Reconciliation to Net Income (Loss) and Earnings Per Share
2
Statement of Income (Loss)
3
Net Income (Loss) by Major Component and Combined Ratio
4
Core Income (Loss)
5
Selected Statistics - Property and Casualty Operations
6
Written and Earned Premiums - Property and Casualty Operations
7
Business Insurance
Segment Income (Loss)
8
Segment Income (Loss) by Major Component and Combined Ratio
9
Selected Statistics
10
Net Written Premiums
11
Bond & Specialty Insurance
Segment Income
12
Segment Income by Major Component and Combined Ratio
13
Selected Statistics
14
Net Written Premiums
15
Personal Insurance
Segment Income (Loss)
16
Segment Income (Loss) by Major Component and Combined Ratio
17
Selected Statistics
18
Net Written Premiums
19
Selected Statistics - Automobile
20
Selected Statistics - Homeowners and Other
21
Supplemental Detail
Interest Expense and Other
22
Consolidated Balance Sheet
23
Investment Portfolio
24
Investment Portfolio - Fixed Maturities Data
25
Investment Income
26
Net Realized and Unrealized Investment Gains (Losses) included in Shareholders’ Equity
27
Reinsurance Recoverables
28
Net Reserves for Losses and Loss Adjustment Expense
29
Asbestos Reserves
30
Capitalization
31
Statutory Capital and Surplus to GAAP Shareholders’ Equity Reconciliation
32
Statement of Cash Flows
33
Statement of Cash Flows (continued)
34
Glossary of Financial Measures and Description of Reportable Business Segments
35-36
The information included in the Financial Supplement is unaudited. This document should be read in conjunction with the Company’s Form 10-K which will be filed with the Securities and Exchange Commission.
Index
The Travelers Companies, Inc.
Financial Highlights
($ and shares in millions, except for per share data)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net income (loss)
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Net income (loss) per share:
Basic
$
2.34
$
(0.16)
$
3.24
$
5.13
$
2.89
$
3.70
$
2.65
$
5.43
$
10.56
$
14.63
Diluted
$
2.33
$
(0.16)
$
3.23
$
5.10
$
2.87
$
3.66
$
2.62
$
5.37
$
10.52
$
14.49
Core income (loss)
$
676
$
(50)
$
798
$
1,262
$
699
$
879
$
655
$
1,289
$
2,686
$
3,522
Core income (loss) per share:
Basic
$
2.64
$
(0.20)
$
3.13
$
4.94
$
2.75
$
3.48
$
2.63
$
5.25
$
10.52
$
14.07
Diluted
$
2.62
$
(0.20)
$
3.12
$
4.91
$
2.73
$
3.45
$
2.60
$
5.20
$
10.48
$
13.94
Return on equity
9.4
%
(0.6)
%
12.1
%
18.4
%
10.2
%
13.0
%
9.2
%
18.6
%
10.0
%
12.7
%
Core return on equity
11.5
%
(0.8)
%
13.5
%
20.5
%
11.1
%
13.7
%
10.1
%
19.8
%
11.3
%
13.7
%
Total assets, at period end
$
109,436
$
113,337
$
116,384
$
116,764
$
117,032
$
119,759
$
120,706
$
120,466
$
116,764
$
120,466
Total equity, at period end
$
25,204
$
26,943
$
27,849
$
29,201
$
28,269
$
29,156
$
28,474
$
28,887
$
29,201
$
28,887
Book value per share, at period end
$
99.69
$
106.42
$
109.94
$
115.68
$
112.42
$
116.86
$
115.74
$
119.77
$
115.68
$
119.77
Less: Net unrealized investment gains, net of tax
7.06
14.41
15.05
16.14
11.21
12.98
10.97
10.01
16.14
10.01
Adjusted book value per share, at period end
$
92.63
$
92.01
$
94.89
$
99.54
$
101.21
$
103.88
$
104.77
$
109.76
$
99.54
$
109.76
Weighted average number of common shares outstanding (basic)
254.4
251.6
253.3
253.4
252.1
250.7
247.7
243.8
253.5
248.5
Weighted average number of common shares outstanding and common stock equivalents (diluted)
255.9
251.6
254.3
254.8
254.1
253.1
250.1
246.4
254.6
250.8
Common shares outstanding at period end
252.8
253.2
253.3
252.4
251.5
249.5
246.0
241.2
252.4
241.2
Common stock dividends declared
$
210
$
218
$
218
$
218
$
216
$
224
$
220
$
216
$
864
$
876
Common stock repurchased:
Under Board of Directors authorization
Shares
3.5
—
—
1.4
2.4
2.6
3.8
5.1
4.9
13.9
Cost
$
425
$
—
$
—
$
200
$
356
$
400
$
600
$
800
$
625
$
2,156
Other
Shares
0.3
—
—
—
0.3
—
—
—
0.3
0.3
Cost
$
46
$
—
$
—
$
1
$
41
$
1
$
1
$
1
$
47
$
44
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
1
The Travelers Companies, Inc.
Reconciliation to Net Income (Loss) and Earnings per Share
($ and shares in millions, except earnings per share)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net income (loss)
Net income (loss)
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Adjustments:
Net realized investment (gains) losses, after-tax
76
(10)
(29)
(48)
(34)
(47)
(7)
(44)
(11)
(132)
Impact of changes in tax laws and/or tax rates (1)
—
—
—
—
—
(8)
—
—
—
(8)
Core income (loss)
$
676
$
(50)
$
798
$
1,262
$
699
$
879
$
655
$
1,289
$
2,686
$
3,522
Basic earnings per share
Net income (loss)
$
2.34
$
(0.16)
$
3.24
$
5.13
$
2.89
$
3.70
$
2.65
$
5.43
$
10.56
$
14.63
Adjustments:
Net realized investment (gains) losses, after-tax
0.30
(0.04)
(0.11)
(0.19)
(0.14)
(0.19)
(0.02)
(0.18)
(0.04)
(0.53)
Impact of changes in tax laws and/or tax rates (1)
—
—
—
—
—
(0.03)
—
—
—
(0.03)
Core income (loss)
$
2.64
$
(0.20)
$
3.13
$
4.94
$
2.75
$
3.48
$
2.63
$
5.25
$
10.52
$
14.07
Diluted earnings per share
Net income (loss)
$
2.33
$
(0.16)
$
3.23
$
5.10
$
2.87
$
3.66
$
2.62
$
5.37
$
10.52
$
14.49
Adjustments:
Net realized investment (gains) losses, after-tax
0.29
(0.04)
(0.11)
(0.19)
(0.14)
(0.18)
(0.02)
(0.17)
(0.04)
(0.52)
Impact of changes in tax laws and/or tax rates (1)
—
—
—
—
—
(0.03)
—
—
—
(0.03)
Core income (loss)
$
2.62
$
(0.20)
$
3.12
$
4.91
$
2.73
$
3.45
$
2.60
$
5.20
$
10.48
$
13.94
Adjustments to net income (loss) and weighted average shares for net income (loss) EPS calculations: (2)
Basic and Diluted
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net income (loss), as reported
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Participating share-based awards - allocated income
(5)
(1)
(6)
(10)
(5)
(7)
(5)
(10)
(19)
(27)
Net income (loss) available to common shareholders - basic and diluted
$
595
$
(41)
$
821
$
1,300
$
728
$
927
$
657
$
1,323
$
2,678
$
3,635
Common Shares
Basic
Weighted average shares outstanding
254.4
251.6
253.3
253.4
252.1
250.7
247.7
243.8
253.5
248.5
Diluted
Weighted average shares outstanding
254.4
251.6
253.3
253.4
252.1
250.7
247.7
243.8
253.5
248.5
Weighted average effects of dilutive securities - stock options and performance shares
1.5
—
1.0
1.4
2.0
2.4
2.4
2.6
1.1
2.3
Diluted weighted average shares outstanding
255.9
251.6
254.3
254.8
254.1
253.1
250.1
246.4
254.6
250.8
(1) Impact is recognized in the accounting period in which the change is enacted.
(2) Adjustments to net income and weighted average shares for net income EPS calculations can generally be used for the core income EPS calculations.
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
2
The Travelers Companies, Inc.
Statement of Income (Loss) - Consolidated
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Premiums
$
7,229
$
6,955
$
7,380
$
7,480
$
7,386
$
7,616
$
7,829
$
8,024
$
29,044
$
30,855
Net investment income
611
268
671
677
701
818
771
743
2,227
3,033
Fee income
108
114
101
106
101
104
97
100
429
402
Net realized investment gains (losses)
(98)
13
37
50
44
61
8
58
2
171
Other revenues
58
51
86
84
81
88
100
86
279
355
Total revenues
7,908
7,401
8,275
8,397
8,313
8,687
8,805
9,011
31,981
34,816
Claims and expenses
Claims and claim adjustment expenses
4,789
5,107
4,886
4,341
4,970
5,045
5,464
4,819
19,123
20,298
Amortization of deferred acquisition costs
1,178
1,173
1,207
1,215
1,207
1,254
1,281
1,301
4,773
5,043
General and administrative expenses
1,137
1,121
1,109
1,142
1,163
1,174
1,187
1,153
4,509
4,677
Interest expense
84
85
87
83
82
83
87
88
339
340
Total claims and expenses
7,188
7,486
7,289
6,781
7,422
7,556
8,019
7,361
28,744
30,358
Income (loss) before income taxes
720
(85)
986
1,616
891
1,131
786
1,650
3,237
4,458
Income tax expense (benefit)
120
(45)
159
306
158
197
124
317
540
796
Net income (loss)
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Other statistics
Effective tax rate on net investment income
15.1
%
6.2
%
15.6
%
15.4
%
15.9
%
16.7
%
16.3
%
16.0
%
14.3
%
16.2
%
Net investment income (after-tax)
$
519
$
251
$
566
$
572
$
590
$
682
$
645
$
624
$
1,908
$
2,541
Catastrophes, net of reinsurance:
Pre-tax
$
333
$
854
$
397
$
29
$
835
$
475
$
501
$
36
$
1,613
$
1,847
After-tax
$
263
$
673
$
314
$
24
$
659
$
376
$
395
$
29
$
1,274
$
1,459
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
27
$
2
$
142
$
180
$
317
$
182
$
(56)
$
95
$
351
$
538
After-tax
$
21
$
1
$
113
$
141
$
249
$
144
$
(44)
$
75
$
276
$
424
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
3
The Travelers Companies, Inc.
Net Income (Loss) by Major Component and Combined Ratio - Consolidated
($ in millions, net of tax)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Underwriting gain (loss)
$
220
$
(232)
$
281
$
741
$
166
$
253
$
68
$
729
$
1,010
$
1,216
Net investment income
519
251
566
572
590
682
645
624
1,908
2,541
Other income (expense), including interest expense
(63)
(69)
(49)
(51)
(57)
(56)
(58)
(64)
(232)
(235)
Core income (loss)
676
(50)
798
1,262
699
879
655
1,289
2,686
3,522
Net realized investment gains (losses)
(76)
10
29
48
34
47
7
44
11
132
Impact of changes in tax laws and/or tax rates (1)
—
—
—
—
—
8
—
—
—
8
Net income (loss)
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Combined ratio (2) (3)
Loss and loss adjustment expense ratio
65.5
%
72.7
%
65.6
%
57.3
%
66.7
%
65.6
%
69.2
%
59.5
%
65.1
%
65.1
%
Underwriting expense ratio
30.0
%
31.0
%
29.3
%
29.4
%
29.9
%
29.7
%
29.4
%
28.5
%
29.9
%
29.4
%
Combined ratio
95.5
%
103.7
%
94.9
%
86.7
%
96.6
%
95.3
%
98.6
%
88.0
%
95.0
%
94.5
%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development
(0.4)
%
—
%
(1.9)
%
(2.4)
%
(4.2)
%
(2.4)
%
0.8
%
(1.2)
%
(1.2)
%
(1.8)
%
Catastrophes, net of reinsurance
4.6
%
12.3
%
5.3
%
0.4
%
11.3
%
6.3
%
6.4
%
0.5
%
5.5
%
6.0
%
Underlying combined ratio
91.3
%
91.4
%
91.5
%
88.7
%
89.5
%
91.4
%
91.4
%
88.7
%
90.7
%
90.3
%
(1) Impact is recognized in the accounting period in which the change is enacted.
(2) Before policyholder dividends.
(3) Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses. These allocations are to conform the calculation of the combined ratio with statutory accounting. Additionally, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. See following:
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Billing and policy fees and other
$
28
$
17
$
24
$
28
$
27
$
27
$
27
$
26
$
97
$
107
Fee income:
Loss and loss adjustment expenses
$
41
$
44
$
35
$
41
$
38
$
39
$
36
$
37
$
161
$
150
Underwriting expenses
67
70
66
65
63
65
61
63
268
252
Total fee income
$
108
$
114
$
101
$
106
$
101
$
104
$
97
$
100
$
429
$
402
Non-insurance general and administrative expenses
$
55
$
52
$
60
$
67
$
70
$
77
$
81
$
75
$
234
$
303
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
4
The Travelers Companies, Inc.
Core Income (Loss) - Consolidated
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Premiums
$
7,229
$
6,955
$
7,380
$
7,480
$
7,386
$
7,616
$
7,829
$
8,024
$
29,044
$
30,855
Net investment income
611
268
671
677
701
818
771
743
2,227
3,033
Fee income
108
114
101
106
101
104
97
100
429
402
Other revenues
58
51
86
84
81
88
100
86
279
355
Total revenues
8,006
7,388
8,238
8,347
8,269
8,626
8,797
8,953
31,979
34,645
Claims and expenses
Claims and claim adjustment expenses
4,789
5,107
4,886
4,341
4,970
5,045
5,464
4,819
19,123
20,298
Amortization of deferred acquisition costs
1,178
1,173
1,207
1,215
1,207
1,254
1,281
1,301
4,773
5,043
General and administrative expenses
1,137
1,121
1,109
1,142
1,163
1,174
1,187
1,153
4,509
4,677
Interest expense
84
85
87
83
82
83
87
88
339
340
Total claims and expenses
7,188
7,486
7,289
6,781
7,422
7,556
8,019
7,361
28,744
30,358
Core income (loss) before income taxes
818
(98)
949
1,566
847
1,070
778
1,592
3,235
4,287
Income tax expense (benefit)
142
(48)
151
304
148
191
123
303
549
765
Core income (loss)
$
676
$
(50)
$
798
$
1,262
$
699
$
879
$
655
$
1,289
$
2,686
$
3,522
Other statistics
Effective tax rate on net investment income
15.1
%
6.2
%
15.6
%
15.4
%
15.9
%
16.7
%
16.3
%
16.0
%
14.3
%
16.2
%
Net investment income (after-tax)
$
519
$
251
$
566
$
572
$
590
$
682
$
645
$
624
$
1,908
$
2,541
Catastrophes, net of reinsurance:
Pre-tax
$
333
$
854
$
397
$
29
$
835
$
475
$
501
$
36
$
1,613
$
1,847
After-tax
$
263
$
673
$
314
$
24
$
659
$
376
$
395
$
29
$
1,274
$
1,459
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
27
$
2
$
142
$
180
$
317
$
182
$
(56)
$
95
$
351
$
538
After-tax
$
21
$
1
$
113
$
141
$
249
$
144
$
(44)
$
75
$
276
$
424
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
5
The Travelers Companies, Inc.
Selected Statistics - Property and Casualty Operations
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
8,152
$
7,751
$
8,243
$
7,617
$
8,407
$
8,597
$
8,876
$
8,364
$
31,763
$
34,244
Net written premiums
$
7,346
$
7,346
$
7,771
$
7,269
$
7,505
$
8,135
$
8,324
$
8,002
$
29,732
$
31,966
Net earned premiums
$
7,229
$
6,955
$
7,380
$
7,480
$
7,386
$
7,616
$
7,829
$
8,029
$
29,044
$
30,860
Losses and loss adjustment expenses
4,733
5,053
4,830
4,291
4,920
5,003
5,415
4,773
18,907
20,111
Underwriting expenses
2,193
2,212
2,214
2,153
2,276
2,361
2,385
2,269
8,772
9,291
Statutory underwriting gain (loss)
303
(310)
336
1,036
190
252
29
987
1,365
1,458
Policyholder dividends
12
8
11
10
11
10
10
10
41
41
Statutory underwriting gain (loss) after policyholder dividends
$
291
$
(318)
$
325
$
1,026
$
179
$
242
$
19
$
977
$
1,324
$
1,417
Other statutory statistics
Reserves for losses and loss adjustment expenses
$
43,913
$
45,112
$
46,181
$
46,247
$
47,153
$
47,893
$
48,662
$
48,589
$
46,247
$
48,589
Increase in reserves
$
170
$
1,199
$
1,069
$
66
$
906
$
740
$
769
$
(73)
$
2,504
$
2,342
Statutory capital and surplus
$
20,808
$
20,607
$
21,230
$
22,180
$
22,403
$
22,797
$
22,987
$
23,906
$
22,180
$
23,906
Net written premiums/surplus (1)
1.41:1
1.42:1
1.39:1
1.34:1
1.33:1
1.35:1
1.36:1
1.34:1
1.34:1
1.34:1
(1) Based on 12 months of rolling net written premiums.
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
6
The Travelers Companies, Inc.
Written and Earned Premiums - Property and Casualty Operations
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Written premiums
Gross
$
8,152
$
7,751
$
8,243
$
7,617
$
8,407
$
8,597
$
8,876
$
8,364
$
31,763
$
34,244
Ceded
(806)
(405)
(472)
(348)
(902)
(462)
(552)
(369)
(2,031)
(2,285)
Net
$
7,346
$
7,346
$
7,771
$
7,269
$
7,505
$
8,135
$
8,324
$
7,995
$
29,732
$
31,959
Earned premiums
Gross
$
7,683
$
7,446
$
7,898
$
7,961
$
7,895
$
8,164
$
8,376
$
8,574
$
30,988
$
33,009
Ceded
(454)
(491)
(518)
(481)
(509)
(548)
(547)
(550)
(1,944)
(2,154)
Net
$
7,229
$
6,955
$
7,380
$
7,480
$
7,386
$
7,616
$
7,829
$
8,024
$
29,044
$
30,855
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
7
The Travelers Companies, Inc.
Segment Income (Loss) - Business Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Premiums
$
3,864
$
3,735
$
3,841
$
3,854
$
3,799
$
3,880
$
3,970
$
4,085
$
15,294
$
15,734
Net investment income
453
180
498
502
523
615
575
552
1,633
2,265
Fee income
102
108
95
100
95
97
90
93
405
375
Other revenues
31
36
58
51
53
57
69
56
176
235
Total revenues
4,450
4,059
4,492
4,507
4,470
4,649
4,704
4,786
17,508
18,609
Claims and expenses
Claims and claim adjustment expenses
2,791
2,880
2,804
2,329
2,788
2,539
2,703
2,368
10,804
10,398
Amortization of deferred acquisition costs
636
622
633
627
627
642
653
659
2,518
2,581
General and administrative expenses
685
656
651
672
683
688
684
691
2,664
2,746
Total claims and expenses
4,112
4,158
4,088
3,628
4,098
3,869
4,040
3,718
15,986
15,725
Segment income (loss) before income taxes
338
(99)
404
879
372
780
664
1,068
1,522
2,884
Income tax expense (benefit)
49
(41)
39
166
55
137
106
201
213
499
Segment income (loss)
$
289
$
(58)
$
365
$
713
$
317
$
643
$
558
$
867
$
1,309
$
2,385
Other statistics
Effective tax rate on net investment income
15.0
%
6.3
%
15.6
%
15.4
%
15.8
%
16.7
%
16.3
%
16.0
%
14.4
%
16.2
%
Net investment income (after-tax)
$
385
$
169
$
421
$
423
$
441
$
511
$
481
$
464
$
1,398
$
1,897
Catastrophes, net of reinsurance:
Pre-tax
$
195
$
377
$
97
$
(24)
$
506
$
149
$
181
$
(43)
$
645
$
793
After-tax
$
154
$
298
$
76
$
(19)
$
399
$
119
$
143
$
(34)
$
509
$
627
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
5
$
—
$
(220)
$
124
$
134
$
73
$
(108)
$
74
$
(91)
$
173
After-tax
$
3
$
—
$
(173)
$
97
$
105
$
58
$
(86)
$
58
$
(73)
$
135
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
8
The Travelers Companies, Inc.
Segment Income (Loss) by Major Component and Combined Ratio - Business Insurance
($ in millions, net of tax)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Underwriting gain (loss)
$
(84)
$
(221)
$
(59)
$
292
$
(116)
$
137
$
80
$
412
$
(72)
$
513
Net investment income
385
169
421
423
441
511
481
464
1,398
1,897
Other income (expense)
(12)
(6)
3
(2)
(8)
(5)
(3)
(9)
(17)
(25)
Segment income (loss)
$
289
$
(58)
$
365
$
713
$
317
$
643
$
558
$
867
$
1,309
$
2,385
Combined ratio (1) (2)
Loss and loss adjustment expense ratio
70.9
%
75.8
%
71.8
%
59.2
%
72.2
%
64.3
%
67.0
%
56.9
%
69.4
%
65.0
%
Underwriting expense ratio
31.3
%
31.3
%
30.5
%
30.6
%
31.3
%
31.0
%
30.5
%
30.1
%
30.9
%
30.7
%
Combined ratio
102.2
%
107.1
%
102.3
%
89.8
%
103.5
%
95.3
%
97.5
%
87.0
%
100.3
%
95.7
%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development
(0.1)
%
—
%
5.8
%
(3.2)
%
(3.5)
%
(1.9)
%
2.7
%
(1.8)
%
0.6
%
(1.1)
%
Catastrophes, net of reinsurance
5.0
%
10.1
%
2.5
%
(0.6)
%
13.3
%
3.9
%
4.6
%
(1.0)
%
4.2
%
5.1
%
Underlying combined ratio
97.3
%
97.0
%
94.0
%
93.6
%
93.7
%
93.3
%
90.2
%
89.8
%
95.5
%
91.7
%
(1) Before policyholder dividends.
(2) Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses. These allocations are to conform the calculation of the combined ratio with statutory accounting. Additionally, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. See following:
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Billing and policy fees and other
$
4
$
3
$
4
$
5
$
4
$
3
$
4
$
3
$
16
$
14
Fee income:
Loss and loss adjustment expenses
$
41
$
44
$
35
$
41
$
38
$
39
$
36
$
37
$
161
$
150
Underwriting expenses
61
64
60
59
57
58
54
56
244
225
Total fee income
$
102
$
108
$
95
$
100
$
95
$
97
$
90
$
93
$
405
$
375
Non-insurance general and administrative expenses
$
47
$
42
$
52
$
56
$
60
$
65
$
68
$
63
$
197
$
256
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
9
The Travelers Companies, Inc.
Selected Statistics - Business Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
4,794
$
4,127
$
4,230
$
3,909
$
4,776
$
4,356
$
4,453
$
4,244
$
17,060
$
17,829
Net written premiums
$
4,190
$
3,777
$
3,833
$
3,631
$
4,125
$
3,980
$
4,021
$
3,973
$
15,431
$
16,099
Net earned premiums
$
3,864
$
3,735
$
3,841
$
3,854
$
3,799
$
3,880
$
3,970
$
4,090
$
15,294
$
15,739
Losses and loss adjustment expenses
2,737
2,828
2,750
2,282
2,741
2,500
2,657
2,326
10,597
10,224
Underwriting expenses
1,247
1,167
1,145
1,132
1,251
1,226
1,205
1,190
4,691
4,872
Statutory underwriting gain (loss)
(120)
(260)
(54)
440
(193)
154
108
574
6
643
Policyholder dividends
10
6
9
7
8
6
8
7
32
29
Statutory underwriting gain (loss) after policyholder dividends
$
(130)
$
(266)
$
(63)
$
433
$
(201)
$
148
$
100
$
567
$
(26)
$
614
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
10
The Travelers Companies, Inc.
Net Written Premiums - Business Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net written premiums by market
Domestic
Select Accounts
$
799
$
734
$
658
$
630
$
729
$
726
$
685
$
693
$
2,821
$
2,833
Middle Market
2,408
1,960
2,131
2,012
2,384
2,087
2,252
2,210
8,511
8,933
National Accounts
301
215
239
241
290
213
228
256
996
987
National Property and Other
428
585
602
471
445
647
638
535
2,086
2,265
Total Domestic
3,936
3,494
3,630
3,354
3,848
3,673
3,803
3,694
14,414
15,018
International
254
283
203
277
277
307
218
272
1,017
1,074
Total
$
4,190
$
3,777
$
3,833
$
3,631
$
4,125
$
3,980
$
4,021
$
3,966
$
15,431
$
16,092
Net written premiums by product line
Domestic
Workers’ compensation
$
1,096
$
780
$
774
$
699
$
948
$
754
$
751
$
722
$
3,349
$
3,175
Commercial automobile
755
667
689
679
762
715
716
705
2,790
2,898
Commercial property
433
620
603
507
466
678
656
608
2,163
2,408
General liability
683
531
630
603
714
615
685
685
2,447
2,699
Commercial multi-peril
956
892
899
861
940
908
953
967
3,608
3,768
Other
13
4
35
5
18
3
42
7
57
70
Total Domestic
3,936
3,494
3,630
3,354
3,848
3,673
3,803
3,694
14,414
15,018
International
254
283
203
277
277
307
218
272
1,017
1,074
Total
$
4,190
$
3,777
$
3,833
$
3,631
$
4,125
$
3,980
$
4,021
$
3,966
$
15,431
$
16,092
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
11
The Travelers Companies, Inc.
Segment Income - Bond & Specialty Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Premiums
$
667
$
693
$
723
$
740
$
743
$
776
$
806
$
813
$
2,823
$
3,138
Net investment income
55
42
58
58
59
64
63
61
213
247
Other revenues
5
5
7
10
5
7
5
6
27
23
Total revenues
727
740
788
808
807
847
874
880
3,063
3,408
Claims and expenses
Claims and claim adjustment expenses
327
403
392
342
374
335
375
389
1,464
1,473
Amortization of deferred acquisition costs
124
128
133
134
134
142
147
147
519
570
General and administrative expenses
125
123
124
128
130
135
135
132
500
532
Total claims and expenses
576
654
649
604
638
612
657
668
2,483
2,575
Segment income before income taxes
151
86
139
204
169
235
217
212
580
833
Income tax expense
29
14
24
40
32
48
43
42
107
165
Segment income
$
122
$
72
$
115
$
164
$
137
$
187
$
174
$
170
$
473
$
668
Other statistics
Effective tax rate on net investment income
14.7
%
3.0
%
14.8
%
14.4
%
15.0
%
15.7
%
15.3
%
15.1
%
12.3
%
15.3
%
Net investment income (after-tax)
$
47
$
41
$
49
$
50
$
50
$
55
$
53
$
52
$
187
$
210
Catastrophes, net of reinsurance:
Pre-tax
$
1
$
7
$
2
$
1
$
24
$
3
$
3
$
10
$
11
$
40
After-tax
$
1
$
5
$
2
$
1
$
19
$
2
$
2
$
8
$
9
$
31
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
—
$
(33)
$
—
$
32
$
15
$
44
$
22
$
24
$
(1)
$
105
After-tax
$
—
$
(26)
$
—
$
25
$
12
$
35
$
18
$
19
$
(1)
$
84
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
12
The Travelers Companies, Inc.
Segment Income by Major Component and Combined Ratio - Bond & Specialty Insurance
($ in millions, net of tax)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Underwriting gain
$
72
$
29
$
61
$
107
$
84
$
128
$
118
$
114
$
269
$
444
Net investment income
47
41
49
50
50
55
53
52
187
210
Other income
3
2
5
7
3
4
3
4
17
14
Segment income
$
122
$
72
$
115
$
164
$
137
$
187
$
174
$
170
$
473
$
668
Combined ratio (1)
Loss and loss adjustment expense ratio
48.8
%
57.8
%
54.0
%
45.7
%
49.9
%
42.6
%
46.3
%
47.4
%
51.5
%
46.6
%
Underwriting expense ratio
37.1
%
36.0
%
35.3
%
35.2
%
35.3
%
35.5
%
34.8
%
34.1
%
35.9
%
34.9
%
Combined ratio
85.9
%
93.8
%
89.3
%
80.9
%
85.2
%
78.1
%
81.1
%
81.5
%
87.4
%
81.5
%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development
—
%
4.7
%
—
%
(4.2)
%
(2.1)
%
(5.7)
%
(2.6)
%
(3.0)
%
—
%
(3.3)
%
Catastrophes, net of reinsurance
0.2
%
1.0
%
0.3
%
0.1
%
3.1
%
0.4
%
0.3
%
1.2
%
0.4
%
1.3
%
Underlying combined ratio
85.7
%
88.1
%
89.0
%
85.0
%
84.2
%
83.4
%
83.4
%
83.3
%
87.0
%
83.5
%
(1) General and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. See following:
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Non-insurance general and administrative expenses
$
1
$
1
$
2
$
2
$
2
$
1
$
1
$
2
$
6
$
6
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
13
The Travelers Companies, Inc.
Selected Statistics - Bond & Specialty Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
750
$
770
$
803
$
861
$
834
$
919
$
984
$
988
$
3,184
$
3,725
Net written premiums
$
663
$
734
$
754
$
800
$
723
$
854
$
894
$
905
$
2,951
$
3,376
Net earned premiums
$
667
$
693
$
723
$
740
$
743
$
776
$
806
$
813
$
2,823
$
3,138
Losses and loss adjustment expenses
325
401
390
339
371
331
373
385
1,455
1,460
Underwriting expenses
254
253
261
261
270
287
300
288
1,029
1,145
Statutory underwriting gain
88
39
72
140
102
158
133
140
339
533
Policyholder dividends
2
2
2
3
3
4
2
3
9
12
Statutory underwriting gain after policyholder dividends
$
86
$
37
$
70
$
137
$
99
$
154
$
131
$
137
$
330
$
521
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
14
The Travelers Companies, Inc.
Net Written Premiums - Bond & Specialty Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net written premiums by market
Domestic
Management Liability
$
401
$
438
$
467
$
463
$
444
$
497
$
532
$
510
$
1,769
$
1,983
Surety
215
220
208
202
200
232
241
215
845
888
Total Domestic
616
658
675
665
644
729
773
725
2,614
2,871
International
47
76
79
135
79
125
121
180
337
505
Total
$
663
$
734
$
754
$
800
$
723
$
854
$
894
$
905
$
2,951
$
3,376
Net written premiums by product line
Domestic
Fidelity & surety
$
272
$
274
$
268
$
258
$
256
$
287
$
307
$
273
$
1,072
$
1,123
General liability
289
326
339
357
340
389
401
400
1,311
1,530
Other
55
58
68
50
48
53
65
52
231
218
Total Domestic
616
658
675
665
644
729
773
725
2,614
2,871
International
47
76
79
135
79
125
121
180
337
505
Total
$
663
$
734
$
754
$
800
$
723
$
854
$
894
$
905
$
2,951
$
3,376
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
15
The Travelers Companies, Inc.
Segment Income (Loss) - Personal Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Premiums
$
2,698
$
2,527
$
2,816
$
2,886
$
2,844
$
2,960
$
3,053
$
3,126
$
10,927
$
11,983
Net investment income
103
46
115
117
119
139
133
130
381
521
Fee income
6
6
6
6
6
7
7
7
24
27
Other revenues
22
10
21
23
23
24
26
24
76
97
Total revenues
2,829
2,589
2,958
3,032
2,992
3,130
3,219
3,287
11,408
12,628
Claims and expenses
Claims and claim adjustment expenses
1,671
1,824
1,690
1,670
1,808
2,171
2,386
2,062
6,855
8,427
Amortization of deferred acquisition costs
418
423
441
454
446
470
481
495
1,736
1,892
General and administrative expenses
320
333
328
333
344
343
360
323
1,314
1,370
Total claims and expenses
2,409
2,580
2,459
2,457
2,598
2,984
3,227
2,880
9,905
11,689
Segment income (loss) before income taxes
420
9
499
575
394
146
(8)
407
1,503
939
Income tax expense (benefit)
84
(1)
107
118
80
25
(6)
80
308
179
Segment income (loss)
$
336
$
10
$
392
$
457
$
314
$
121
$
(2)
$
327
$
1,195
$
760
Other statistics
Effective tax rate on net investment income
15.8
%
9.1
%
16.2
%
16.0
%
16.4
%
17.1
%
16.8
%
16.5
%
15.2
%
16.7
%
Net investment income (after-tax)
$
87
$
41
$
96
$
99
$
99
$
116
$
111
$
108
$
323
$
434
Catastrophes, net of reinsurance:
Pre-tax
$
137
$
470
$
298
$
52
$
305
$
323
$
317
$
69
$
957
$
1,014
After-tax
$
108
$
370
$
236
$
42
$
241
$
255
$
250
$
55
$
756
$
801
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
22
$
35
$
362
$
24
$
168
$
65
$
30
$
(3)
$
443
$
260
After-tax
$
18
$
27
$
286
$
19
$
132
$
51
$
24
$
(2)
$
350
$
205
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
16
The Travelers Companies, Inc.
Segment Income (Loss) by Major Component and Combined Ratio - Personal Insurance
($ in millions, net of tax)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Underwriting gain (loss)
$
232
$
(40)
$
279
$
342
$
198
$
(12)
$
(130)
$
203
$
813
$
259
Net investment income
87
41
96
99
99
116
111
108
323
434
Other income
17
9
17
16
17
17
17
16
59
67
Segment income (loss)
$
336
$
10
$
392
$
457
$
314
$
121
$
(2)
$
327
$
1,195
$
760
Combined ratio (1)
Loss and loss adjustment expense ratio
61.9
%
72.2
%
60.0
%
57.9
%
63.6
%
73.3
%
78.2
%
66.0
%
62.8
%
70.3
%
Underwriting expense ratio
26.3
%
29.1
%
26.4
%
26.2
%
26.7
%
26.4
%
26.4
%
25.1
%
26.9
%
26.2
%
Combined ratio
88.2
%
101.3
%
86.4
%
84.1
%
90.3
%
99.7
%
104.6
%
91.1
%
89.7
%
96.5
%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development
(0.8)
%
(1.3)
%
(12.8)
%
(0.8)
%
(5.9)
%
(2.2)
%
(1.0)
%
0.1
%
(4.1)
%
(2.2)
%
Catastrophes, net of reinsurance
5.0
%
18.6
%
10.5
%
1.8
%
10.8
%
10.9
%
10.4
%
2.3
%
8.8
%
8.5
%
Underlying combined ratio
84.0
%
84.0
%
88.7
%
83.1
%
85.4
%
91.0
%
95.2
%
88.7
%
85.0
%
90.2
%
(1) Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses to conform the calculation of the combined ratio with statutory accounting. Additionally, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. See following:
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Billing and policy fees and other
$
24
$
14
$
20
$
23
$
23
$
24
$
23
$
23
$
81
$
93
Fee income
$
6
$
6
$
6
$
6
$
6
$
7
$
7
$
7
$
24
$
27
Non-insurance general and administrative expenses
$
—
$
—
$
—
$
—
$
2
$
3
$
4
$
3
$
—
$
12
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
17
The Travelers Companies, Inc.
Selected Statistics - Personal Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
2,608
$
2,854
$
3,210
$
2,847
$
2,797
$
3,322
$
3,439
$
3,132
$
11,519
$
12,690
Net written premiums
$
2,493
$
2,835
$
3,184
$
2,838
$
2,657
$
3,301
$
3,409
$
3,124
$
11,350
$
12,491
Net earned premiums
$
2,698
$
2,527
$
2,816
$
2,886
$
2,844
$
2,960
$
3,053
$
3,126
$
10,927
$
11,983
Losses and loss adjustment expenses
1,671
1,824
1,690
1,670
1,808
2,172
2,385
2,062
6,855
8,427
Underwriting expenses
692
792
808
760
755
848
880
791
3,052
3,274
Statutory underwriting gain (loss)
$
335
$
(89)
$
318
$
456
$
281
$
(60)
$
(212)
$
273
$
1,020
$
282
Policies in force (in thousands)
Automobile
2,970
2,993
3,015
3,029
3,056
3,098
3,141
3,179
3,029
3,179
Homeowners and Other
5,534
5,679
5,790
5,858
5,944
6,076
6,168
6,230
5,858
6,230
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
18
The Travelers Companies, Inc.
Net Written Premiums - Personal Insurance
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net written premiums by product line
Domestic
Automobile
$
1,333
$
1,204
$
1,484
$
1,348
$
1,375
$
1,467
$
1,529
$
1,456
$
5,369
$
5,827
Homeowners and Other
1,017
1,458
1,524
1,330
1,144
1,634
1,698
1,504
5,329
5,980
Total Domestic
2,350
2,662
3,008
2,678
2,519
3,101
3,227
2,960
10,698
11,807
International
143
173
176
160
138
200
182
164
652
684
Total
$
2,493
$
2,835
$
3,184
$
2,838
$
2,657
$
3,301
$
3,409
$
3,124
$
11,350
$
12,491
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
19
The Travelers Companies, Inc.
Selected Statistics - Personal Insurance - Automobile
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
1,447
$
1,322
$
1,609
$
1,460
$
1,481
$
1,604
$
1,656
$
1,567
$
5,838
$
6,308
Net written premiums
$
1,433
$
1,316
$
1,602
$
1,453
$
1,466
$
1,597
$
1,648
$
1,562
$
5,804
$
6,273
Net earned premiums
$
1,467
$
1,254
$
1,499
$
1,500
$
1,478
$
1,525
$
1,557
$
1,581
$
5,720
$
6,141
Losses and loss adjustment expenses
982
738
841
923
845
1,026
1,180
1,280
3,484
4,331
Underwriting expenses
354
374
381
369
370
389
399
369
1,478
1,527
Statutory underwriting gain (loss)
$
131
$
142
$
277
$
208
$
263
$
110
$
(22)
$
(68)
$
758
$
283
Other statistics
Combined ratio (1):
Loss and loss adjustment expense ratio
66.9
%
58.9
%
56.0
%
61.5
%
57.2
%
67.2
%
75.9
%
80.9
%
60.9
%
70.5
%
Underwriting expense ratio
24.3
%
28.9
%
24.3
%
24.5
%
24.6
%
24.4
%
24.1
%
23.2
%
25.4
%
24.1
%
Combined ratio
91.2
%
87.8
%
80.3
%
86.0
%
81.8
%
91.6
%
100.0
%
104.1
%
86.3
%
94.6
%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development
(0.2)
%
(1.2)
%
(1.4)
%
(1.4)
%
(5.2)
%
(2.1)
%
(0.4)
%
0.6
%
(1.0)
%
(1.7)
%
Catastrophes, net of reinsurance
0.5
%
2.9
%
0.2
%
—
%
0.4
%
1.7
%
3.4
%
(0.3)
%
0.8
%
1.3
%
Underlying combined ratio
90.9
%
86.1
%
81.5
%
87.4
%
86.6
%
92.0
%
97.0
%
103.8
%
86.5
%
95.0
%
Catastrophes, net of reinsurance:
Pre-tax
$
8
$
35
$
3
$
—
$
6
$
26
$
53
$
(5)
$
46
$
80
After-tax
$
6
$
27
$
3
$
—
$
5
$
21
$
41
$
(4)
$
36
$
63
Prior year reserve development - favorable (unfavorable):
Pre-tax
$
3
$
15
$
21
$
20
$
78
$
33
$
6
$
(10)
$
59
$
107
After-tax
$
2
$
12
$
17
$
16
$
61
$
26
$
5
$
(8)
$
47
$
84
Policies in force (in thousands)
2,970
2,993
3,015
3,029
3,056
3,098
3,141
3,179
Change from prior year quarter
(0.4)
%
0.4
%
1.2
%
1.9
%
2.9
%
3.5
%
4.2
%
5.0
%
Change from prior quarter
(0.1)
%
0.8
%
0.7
%
0.5
%
0.9
%
1.4
%
1.4
%
1.2
%
(1) Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Billing and policy fees and other
$
15
$
9
$
12
$
13
$
14
$
14
$
14
$
14
$
49
$
56
Fee income
$
3
$
4
$
4
$
3
$
3
$
4
$
4
$
4
$
14
$
15
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
20
The Travelers Companies, Inc.
Selected Statistics - Personal Insurance - Homeowners and Other
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory underwriting
Gross written premiums
$
1,161
$
1,532
$
1,601
$
1,387
$
1,316
$
1,718
$
1,783
$
1,565
$
5,681
$
6,382
Net written premiums
$
1,060
$
1,519
$
1,582
$
1,385
$
1,191
$
1,704
$
1,761
$
1,562
$
5,546
$
6,218
Net earned premiums
$
1,231
$
1,273
$
1,317
$
1,386
$
1,366
$
1,435
$
1,496
$
1,545
$
5,207
$
5,842
Losses and loss adjustment expenses
689
1,086
849
747
963
1,146
1,205
782
3,371
4,096
Underwriting expenses
338
418
427
391
385
459
481
422
1,574
1,747
Statutory underwriting gain (loss)
$
204
$
(231)
$
41
$
248
$
18
$
(170)
$
(190)
$
341
$
262
$
(1)
Other statistics
Combined ratio (1):
Loss and loss adjustment expense ratio
56.0
%
85.3
%
64.5
%
53.9
%
70.5
%
79.8
%
80.5
%
50.7
%
64.7
%
70.1
%
Underwriting expense ratio
28.6
%
29.3
%
28.7
%
28.1
%
28.9
%
28.5
%
28.8
%
27.1
%
28.7
%
28.3
%
Combined ratio
84.6
%
114.6
%
93.2
%
82.0
%
99.4
%
108.3
%
109.3
%
77.8
%
93.4
%
98.4
%
Impact on combined ratio:
Net favorable prior year reserve development
(1.6)
%
(1.5)
%
(25.9)
%
(0.3)
%
(6.6)
%
(2.2)
%
(1.6)
%
(0.4)
%
(7.4)
%
(2.6)
%
Catastrophes, net of reinsurance
10.5
%
34.1
%
22.3
%
3.8
%
21.9
%
20.6
%
17.6
%
4.8
%
17.5
%
16.0
%
Underlying combined ratio
75.7
%
82.0
%
96.8
%
78.5
%
84.1
%
89.9
%
93.3
%
73.4
%
83.3
%
85.0
%
Catastrophes, net of reinsurance:
Pre-tax
$
129
$
435
$
295
$
52
$
299
$
297
$
264
$
74
$
911
$
934
After-tax
$
102
$
343
$
233
$
42
$
236
$
234
$
209
$
59
$
720
$
738
Prior year reserve development - favorable:
Pre-tax
$
19
$
20
$
341
$
4
$
90
$
32
$
24
$
7
$
384
$
153
After-tax
$
16
$
15
$
269
$
3
$
71
$
25
$
19
$
6
$
303
$
121
Policies in force (in thousands)
5,534
5,679
5,790
5,858
5,944
6,076
6,168
6,230
Change from prior year quarter
7.2
%
7.9
%
8.0
%
7.6
%
7.4
%
7.0
%
6.5
%
6.4
%
Change from prior quarter
1.7
%
2.6
%
2.0
%
1.2
%
1.5
%
2.2
%
1.5
%
1.0
%
(1) Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Billing and policy fees and other
$
9
$
5
$
8
$
10
$
9
$
10
$
9
$
9
$
32
$
37
Fee income
$
3
$
2
$
2
$
3
$
3
$
3
$
3
$
3
$
10
$
12
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
21
The Travelers Companies, Inc.
Interest Expense and Other
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Revenues
Other revenues
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Claims and expenses
Interest expense
84
85
87
83
82
83
87
88
339
340
General and administrative expenses
7
9
6
9
6
8
8
7
31
29
Total claims and expenses
91
94
93
92
88
91
95
95
370
369
Loss before income tax benefit
(91)
(94)
(93)
(92)
(88)
(91)
(95)
(95)
(370)
(369)
Income tax benefit
(20)
(20)
(19)
(20)
(19)
(19)
(20)
(20)
(79)
(78)
Loss
$
(71)
$
(74)
$
(74)
$
(72)
$
(69)
$
(72)
$
(75)
$
(75)
$
(291)
$
(291)
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
22
The Travelers Companies, Inc.
Consolidated Balance Sheet
($ in millions)
December 31, 2021 (1)
December 31, 2020
Assets
Fixed maturities, available for sale, at fair value (amortized cost $74,751 and $68,830; allowance for expected credit losses of $3 and $2)
$
77,810
$
74,003
Equity securities, at fair value (cost $749 and $415)
893
484
Real estate investments
979
1,026
Short-term securities
3,836
5,511
Other investments
3,857
3,399
Total investments
87,375
84,423
Cash
761
721
Investment income accrued
615
603
Premiums receivable (net of allowance for expected credit losses of $107 and $105)
8,085
7,829
Reinsurance recoverables (net of allowance for estimated uncollectible reinsurance of $141 and $146)
8,452
8,350
Ceded unearned premiums
902
772
Deferred acquisition costs
2,542
2,358
Contractholder receivables (net of allowance for expected credit losses of $21 and $19)
3,890
4,242
Goodwill
4,008
3,976
Other intangible assets
306
317
Other assets
3,530
3,173
Total assets
$
120,466
$
116,764
Liabilities
Claims and claim adjustment expense reserves
$
56,907
$
54,521
Unearned premium reserves
16,469
15,222
Contractholder payables
3,911
4,261
Payables for reinsurance premiums
384
356
Deferred taxes
289
558
Debt
7,290
6,550
Other liabilities
6,329
6,095
Total liabilities
91,579
87,563
Shareholders’ equity
Common stock (1,750.0 shares authorized; 241.2 and 252.4 shares issued and outstanding)
24,154
23,743
Retained earnings
41,555
38,771
Accumulated other comprehensive income
1,193
2,502
Treasury stock, at cost (541.5 and 527.3 shares)
(38,015)
(35,815)
Total shareholders’ equity
28,887
29,201
Total liabilities and shareholders’ equity
$
120,466
$
116,764
(1) Preliminary
Certain prior period amounts have been reclassified to conform to the 2021 presentation.
Net unrealized investment gains, net of tax, included in shareholders’ equity
$
2,415
$
4,074
(1) Yields are provided for those investments with an embedded book yield.
Certain prior period amounts have been reclassified to conform to the 2021 presentation.
24
The Travelers Companies, Inc.
Investment Portfolio - Fixed Maturities Data
(at carrying value, $ in millions)
December 31, 2021
December 31, 2020
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies
$
3,562
$
2,149
Obligations of states and political subdivisions:
Pre-refunded
4,032
3,544
All other
32,830
32,816
Total
36,862
36,360
Debt securities issued by foreign governments
1,041
1,054
Mortgage-backed securities - principally obligations of U.S. Government agencies
1,817
2,361
Corporates (including redeemable preferreds)
34,528
32,079
Total fixed maturities
$
77,810
$
74,003
Fixed Maturities
Quality Characteristics (1)
December 31, 2021
December 31, 2020
Amount
% of Total
Amount
% of Total
Quality Ratings
Aaa
$
33,323
42.8
%
$
31,653
42.8
%
Aa
18,140
23.3
18,327
24.8
A
14,757
19.0
12,944
17.5
Baa
10,483
13.5
9,738
13.1
Total investment grade
76,703
98.6
72,662
98.2
Ba
742
0.9
870
1.2
B
293
0.4
366
0.5
Caa and lower
72
0.1
105
0.1
Total below investment grade
1,107
1.4
1,341
1.8
Total fixed maturities
$
77,810
100.0
%
$
74,003
100.0
%
Average weighted quality
Aa2, AA
Aa2, AA
Weighted average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases
4.2
3.8
(1) Rated using external rating agencies or by Travelers when a public rating does not exist. Below investment grade assets refer to securities rated “Ba” or below.
25
The Travelers Companies, Inc.
Investment Income
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Gross investment income
Fixed maturities
$
511
$
498
$
502
$
500
$
491
$
493
$
497
$
508
$
2,011
$
1,989
Short-term securities
22
13
6
3
3
1
2
1
44
7
Other
88
(234)
173
182
218
335
281
243
209
1,077
621
277
681
685
712
829
780
752
2,264
3,073
Investment expenses
10
9
10
8
11
11
9
9
37
40
Net investment income, pre-tax
611
268
671
677
701
818
771
743
2,227
3,033
Income taxes
92
17
105
105
111
136
126
119
319
492
Net investment income, after-tax
$
519
$
251
$
566
$
572
$
590
$
682
$
645
$
624
$
1,908
$
2,541
Effective tax rate
15.1
%
6.2
%
15.6
%
15.4
%
15.9
%
16.7
%
16.3
%
16.0
%
14.3
%
16.2
%
Average invested assets (1)
$76,191
$76,635
$78,722
$80,373
$81,209
$82,594
$84,647
$85,806
$78,070
$83,574
Average yield pre-tax (1)
3.2
%
1.4
%
3.4
%
3.4
%
3.5
%
4.0
%
3.6
%
3.5
%
2.9
%
3.6
%
Average yield after-tax
2.7
%
1.3
%
2.9
%
2.8
%
2.9
%
3.3
%
3.0
%
2.9
%
2.4
%
3.0
%
(1) Excludes net unrealized investment gains (losses), and is adjusted for cash, receivables for investment sales, payables on investment purchases and accrued investment income.
26
The Travelers Companies, Inc.
Net Realized and Unrealized Investment Gains (Losses) included in Shareholders' Equity
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Net realized investment gains (losses)
Fixed maturities
$
(2)
$
10
$
23
$
21
$
14
$
24
$
12
$
17
$
52
$
67
Equity securities
(82)
44
16
38
26
32
(1)
38
16
95
Other (1)
(14)
(41)
(2)
(9)
4
5
(3)
3
(66)
9
Realized investment gains (losses) before tax
(98)
13
37
50
44
61
8
58
2
171
Related taxes
(22)
3
8
2
10
14
1
14
(9)
39
Net realized investment gains (losses)
$
(76)
$
10
$
29
$
48
$
34
$
47
$
7
$
44
$
11
$
132
Gross investment gains (1)
$
31
$
69
$
41
$
64
$
50
$
72
$
24
$
66
$
205
$
212
Gross investment losses before impairments (1)
(113)
(10)
(8)
(17)
(6)
(11)
(15)
(7)
(148)
(39)
Net investment gains (losses) before impairments
(82)
59
33
47
44
61
9
59
57
173
Net credit impairment (charges) recoveries
(16)
(46)
4
3
—
—
(1)
(1)
(55)
(2)
Net realized investment gains (losses) before tax
(98)
13
37
50
44
61
8
58
2
171
Related taxes
(22)
3
8
2
10
14
1
14
(9)
39
Net realized investment gains (losses)
$
(76)
$
10
$
29
$
48
$
34
$
47
$
7
$
44
$
11
$
132
($ in millions)
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
Net unrealized investment gains, net of tax, included in shareholders’ equity, by asset type
Fixed maturities
$
2,271
$
4,632
$
4,842
$
5,175
$
3,577
$
4,113
$
3,428
$
3,062
Other
2
2
2
—
2
(1)
(2)
(2)
Unrealized investment gains before tax
2,273
4,634
4,844
5,175
3,579
4,112
3,426
3,060
Related taxes
488
988
1,032
1,101
762
873
727
645
Balance, end of period
$
1,785
$
3,646
$
3,812
$
4,074
$
2,817
$
3,239
$
2,699
$
2,415
(1) Includes the following gross investment gains and gross investment losses related to U.S. Treasury futures, which are settled daily:
Gross investment Treasury future gains
$
5
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
5
$
—
Gross investment Treasury future losses
$
12
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
12
$
—
The Company entered into these arrangements as part of its strategy to manage the duration of its fixed maturity portfolio. In a changing interest rate environment, the change in the value of the futures contracts can be expected to partially offset changes in the value of the fixed maturity portfolio.
Certain prior period amounts have been reclassified to conform to the 2021 presentation.
27
The Travelers Companies, Inc.
Reinsurance Recoverables
($ in millions)
December 31, 2021
December 31, 2020
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses (1)
$
3,931
$
3,731
Gross structured settlements (2)
2,900
2,964
Mandatory pools and associations (3)
1,762
1,801
Gross reinsurance recoverables (4)
8,593
8,496
Allowance for estimated uncollectible reinsurance (5)
(141)
(146)
Net reinsurance recoverables
$
8,452
$
8,350
(1) The Company’s top five reinsurer groups, including retroactive reinsurance, included in gross reinsurance recoverables is as follows:
Reinsurer
A.M. Best Rating of Group's Predominant Reinsurer
December 31, 2021
Swiss Re Group
A+ second highest of 16 ratings
$
531
Munich Re Group
A+ second highest of 16 ratings
297
Berkshire Hathaway
A++ highest of 16 ratings
289
Alleghany Group
A+ second highest of 16 ratings
244
Axa Group
A+ second highest of 16 ratings
187
The gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and incurred but not reported claims. The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves. Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.
(2) Included in reinsurance recoverables are certain amounts related to structured settlements, which comprise annuities purchased from various life insurance companies to settle certain personal physical injury claims, of which workers’ compensation claims comprise a significant portion. In cases where the Company did not receive a release from the claimant, the amounts due from the life insurance company related to the structured settlement are included in both the claims and claim adjustment expense reserves and reinsurance recoverables in the Company’s consolidated balance sheet, as the Company retains the liability to pay the claimant in the event that the life insurance company fails to make the required annuity payments. The Company would be required to make such payments, to the extent the purchased annuities are not covered by state guaranty associations.
The Company’s top five groups included in gross structured settlements is as follows:
Group
A.M. Best Rating of Group's Predominant Insurer
December 31, 2021
Fidelity & Guaranty Life Group
A- fourth highest of 16 ratings
$
724
Genworth Financial Group
B seventh highest of 16 ratings
307
John Hancock Group
A+ second highest of 16 ratings
264
Symetra Financial Corporation
A third highest of 16 ratings
222
Brighthouse Financial, Inc.
A third highest of 16 ratings
220
(3) The mandatory pools and associations represent various involuntary assigned risk pools that the Company is required to participate in. These pools principally involve workers’ compensation and automobile insurance, which provide various insurance coverages to insureds that otherwise are unable to purchase coverage in the open market. The costs of these mandatory pools in most states are usually charged back to the participating members in proportion to voluntary writings of related business in that state. In the event that a member of the pool becomes insolvent, the remaining members assume an additional pro rata share of the pool’s liabilities.
(4) Of the total reinsurance recoverables at December 31, 2021, after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance, $5.93 billion, or 87%, were rated by A.M. Best Company. The Company utilizes updated A.M. Best credit ratings on a quarterly basis when determining the allowance. Of the total rated by A.M. Best Company, 94% were rated A- or better. The remaining 13% of reinsurance recoverables were comprised of the following: 6% related to captive insurance companies, 1% related to the Company’s participation in voluntary pools and 6% were balances from other companies not rated by A.M. Best Company. Certain of the Company's reinsurance recoverables are collateralized by letters of credit, funds held or trust agreements.
(5) The Company reports its reinsurance recoverables net of an allowance for estimated uncollectible reinsurance. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses and other relevant factors. For structured settlements, the allowance is also based upon the Company’s ongoing review of life insurers’ creditworthiness and estimated amounts of coverage that would be available from state guaranty funds if a life insurer defaults. A probability-of-default methodology which reflects current and forecasted economic conditions is used to estimate the amount of uncollectible reinsurance due to credit-related factors and the estimate is reported in an allowance for estimated uncollectible reinsurance. The allowance also includes estimated uncollectible amounts related to dispute risk with reinsurers.
28
The Travelers Companies, Inc.
Net Reserves for Losses and Loss Adjustment Expense
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Statutory Reserves for Losses and Loss Adjustment Expenses
Business Insurance
Beginning of period
$
35,142
$
35,415
$
36,210
$
36,946
$
36,999
$
37,694
$
38,010
$
38,342
$
35,142
$
36,999
Incurred
2,737
2,828
2,750
2,282
2,741
2,500
2,657
2,326
10,597
10,224
Paid
(2,364)
(2,067)
(2,054)
(2,296)
(2,056)
(2,196)
(2,288)
(2,438)
(8,781)
(8,978)
Foreign exchange and other
(100)
34
40
67
10
12
(37)
3
41
(12)
End of period
$
35,415
$
36,210
$
36,946
$
36,999
$
37,694
$
38,010
$
38,342
$
38,233
$
36,999
$
38,233
Bond & Specialty Insurance
Beginning of period
$
3,094
$
3,085
$
3,276
$
3,447
$
3,571
$
3,691
$
3,770
$
3,892
$
3,094
$
3,571
Incurred
325
401
390
339
371
331
373
385
1,455
1,460
Paid
(300)
(216)
(237)
(243)
(256)
(254)
(235)
(341)
(996)
(1,086)
Foreign exchange and other
(34)
6
18
28
5
2
(16)
2
18
(7)
End of period
$
3,085
$
3,276
$
3,447
$
3,571
$
3,691
$
3,770
$
3,892
$
3,938
$
3,571
$
3,938
Personal Insurance
Beginning of period
$
5,507
$
5,413
$
5,626
$
5,788
$
5,677
$
5,768
$
6,113
$
6,428
$
5,507
$
5,677
Incurred
1,671
1,824
1,690
1,670
1,808
2,172
2,385
2,062
6,855
8,427
Paid
(1,693)
(1,644)
(1,546)
(1,816)
(1,730)
(1,837)
(2,051)
(2,075)
(6,699)
(7,693)
Foreign exchange and other
(72)
33
18
35
13
10
(19)
3
14
7
End of period
$
5,413
$
5,626
$
5,788
$
5,677
$
5,768
$
6,113
$
6,428
$
6,418
$
5,677
$
6,418
Total
Beginning of period
$
43,743
$
43,913
$
45,112
$
46,181
$
46,247
$
47,153
$
47,893
$
48,662
$
43,743
$
46,247
Incurred
4,733
5,053
4,830
4,291
4,920
5,003
5,415
4,773
18,907
20,111
Paid
(4,357)
(3,927)
(3,837)
(4,355)
(4,042)
(4,287)
(4,574)
(4,854)
(16,476)
(17,757)
Foreign exchange and other
(206)
73
76
130
28
24
(72)
8
73
(12)
End of period
$
43,913
$
45,112
$
46,181
$
46,247
$
47,153
$
47,893
$
48,662
$
48,589
$
46,247
$
48,589
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos
$
—
$
—
$
295
$
—
$
—
$
—
$
225
$
—
$
295
$
225
All other
(5)
—
(75)
(124)
(134)
(73)
(117)
(74)
(204)
(398)
Total Business Insurance (1)
(5)
—
220
(124)
(134)
(73)
108
(74)
91
(173)
Bond & Specialty Insurance
—
33
—
(32)
(15)
(44)
(22)
(24)
1
(105)
Personal Insurance
(22)
(35)
(362)
(24)
(168)
(65)
(30)
3
(443)
(260)
Total
$
(27)
$
(2)
$
(142)
$
(180)
$
(317)
$
(182)
$
56
$
(95)
$
(351)
$
(538)
(1) Excludes accretion of discount.
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
29
The Travelers Companies, Inc.
Asbestos Reserves
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Asbestos reserves
Beginning reserves:
Gross
$
1,601
$
1,530
$
1,470
$
1,772
$
1,668
$
1,616
$
1,565
$
1,777
$
1,601
$
1,668
Ceded
(322)
(316)
(301)
(365)
(330)
(327)
(315)
(369)
(322)
(330)
Net
1,279
1,214
1,169
1,407
1,338
1,289
1,250
1,408
1,279
1,338
Incurred losses and loss expenses:
Gross
—
—
362
—
—
—
287
—
362
287
Ceded
—
—
(67)
—
—
—
(62)
—
(67)
(62)
Paid loss and loss expenses:
Gross
69
60
61
105
52
51
75
89
295
267
Ceded
(6)
(15)
(2)
(35)
(3)
(12)
(8)
(23)
(58)
(46)
Foreign exchange and other:
Gross
(2)
—
1
1
—
—
—
(1)
—
(1)
Ceded
—
—
1
—
—
—
—
—
1
—
Ending reserves:
Gross
1,530
1,470
1,772
1,668
1,616
1,565
1,777
1,687
1,668
1,687
Ceded
(316)
(301)
(365)
(330)
(327)
(315)
(369)
(346)
(330)
(346)
Net
$
1,214
$
1,169
$
1,407
$
1,338
$
1,289
$
1,250
$
1,408
$
1,341
$
1,338
$
1,341
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
30
The Travelers Companies, Inc.
Capitalization
($ in millions)
December 31, 2021
December 31, 2020
Debt
Short-term debt
Commercial paper
$
100
$
100
Total short-term debt
100
100
Long-term debt
7.75% Senior notes due April 15, 2026
200
200
7.625% Junior subordinated debentures due December 15, 2027
125
125
6.375% Senior notes due March 15, 2033 (1)
500
500
6.75% Senior notes due June 20, 2036 (1)
400
400
6.25% Senior notes due June 15, 2037 (1)
800
800
5.35% Senior notes due November 1, 2040 (1)
750
750
4.60% Senior notes due August 1, 2043 (1)
500
500
4.30% Senior notes due August 25, 2045 (1)
400
400
8.50% Junior subordinated debentures due December 15, 2045
56
56
3.75% Senior notes due May 15, 2046 (1)
500
500
8.312% Junior subordinated debentures due July 1, 2046
73
73
4.00% Senior notes due May 30, 2047 (1)
700
700
4.05% Senior notes due March 7, 2048 (1)
500
500
4.10% Senior notes due March 4, 2049 (1)
500
500
2.55% Senior notes due April 27, 2050 (1)
500
500
3.05% Senior notes due June 8, 2051 (1)
750
—
Total long-term debt
7,254
6,504
Unamortized fair value adjustment
39
41
Unamortized debt issuance costs
(103)
(95)
7,190
6,450
Total debt
7,290
6,550
Common equity (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)
26,472
25,127
Total capital (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)
$
33,762
$
31,677
Total debt to capital (excluding net unrealized investment gains, net of tax, included in shareholders’ equity)
21.6
%
20.7
%
(1) Redeemable anytime with “make-whole” premium.
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
31
The Travelers Companies, Inc.
Statutory Capital and Surplus to GAAP Shareholders' Equity Reconciliation
($ in millions)
December 31, 2021 (1)
December 31, 2020
Statutory capital and surplus
$
23,906
$
22,180
GAAP adjustments
Goodwill and intangible assets
3,557
3,568
Investments
3,261
5,337
Noninsurance companies
(4,230)
(3,730)
Deferred acquisition costs
2,542
2,358
Deferred federal income tax
(1,274)
(1,585)
Current federal income tax
(39)
(42)
Reinsurance recoverables
87
55
Furniture, equipment & software
770
841
Agents balances
147
168
Other
160
51
Total GAAP adjustments
4,981
7,021
GAAP shareholders’ equity
$
28,887
$
29,201
(1) Estimated and Preliminary
See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.
32
The Travelers Companies, Inc.
Statement of Cash Flows - Preliminary
($ in millions)
1Q2020
2Q2020
3Q2020
4Q2020
1Q2021
2Q2021
3Q2021
4Q2021
YTD 4Q2020
YTD 4Q2021
Cash flows from operating activities
Net income (loss)
$
600
$
(40)
$
827
$
1,310
$
733
$
934
$
662
$
1,333
$
2,697
$
3,662
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment (gains) losses
98
(13)
(37)
(50)
(44)
(61)
(8)
(58)
(2)
(171)
Depreciation and amortization
203
188
186
212
235
215
212
208
789
870
Deferred federal income tax expense (benefit)
6
(77)
4
38
56
1
4
1
(29)
62
Amortization of deferred acquisition costs
1,178
1,173
1,207
1,215
1,207
1,254
1,281
1,301
4,773
5,043
Equity in (income) loss from other investments
(67)
253
(154)
(162)
(200)
(313)
(261)
(219)
(130)
(993)
Premiums receivable
(326)
(245)
247
418
(333)
(385)
256
204
94
(258)
Reinsurance recoverables
(15)
75
(210)
(12)
12
142
(134)
(121)
(162)
(101)
Deferred acquisition costs
(1,215)
(1,238)
(1,241)
(1,160)
(1,258)
(1,343)
(1,354)
(1,272)
(4,854)
(5,227)
Claims and claim adjustment expense reserves
388
1,067
1,218
(51)
777
536
986
89
2,622
2,388
Unearned premium reserves
414
229
317
(368)
509
459
492
(211)
592
1,249
Other
(636)
292
(38)
511
(504)
410
407
437
129
750
Net cash provided by operating activities
628
1,664
2,326
1,901
1,190
1,849
2,543
1,692
6,519
7,274
Cash flows from investing activities
Proceeds from maturities of fixed maturities
1,461
1,610
2,170
2,146
2,064
2,283
2,176
2,329
7,387
8,852
Proceeds from sales of investments:
Fixed maturities
388
832
774
1,063
1,238
1,244
382
301
3,057
3,165
Equity securities
38
21
22
35
25
20
29
28
116
102
Real estate investments
—
—
—
—
—
—
7
24
—
31
Other investments
59
75
45
97
79
116
80
152
276
427
Purchases of investments:
Fixed maturities
(2,630)
(2,160)
(5,161)
(4,122)
(4,754)
(4,708)
(4,894)
(3,797)
(14,073)
(18,153)
Equity securities
(35)
(24)
(36)
(32)
(19)
(22)
(334)
(32)
(127)
(407)
Real estate investments
(16)
(8)
(9)
(80)
(5)
(9)
(8)
(6)
(113)
(28)
Other investments
(103)
(125)
(78)
(166)
(97)
(124)
(115)
(184)
(472)
(520)
Net sales (purchases) of short-term securities
906
(2,053)
(240)
821
524
(718)
948
917
(566)
1,671
Securities transactions in course of settlement
85
9
428
(569)
269
(40)
178
(426)
(47)
(19)
Acquisition, net of cash acquired
—
—
—
—
(38)
—
—
—
—
(38)
Other
(69)
(75)
(78)
(108)
(60)
(53)
(86)
(80)
(330)
(279)
Net cash provided by (used in) investing activities
84
(1,898)
(2,163)
(915)
(774)
(2,011)
(1,637)
(774)
(4,892)
(5,196)
Certain prior period amounts have been reclassified to conform to the 2021 presentation.
Treasury stock acquired - net employee share-based compensation
(46)
—
—
(1)
(41)
(1)
(1)
(1)
(47)
(44)
Dividends paid to shareholders
(210)
(216)
(217)
(218)
(214)
(222)
(219)
(214)
(861)
(869)
Payment of debt
—
—
—
(500)
—
—
—
—
(500)
—
Issuance of debt
—
490
—
—
—
739
—
—
490
739
Issuance of common stock - employee share options
31
34
7
55
134
72
50
37
127
293
Net cash provided by (used in) financing activities
(650)
308
(210)
(864)
(477)
188
(770)
(978)
(1,416)
(2,037)
Effect of exchange rate changes on cash
(12)
5
7
16
3
—
(7)
3
16
(1)
Net increase (decrease) in cash
50
79
(40)
138
(58)
26
129
(57)
227
40
Cash at beginning of period
494
544
623
583
721
663
689
818
494
721
Cash at end of period
$
544
$
623
$
583
$
721
$
663
$
689
$
818
$
761
$
721
$
761
Income taxes paid
$
15
$
2
$
396
$
165
$
58
$
284
$
201
$
164
$
578
$
707
Interest paid
$
60
$
106
$
60
$
113
$
59
$
104
$
59
$
115
$
339
$
337
34
The Travelers Companies, Inc.
Glossary of Financial Measures and Description of Reportable Business Segments
The following measures are used by the Company’s management to evaluate financial performance against historical results, to establish performance targets on a consolidated basis, and for other reasons as discussed below. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated financial statements or are not required to be disclosed in the notes to financial statements or, in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure.
In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance.
Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, included in shareholders’ equity, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.
Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.
Core income (loss) is consolidated net income (loss) excluding the after-tax impact of net realized investment gains (losses), discontinued operations, the effect of a change in tax laws and tax rates at enactment, and cumulative effect of changes in accounting principles when applicable. Segment income (loss) is determined in the same manner as core income (loss) on a segment basis. Management uses segment income (loss) to analyze each segment’s performance and as a tool in making business decisions. Financial statement users also consider core income (loss) when analyzing the results and trends of insurance companies. Core income (loss) per share is core income (loss) on a per common share basis.
Average shareholders’ equity is (a) the sum of total shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two. Adjusted shareholders’ equity is shareholders’ equity excluding net realized investment gains (losses), net of tax, net unrealized investment gains (losses), net of tax, included in shareholders’ equity for the periods presented and the effect of a change in tax laws and tax rates at enactment (excluding the portion related to net unrealized investment gains (losses)). Adjusted average shareholders’ equity is (a) the sum of total adjusted shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
Reconciliation of Shareholders’ Equity to Adjusted Shareholders’ Equity
As of
($ in millions)
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
December 31, 2021
Shareholders’ equity
$
25,204
$
26,943
$
27,849
$
29,201
$
28,269
$
29,156
$
28,474
$
28,887
Adjustments:
Net unrealized investment gains, net of tax, included in shareholders’ equity
(1,785)
(3,646)
(3,812)
(4,074)
(2,817)
(3,239)
(2,699)
(2,415)
Net realized investment (gains) losses, net of tax
76
66
37
(11)
(34)
(81)
(88)
(132)
Impact of changes in tax laws and/or tax rates (1)
—
—
—
—
—
(8)
(8)
(8)
Adjusted shareholders’ equity
$
23,495
$
23,363
$
24,074
$
25,116
$
25,418
$
25,828
$
25,679
$
26,332
(1) Impact is recognized in the accounting period in which the change is enacted
Return on equity is the ratio of annualized net income (loss) to average shareholders’ equity for the periods presented. Core return on equity is the ratio of annualized core income (loss) to adjusted average shareholders’ equity for the periods presented. In the opinion of the Company’s management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.
Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. In the opinion of the Company’s management, it is important to measure the profitability of each segment excluding the results of investing activities, which are managed separately from the insurance business. This measure is used to assess each segment’s business performance and as a tool in making business decisions.
A catastrophe is a severe loss designated a catastrophe 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. Catastrophes can be caused by various natural events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis, volcanic eruptions and other naturally-occurring events, such as solar flares. Catastrophes can also be man-made, such as terrorist attacks and other intentionally destructive acts including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and core income and claims and claim adjustment expense reserves upon occurrence. A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools. The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is exceeded and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company. Additionally, an aggregate threshold is applied for international business across all reportable segments. The threshold for 2021 ranges from $20 million to $30 million of losses before reinsurance and taxes.
Net favorable (unfavorable) prior year loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims, which may be related to one or more prior years. In the opinion of the Company’s management, a discussion of loss reserve development is meaningful to
35
The Travelers Companies, Inc.
Glossary of Financial Measures and Description of Reportable Business Segments
users of the financial statements as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and core income (loss), and changes in claims and claim adjustment expense reserve levels from period to period.
Combined ratio For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators. The combined ratio, as used in this financial supplement, is the equivalent of, and is calculated in the same manner as, the SAP combined ratio except that the SAP underwriting expense ratio is based on net written premiums and the underwriting expense ratio as used in this financial supplement is based on net earned premiums. For SAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses less certain administrative services fee income to net earned premiums as defined in the statutory financial statements required by insurance regulators. The loss and LAE ratio as used in this financial supplement is calculated in the same manner as the SAP ratio. For SAP, the underwriting expense ratio is the ratio of underwriting expenses incurred (including commissions paid), less certain administrative services fee income and billing and policy fees and other, to net written premiums as defined in the statutory financial statements required by insurance regulators. The underwriting expense ratio as used in this financial supplement, is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income and billing and policy fees, to net earned premiums. Underlying combined ratio is the combined ratio adjusted to exclude the impact of prior year reserve development and catastrophes, net of reinsurance.
The combined ratio, loss and LAE ratio, and underwriting expense ratio are used as indicators of the Company’s underwriting discipline, efficiency in acquiring and servicing its business and overall underwriting profitability. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
Other companies’ method of computing similarly titled measures may not be comparable to the Company’s method of computing these ratios.
Gross written premiums reflect the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. Net written premiums reflect gross written premiums less premiums ceded to reinsurers.
Book value per share is total common shareholders’ equity divided by the number of common shares outstanding. Adjusted book value per share is total common shareholders’ equity excluding net unrealized investment gains and losses, net of tax, included in shareholders’ equity, divided by the number of common shares outstanding. In the opinion of the Company’s management, adjusted book value per share is useful in an analysis of a property casualty company’s book value per share as it removes the effect of changing prices on invested assets, (i.e., net unrealized investment gains (losses), net of tax) which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves.
Total capital is the sum of total shareholders’ equity and debt. Debt-to-capital ratio excluding net unrealized gain (loss) on investments, net of tax, included in shareholders’ equity is the ratio of debt to total capital excluding net unrealized investment gains and losses, net of tax, included in shareholders’ equity. In the opinion of the Company’s management, the debt to capital ratio is useful in an analysis of the Company’s financial leverage.
Statutory capital and surplus represents the excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.
Travelers has organized its businesses into the following reportable business segments:
Business Insurance - Business Insurance offers a broad array of property and casualty insurance and insurance-related services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyd’s. Business Insurance is organized as follows: Select Accounts; Middle Market including Commercial Accounts, Construction, Technology, Public Sector Services, Oil & Gas, Excess Casualty, Inland Marine, Ocean Marine, and Boiler & Machinery; National Accounts; National Property and Other including National Property, Northland Transportation, Northfield, National Programs, and Agribusiness; and International including Global Services. Business Insurance also includes Simply Business, a leading provider of small business insurance policies primarily in the United Kingdom that was acquired in August 2017, as well as Business Insurance Other, which primarily comprises the Company’s asbestos and environmental liabilities, and the assumed reinsurance and certain other runoff operations.
Bond & Specialty Insurance - Bond & Specialty Insurance provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers in the United States and certain specialty insurance products in Canada, the United Kingdom, the Republic of Ireland and Brazil (through a joint venture as described below), utilizing various degrees of financially-based underwriting approaches. The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction and general commercial enterprises; management liability coverages including directors’ and officers’ liability, employee dishonesty, employment practices liability, fiduciary liability and cyber risk for public corporations, private companies, not-for-profit organizations and financial institutions; professional liability coverage for a variety of professionals including, among others, lawyers and design professionals; and in the United States only, property, workers’ compensation, auto and general liability for financial institutions.
Bond & Specialty Insurance surety business in Brazil and Colombia is conducted through Junto Holding Brasil S.A. (Junto) and Junto Holding Latam S.A. in Brazil. The Company owns 49.5% of both Junto, a market leader in surety coverages in Brazil, and Junto Holding Latam S.A., a Colombian start-up surety provider. These joint venture investments are accounted for using the equity method and are included in “other investments” on the consolidated balance sheet.
Personal Insurance - Personal Insurance writes a broad range of property and casualty insurance covering individuals’ personal risks, primarily in the United States, as well as in Canada. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.
