and an adjustment for certain non-property exposures. The hurricane loss amounts are based on the Company's catastrophe risk model estimates and include losses from the hurricane hazards of wind and storm surge. The...

  • Page 120
    ... 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 121
    ... at February 12, 2015 was "A+" (second highest of 16 ratings). A.M. Best has placed the ratings of each entity under review with negative implications. At December 31, 2014, the Company held $1.17 billion of collateral in the form of letters of credit, funds and trust agreements held to fully or...

  • Page 122
    ... attained in 2014. In the Personal Insurance segment, the Company expects both Agency Automobile and Agency Homeowners and Other renewal premium changes during 2015 will remain positive, driven by both positive renewal rate changes (based on the Company's actions to file for rate increases) and...

  • Page 123
    ...renewal premium changes. Property and casualty insurance market conditions are expected to remain competitive during 2015 for new business, not only in Business and International Insurance and Bond & Specialty Insurance, but especially in Personal Insurance, where price comparison technology used by...

  • Page 124
    ...business. In Agency Homeowners and Other, the Company anticipates underlying underwriting margins in 2015 that will be lower than in 2014, reflecting normalized levels of non-catastrophe weather-related losses. Also in Personal Insurance, the Company's direct to consumer initiative, the distribution...

  • Page 125
    ... Disclosure About Market Risk-Foreign Currency Exchange Rate Risk." Capital Position. The Company believes it has a strong capital position and, as part of its ongoing efforts to create shareholder value, expects to continue to return capital not needed to support its business operations to its...

  • Page 126
    ...to meet the cash requirements of its business operations and to satisfy general corporate purposes when needed. Operating Company Liquidity. The liquidity requirements of the Company's insurance subsidiaries are met primarily by funds generated from premiums, fees, income received on investments and...

  • Page 127
    ... exceeds the 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. 126

  • Page 128
    ... 10, 2015. 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 Exchange Act of...

  • Page 129
    ...to borrow funds at competitive rates and raise new capital to meet its needs. The following table summarizes the components of the Company's capital structure at December 31, 2014 and 2013. (at December 31, in millions) 2014 2013 Debt: Short-term Long-term Net unamortized fair value adjustments and...

  • Page 130
    ... timing of claims and claim-related payments. The amounts do not represent the exact liability, but instead represent estimates, generally utilizing actuarial projections techniques, at a given accounting date. These estimates include expectations of what the ultimate settlement and administration...

  • Page 131
    ...(5) Estimated claims and claim-related payments Claims and claim adjustment expenses (6) Claims from large deductible policies (7) Loss-based assessments(8) Payout from ceded funds withheld(9) Total estimated claims and claimrelated payments Liabilities related to unrecognized tax benefits(10) Total...

  • Page 132
    ... for goods and services including property, plant and equipment, office supplies, archival services, etc. Represents estimated timing for fulfilling unfunded commitments for private equity limited partnerships and real estate partnerships. The amounts in "Claims and claim adjustment expenses" in the...

  • Page 133
    ... each case determined in accordance with statutory accounting practices and by state regulation. This declaration or payment is further limited by adjusted unassigned surplus, as determined in accordance with statutory accounting practices. The insurance holding company laws of other states in which...

  • Page 134
    ..., the Company sponsors a nonqualified defined benefit pension plan which covers certain highly-compensated employees, pension plans for employees of its foreign subsidiaries, and a postretirement health and life insurance benefit plan for employees satisfying certain age and service requirements and...

  • Page 135
    ..., 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, with the remainder allocated to short-term securities. For 2015, the Company plans to apply an expected long-term rate of return on plan assets...

  • Page 136
    ...Case December 31, 2013 IBNR Total General liability Commercial property Commercial multi-peril Commercial automobile Workers' compensation Fidelity and surety Personal automobile Homeowners and personal- other International and other Property-casualty Accident and health Claims and claim adjustment...

  • Page 137
    ...Company's future operating results. See the preceding discussion of "Asbestos Claims and Litigation" and "Environmental Claims and Litigation." General Discussion The process for estimating the liabilities for claims and claim adjustment expenses begins with the collection and analysis of claim data...

  • Page 138
    ... insured reports the loss many years later. Most general liability policies are written on an occurrence basis. These policies are subject to substantial loss development over time as facts and circumstances change in the years following the policy issuance. The occurrence form, which accounts for...

  • Page 139
    ... of IBNR to the total claim liability for the product line. Writing new products with material reporting lags can result in adding several years' worth of IBNR claim exposure before the reporting lag exposure becomes clearly observable, thereby increasing the risk associated with pricing and...

  • Page 140
    ... Estimating the number of large claims and their average values based on historical trends from prior accident periods, adjusted for the current environment and supplemented with actual data for the accident year analyzed to the extent available. Utilizing individual claim adjuster estimates of the...

  • 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
    ... product line being discussed. These changes were calculated, net of reinsurance, from statutory annual statement data found in Schedule P of those statements, and represent the reported reserve development on the beginning-of-the-year claim liabilities divided by the beginning claim liabilities...

  • Page 143
    ... than settle a claim Changes in statutes of limitations Changes in the underlying court system Distortions from losses resulting from large single accounts or single issues Changes in tort law Shifts in lawsuit mix between federal and state courts Changes in claim adjuster office structure (causing...

  • Page 144
    ... management liability business, primarily for the errors & omissions and fiduciary products for accident years 2007 and prior. Commercial Property Commercial property is generally considered a short tail line with a simpler and faster claim reporting and adjustment process than liability coverages...

  • Page 145
    ... one-year changes in reserve estimates for this product line. Commercial property reserves represent approximately 3% of the Company's total claims and claim adjustment expense reserves. Since commercial property is considered a short tail coverage, the one year change for commercial property can...

  • Page 146
    ... claims and claim adjustment expense reserves. As discussed above, this line combines general liability and commercial property coverages and it has been impacted in the past by many of the same events as those two lines. The Company's change in reserve estimate for this product line was 3% for 2014...

  • Page 147
    ... line. Commercial automobile reserves represent approximately 7% of the Company's total claims and claim adjustment expense reserves. The Company's change in reserve estimate for this product line was -2% for 2014, 1% for 2013 and 7% for 2012. The 2014 change reflected better than expected loss...

  • Page 148
    ... jobs Degree of legal involvement Changes in the interpretations and processes of the administrative bodies that oversee workers' compensation claims Future wage inflation for states that index benefits Changes in the administrative policies of second injury funds Medical risk factors Changes...

  • Page 149
    ... 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 150
    ... change and, thus, affect the required fidelity and surety reserves (beyond those included in the general discussion section) include: Fidelity risk factors Type of business of insured Policy limit and attachment points Third-party claims Coverage litigation Complexity of claims Growth in insureds...

  • Page 151
    ... loss experience in the contract surety product line for accident years 2008 and prior. Personal Automobile Personal automobile includes both short and long tail coverages. The payments that are made quickly typically pertain to auto physical damage (property) claims and property damage (liability...

  • Page 152
    ... change was primarily driven by higher than expected bodily injury severity for accident year 2011. 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...

  • Page 153
    ... could result in a 1.1% increase (decrease) in claims and claim adjustment expense reserves. Historically, the one-year change in the reserve estimate for this product line (excluding the umbrella line of business, which for statutory reporting purposes is included with the general liability line of...

  • Page 154
    ... on data characterizations and reporting requirements in the U.S. statutory reporting framework. Due to changes in the business mix for this line over time, including the recent acquisition of Dominion, the recently incurred claim liabilities are relatively shorter tail (due to both the products and...

  • Page 155
    ... Changes in tort law Changes in claim adjuster office structure (causing distortions in the data) International 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...

  • Page 156
    ... commutation activity could result in additional income statement charges. Recoverables attributable to structured settlements relate primarily to personal injury claims, of which workers' compensation claims comprise a significant portion, for which the Company has purchased annuities and remains...

  • Page 157
    ... like securities, sector groupings and matrix pricing. Additionally, the pricing service uses an Option Adjusted Spread model to develop prepayment and interest rate scenarios. The pricing service evaluates each asset class based on relevant market information, relevant credit information, perceived...

  • Page 158
    ... Company holds a number of municipal bonds and corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using an internal pricing matrix with some unobservable inputs that are significant to the valuation. Due to the limited amount of observable market...

  • Page 159
    ... accounting standards updates. The Company is currently required to prepare its financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP), as promulgated by the Financial Accounting Standards Board (FASB). During the last several years, the Securities and Exchange...

  • Page 160
    ...its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating income, investment income and performance, loss costs, return on equity, and expected current returns and combined ratios); the sufficiency of the Company's asbestos and...

  • Page 161
    ... of "Item 7- Management's Discussion and Analysis of Financial Condition and Results of Operations." The Company's foreign exchange market risk exposure is concentrated in the Company's invested assets, insurance reserves and shareholders' equity denominated in foreign currencies. Cash flows from...

  • Page 162
    ...the Company's sensitivity analysis model, a hypothetical change in market rates is selected that is expected to reflect reasonably possible near-term changes in those rates. "Near-term" means a period of time going forward up to one year from the date of the consolidated financial statements. Actual...

  • Page 163
    ... 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 estimate the impact on the market value of the foreign...

  • Page 164
    ... DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm Consolidated Statement of Income for the years ended December 31, 2014, 2013 and 2012 Consolidated Statement of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012...

  • Page 165
    ... three-year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Travelers Companies, Inc. and subsidiaries' internal control over...

  • Page 166
    ... except per share amounts) For the year ended December 31, 2014 2013 2012 Revenues Premiums Net investment income Fee income Net realized investment gains(1) Other revenues Total revenues Claims and expenses Claims and claim adjustment expenses Amortization of deferred acquisition costs General and...

  • Page 167
    ... THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in millions) For the year ended December 31, 2014 2013 2012 Net income Other comprehensive income (loss): Changes in net unrealized gains on investment securities: Having no credit losses recognized...

  • Page 168
    ... 31, 2014 2013 Assets Fixed maturities, available for sale, at fair value (amortized cost $60,801 and $62,196) Equity securities, available for sale, at fair value (cost $579 and $686) Real estate investments Short-term securities Other investments Total investments Cash Investment income accrued...

  • Page 169
    ... THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (in millions) For the year ended December 31, 2014 2013 2012 Common stock Balance, beginning of year Employee share-based compensation Compensation amortization under share-based plans and...

  • Page 170
    ...-net employee share-based compensation Dividends paid to shareholders Issuance of common stock-employee share options Payment of debt Issuance of debt Excess tax benefits from share-based payment arrangements Net cash used in financing activities Effect of exchange rate changes on cash Net increase...

  • Page 171
    ... $1.035 billion. Dominion primarily markets personal lines and small commercial insurance business in Canada. At the acquisition date, the Company recorded at fair value $3.91 billion of assets acquired and $2.88 billion of liabilities assumed as part of purchase accounting, including $16...

  • Page 172
    ... THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets...

  • Page 173
    ... diversity in practice concerning employee share-based payments that contain performance targets that could be achieved after the requisite service period. Many reporting entities account for performance targets that could be achieved after the requisite service period as performance conditions that...

  • Page 174
    ... for sale with changes in fair value, net of income taxes, charged or credited directly to other comprehensive income. Real Estate Investments The Company's real estate investments include warehouses, office buildings and other commercial land and properties that are directly owned. Real estate is...

  • Page 175
    ... STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company uses the equity method of accounting for investments in private equity limited partnerships, hedge funds and real estate partnerships. The partnerships and the hedge funds generally report investments...

  • Page 176
    ... and reports the credit loss component in net realized investment gains (losses). The impairment related to all other factors is reported in other comprehensive income. For equity securities (including public common and non-redeemable preferred stock) and for fixed maturity investments the Company...

  • Page 177
    ... STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Determination of Credit Loss-Fixed Maturities 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...

  • Page 178
    ... Funds and Real Estate Partnerships The Company reviews its investments in private equity limited partnerships, hedge funds and real estate partnerships for impairment no less frequently than quarterly and monitors the performance throughout the year through discussions with the managers/general...

  • Page 179
    ... Assets The Company performs a review, on at least an annual basis, of goodwill held by the reporting units which are the Company's three operating and reportable segments: Business and International Insurance; Bond & Specialty Insurance; and Personal Insurance. The Company estimates the fair value...

  • Page 180
    ...' compensation excess insurance policies, were discounted using a rate of 5% at both December 31, 2014 and 2013. These discounted reserves totaled $2.01 billion and $2.21 billion at December 31, 2014 and 2013, respectively. The Company performs a continuing review of its claims and claim adjustment...

  • Page 181
    ...ACCOUNTING POLICIES (Continued) respectively. 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...

  • Page 182
    ... using current exchange rates for items reported in the balance sheets and average exchange rates for items recorded in earnings. The change in unrealized foreign currency translation gain or loss during the year, net of tax, is a component of other comprehensive income. Share-Based Compensation...

  • Page 183
    ... insurance. Middle Market provides mid-sized businesses with property and casualty products, including commercial multi-peril, commercial property, general liability, commercial auto and workers' compensation insurance, as well as risk management, claims handling and other services. Middle Market...

  • Page 184
    ... specialty classes of commercial business primarily on an excess and surplus lines basis, through Northland, and tailored property and casualty programs on an admitted basis for customers with common risk characteristics or coverage requirements through National Programs. Specialized Distribution...

  • Page 185
    ...liability coverages and related risk management services to a wide range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction and general...

  • Page 186
    ... with the new segment structure implemented in 2014. Business and International Insurance Total Reportable Segments (for the year ended December 31, in millions) Bond & Specialty Insurance Personal Insurance 2014 Premiums Net investment income Fee income Other revenues Total operating revenues...

  • Page 187
    ...) 2014 2013 2012 Business and International Insurance: Domestic: Select Accounts Middle Market National Accounts First Party Specialized Distribution Total Domestic International Total Business and International Insurance Bond & Specialty Insurance Personal Insurance: Automobile Homeowners and...

  • Page 188
    ...Total Business and International Insurance Bond & Specialty Insurance: Fidelity and surety General liability Other Total Bond & Specialty Insurance Personal Insurance: Automobile Homeowners and Other Total Personal Insurance Total earned premiums Net investment income Fee income Other revenues Total...

  • Page 189
    ...THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2. SEGMENT INFORMATION (Continued) (at December 31, in millions) 2014 2013 Asset reconciliation: Business and International Insurance Bond & Specialty Insurance Personal Insurance Total assets for...

  • Page 190
    ... 31, 2014, in millions) Amortized Cost Gross Unrealized Gains Losses Fair Value U.S. Treasury securities and obligations of U.S. government and government agencies and authorities Obligations of states, municipalities and political subdivisions: Pre-refunded All other Total obligations of states...

  • Page 191
    ...-guaranteed CMO holdings at December 31, 2014 and 2013, respectively, was "Ba1" and "Ba3," respectively. The average credit rating of all of the above securities was "Aa3" and "A1" at December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, the Company held commercial mortgage-backed...

  • Page 192
    ...gross losses of $3 million, $1 million and less than $1 million were realized on those sales (excluding impairments) in 2014, 2013 and 2012, respectively. Real Estate The Company's real estate investments include warehouses, office buildings and other commercial land and properties that are directly...

  • Page 193
    ... 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 194
    ... 31, 2014 and 2013, 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...

  • Page 195
    ... Fair Unrealized Value Losses Total Fair Value Gross Unrealized Losses Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities Obligations of states, municipalities and political subdivisions Debt securities issued by foreign governments...

  • Page 196
    ... realized investment gains in the consolidated statement of income were as follows: (for the year ended December 31, in millions) 2014 2013 2012 Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities Obligations of states, municipalities...

  • Page 197
    ... Company when a public rating does not exist. Such securities include below investment grade bonds that are publicly traded and certain other privately issued bonds that are classified as below investment grade loans. Net Investment Income (for the year ended December 31, in millions) 2014 2013 2012...

  • Page 198
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. INVESTMENTS (Continued) Changes in net unrealized gains on investment securities that are included as a separate component of other comprehensive income (loss) were as follows: (at and for the year...

  • Page 199
    ... using its proprietary pricing applications, which include available relevant market information, benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Additionally, the pricing service uses an Option Adjusted Spread model to develop prepayment and interest rate...

  • Page 200
    ... of Contents THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. FAIR VALUE MEASUREMENTS (Continued) The pricing service evaluates each asset class based on relevant market information, relevant credit information, perceived market movements and...

  • Page 201
    ...in Level 2. Other Investments The Company holds investments in various publicly-traded securities which are reported in other investments. These investments include mutual funds and other small holdings. The $19 million fair value of these investments at both December 31, 2014 and 2013, respectively...

  • Page 202
    ... 31, 2014, in millions) Total Level 1 Level 2 Level 3 Invested assets: Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities Obligations of states, municipalities and political subdivisions Debt securities issued by foreign governments...

  • Page 203
    ..., in millions) Total Level 1 Level 2 Level 3 Invested assets: Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities Obligations of states, municipalities and political subdivisions Debt securities issued by foreign governments Mortgage...

  • Page 204
    ... out of Level 3 Balance at December 31, 2014 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 $ 255 $ 3 (2) 232 (1) (90) 18 (183) 232 $ 34...

  • Page 205
    ... securities at December 31, 2014 and 2013, respectively. A description of the process and inputs used by the pricing service to estimate fair value is discussed in the "Fixed Maturities" section above. Estimates of fair value for U.S. Treasury securities and money market funds are based on market...

  • Page 206
    ...in workers' compensation and automobile insurance, as well as homeowners' insurance in certain coastal areas. In addition, the Company provides services for several of these involuntary arrangements (mandatory pools and associations) under which it writes such residual market business directly, then...

  • Page 207
    ... required annuity payments, the Company would be required to make such payments. The following is a summary of reinsurance financial data reflected in the consolidated statement of income: (for the year ended December 31, in millions) 2014 2013 2012 Written premiums Direct Assumed Ceded Total net...

  • 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
    ...acquisition of Dominion in 2013 and in connection with the merger of The St. Paul Companies, Inc. and Travelers Property Casualty Corp. in 2004, respectively, and were based on management's estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables. The method used...

  • Page 210
    ... in connection with the acquisition of Dominion in 2013. The following presents a summary of the Company's amortization expense for other intangible assets by major asset class: (for the year ended December 31, in millions) 2014 2013 2012 Customer-related Fair value adjustment on claims and claim...

  • Page 211
    ... in prior years (957) Total increases 13,664 Claims and claim adjustment expense payments for claims arising in: Current year 5,828 Prior years 8,099 Total payments 13,927 Acquisition(1) - Unrealized foreign exchange (gain) loss (286) Net reserves at end of year 41,036 Plus reinsurance recoverables...

  • Page 212
    ... of 2014 related to a legal matter, which is discussed in more detail in the "Asbestos Direct Action Litigation" section of note 16 and (iii) higher than expected loss experience for liability coverages in the commercial multi-peril product line for accident years 2010 through 2013. Bond & Specialty...

  • Page 213
    ... the New York Fund for Reopened Cases for workers' compensation) and (iv) better than expected loss experience for the surety line of business in Canada and the marine line of business in the Company's operations at Lloyd's. These factors contributing to net favorable prior year reserve development...

  • Page 214
    ... general liability product line for the 2011 accident year resulting from higher than expected claim frequency. Bond & Specialty Insurance. Net favorable prior year reserve development in 2012 of $180 million was primarily driven by better than expected loss experience in the contract surety product...

  • Page 215
    ... STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) In the third quarter of 2014, the Company completed its annual in-depth asbestos claim review, including a review of active policyholders and litigation cases for potential product and "non-product" liability, and noted the continuation...

  • Page 216
    ...THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7. INSURANCE CLAIM RESERVES (Continued) and 2012, respectively, related to policyholders with whom the Company had entered into settlement agreements limiting the Company's liability. Environmental...

  • Page 217
    ..., the Company's estimate of claims and claim adjustment expenses may change. These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company's operating results in...

  • Page 218
    Table of Contents THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 8. DEBT Debt outstanding was as follows: (at December 31, in millions) 2014 2013 Short-term: Commercial paper 5.50% Senior notes due December 1, 2015 Total short-term debt Long-...

  • Page 219
    ...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 220
    ...paid semi-annually. The Company's consolidated balance sheet includes the debt instruments acquired in the merger, which were recorded at fair value as of the acquisition date. The resulting fair value adjustment is being amortized over the remaining life of the respective debt instruments using the...

  • Page 221
    ...under the credit agreement. This credit agreement also supports the Company's commercial paper program. Shelf Registration In June 2013, the Company filed with the Securities and Exchange Commission a universal shelf registration statement for the potential offering and sale of securities to replace...

  • Page 222
    ... (Continued) 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 223
    ... THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. SHAREHOLDERS' EQUITY AND DIVIDEND AVAILABILITY (Continued) TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The...

  • Page 224
    ... on Investment Securities Having No Credit Losses Recognized in the Consolidated Statement of Income Net Benefit Plan Assets and Obligations Recognized in Shareholders' Equity Net Unrealized Foreign Currency Translation Total Accumulated Other Comprehensive Income Balance, December 31, $ 2011...

  • Page 225
    ... Company's other comprehensive income (loss) and the related income tax expense (benefit) for the years ended December 31, 2014, 2013 and 2012. (for the year ended December 31, in millions) 2014 2013 2012 Changes in net unrealized gains on investment securities: Having no credit losses recognized...

  • Page 226
    ...'s AOCI to the Company's consolidated statement of income for the years ended December 31, 2014, 2013 and 2012. (for the year ended December 31, in millions) 2014 2013 2012 Reclassification adjustments related to unrealized gains on investment securities: Having no credit losses recognized in the...

  • Page 227
    ... PER SHARE (Continued) The following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations: (for the year ended December 31, in millions, except per share amounts) 2014 2013 2012 Basic and Diluted Net income, as reported Participating share...

  • Page 228
    ...in the consolidated statement of income Composition of income tax included in shareholders' equity Expense (benefit) relating to share-based compensation, the changes in unrealized gain on investments, unrealized loss on foreign exchange and other items in other comprehensive income Total income tax...

  • Page 229
    ...return purposes, as of December 31, 2014, the Company had net operating loss (NOL) carryforwards in the United States, Canada and the United Kingdom. The amount and timing of realizing the benefits of NOL carryforwards depend on future taxable income and limitations imposed by tax laws. The benefits...

  • Page 230
    ...income tax returns for 2011 and 2012. The Company does not expect any significant changes to its liability for unrecognized tax benefits during the next twelve months. 13. SHARE-BASED INCENTIVE COMPENSATION The Company has a share-based incentive compensation plan, The Travelers Companies, Inc. 2014...

  • Page 231
    ... months following termination of service as a director. The shares of deferred stock units issued under the Director Compensation Program are awarded under the 2014 Incentive Plan. Stock Option Awards Stock option awards granted to eligible officers and key employees have a ten-year term. Prior to...

  • Page 232
    ... estimating the fair value of options on grant date for the years ended December 31, 2014, 2013 and 2012: 2014 Original Grants Expected term of stock options Expected volatility of the Company's stock Weighted average volatility Expected annual dividend per share Risk-free rate 6 years 27.2% - 27...

  • Page 233
    ... officers and key employees under the Equity Awards program established pursuant to the 2014 Incentive Plan. A restricted stock unit represents the right to receive a share of common stock. These restricted stock unit awards are granted at market price, generally vest three years from the date...

  • Page 234
    ... at the market price of the Company stock at date of grant. Under terms of the 2014 Incentive Plan, holders of deferred stock units and performance shares may receive dividend equivalents. The total fair value of shares that vested during the years ended December 31, 2014, 2013 and 2012 was $147...

  • Page 235
    ...-BASED INCENTIVE COMPENSATION (Continued) On February 3, 2015, the Company, under the 2014 Stock Incentive Plan, granted 1,044,313 common stock awards in the form of restricted stock units, deferred stock units and performance share awards to participating officers, non-employee directors and other...

  • Page 236
    ... change Acquisition Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Company contributions Benefits paid Foreign currency exchange rate change Settlement Acquisition Fair value of plan assets at end of year Funded...

  • Page 237
    ... loss (gain) Benefits paid Foreign currency exchange rate change Acquisition Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Company contributions Benefits paid Fair value of plan assets at end of year Funded...

  • Page 238
    ... TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) is no required contribution to the qualified domestic pension plan during 2015. With respect to the Company's foreign pension plans...

  • Page 239
    ... rate Future compensation increase rate Assumptions used to determine net periodic benefit cost Discount rate Expected long-term rate of return on pension plans' assets Expected long-term rate of return on postretirement benefit plans' assets Assumed health care cost trend rates Following year...

  • Page 240
    ... income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, U.S. Treasury securities and debt securities issued by foreign governments. Other investments include two private equity funds held by the Company's qualified defined benefit pension plan...

  • Page 241
    ... two private equity funds comprising these investments are determined by an external fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. Due to the significant unobservable inputs in these valuations, the total...

  • Page 242
    ... STATEMENTS (Continued) 14. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) (at December 31, 2013, in millions) Total Level 1 Level 2 Level 3 Invested assets: Fixed maturities Obligations of states, municipalities and political subdivisions Debt securities issued by foreign...

  • Page 243
    ... Contents THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 14. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) The following table presents the changes in the Level 3 fair value category for the years ended December 31, 2014 and...

  • Page 244
    ...PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued) Estimated Future Benefit Payments The following table presents the estimated benefits expected to be paid by the Company's pension and postretirement benefit plans for the next ten years (reflecting estimated future employee service). Benefits...

  • Page 245
    ... be material to the Company's results of operations in future periods. Settlement of 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), a wholly...

  • Page 246
    ...had not been met. The plaintiffs in the Statutory and Hawaii Actions and the Common Law Claims actions thereafter filed motions in the bankruptcy court to compel TPC to make payment under the settlement agreements, arguing that all conditions precedent to the Settlements had been met. On December 16...

  • Page 247
    ... in the Company's consolidated financial statements. Resolution of Gain Contingency The Travelers Indemnity Company was one of the Settlement Class plaintiffs and a class member in a class action lawsuit captioned Safeco Insurance Company of America, et al. v American International Group, Inc. et...

  • Page 248
    ...commitments to private equity limited partnerships and real estate partnerships in which it invests. These commitments totaled $1.63 billion and $1.52 billion at December 31, 2014 and 2013, respectively. Guarantees In the ordinary course of selling businesses to third parties, the Company has agreed...

  • Page 249
    ... realized investment gains(1) Other revenues Total revenues Claims and expenses Claims and claim adjustment expenses Amortization of deferred acquisition costs General and administrative expenses Interest expense Total claims and expenses Income (loss) before income taxes Income tax expense (benefit...

  • Page 250
    ... realized investment gains(1) Other revenues Total revenues Claims and expenses Claims and claim adjustment expenses Amortization of deferred acquisition costs General and administrative expenses Interest expense Total claims and expenses Income (loss) before income taxes Income tax expense (benefit...

  • Page 251
    ... realized investment gains(1) Other revenues Total revenues Claims and expenses Claims and claim adjustment expenses Amortization of deferred acquisition costs General and administrative expenses Interest expense Total claims and expenses Income (loss) before income taxes Income tax expense (benefit...

  • Page 252
    ... Changes in net unrealized gains 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 changes in benefit plan assets and obligations Net changes in unrealized foreign currency...

  • Page 253
    ... Changes in net unrealized gains 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 changes in benefit plan assets and obligations Net changes in unrealized foreign currency...

  • Page 254
    ... gains 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 changes in benefit plan assets and obligations Net changes in unrealized foreign currency translation Other...

  • Page 255
    ...TPC Travelers(1) Eliminations Consolidated Assets Fixed maturities, available for sale, at fair value (amortized cost $60,801) Equity securities, available for sale, at fair value (cost $579) Real estate investments Short-term securities Other investments Total investments Cash Investment income...

  • Page 256
    ...TPC Travelers(1) Eliminations Consolidated Assets Fixed maturities, available for sale, at fair value (amortized cost $62,196) Equity securities, available for sale, at fair value (cost $686) Real estate investments Short-term securities Other investments Total investments Cash Investment income...

  • Page 257
    ... employee share-based compensation - Dividends paid to shareholders - Issuance of common stock- - employee share options Excess tax benefits from sharebased payment arrangements - Dividends paid to parent company (2,978) Net cash used in financing activities (2,978) Effect of exchange rate changes...

  • Page 258
    Interest paid $ 47 $ - $ 318 $ - $ 365 (1) The Travelers Companies, Inc., excluding its subsidiaries. 256

  • Page 259
    ...-net employee share-based - compensation Excess tax benefits from sharebased payment arrangements - Dividends paid to parent company (1,307) Capital contributions, loans and other transactions between subsidiaries 500 Net cash used in financing activities (1,307) Effect of exchange rate changes on...

  • Page 260
    Cash at beginning of year Cash at end of year Supplemental disclosure of cash flow information Income taxes paid (received) Interest paid $ 177 137 $ 151 154 $ 2 3 $ - - $ 330 294 $ $ 942 $ 60 $ 325 $ - $ (210) $ 295 $ - $ - $ 1,057 355 (1) The Travelers Companies, Inc., excluding its ...

  • Page 261
    ... acquired-net employee share-based compensation - Excess tax benefits from sharebased payment arrangements - Dividends paid to parent company (1,353) Net cash used in financing (1,353) activities Effect of exchange rate changes on cash - Net increase in cash 63 Cash at beginning of year 114 Cash...

  • Page 262
    Income taxes paid (received) Interest paid $ $ 287 $ 73 $ 108 $ - $ (207) $ 302 $ - $ - $ 188 375 (1) The Travelers Companies, Inc., excluding its subsidiaries. 258

  • Page 263
    ...THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 19. SELECTED QUARTERLY FINANCIAL DATA (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter 2014 (in millions, except per share amounts) Total Total revenues Total expenses Income...

  • Page 264
    ... 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 265
    ... to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed the Company's internal control over financial reporting as of December 31, 2014. The standard measures adopted...

  • Page 266
    ... 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, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity...

  • Page 267
    ... any obligation to report Rule 10b5-1 plans that may be adopted by any employee or director of the Company in the future, or to report any modifications or termination of any publicly announced plan. As of the date of this report, Jay S. Fishman, Chairman and Chief Executive Officer was the only...

  • Page 268
    ... Citigroup's Global Consumer Europe, Middle East and Africa unit between April 2000 and March 2001. Before that, Mr. Benet spent ten years in various executive positions with Travelers Life & Annuity, including Chief Financial Officer of Travelers Life & Annuity and Executive Vice President, Group...

  • Page 269
    ... 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 270
    ... Report," "Tabular Executive Compensation Disclosure" 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...

  • Page 271
    ... United Kingdom and the Republic of Ireland and The Travelers Deferred Compensation Plan for Non-Employee Directors. Shares delivered under these plans are issued pursuant to the 2004 Incentive Plan and the 2014 Incentive Plan. Total includes (i) 10,043,187 stock options, (ii) 1,787,586 performance...

  • Page 272
    ... 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 20, 2015 is incorporated herein by reference. PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Documents filed as a part of the report...

  • Page 273
    ... the 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 Director, Chairman and Chief Executive Officer (Principal Executive Officer) Jay...

  • Page 274
    Table of Contents Date By * Director William J. Kane February 12, 2015 By * Director Cleve L. Killingsworth Jr. February 12, 2015 By * Director Philip T. Ruegger III February 12, 2015 By * Director Donald J. Shepard February 12, 2015 By * Director Laurie J. Thomsen February 12, 2015 *By ...

  • Page 275
    ... FINANCIAL STATEMENTS AND SCHEDULES Page Report of Independent Registered Public Accounting Firm Consolidated Statement of Income for the years ended December 31, 2014, 2013 and 2012 Consolidated Statement of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012 Consolidated...

  • Page 276
    ...of Independent Registered Public Accounting Firm The Board of Directors and Stockholders The Travelers Companies, Inc.: Under date of February 12, 2015, we reported on the consolidated balance sheet of The Travelers Companies, Inc. and subsidiaries (the Company) as of December 31, 2014 and 2013, and...

  • Page 277
    ... SCHEDULE 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, 2014 2013 2012 Revenues Net investment income Net realized investment gains(1) Other revenues Total revenues...

  • Page 278
    ...COMPREHENSIVE INCOME For the year ended December 31, 2014 2013 2012 Consolidated net income Other comprehensive income-parent company: Changes in net unrealized gains on investment securities: Having no credit losses recognized in the consolidated statement of income Having credit losses recognized...

  • Page 279
    ... II THE TRAVELERS COMPANIES, INC. (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT (in millions) CONDENSED BALANCE SHEET At December 31, 2014 2013 Assets Fixed maturities Equity securities Short-term securities Investment in subsidiaries Other assets Total assets Liabilities Debt...

  • Page 280
    Table of Contents SCHEDULE II THE TRAVELERS COMPANIES, INC. (Parent Company Only) CONDENSED FINANCIAL INFORMATION OF REGISTRANT (in millions) CONDENSED STATEMENT OF CASH FLOWS For the year ended December 31, 2014 2013 2012 Cash flows from operating activities Net income Adjustments to reconcile ...

  • Page 281
    ... of Contents THE TRAVELERS COMPANIES, INC. (Parent Company Only) NOTES TO THE CONDENSED FINANCIAL INFORMATION OF REGISTRANT 1. GUARANTEES In the ordinary course of selling businesses to third parties, The Travelers Companies, Inc. (TRV) has agreed to indemnify purchasers for losses arising out of...

  • Page 282
    ... Personal Insurance Total- Reportable Segments Other Consolidated $ 2012 Business and International Insurance $ Bond & Specialty Insurance Personal Insurance Total- Reportable Segments Other Consolidated $ Claims and Amortization Claim of Deferred Net Investment Adjustment Acquisition Income...

  • Page 283
    ...$ 3 $ 76 41 (1) Amount in 2013 represents allowance for uncollectible reinsurance recoverables acquired November 1, 2013 as part of the Company's acquisition of Dominion. Credited to the related asset account. (2) See the accompanying Report of Independent Registered Public Accounting Firm. 279

  • Page 284
    ... of Contents SCHEDULE VI THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES Supplementary Information Concerning Property-Casualty Insurance Operations(1) 2012-2014 (in millions) Claims and Claim Adjustment Expenses Incurred Related to: Amortization of Deferred Net Unearned Earned Investment Current...

  • Page 285
    ... Travelers Companies, Inc. Policy Regarding Executive Incentive Compensation Recoupment was filed as Exhibit 10.42 to the Company's annual report on Form 10-K for the fiscal year ended December 31, 2009, and is incorporated herein by reference. 10.3* Amended and Restated Employment Agreement between...

  • Page 286
    ... Plan was filed as Exhibit 10.11 to the Company's annual report on Form 10-K for the fiscal year ended December 31, 2012, and is incorporated herein by reference. 10.14* Current Director Compensation Program, effective as of May 28, 2014, was filed as Exhibit 10.2 to the Company's quarterly report...

  • Page 287
    ... of Contents Exhibit Number Description of Exhibit 10.25* TPC Deferred Compensation Plan was filed as Exhibit 10.23 to TPC's annual report on Form 10-K for the fiscal year ended December 31, 2002, and is incorporated herein by reference. 10.26* The Travelers Benefit Equalization Plan, as Amended...

  • Page 288
    Table of Contents Exhibit Number Description of Exhibit 10.41* Form of Performance Shares Award Notification and Agreement for Jay S. Fishman (2012) was filed as Exhibit 10.46 to the Company's annual report on Form 10-K for the fiscal year ended December 31, 2011, and is incorporated herein by ...

  • Page 289
    ... Exhibit Number Description of Exhibit 101.1†The following financial information from The Travelers Companies, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2014 formatted in XBRL: (i) Consolidated Statement of Income for the years ended December 31, 2014, 2013 and 2012; (ii...

  • Page 290
    ... course of business by the Employer. The term "Employee" shall not include any individual (i) who performs services for the Company or an Affiliate through, or is paid by, a third party (including but not limited to a third-party temporary agency or an employee leasing or staffing agency), or (ii...

  • Page 291
    ... the Employee is assigned) or at a location that is closer to the Employee's current residence than is the Employee's current work site. In the case of a sale or transfer of all or any portion of the business operation of the Company or an Affiliate (by means of a stock or asset disposition, merger...

  • Page 292
    ...ii) the adjusted service date for an Employee who has had a break in service and is eligible for service restoration based on the terms of the Travelers Pension Plan or any prior applicable pension plan. Notwithstanding the foregoing, if an Employee received severance benefits from the Company or an...

  • Page 293
    ... Administrator will provide the Employee with a written notice ("Notice") of the amount of Severance Benefits payable to the Employee under the Plan and what conditions the Employee must meet to receive payment of Severance Benefits (e.g., execution of a Confidential Separation Agreement). (b) Claim...

  • Page 294
    ...Employees all information required under Federal law or provisions of the Plan to be furnished to them; have prepared and filed all reports or other information required under Federal law to be provided to any governmental entity; and hear, review and determine claims for benefits. (f) The Company...

  • Page 295
    ...of law rules. The Plan is intended to be an employee welfare benefit plan within the meaning of Section 3(1) of ERISA. All controversies, disputes, and claims arising under or relating to the Plan must be submitted to the United States District Court for the District of Minnesota, unless the parties...

  • Page 296
    ... an Employee's Severance Benefit exceed two times the lesser of (i) the Employee's annualized compensation for the calendar year immediately preceding the calendar year of his or her Termination of Employment; or (ii) the maximum amount that may be taken into account under a qualified pension plan...

  • Page 297
    ...on account of an Employee's Termination of Employment. All capitalized terms used in this Schedule A, not otherwise defined in this Schedule A, have the meanings given to them in the Plan. 13 THE TRAVELERS SEVERANCE PLAN (As amended and restated effective January 1, 2015) Severance Benefit Schedule...

  • Page 298
    ... the time of his/her Termination of Employment. On the first day payroll date following the one year anniversary of the Employee's Termination of Employment, or as soon as reasonably practicable thereafter, the Employee will receive a single lump-sum payment equal to his/her total Severance Benefit...

  • Page 299
    ... (ii) in such relocation, the Employee moves to a primary residence in one of the forty-eight (48) contiguous states within the United States of America. The cost, direction and limits of this relocation benefit will be determined under the applicable relocation plan; provided that, in no event will...

  • Page 300
    ... For that reason, the Retirement Plan amendment that first becomes effective for Benefit Commencement Dates on or after September 1, 2014 will not accelerate the timing of any Excess Benefit under this Plan. IV. Section 8.3.3 is restated in its entirety, effective January 1, 2015, to read as follows...

  • Page 301
    ... 13.) Participant: "NAME" Number of Award Shares: "GRANTED" Grant Date: Scheduled Settlement Date: "GRANT DATE" 3 years from Grant Date 1. Grant of Restricted Stock Units. This restricted stock unit award ("Award") is granted pursuant to The Travelers Companies, Inc. 2014 Stock Incentive Plan, as...

  • Page 302
    ... any statutory benefits or severance pay due to the Participant. No Limitation on the Company's Rights. The Participant agrees that nothing in this Award Agreement shall in any way affect the 10. Company's right or power to make adjustments, reclassifications or changes in its capital or business...

  • Page 303
    ... the Company and other members of the Travelers Group hold certain personal information about the Participant, which may include, without limitation, information such as his or her name, home address, telephone number, gender, date of birth, salary, nationality, job title, social insurance number or...

  • Page 304
    ... 16.) Participant: Number of Shares: Expiration Date: "NAME" "GRANTED" "EXPIRATION DATE" Grant Date: Grant Price: Vesting Date: "GRANT DATE" $ "GRANT PRICE" 3 years from Grant Date 1. Grant of Option. This option is granted pursuant to The Travelers Companies, Inc. 2014 Stock Incentive Plan, as...

  • Page 305
    ...of the country in which the Participant is working at the time of grant or exercise of the Option (including any rules or regulations governing securities, foreign exchange, tax, or labor matters) or Company accounting or other policies dictated by such country's political or regulatory climate, may...

  • Page 306
    ... is not limited to, non-public information such as social security numbers or social insurance numbers; medical information; internal information about the Travelers Group's business, such as non-public financial, sales, marketing, claim, technical and business information, including profit and loss...

  • Page 307
    ..., as applicable), if the Participant breaches the Non-Solicitation Conditions, the Confidentiality Conditions and/or the POE Agreement, in addition to all rights and remedies available to the Travelers Group at law and in equity (including without limitation those set forth in the Option Rules for...

  • Page 308
    ... or agreements between the Travelers Group and the Participant or the Participant's obligations under applicable law. Option Rules. The Option Rules provide a right to payment, subject to certain conditions, following the Participant's Termination Date if the Participant meets the Retirement Rule...

  • Page 309
    ... the Company and other members of the Travelers Group hold certain personal information about the Participant, which may include, without limitation, information such as his or her name, home address, telephone number, gender, date of birth, salary, nationality, job title, social insurance number or...

  • Page 310
    ...vesting, payment, exercise and exercisability of your Option in cases of termination of employment if you satisfy certain age and years of service requirements ("Retirement Rule"), as set forth in "Retirement Rule" below. Participants based in countries outside the United States on the Grant Date or...

  • Page 311
    ...that compete with the business operations of the Travelers Group since your Termination Date. You may be required to provide the Company with other evidence of your compliance with the Retirement Rule as the Company may require. 11 EXHIBIT B Special Rules Applicable to Participants Based in Certain...

  • Page 312
    ...Participant agrees not to utilize Trade Secrets and/or Confidential Information in the negotiation, competition for, solicitation or execution of any individual book roll over(s) or other book of business transfer arrangements involving the transfer of business away from the Travelers Group. As used...

  • Page 313
    ... definite period of time. The Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable Irish law and the...

  • Page 314
    ... duration of time. Each member of the Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable law and...

  • Page 315
    ... as administratively practicable thereafter. The number of shares of Common Stock delivered to the Participant shall be reduced by a number of shares of Common Stock having a Fair Market Value on the date of delivery equal to the tax withholding obligation (including any applicable employment taxes...

  • Page 316
    ... transfer of business away from the Travelers Group, at any time during the twenty-four month period following the Termination Date (the "Enhanced Restricted Period"). The Participant may, at any time after the Termination Date, broadly direct a third party (including but not limited to employees of...

  • Page 317
    ... as social security numbers or social insurance numbers; medical information; internal information about the Travelers Group's business, such as non-public financial, sales, marketing, claim, technical and business information, including profit and loss statements, business/marketing strategy and...

  • Page 318
    ...or agreements between the Travelers Group and the Participant or the Participant's obligations under applicable law. Award Rules. The Award Rules provide a right to payment, subject to certain conditions, following the Participant's Termination Date if the Participant meets the Retirement Rule which...

  • Page 319
    ... any statutory benefits or severance pay due to the Participant. 13. No Limitation on the Company's Rights. The Participant agrees that nothing in this Award Agreement shall in any way affect the Company's right or power to make adjustments, reclassifications or changes in its capital or business...

  • Page 320
    ... the Company and other members of the Travelers Group hold certain personal information about the Participant, which may include, without limitation, information such as his or her name, home address, telephone number, gender, date of birth, salary, nationality, job title, social insurance number or...

  • Page 321
    ... in your employment jurisdiction) Take an approved personal leave of absence approved by the Travelers Group under its Personal Leave Policy, if applicable The restricted stock unit Award Shares will continue to vest and the shares will be issued and distributed to you upon the Vesting Date for the...

  • Page 322
    ... terms and conditions that govern the Award granted to the Participant under The Travelers Companies, Inc. 2014 Stock Incentive Plan (the "Plan") if the Participant is employed in one of the jurisdictions listed below on the Grant Date or on the Termination Date if the Participant is employed in...

  • Page 323
    ...Participant agrees not to utilize Trade Secrets and/or Confidential Information in the negotiation, competition for, solicitation or execution of any individual book roll over(s) or other book of business transfer arrangements involving the transfer of business away from the Travelers Group. As used...

  • Page 324
    ... definite period of time. The Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable Irish law and the...

  • Page 325
    ... an employee of the Company or an affiliate of the Company (together, the "Travelers Group"). The Company hereby grants to the Participant as of the Grant Date an award ("Award") for the initial number of Performance Shares set forth above pursuant to the Plan, as it may be amended from time to time...

  • Page 326
    ... Section 6), times the dollar amount of the cash dividend per share of Common Stock, and then dividing by the Fair Market Value of the Common Stock as of the dividend payment date. The Participant's right to any Performance Shares credited to the Participant's account in connection with dividends...

  • Page 327
    ... is not limited to, non-public information such as social security numbers or social insurance numbers; medical information; internal information about the Travelers Group's business, such as non-public financial, sales, marketing, claim, technical and business information, including profit and loss...

  • Page 328
    ... Canada) 001.866.871.4378 (Europe) The Travelers Companies, Inc. Employee Services Unit 385 Washington Street Mail Code: 9275-SB02L St. Paul, MN USA 55102 (i) As consideration for and by accepting the Award, the Participant agrees that the Non-Solicitation Conditions and Confidentiality Conditions...

  • Page 329
    ...or agreements between the Travelers Group and the Participant or the Participant's obligations under applicable law. Award Rules. The Award Rules provide a right to payment, subject to certain conditions, following the Participant's Termination Date if the Participant meets the Retirement Rule which...

  • Page 330
    ... the Company and other members of the Travelers Group hold certain personal information about the Participant, which may include, without limitation, information such as his or her name, home address, telephone number, gender, date of birth, salary, nationality, job title, social insurance number or...

  • Page 331
    ... Date, special rules may apply for vesting, payment and settlement of your Award in cases of termination of employment if you satisfy certain age and years of service requirements ("Retirement Rule"), as set forth in "Retirement Rule" below. Participants based in countries outside the United States...

  • Page 332
    ... Shares already credited to the Participant's account. Retirement Rule If, as of your Termination Date, you are at least (i) age 65, (ii) age 62 with one or more full years of service, or (iii) age 55 with 10 or more full years of service, then you meet the "Retirement Rule." The Retirement Rule...

  • Page 333
    ...Adjusted Operating Income divided by Adjusted Shareholders' Equity. "Adjusted Operating Income" for each year in the Performance Period is defined as the Company's net income from continuing operations as reported in the Company's financial statements (including accompanying footnotes and management...

  • Page 334
    ... terms and conditions that govern the Award granted to the Participant under The Travelers Companies, Inc. 2014 Stock Incentive Plan (the "Plan") if the Participant is employed in one of the jurisdictions listed below on the Grant Date or on the Termination Date if the Participant is employed in...

  • Page 335
    ...Participant agrees not to utilize Trade Secrets and/or Confidential Information in the negotiation, competition for, solicitation or execution of any individual book roll over(s) or other book of business transfer arrangements involving the transfer of business away from the Travelers Group. As used...

  • Page 336
    ... definite period of time. The Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable Irish law and the...

  • Page 337
    ... duration of time. Each member of the Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable law and...

  • Page 338
    ... Section 6), times the dollar amount of the cash dividend per share of Common Stock, and then dividing by the Fair Market Value of the Common Stock as of the dividend payment date. The Participant's right to any Performance Shares credited to the Participant's account in connection with dividends...

  • Page 339
    ... transfer of business away from the Travelers Group, at any time during the twenty-four month period following the Termination Date (the "Enhanced Restricted Period"). The Participant may, at any time after the Termination Date, broadly direct a third party (including but not limited to employees of...

  • Page 340
    ... is not limited to, non-public information such as social security numbers or social insurance numbers; medical information; internal information about the Travelers Group's business, such as non-public financial, sales, marketing, claim, technical and business information, including profit and loss...

  • Page 341
    ...or agreements between the Travelers Group and the Participant or the Participant's obligations under applicable law. Award Rules. The Award Rules provide a right to payment, subject to certain conditions, following the Participant's Termination Date if the Participant meets the Retirement Rule which...

  • Page 342
    ... any statutory benefits or severance pay due to the Participant. 15. No Limitation on the Company's Rights. The Participant agrees that nothing in this Award Agreement shall in any way affect the Company's right or power to make adjustments, reclassifications or 7 changes in its capital or business...

  • Page 343
    ... the Company and other members of the Travelers Group hold certain personal information about the Participant, which may include, without limitation, information such as his or her name, home address, telephone number, gender, date of birth, salary, nationality, job title, social insurance number or...

  • Page 344
    ... you do not meet the Retirement Rule) Become disabled (as defined under the Travelers Group's applicable long-term disability plan or policy covering disabilities in your employment jurisdiction) Performance Shares is forfeited. You will be entitled to receive the number of shares of Common Stock...

  • Page 345
    ...Adjusted Operating Income divided by Adjusted Shareholders' Equity. "Adjusted Operating Income" for each year in the Performance Period is defined as the Company's net income from continuing operations as reported in the Company's financial statements (including accompanying footnotes and management...

  • Page 346
    ... Adjusted Operating Income. 14 EXHIBIT C Special Rules Applicable to Participants Based in Certain Jurisdictions Terms and Conditions This Exhibit C includes additional and/or alternative terms and conditions that govern the Award granted to the Participant under The Travelers Companies, Inc. 2014...

  • Page 347
    ...Participant agrees not to utilize Trade Secrets and/or Confidential Information in the negotiation, competition for, solicitation or execution of any individual book roll over(s) or other book of business transfer arrangements involving the transfer of business away from the Travelers Group. As used...

  • Page 348
    ... definite period of time. The Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable Irish law and the...

  • Page 349
    ... duration of time. Each member of the Travelers Group retains the right to decrease the Participant's compensation and/or benefits, transfer or demote the Participant or otherwise change the terms or conditions of the Participant's employment with the Travelers Group, subject to applicable law and...

  • Page 350
    ... earned based on actual performance) and will receive a distribution of 75% of the earned Performance Shares on a date determined by the Company that is between January 1 and March 15 of 2018 (the "Regular Settlement Date"). Subject to the Participant's continued employment through the Final Vesting...

  • Page 351
    ... in exchange for Units either in a lump sum or in annual installments, as you may elect, to be paid or commence six (6) months following your termination of service on the Board, or such later date you may elect, pursuant to The Travelers Companies, Inc. Deferred Compensation Plan For Non-Employee...

  • Page 352
    ... by Director. By signing below, Participant accepts the Award and agrees to be bound by the terms, conditions, and restrictions set forth in the 2014 Plan, this Notification, and the Company's policies, as in effect from time to time, relating to the 2014 Plan. THE TRAVELERS COMPANIES, INC. DIRECTOR...

  • Page 353
    The ratio of earnings to fixed charges is computed by dividing income available for fixed charges by the fixed charges. For purposes of this ratio, fixed charges consist of that portion of rentals deemed representative of the appropriate interest factor. 286

  • Page 354
    ... Property Casualty Insurance Company Travelers Personal Insurance Company Travelers Texas MGA, Inc. The Travelers Indemnity Company Arch Street North LLC Gulf Underwriters Insurance Company Select Insurance Company Travelers Casualty and Surety Company of Europe Limited First Floridian Auto and Home...

  • Page 355
    Travelers Casualty and Surety Company 8527512 Canada Inc. The Dominion of Canada General Insurance Company(1) Farmington Casualty Company 287 Connecticut Canada Canada Connecticut

  • Page 356
    ...Connecticut Travelers Casualty UK Investments LLC Travelers Commercial Insurance Company Travelers Excess and Surplus Lines Company Travelers Lloyds of Texas Insurance Company Travelers Insurance Company of Canada St. Paul Fire and Marine Insurance Company St. Paul Mercury Insurance Company St. Paul...

  • Page 357
    ... related financial statement schedules, and the effectiveness of internal control over financial reporting as of December 31, 2014, which reports appear in the December 31, 2014 annual report on Form 10-K of The Travelers Companies, Inc. /s/ KPMG LLP KPMG LLP New York, New York February 12, 2015 289

  • Page 358
    ... to sign on my behalf a Form 10-K for the year ended December 31, 2014, to be filed by the Corporation with the Securities and Exchange Commission, and any amendments thereto, which shall have the same force and effect as though I had manually signed the Form 10-K or any amendments thereto. Date By...

  • Page 359
    Philip T. Ruegger III By /s/ DONALD J. SHEPARD February 3, 2015 Donald J. Shepard By /s/ LAURIE J. THOMSEN February 4, 2015 Laurie J. Thomsen 290

  • Page 360
    ... I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2014 of The Travelers Companies, Inc. (the Company); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in...

  • Page 361
    Chairman and Chief Executive Officer 291

  • Page 362
    ... I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2014 of The Travelers Companies, Inc. (the Company); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in...

  • Page 363
    Vice Chairman and Chief Financial Officer 292

  • Page 364
    ... to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and 18 U.S.C. Section 1350, the undersigned officer of The Travelers Companies, Inc. (the "Company") hereby certifies that the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (the "Report") fully...

  • Page 365
    ... to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and 18 U.S.C. Section 1350, the undersigned officer of The Travelers Companies, Inc. (the "Company") hereby certifies that the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (the "Report") fully...

  • Page 366
    QuickLinks Exhibit 32.2 THE TRAVELERS COMPANIES, INC. CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (Back To Top)