8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________

FORM 8-K

______________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 19, 2022

_______________________________________________

The Travelers Companies, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________

Minnesota	001-10898	41-0518860
(State or other jurisdiction of<br>incorporation)	(Commission File Number)	(I.R.S. Employer<br>Identification No.)

485 Lexington Avenue

New York, New York 10017

(Address of principal executive offices) (Zip Code)

(917) 778-6000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, without par value	TRV	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02.  Results of Operations and Financial Condition.

On October 19, 2022, The Travelers Companies, Inc. (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended September 30, 2022, and the availability of the Company’s third quarter financial supplement on the Company’s web site.  The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(d)                                 Exhibits.

Exhibit No.	Description
99.1	Press Release, datedOctobera991pressrelease93022.htm19, 2022, reporting results of operations (This exhibit is furnished and not filed.)
99.2	ThirdQuarter 2022 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.)
101.1	Pursuant to Rule 406 of Regulation S-T, the cover page to this Current Report on Form 8-K is formatted in Inline XBRL.
104.1	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1.)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, The Travelers Companies, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			THE TRAVELERS COMPANIES, INC.
Date:	October 19, 2022	By:	/S/   CHRISTINE K. KALLA
			Name: Christine K. Kalla
			Executive Vice President and General Counsel

Document

                                            Exhibit 99.1

The Travelers Companies, Inc.

485 Lexington Avenue

New York, NY 10017-2630

www.travelers.com

NYSE: TRV

Travelers Reports Third Quarter 2022 Net Income of $454 million and Core Income of $526 million,

Strong Results in Light of Hurricane Ian

Strong Year-to-Date 2022 Return on Equity of 11.1% and Core Return on Equity of 10.9%

Third Quarter 2022 Net Income per Diluted Share of $1.89 and Return on Equity of 8.5%

Third Quarter 2022 Core Income per Diluted Share of $2.20 and Core Return on Equity of 7.9%

•Consolidated combined ratio of 98.2% and underlying combined ratio of 92.5%.

•Catastrophe losses of $512 million pre-tax compared to $501 million pre-tax in the prior year quarter.

•Record net written premiums of $9.198 billion, up 10% compared to the prior year quarter.

•Net written premium growth in all three segments compared to the prior year quarter; Business Insurance up 9%, Bond & Specialty Insurance up 8% and Personal Insurance up 13%.

•Total capital returned to shareholders of $722 million, including $501 million of share repurchases.

•Book value per share of $84.94, down 27% from September 30, 2021, driven by higher interest rates; adjusted book value per share of $111.90, up 7% from September 30, 2021.

•Board of Directors declares regular cash dividend of $0.93 per share.

New York, October 19, 2022 — The Travelers Companies, Inc. today reported net income of $454 million, or $1.89 per diluted share, for the quarter ended September 30, 2022, compared to $662 million, or $2.62 per diluted share, in the prior year quarter. Core income in the current quarter was $526 million, or $2.20 per diluted share, compared to $655 million, or $2.60 per diluted share, in the prior year quarter. Core income decreased primarily due to lower net investment income and a lower underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), partially offset by net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year quarter. Net realized investment losses in the current quarter were $93 million pre-tax ($72 million after-tax), compared to net realized investment gains of $8 million pre-tax ($7 million after-tax) in the prior year quarter. Per diluted share amounts benefited from the impact of share repurchases.

Consolidated Highlights

( in millions, except for per share amounts, and after-tax, except for premiums and revenues)	Three Months Ended September 30,												Nine Months Ended September 30,
				2021				Change				2022				2021				Change
Net written premiums	$	9,198			$	8,324			10	%			$	26,585			$	23,964			11	%
Total revenues	$	9,303			$	8,805			6				$	27,248			$	25,805			6
Net income	$	454			$	662			(31)				$	2,023			$	2,329			(13)
per diluted share	$	1.89			$	2.62			(28)				$	8.34			$	9.16			(9)
Core income	$	526			$	655			(20)				$	2,188			$	2,233			(2)
per diluted share	$	2.20			$	2.60			(15)				$	9.02			$	8.78			3
Diluted weighted average shares outstanding	237.9				250.1				(5)				240.9				252.4				(5)
Combined ratio	98.2		%		98.6		%		(0.4)		pts		96.0		%		96.8		%		(0.8)		pts
Underlying combined ratio	92.5		%		91.4		%		1.1		pts		92.2		%		90.8		%		1.4		pts
Return on equity	8.5		%		9.2		%		(0.7)		pts		11.1		%		10.8		%		0.3		pts
Core return on equity	7.9		%		10.1		%		(2.2)		pts		10.9		%		11.6		%		(0.7)		pts

All values are in US Dollars.

	As of						Change From
	September 30,<br>2022		December 31,<br>2021		September 30,<br>2021		December 31,<br>2021		September 30,<br>2021
Book value per share	$	84.94	$	119.77	$	115.74	(29)	%	(27)	%
Adjusted book value per share	111.90		109.76		104.77		2	%	7	%

See Glossary of Financial Measures for definitions and the statistical supplement for additional financial data.

“We are pleased to report solid third quarter 2022 results, particularly in light of significant industry-wide losses from Hurricane Ian,” said Alan Schnitzer, Chairman and Chief Executive Officer. “Our strategic approach to underwriting for catastrophes has once again served us well. Our focus is now on taking care of our customers and meeting our industry-leading objective of resolving 90% of our property claims arising out of catastrophes, including this historic storm, within 30 days.

“Even in the face of challenging weather, we generated meaningful profit with core income for the quarter of $526 million, or $2.20 per diluted share, and core return on equity of 7.9%. These results benefited from record net earned premiums of $8.6 billion, up 10% compared to the prior year period, and a solid underlying combined ratio of 92.5%. Underwriting income in our commercial businesses was excellent, driven by strong net earned premiums and an aggregate underlying combined ratio for Business Insurance and Bond & Specialty Insurance of 88.0%. Our high-quality investment portfolio generated solid after-tax net investment income of $505 million despite the significant downturn in the broader equity markets. These results, along with our strong balance sheet, enabled us to return $722 million of excess capital to our shareholders this quarter, including $501 million of share repurchases.

“Our best-in-class marketplace execution produced 10% growth in net written premiums this quarter to a record $9.2 billion. In Business Insurance, net written premiums grew by 9%. Renewal premium change was very strong at an historically high 10.2%, while renewal rate change of 5.0% was higher than in the first half of the year. Retention remained very strong at 86%, and new business increased 9% from the prior year period. In Bond & Specialty Insurance, net written premiums increased by 8%, driven by excellent production results in both our surety and management liability businesses. In Personal Insurance, renewal premium change was meaningfully higher both year over year and sequentially, as we continue to address elevated industry-wide loss costs.

“Our meaningful franchise value is reflected in our top- and bottom-line results for the quarter and year-to-date. Our terrific quarterly performance over the past two years builds on our excellent, decade-long track record of growing at industry-leading returns with industry-low volatility. At the same time, we continue to focus on, and invest in, our innovation priorities. Given the success with which we have executed on our Perform & Transform call to action, we are confident in our ability to continue to create meaningful shareholder value over time.”

Consolidated Results

	Three Months Ended September 30,												Nine Months Ended September 30,
($ in millions and pre-tax, unless noted otherwise)	2022				2021				Change				2022				2021				Change
Underwriting gain:	$	115			$	75			$	40			$	887			$	616			$	271
Underwriting gain includes:
Net favorable (unfavorable) prior year reserve development	20				(56)				76				464				443				21
Catastrophes, net of reinsurance	(512)				(501)				(11)				(1,418)				(1,811)				393
Net investment income	593				771				(178)				1,937				2,290				(353)
Other income (expense), including interest expense	(87)				(68)				(19)				(246)				(211)				(35)
Core income before income taxes	621				778				(157)				2,578				2,695				(117)
Income tax expense	95				123				(28)				390				462				(72)
Core income	526				655				(129)				2,188				2,233				(45)
Net realized investment gains (losses) after income taxes	(72)				7				(79)				(165)				88				(253)
Impact of changes in tax laws and/or tax rates (1)	—				—				—				—				8				(8)
Net income	$	454			$	662			$	(208)			$	2,023			$	2,329			$	(306)
Combined ratio	98.2		%		98.6		%		(0.4)			pts	96.0		%		96.8		%		(0.8)			pts
Impact on combined ratio
Net (favorable) unfavorable prior year reserve development	(0.2)			pts	0.8			pts	(1.0)			pts	(1.9)			pts	(1.9)			pts	—			pts
Catastrophes, net of reinsurance	5.9			pts	6.4			pts	(0.5)			pts	5.7			pts	7.9			pts	(2.2)			pts
Underlying combined ratio	92.5		%		91.4		%		1.1			pts	92.2		%		90.8		%		1.4			pts
Net written premiums
Business Insurance	$	4,370			$	4,021			9		%		$	13,245			$	12,126			9		%
Bond & Specialty Insurance	964				894				8				2,808				2,471				14
Personal Insurance	3,864				3,409				13				10,532				9,367				12
Total	$	9,198			$	8,324			10		%		$	26,585			$	23,964			11		%

(1) Impact is recognized in the accounting period in which the change is enacted

Third Quarter 2022 Results

(All comparisons vs. third quarter 2021, unless noted otherwise)

Net income of $454 million decreased $208 million, due to lower core income and net realized investment losses compared to net realized investment gains in the prior year quarter. Core income of $526 million decreased $129 million, primarily due to lower net investment income and a lower underlying underwriting gain, partially offset by net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year quarter. Business Insurance and Bond & Specialty Insurance reported strong and higher underlying underwriting gains, which were more than offset by the underlying underwriting results in Personal Insurance. The underlying underwriting results in all three segments benefited from higher business volumes. Net realized investment losses were $93 million pre-tax ($72 million after-tax), compared to net realized investment gains of $8 million pre-tax ($7 million after-tax) in the prior year quarter.

Combined ratio:

•The combined ratio of 98.2% improved 0.4 points due to net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year quarter (1.0 points) and a smaller impact from catastrophe losses (0.5 points), partially offset by a higher underlying combined ratio (1.1 points).

•The underlying combined ratio of 92.5% increased 1.1 points. See below for further details by segment.

•Net favorable prior year reserve development in Bond & Specialty Insurance and Personal Insurance was partially offset by net unfavorable prior year reserve development in Business Insurance. Net prior year

reserve development in the third quarter of 2022 included a $212 million addition to asbestos reserves, compared to a $225 million addition in the prior year quarter. See below for further details by segment.

•Catastrophe losses primarily resulted from Hurricanes Ian and Fiona, as well as severe storms in several regions of the United States.

Net investment income of $593 million pre-tax ($505 million after-tax) decreased 23%. Income from the non-fixed income investment portfolio decreased from a very strong result in the prior year quarter, primarily due to lower private equity partnership returns. Non-fixed income returns are generally reported on a one-quarter lagged basis and directionally follow the broader equity markets. Income from the fixed income investment portfolio increased over the prior year quarter due to growth in fixed maturity investments and a higher average yield.

Net written premiums of $9.198 billion increased 10%. See below for further details by segment.

Year-to-Date 2022 Results

(All comparisons vs. year-to-date 2021, unless noted otherwise)

Net income of $2.023 billion decreased $306 million, primarily due to net realized investment losses compared to net realized investment gains in the prior year period and lower core income. Core income of $2.188 billion decreased $45 million, primarily due to lower net investment income and a lower underlying underwriting gain, partially offset by lower catastrophe losses. Business Insurance and Bond & Specialty Insurance reported strong and higher underlying underwriting gains, which were more than offset by the underlying underwriting results in Personal Insurance. The underlying underwriting results benefited from higher business volumes and a $47 million benefit relating to the resolution of prior year income tax matters. Net realized investment losses were $211 million pre-tax ($165 million after-tax), compared to net realized investment gains of $113 million pre-tax ($88 million after-tax) in the prior year period.

Combined ratio:

•The combined ratio of 96.0% improved 0.8 points due to lower catastrophe losses (2.2 points), partially offset by a higher underlying combined ratio (1.4 points).

•The underlying combined ratio of 92.2% increased 1.4 points. See below for further details by segment.

•Net favorable prior year reserve development occurred in all segments. See below for further details by segment. Catastrophe losses included the third quarter events described above, as well as severe wind and hail storms in several regions of the United States in the first six months of 2022.

Net investment income of $1.937 billion pre-tax ($1.639 billion after-tax) decreased 15%. Income from the non-fixed income investment portfolio decreased from a very strong result in the prior year period, primarily due to lower private equity partnership returns. Income from the fixed income investment portfolio increased over the prior year quarter, primarily due to growth in fixed maturity investments.

Net written premiums of $26.585 billion increased 11%. See below for further details by segment.

Shareholders’ Equity

Shareholders’ equity of $19.906 billion decreased 31% from year-end 2021, primarily due to net unrealized investment losses compared to net unrealized investment gains at year-end 2021, common share repurchases and dividends to shareholders, partially offset by net income of $2.023 billion. Net unrealized investment losses included in shareholders’ equity were $8.021 billion pre-tax ($6.317 billion after-tax), compared to net unrealized investment gains of $3.060 billion pre-tax ($2.415 billion after-tax) at year-end 2021, driven by higher interest rates. Book value per share of $84.94 decreased 27% from September 30, 2021 and 29% from year-end 2021. Adjusted book value per share of $111.90, which excludes net unrealized investment gains (losses), increased 7% over September 30, 2021 and 2% over year-end 2021.

The Company repurchased 3.1 million shares during the third quarter at an average price of $163.63 per share for a total of $501 million. At September 30, 2022, the Company had $2.505 billion of capacity remaining under its share repurchase authorization approved by the Board of Directors. At the end of the quarter, statutory capital and surplus

was $23.375 billion, and the ratio of debt-to-capital was 26.8%. The ratio of debt-to-capital excluding after-tax net unrealized investment gains (losses) included in shareholders’ equity was 21.8%, within the Company’s target range of 15% to 25%.

The Board of Directors declared a regular quarterly dividend of $0.93 per share. The dividend is payable December 30, 2022 to shareholders of record at the close of business on December 9, 2022.

Business Insurance Segment Financial Results

	Three Months Ended September 30,												Nine Months Ended September 30,
($ in millions and pre-tax, unless noted otherwise)	2022				2021				Change				2022				2021				Change
Underwriting gain:	$	148			$	88			$	60			$	787			$	117			$	670
Underwriting gain includes:
Net favorable (unfavorable) prior year reserve development	(61)				(108)				47				254				99				155
Catastrophes, net of reinsurance	(216)				(181)				(35)				(529)				(836)				307
Net investment income	426				575				(149)				1,415				1,713				(298)
Other income (expense)	(14)				1				(15)				(19)				(14)				(5)
Segment income before income taxes	560				664				(104)				2,183				1,816				367
Income tax expense	89				106				(17)				377				298				79
Segment income	$	471			$	558			$	(87)			$	1,806			$	1,518			$	288
Combined ratio	96.3		%		97.5		%		(1.2)			pts	93.5		%		98.7		%		(5.2)			pts
Impact on combined ratio
Net (favorable) unfavorable prior year reserve development	1.4			pts	2.7			pts	(1.3)			pts	(2.0)			pts	(0.9)			pts	(1.1)			pts
Catastrophes, net of reinsurance	4.9			pts	4.6			pts	0.3			pts	4.1			pts	7.2			pts	(3.1)			pts
Underlying combined ratio	90.0		%		90.2		%		(0.2)			pts	91.4		%		92.4		%		(1.0)			pts
Net written premiums by market
Domestic
Select Accounts	$	739			$	685			8		%		$	2,365			$	2,140			11		%
Middle Market	2,465				2,252				9				7,410				6,723				10
National Accounts	247				228				8				790				731				8
National Property and Other	702				638				10				1,889				1,730				9
Total Domestic	4,153				3,803				9				12,454				11,324				10
International	217				218				—				791				802				(1)
Total	$	4,370			$	4,021			9		%		$	13,245			$	12,126			9		%

Third Quarter 2022 Results

(All comparisons vs. third quarter 2021, unless noted otherwise)

Segment income for Business Insurance was $471 million after-tax, a decrease of $87 million. Segment income decreased primarily due to lower net investment income and higher catastrophe losses, partially offset by lower net unfavorable prior year reserve development and a higher underlying underwriting gain. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

•The combined ratio of 96.3% improved 1.2 points due to lower net unfavorable prior year reserve development (1.3 points) and a lower underlying combined ratio (0.2 points), partially offset by higher catastrophe losses (0.3 points).

•The underlying combined ratio of 90.0% improved 0.2 points. The expense ratio improved 1.1 points. The loss ratio increased 0.9 points, as the benefit of earned pricing was more than offset by the comparison to

both a low level of property losses and the favorable impact associated with the pandemic in the prior year quarter.

•Net unfavorable prior year reserve development was primarily driven by an addition to asbestos reserves of $212 million, partially offset by better than expected loss experience in the domestic operations' workers' compensation product line for multiple accident years and in the commercial property product line for recent accident years. Net unfavorable prior year reserve development in the prior year quarter included an addition to asbestos reserves of $225 million.

Net written premiums of $4.370 billion increased 9%, reflecting strong renewal premium change and retention, as well as higher levels of new business.

Year-to-Date 2022 Results

(All comparisons vs. year-to-date 2021, unless noted otherwise)

Segment income for Business Insurance was $1.806 billion after-tax, an increase of $288 million. Segment income increased primarily due to lower catastrophe losses, a higher underlying underwriting gain and higher net favorable prior year reserve development, partially offset by lower net investment income. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

•The combined ratio of 93.5% improved 5.2 points due to lower catastrophe losses (3.1 points), higher net favorable prior year reserve development (1.1 points) and a lower underlying combined ratio (1.0 points).

•The underlying combined ratio of 91.4% improved 1.0 points, reflecting an improvement of 1.0 points in the expense ratio.

•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations' workers' compensation product line for multiple accident years, and in the commercial multi-peril and commercial property product lines for recent accident years, partially offset by an addition to asbestos reserves, an addition to reserves in the domestic operations' general liability product line (excluding asbestos and environmental), including for run-off operations, and an addition to environmental reserves.

Net written premiums of $13.245 billion increased 9%, reflecting the same factors described above for the third quarter of 2022.

Bond & Specialty Insurance Segment Financial Results

	Three Months Ended September 30,												Nine Months Ended September 30,
($ in millions and pre-tax, unless noted otherwise)	2022				2021				Change				2022				2021				Change
Underwriting gain:	$	234			$	150			$	84			$	629			$	422			$	207
Underwriting gain includes:
Net favorable prior year reserve development	63				22				41				171				81				90
Catastrophes, net of reinsurance	(11)				(3)				(8)				(16)				(30)				14
Net investment income	65				63				2				188				186				2
Other income	5				4				1				11				13				(2)
Segment income before income taxes	304				217				87				828				621				207
Income tax expense	62				43				19				141				123				18
Segment income	$	242			$	174			$	68			$	687			$	498			$	189
Combined ratio	72.5		%		81.1		%		(8.6)			pts	74.8		%		81.4		%		(6.6)			pts
Impact on combined ratio
Net favorable prior year reserve development	(7.2)			pts	(2.6)			pts	(4.6)			pts	(6.7)			pts	(3.5)			pts	(3.2)			pts
Catastrophes, net of reinsurance	1.3			pts	0.3			pts	1.0			pts	0.6			pts	1.3			pts	(0.7)			pts
Underlying combined ratio	78.4		%		83.4		%		(5.0)			pts	80.9		%		83.6		%		(2.7)			pts
Net written premiums
Domestic
Management Liability	$	554			$	532			4		%		$	1,592			$	1,473			8		%
Surety	284				241				18				828				673				23
Total Domestic	838				773				8				2,420				2,146				13
International	126				121				4				388				325				19
Total	$	964			$	894			8		%		$	2,808			$	2,471			14		%

Third Quarter 2022 Results

(All comparisons vs. third quarter 2021, unless noted otherwise)

Segment income for Bond & Specialty Insurance was $242 million after-tax, an increase of $68 million. Segment income increased primarily due to a higher underlying underwriting gain and higher net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

•The combined ratio of 72.5% improved 8.6 points due to a lower underlying combined ratio (5.0 points) and higher net favorable prior year reserve development (4.6 points), partially offset by higher catastrophe losses (1.0 points).

•The underlying combined ratio improved 5.0 points to a very strong 78.4%, driven primarily by the benefit of earned pricing and the favorable re-estimation of losses incurred for management liability coverages in the first six months of 2022.

•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations' fidelity and surety product lines and in the general liability product line for management liability coverages for recent accident years.

Net written premiums of $964 million increased 8%, reflecting strong production in surety and strong renewal premium change, retention and new business in management liability.

Year-to-Date 2022 Results

(All comparisons vs. year-to-date 2021, unless noted otherwise)

Segment income for Bond & Specialty Insurance was $687 million after-tax, an increase of $189 million. Segment income increased primarily due to a higher underlying underwriting gain and higher net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes. The current year also benefited by $24 million relating to the resolution of prior year income tax matters.

Combined ratio:

•The combined ratio of 74.8% improved 6.6 points due to higher net favorable prior year reserve development (3.2 points), a lower underlying combined ratio (2.7 points) and lower catastrophe losses (0.7 points).

•The underlying combined ratio improved 2.7 points to a very strong 80.9%, primarily driven by the benefit of earned pricing.

•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations' fidelity and surety product lines for recent accident years.

Net written premiums of $2.808 billion increased 14%, reflecting the same factors described above for the third quarter of 2022.

Personal Insurance Segment Financial Results

	Three Months Ended September 30,												Nine Months Ended September 30,
($ in millions and pre-tax, unless noted otherwise)	2022				2021				Change				2022				2021				Change
Underwriting gain (loss):	$	(267)			$	(163)			$	(104)			$	(529)			$	77			$	(606)
Underwriting gain (loss) includes:
Net favorable prior year reserve development	18				30				(12)				39				263				(224)
Catastrophes, net of reinsurance	(285)				(317)				32				(873)				(945)				72
Net investment income	102				133				(31)				334				391				(57)
Other income	18				22				(4)				50				64				(14)
Segment income (loss) before income taxes	(147)				(8)				(139)				(145)				532				(677)
Income tax expense (benefit)	(36)				(6)				(30)				(66)				99				(165)
Segment income (loss)	$	(111)			$	(2)			$	(109)			$	(79)			$	433			$	(512)
Combined ratio	107.2		%		104.6		%		2.6			pts	104.7		%		98.3		%		6.4			pts
Impact on combined ratio
Net favorable prior year reserve development	(0.5)			pts	(1.0)			pts	0.5			pts	(0.4)			pts	(3.0)			pts	2.6			pts
Catastrophes, net of reinsurance	8.4			pts	10.4			pts	(2.0)			pts	8.9			pts	10.6			pts	(1.7)			pts
Underlying combined ratio	99.3		%		95.2		%		4.1			pts	96.2		%		90.7		%		5.5			pts
Net written premiums
Domestic
Automobile	$	1,743			$	1,529			14		%		$	4,868			$	4,371			11		%
Homeowners and Other	1,952				1,698				15				5,164				4,476				15
Total Domestic	3,695				3,227				15				10,032				8,847				13
International	169				182				(7)				500				520				(4)
Total	$	3,864			$	3,409			13		%		$	10,532			$	9,367			12		%

Third Quarter 2022 Results

(All comparisons vs. third quarter 2021, unless noted otherwise)

Segment loss for Personal Insurance was $111 million after-tax, compared with a segment loss of $2 million after-tax in the prior year quarter. Segment loss increased primarily due to lower underlying underwriting results and lower net investment income, partially offset by lower catastrophe losses. Underlying underwriting results benefited from higher business volumes.

Combined ratio:

•The combined ratio of 107.2% increased 2.6 points due to a higher underlying combined ratio (4.1 points) and lower net favorable prior year reserve development (0.5 points), partially offset by lower catastrophe losses (2.0 points).

•The underlying combined ratio of 99.3% increased 4.1 points, driven primarily by elevated severity in both the automobile and homeowners and other product lines, partially offset by a lower expense ratio.

•Net favorable prior year reserve development was not significant in the quarter.

Net written premiums of $3.864 billion increased 13%, primarily reflecting higher pricing in both Domestic Automobile and Domestic Homeowners and Other.

Year-to-Date 2022 Results

(All comparisons vs. year-to-date 2021, unless noted otherwise)

Segment loss for Personal Insurance was $79 million after-tax, compared with segment income of $433 million in the prior year period. The segment loss was primarily due to a lower underlying underwriting gain, lower net favorable prior year reserve development and lower net investment income, partially offset by lower catastrophe losses. The underlying underwriting results benefited from higher business volumes. The current year also benefited by $20 million relating to the resolution of prior year income tax matters.

Combined ratio:

•The combined ratio of 104.7% increased 6.4 points due to a higher underlying combined ratio (5.5 points) and lower net favorable prior year reserve development (2.6 points), partially offset by lower catastrophe losses (1.7 points).

•The underlying combined ratio of 96.2% increased 5.5 points, driven primarily by elevated severity in the current year in both the automobile and homeowners and other product lines and a comparison to a low level of loss activity in the prior year period in the automobile product line, partially offset by a lower expense ratio.

•Net favorable prior year reserve development was not significant in the current year.

Net written premiums of $10.532 billion increased 12%, primarily reflecting higher pricing in both Domestic Automobile and Domestic Homeowners and Other.

Financial Supplement and Conference Call

The information in this press release should be read in conjunction with the financial supplement that is available on our website at www.travelers.com. Travelers management will discuss the contents of this release and other relevant topics via webcast at 9 a.m. Eastern (8 a.m. Central) on Wednesday, October 19, 2022. Investors can access the call via webcast at http://investor.travelers.com or by dialing 1.888.440.6281 within the United States or 1.646.960.0218 outside the United States. Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the Company’s website.

Following the live event, replays will be available via webcast for one year at http://investor.travelers.com and by telephone for 30 days by dialing 1.800.770.2030 within the United States or 1.647.362.9199 outside the United States. All callers should use conference ID 5449478.

About Travelers

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $35 billion in 2021. For more information, visit www.travelers.com.

Travelers may use its website and/or social media outlets, such as Facebook and Twitter, as distribution channels of material Company information. Financial and other important information regarding the Company is routinely accessible through and posted on our website at http://investor.travelers.com, our Facebook page at https://www.facebook.com/travelers and our Twitter account (@Travelers) at https://twitter.com/travelers. In addition, you may automatically receive email alerts and other information about Travelers when you enroll your email address by visiting the Email Notifications section at http://investor.travelers.com.

Travelers is organized into the following reportable business segments:

Business Insurance - Business Insurance offers a broad array of property and casualty insurance products and 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.

Bond & Specialty Insurance - Bond & Specialty Insurance offers surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers, primarily in the United States, and certain surety and specialty insurance products in Canada, the United Kingdom and the Republic of Ireland, as well as Brazil through a joint venture, in each case utilizing various degrees of financially-based underwriting approaches.

Personal Insurance - Personal Insurance offers a broad range of property and casualty insurance products and services 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.

* * * * *

Forward-Looking Statements

This press release contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “views,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements include, among other things, the Company’s statements about:

•the Company’s outlook, the impact of trends on its business and its future results of operations and financial condition;

•the impact of COVID-19 and related economic conditions;

•the impact of legislative or regulatory actions or court decisions;

•share repurchase plans;

•future pension plan contributions;

•the sufficiency of the Company’s asbestos and other reserves;

•the impact of emerging claims issues as well as other insurance and non-insurance litigation;

•the cost and availability of reinsurance coverage;

•catastrophe losses and modeling;

•the impact of investment, economic and underwriting market conditions, including interest rates and inflation;

•the impact of changing climate conditions;

•strategic and operational initiatives to improve profitability and competitiveness;

•the Company’s competitive advantages and innovation agenda;

•new product offerings;

•the impact of developments in the tort environment; and

•the impact of developments in the geopolitical environment.

The Company cautions investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the Company’s control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Some of the factors that could cause actual results to differ include, but are not limited to, the following:

Insurance-Related Risks

•high levels of catastrophe losses;

•actual claims may exceed the Company’s claims and claim adjustment expense reserves, or the estimated level of claims and claim adjustment expense reserves may increase, including as a result of, among other things, changes in the legal/tort, regulatory and economic environments, including increased inflation;

•the Company’s potential exposure to asbestos and environmental claims and related litigation;

•the Company is exposed to, and may face adverse developments involving, mass tort claims; and

•the effects of emerging claim and coverage issues on the Company’s business are uncertain, and court decisions or legislative changes that take place after the Company issues its policies can result in an unexpected increase in the number of claims.

Financial, Economic and Credit Risks

•a period of financial market disruption or an economic downturn;

•the Company’s investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses;

•the Company is exposed to credit risk related to reinsurance and structured settlements, and reinsurance coverage may not be available to the Company;

•the Company is exposed to credit risk in certain of its insurance operations and with respect to certain guarantee or indemnification arrangements that it has with third parties;

•a downgrade in the Company’s claims-paying and financial strength ratings; and

•the Company’s insurance subsidiaries may be unable to pay dividends to the Company’s holding company in sufficient amounts.

Business and Operational Risks

•the ongoing impact of COVID-19 and related risks, including with respect to revenues, claims and claim adjustment expenses, general and administrative expenses, investments, inflation, adverse legislative and/or regulatory action, operational disruptions and heightened cyber security risks;

•the intense competition that the Company faces, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which it operates;

•disruptions to the Company’s relationships with its independent agents and brokers or the Company’s inability to manage effectively a changing distribution landscape;

•the Company’s efforts to develop new products or services, expand in targeted markets, improve business processes and workflows or make acquisitions may not be successful and may create enhanced risks;

•the Company's pricing and capital models may provide materially different indications than actual results;

•loss of or significant restrictions on the use of particular types of underwriting criteria, such as credit scoring, or other data or methodologies, in the pricing and underwriting of the Company’s products; and

•the Company is subject to additional risks associated with its business outside the United States.

Technology and Intellectual Property Risks

•as a result of cyber attacks (the risk of which could be exacerbated by geopolitical tensions) or otherwise, the Company may experience difficulties with technology, data and network security or outsourcing relationships;

•the Company’s dependence on effective information technology systems and on continuing to develop and implement improvements in technology; and

•the Company may be unable to protect and enforce its own intellectual property or may be subject to claims for infringing the intellectual property of others.

Regulatory and Compliance Risks

•changes in regulation, including higher tax rates; and

•the Company's compliance controls may not be effective.

In addition, the Company’s share repurchase plans depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws (including the Inflation Reduction Act) and other factors.

Our forward-looking statements speak only as of the date of this press release or as of the date they are made, and we undertake no obligation to update forward-looking statements. For a more detailed discussion of these factors, see the information under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Forward Looking Statements” in the quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on October 19, 2022, and in our most recent annual report on Form 10-K filed with the SEC on February 17, 2022, in each case as updated by our periodic filings with the SEC.

GLOSSARY OF FINANCIAL MEASURES AND RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

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. Reconciliations of these measures to the most comparable GAAP measures also follow.

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.

RECONCILIATION OF NET INCOME TO CORE INCOME AND CERTAIN OTHER NON-GAAP MEASURES

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.

Reconciliation of Net Income to Core Income less Preferred Dividends

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, after-tax)	2022		2021		2022		2021
Net income	$	454	$	662	$	2,023	$	2,329
Adjustments:
Net realized investment (gains) losses	72		(7)		165		(88)
Impact of changes in tax laws and/or tax rates (1)	—		—		—		(8)
Core income	$	526	$	655	$	2,188	$	2,233

(1) Impact is recognized in the accounting period in which the change is enacted

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, pre-tax)	2022		2021		2022		2021
Net income	$	528	$	786	$	2,367	$	2,808
Adjustments:
Net realized investment (gains) losses	93		(8)		211		(113)
Core income	$	621	$	778	$	2,578	$	2,695
	Twelve Months Ended December 31,										Average Annual
---	---	---	---	---	---	---	---	---	---	---	---	---
($ in millions, after-tax)	2021		2020		2019		2018		2017		2005 - 2016
Net income	$	3,662	$	2,697	$	2,622	$	2,523	$	2,056	$	3,159
Less: Loss from discontinued operations	—		—		—		—		—		(37)
Income from continuing operations	3,662		2,697		2,622		2,523		2,056		3,196
Adjustments:
Net realized investment (gains) losses	(132)		(11)		(85)		(93)		(142)		(29)
Impact of changes in tax laws and/or tax rates (1) (2)	(8)		—		—		—		129		—
Core income	3,522		2,686		2,537		2,430		2,043		3,167
Less: Preferred dividends	—		—		—		—		—		2
Core income, less preferred dividends	$	3,522	$	2,686	$	2,537	$	2,430	$	2,043	$	3,165

(1) Impact is recognized in the accounting period in which the change is enacted

(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

Reconciliation of Net Income per Share to Core Income per Share on a Basic and Diluted Basis

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic income per share
Net income	$	1.91	$	2.65	$	8.43	$	9.24
Adjustments:
Net realized investment (gains) losses, after-tax	0.31		(0.02)		0.69		(0.35)
Impact of changes in tax laws and/or tax rates (1)	—		—		—		(0.03)
Core income	$	2.22	$	2.63	$	9.12	$	8.86
Diluted income per share
Net income	$	1.89	$	2.62	$	8.34	$	9.16
Adjustments:
Net realized investment (gains) losses, after-tax	0.31		(0.02)		0.68		(0.35)
Impact of changes in tax laws and/or tax rates (1)	—		—		—		(0.03)
Core income	$	2.20	$	2.60	$	9.02	$	8.78

(1) Impact is recognized in the accounting period in which the change is enacted

Reconciliation of Segment Income (Loss) to Total Core Income

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, after-tax)	2022		2021		2022		2021
Business Insurance	$	471	$	558	$	1,806	$	1,518
Bond & Specialty Insurance	242		174		687		498
Personal Insurance	(111)		(2)		(79)		433
Total segment income	602		730		2,414		2,449
Interest Expense and Other	(76)		(75)		(226)		(216)
Total core income	$	526	$	655	$	2,188	$	2,233

RECONCILIATION OF SHAREHOLDERS’ EQUITY TO ADJUSTED SHAREHOLDERS’ EQUITY AND CALCULATION OF RETURN ON EQUITY AND CORE RETURN ON EQUITY

Adjusted shareholders’ equity is shareholders’ equity excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity, net realized investment gains (losses), net of tax, for the period presented, the effect of a change in tax laws and tax rates at enactment (excluding the portion related to net unrealized investment gains (losses)), preferred stock and discontinued operations.

Reconciliation of Shareholders’ Equity to Adjusted Shareholders’ Equity

	As of September 30,
($ in millions)	2022		2021
Shareholders’ equity	$	19,906	$	28,474
Adjustments:
Net unrealized investment (gains) losses, net of tax, included in shareholders’ equity	6,317		(2,699)
Net realized investment (gains) losses, net of tax	165		(88)
Impact of changes in tax laws and/or tax rates (1)	—		(8)
Adjusted shareholders’ equity	$	26,388	$	25,679

(1) Impact is recognized in the accounting period in which the change is enacted

	As of December 31,										Average Annual
($ in millions)	2021		2020		2019		2018		2017		2005 - 2016
Shareholders’ equity	$	28,887	$	29,201	$	25,943	$	22,894	$	23,731	$	24,883
Adjustments:
Net unrealized investment (gains) losses, net of tax, included in shareholders’ equity	(2,415)		(4,074)		(2,246)		113		(1,112)		(1,354)
Net realized investment (gains) losses, net of tax	(132)		(11)		(85)		(93)		(142)		(29)
Impact of changes in tax laws and/or tax rates (1) (2)	(8)		—		—		—		287		—
Preferred stock	—		—		—		—		—		(53)
Loss from discontinued operations	—		—		—		—		—		37
Adjusted shareholders’ equity	$	26,332	$	25,116	$	23,612	$	22,914	$	22,764	$	23,484

(1) Impact is recognized in the accounting period in which the change is enacted

(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

Return on equity is the ratio of annualized net income (loss) less preferred dividends to average shareholders’ equity for the periods presented. Core return on equity is the ratio of annualized core income (loss) less preferred dividends 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.

Average shareholders’ equity is (a) the sum of total shareholders’ equity excluding preferred stock 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 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.

Calculation of Return on Equity and Core Return on Equity

	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions, after-tax)	2022			2021			2022			2021
Annualized net income	$	1,815		$	2,645		$	2,697		$	3,105
Average shareholders’ equity	21,390			28,815			24,267			28,754
Return on equity	8.5		%	9.2		%	11.1		%	10.8		%
Annualized core income	$	2,104		$	2,620		$	2,917		$	2,977
Adjusted average shareholders’ equity	26,481			25,842			26,673			25,590
Core return on equity	7.9		%	10.1		%	10.9		%	11.6		%
	Twelve Months Ended December 31,															Average Annual
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
($ in millions, after-tax)	2021			2020			2019			2018			2017				2005 - 2016
Net income, less preferred dividends	$	3,662		$	2,697		$	2,622		$	2,523		$	2,056			$	3,157
Average shareholders' equity	28,735			26,892			24,922			22,843			23,671				24,913
Return on equity	12.7		%	10.0		%	10.5		%	11.0		%	8.7		%		12.7		%
Core income, less preferred dividends	$	3,522		$	2,686		$	2,537		$	2,430		$	2,043			$	3,165
Adjusted average shareholders’ equity	25,718			23,790			23,335			22,814			22,743				23,505
Core return on equity	13.7		%	11.3		%	10.9		%	10.7		%	9.0		%		13.5		%

RECONCILIATION OF PRE-TAX UNDERWRITING GAIN EXCLUDING CERTAIN ITEMS TO NET INCOME

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. Pre-tax underwriting gain, excluding the impact of catastrophes and net favorable (unfavorable) prior year loss reserve development, is the underwriting gain adjusted to exclude claims and claim adjustment expenses, reinstatement premiums and assessments related to catastrophes and loss reserve development related to time periods prior to the current year. In the opinion of the Company’s management, this measure is meaningful to users of the financial statements to understand the Company’s periodic earnings and the variability of earnings caused by the unpredictable nature (i.e., the timing and amount) of catastrophes and loss reserve development. This measure is also referred to as underlying underwriting gain, underlying underwriting margin, underlying underwriting income or underlying underwriting result.

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 2022 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 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.

Reconciliation of Net Income to Pre-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, after-tax, except as noted)	2022		2021		2022		2021
Net income	$	454	$	662	$	2,023	$	2,329
Net realized investment (gains) losses	72		(7)		165		(88)
Impact of changes in tax laws and/or tax rates (1)	—		—		—		(8)
Core income	526		655		2,188		2,233
Net investment income	(505)		(645)		(1,639)		(1,917)
Other (income) expense, including interest expense	69		58		202		171
Underwriting income	90		68		751		487
Income tax expense on underwriting results	25		7		136		129
Pre-tax underwriting income	115		75		887		616
Pre-tax impact of net (favorable) unfavorable prior year loss reserve development	(20)		56		(464)		(443)
Pre-tax impact of catastrophes	512		501		1,418		1,811
Pre-tax underlying underwriting income	$	607	$	632	$	1,841	$	1,984

(1) Impact is recognized in the accounting period in which the change is enacted

Reconciliation of Net Income to After-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions, after-tax)	2022		2021		2022		2021
Net income	$	454	$	662	$	2,023	$	2,329
Net realized investment (gains) losses	72		(7)		165		(88)
Impact of changes in tax laws and/or tax rates (1)	—		—		—		(8)
Core income	526		655		2,188		2,233
Net investment income	(505)		(645)		(1,639)		(1,917)
Other (income) expense, including interest expense	69		58		202		171
Underwriting income	90		68		751		487
Impact of net (favorable) unfavorable prior year reserve development	(16)		44		(367)		(349)
Impact of catastrophes	404		395		1,118		1,430
Underlying underwriting income	$	478	$	507	$	1,502	$	1,568

(1) Impact is recognized in the accounting period in which the change is enacted

	Twelve Months Ended December 31,
($ in millions, after-tax)	2021		2020		2019		2018		2017		2016		2015		2014		2013		2012		2011
Net income	$	3,662	$	2,697	$	2,622	$	2,523	$	2,056	$	3,014	$	3,439	$	3,692	$	3,673	$	2,473	$	1,426
Net realized investment gains	(132)		(11)		(85)		(93)		(142)		(47)		(2)		(51)		(106)		(32)		(36)
Impact of changes in tax laws and/or tax rates (1) (2)	(8)		—		—		—		129		—		—		—		—		—		—
Core income	3,522		2,686		2,537		2,430		2,043		2,967		3,437		3,641		3,567		2,441		1,390
Net investment income	(2,541)		(1,908)		(2,097)		(2,102)		(1,872)		(1,846)		(1,905)		(2,216)		(2,186)		(2,316)		(2,330)
Other (income) expense, including interest expense	235		232		214		248		179		78		193		159		61		171		195
Underwriting income (loss)	1,216		1,010		654		576		350		1,199		1,725		1,584		1,442		296		(745)
Impact of net (favorable) unfavorable prior year reserve development	(424)		(276)		47		(409)		(378)		(510)		(617)		(616)		(552)		(622)		(473)
Impact of catastrophes	1,459		1,274		699		1,355		1,267		576		338		462		387		1,214		1,669
Underlying underwriting income	$	2,251	$	2,008	$	1,400	$	1,522	$	1,239	$	1,265	$	1,446	$	1,430	$	1,277	$	888	$	451

(1) Impact is recognized in the accounting period in which the change is enacted

(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

COMBINED RATIO AND ADJUSTMENTS FOR UNDERLYING COMBINED RATIO

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 earnings release, 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 earnings release 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 earnings release 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 earnings release, is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income, billing and policy fees and other, to net earned premiums.

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.

Underlying combined ratio represents the combined ratio excluding the impact of net prior year reserve development and catastrophes. The underlying combined ratio is an indicator of the Company’s underwriting discipline and underwriting profitability for the current accident year.

Other companies’ method of computing similarly titled measures may not be comparable to the Company’s method of computing these ratios.

Calculation of the Combined Ratio

	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions, pre-tax)	2022			2021			2022			2021
Loss and loss adjustment expense ratio
Claims and claim adjustment expenses	$	6,088		$	5,464		$	16,930		$	15,479
Less:
Policyholder dividends	14			10			31			31
Allocated fee income	38			36			112			113
Loss ratio numerator	$	6,036		$	5,418		$	16,787		$	15,335
Underwriting expense ratio
Amortization of deferred acquisition costs	$	1,406		$	1,281		$	4,081		$	3,742
General and administrative expenses (G&A)	1,193			1,187			3,607			3,524
Less:
Non-insurance G&A	83			81			252			228
Allocated fee income	66			61			195			189
Billing and policy fees and other	27			27			81			81
Expense ratio numerator	$	2,423		$	2,299		$	7,160		$	6,768
Earned premium	$	8,615		$	7,829		$	24,946		$	22,831
Combined ratio (1)
Loss and loss adjustment expense ratio	70.1		%	69.2		%	67.3		%	67.2		%
Underwriting expense ratio	28.1		%	29.4		%	28.7		%	29.6		%
Combined ratio	98.2		%	98.6		%	96.0		%	96.8		%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development	(0.2)		%	0.8		%	(1.9)		%	(1.9)		%
Catastrophes, net of reinsurance	5.9		%	6.4		%	5.7		%	7.9		%
Underlying combined ratio	92.5		%	91.4		%	92.2		%	90.8		%

(1)  For purposes of computing ratios, 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.

RECONCILIATION OF BOOK VALUE PER SHARE AND SHAREHOLDERS’ EQUITY TO CERTAIN NON-GAAP MEASURES

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. Tangible book value per share is adjusted book value per share excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding. In the opinion of the Company’s management, tangible book value per share is useful in an analysis of a property casualty company’s book value on a nominal basis as it removes certain effects of purchase accounting (i.e., goodwill and other intangible assets), in addition to the effect of changing prices on invested assets.

Reconciliation of Shareholders’ Equity to Tangible Shareholders’ Equity, Excluding Net Unrealized Investment Gains (Losses), Net of Tax

	As of
($ in millions, except per share amounts)	September 30,<br>2022		December 31,<br>2021		September 30,<br>2021
Shareholders’ equity	$	19,906	$	28,887	$	28,474
Less: Net unrealized investment gains (losses), net of tax, included in shareholders’ equity	(6,317)		2,415		2,699
Shareholders’ equity, excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity	26,223		26,472		25,775
Less:
Goodwill	3,922		4,008		4,005
Other intangible assets	287		306		309
Impact of deferred tax on other intangible assets	(54)		(66)		(63)
Tangible shareholders’ equity, excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity	$	22,068	$	22,224	$	21,524
Common shares outstanding	234.3		241.2		246.0
Book value per share	$	84.94	$	119.77	$	115.74
Adjusted book value per share	111.90		109.76		104.77
Tangible book value per share, excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity	94.17		92.15		87.49

RECONCILIATION OF TOTAL CAPITALIZATION TO TOTAL CAPITALIZATION EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES), NET OF TAX

Total capitalization 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 capitalization excluding the after-tax impact of net unrealized investment gains and losses 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.

	As of
($ in millions)	September 30,<br>2022			December 31,<br>2021
Debt	$	7,291		$	7,290
Shareholders’ equity	19,906			28,887
Total capitalization	27,197			36,177
Less: Net unrealized investment gains (losses), net of tax, included in shareholders’ equity	(6,317)			2,415
Total capitalization excluding net unrealized gain (loss) on investments, net of tax, included in shareholders’ equity	$	33,514		$	33,762
Debt-to-capital ratio	26.8		%	20.2		%
Debt-to-capital ratio excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity	21.8		%	21.6		%

RECONCILIATION OF INVESTED ASSETS TO INVESTED ASSETS EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES)

	As of September 30,
($ in millions, pre-tax)	2022		2021
Invested assets	$	78,113	$	87,506
Less: Net unrealized investment gains (losses), pre-tax	(8,021)		3,426
Invested assets excluding net unrealized investment gains (losses)	$	86,134	$	84,080
	As of December 31,
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
($ in millions, pre-tax)	2021		2020		2019		2018		2017		2016		2015		2014		2013		2012		2011
Invested assets	$	87,375	$	84,423	$	77,884	$	72,278	$	72,502	$	70,488	$	70,470	$	73,261	$	73,160	$	73,838	$	72,701
Less: Net unrealized investment gains (losses), pre-tax	3,060		5,175		2,853		(137)		1,414		1,112		1,974		3,008		2,030		4,761		4,399
Invested assets excluding net unrealized investment gains (losses)	$	84,315	$	79,248	$	75,031	$	72,415	$	71,088	$	69,376	$	68,496	$	70,253	$	71,130	$	69,077	$	68,302

OTHER DEFINITIONS

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.

For Business Insurance and Bond & Specialty Insurance, retention is the amount of premium available for renewal that was retained, excluding rate and exposure changes. For Personal Insurance, retention is the ratio of the expected number of renewal policies that will be retained throughout the annual policy period to the number of available renewal base policies. For all of the segments, renewal rate change represents the estimated change in average premium on policies that renew, excluding exposure changes. Exposure is the measure of risk used in the pricing of an insurance product. The change in exposure is the amount of change in premium on policies that renew attributable to the change in portfolio risk. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. New business is the amount of written premium related to new policyholders and additional products sold to existing policyholders. These are operating statistics, which are in part dependent on the use of estimates and are therefore subject to change. For Business Insurance, retention, renewal premium change and new business exclude National Accounts. For Bond & Specialty Insurance, retention, renewal premium change and new business exclude surety and other products that are generally sold on a non-recurring, project specific basis. For each of the segments, production statistics referred to herein are domestic only unless otherwise indicated.

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.

Holding company liquidity is the total funds available at the holding company level to fund general corporate purposes, primarily the payment of shareholder dividends and debt service. These funds consist of total cash, short-term invested assets and other readily marketable securities held by the holding company.

For a glossary of other financial terms used in this press release, we refer you to the Company’s most recent annual report on Form 10-K filed with the SEC on February 17, 2022, and subsequent periodic filings with the SEC.

Contacts

Media:	Institutional Investors:
Patrick Linehan	Abbe Goldstein
917.778.6267	917.778.6825

20

Document

The Travelers Companies, Inc.                                                Exhibit 99.2

Financial Supplement - Third Quarter 2022

	Page Number
Consolidated Results
Financial Highlights	1
Reconciliation to Net Income and Earnings Per Share	2
Statement of Income	3
Net Income by Major Component and Combined Ratio	4
Core Income	5
Selected Statistics - Property and Casualty Operations	6
Written and Earned Premiums - Property and Casualty Operations	7
Business Insurance
Segment Income	8
Segment Income 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 Investment Gains (Losses) and Net 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-Q 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)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Net income	$	733		$	934		$	662		$	1,333		$	1,018		$	551		$	454		$	2,329		$	2,023
Net income per share:
Basic	$	2.89		$	3.70		$	2.65		$	5.43		$	4.20		$	2.29		$	1.91		$	9.24		$	8.43
Diluted	$	2.87		$	3.66		$	2.62		$	5.37		$	4.15		$	2.27		$	1.89		$	9.16		$	8.34
Core income	$	699		$	879		$	655		$	1,289		$	1,037		$	625		$	526		$	2,233		$	2,188
Core income per share:
Basic	$	2.75		$	3.48		$	2.63		$	5.25		$	4.27		$	2.60		$	2.22		$	8.86		$	9.12
Diluted	$	2.73		$	3.45		$	2.60		$	5.20		$	4.22		$	2.57		$	2.20		$	8.78		$	9.02
Return on equity	10.2		%	13.0		%	9.2		%	18.6		%	15.0		%	9.1		%	8.5		%	10.8		%	11.1		%
Core return on equity	11.1		%	13.7		%	10.1		%	19.8		%	15.5		%	9.3		%	7.9		%	11.6		%	10.9		%
Total assets, at period end	$	117,032		$	119,759		$	120,706		$	120,466		$	118,592		$	116,587		$	114,317		$	120,706		$	114,317
Total equity, at period end	$	28,269		$	29,156		$	28,474		$	28,887		$	25,531		$	22,874		$	19,906		$	28,474		$	19,906
Book value per share, at period end	$	112.42		$	116.86		$	115.74		$	119.77		$	106.40		$	96.39		$	84.94		$	115.74		$	84.94
Less: Net unrealized investment gains (losses), net of tax	11.21			12.98			10.97			10.01			(5.79)			(15.98)			(26.96)			10.97			(26.96)
Adjusted book value per share, at period end	$	101.21		$	103.88		$	104.77		$	109.76		$	112.19		$	112.37		$	111.90		$	104.77		$	111.90
Weighted average number of common shares outstanding (basic)	252.1			250.7			247.7			243.8			240.9			238.4			235.4			250.1			238.3
Weighted average number of common shares outstanding and common stock equivalents (diluted)	254.1			253.1			250.1			246.4			243.7			241.1			237.9			252.4			240.9
Common shares outstanding at period end	251.5			249.5			246.0			241.2			240.0			237.3			234.3			246.0			234.3
Common stock dividends declared	$	216		$	224		$	220		$	216		$	214		$	225		$	221		$	660		$	660
Common stock repurchased:
Under Board of Directors authorization
Shares	2.4			2.6			3.8			5.1			2.9			2.9			3.1			8.8			8.9
Cost	$	356		$	400		$	600		$	800		$	500		$	500		$	500		$	1,356		$	1,500
Other
Shares	0.3			—			—			—			0.4			—			—			0.3			0.4
Cost	$	41		$	1		$	1		$	1		$	59		$	—		$	1		$	43		$	60

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Reconciliation to Net Income and Earnings per Share

($ and shares in millions, except earnings per share)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net income
Net income	$	733	$	934	$	662	$	1,333	$	1,018	$	551	$	454	$	2,329	$	2,023
Adjustments:
Net realized investment (gains) losses, after-tax	(34)		(47)		(7)		(44)		19		74		72		(88)		165
Impact of changes in tax laws and/or tax rates (1)	—		(8)		—		—		—		—		—		(8)		—
Core income	$	699	$	879	$	655	$	1,289	$	1,037	$	625	$	526	$	2,233	$	2,188
Basic earnings per share
Net income	$	2.89	$	3.70	$	2.65	$	5.43	$	4.20	$	2.29	$	1.91	$	9.24	$	8.43
Adjustments:
Net realized investment (gains) losses, after-tax	(0.14)		(0.19)		(0.02)		(0.18)		0.07		0.31		0.31		(0.35)		0.69
Impact of changes in tax laws and/or tax rates (1)	—		(0.03)		—		—		—		—		—		(0.03)		—
Core income	$	2.75	$	3.48	$	2.63	$	5.25	$	4.27	$	2.60	$	2.22	$	8.86	$	9.12
Diluted earnings per share
Net income	$	2.87	$	3.66	$	2.62	$	5.37	$	4.15	$	2.27	$	1.89	$	9.16	$	8.34
Adjustments:
Net realized investment (gains) losses, after-tax	(0.14)		(0.18)		(0.02)		(0.17)		0.07		0.30		0.31		(0.35)		0.68
Impact of changes in tax laws and/or tax rates (1)	—		(0.03)		—		—		—		—		—		(0.03)		—
Core income	$	2.73	$	3.45	$	2.60	$	5.20	$	4.22	$	2.57	$	2.20	$	8.78	$	9.02

Adjustments to net income and weighted average shares for net income EPS calculations: (2)

Basic and Diluted	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net income, as reported	$	733	$	934	$	662	$	1,333	$	1,018	$	551	$	454	$	2,329	$	2,023
Participating share-based awards - allocated income	(5)		(7)		(5)		(10)		(7)		(4)		(4)		(17)		(15)
Net income available to common shareholders - basic and diluted	$	728	$	927	$	657	$	1,323	$	1,011	$	547	$	450	$	2,312	$	2,008
Common Shares
Basic
Weighted average shares outstanding	252.1		250.7		247.7		243.8		240.9		238.4		235.4		250.1		238.3
Diluted
Weighted average shares outstanding	252.1		250.7		247.7		243.8		240.9		238.4		235.4		250.1		238.3
Weighted average effects of dilutive securities - stock options and performance shares	2.0		2.4		2.4		2.6		2.8		2.7		2.5		2.3		2.6
Diluted weighted average shares outstanding	254.1		253.1		250.1		246.4		243.7		241.1		237.9		252.4		240.9

(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.

The Travelers Companies, Inc.                                                 

Statement of Income - Consolidated

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Revenues
Premiums	$	7,386		$	7,616		$	7,829		$	8,024		$	8,014		$	8,317		$	8,615		$	22,831		$	24,946
Net investment income	701			818			771			743			637			707			593			2,290			1,937
Fee income	101			104			97			100			103			100			104			302			307
Net realized investment gains (losses)	44			61			8			58			(23)			(95)			(93)			113			(211)
Other revenues	81			88			100			86			78			107			84			269			269
Total revenues	8,313			8,687			8,805			9,011			8,809			9,136			9,303			25,805			27,248
Claims and expenses
Claims and claim adjustment expenses	4,970			5,045			5,464			4,819			5,039			5,803			6,088			15,479			16,930
Amortization of deferred acquisition costs	1,207			1,254			1,281			1,301			1,310			1,365			1,406			3,742			4,081
General and administrative expenses	1,163			1,174			1,187			1,153			1,191			1,223			1,193			3,524			3,607
Interest expense	82			83			87			88			87			88			88			252			263
Total claims and expenses	7,422			7,556			8,019			7,361			7,627			8,479			8,775			22,997			24,881
Income before income taxes	891			1,131			786			1,650			1,182			657			528			2,808			2,367
Income tax expense	158			197			124			317			164			106			74			479			344
Net income	$	733		$	934		$	662		$	1,333		$	1,018		$	551		$	454		$	2,329		$	2,023
Other statistics
Effective tax rate on net investment income	15.9		%	16.7		%	16.3		%	16.0		%	15.4		%	15.8		%	14.8		%	16.3		%	15.4		%
Net investment income (after-tax)	$	590		$	682		$	645		$	624		$	539		$	595		$	505		$	1,917		$	1,639
Catastrophes, net of reinsurance:
Pre-tax	$	835		$	475		$	501		$	36		$	160		$	746		$	512		$	1,811		$	1,418
After-tax	$	659		$	376		$	395		$	29		$	127		$	587		$	404		$	1,430		$	1,118
Prior year reserve development - favorable (unfavorable):
Pre-tax	$	317		$	182		$	(56)		$	95		$	153		$	291		$	20		$	443		$	464
After-tax	$	249		$	144		$	(44)		$	75		$	122		$	229		$	16		$	349		$	367

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Net Income by Major Component and Combined Ratio - Consolidated

($ in millions, net of tax)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Underwriting gain	$	166		$	253		$	68		$	729		$	575		$	86		$	90		$	487		$	751
Net investment income	590			682			645			624			539			595			505			1,917			1,639
Other income (expense), including interest expense	(57)			(56)			(58)			(64)			(77)			(56)			(69)			(171)			(202)
Core income	699			879			655			1,289			1,037			625			526			2,233			2,188
Net realized investment gains (losses)	34			47			7			44			(19)			(74)			(72)			88			(165)
Impact of changes in tax laws and/or tax rates (1)	—			8			—			—			—			—			—			8			—
Net income	$	733		$	934		$	662		$	1,333		$	1,018		$	551		$	454		$	2,329		$	2,023
Combined ratio (2) (3)
Loss and loss adjustment expense ratio	66.7		%	65.6		%	69.2		%	59.5		%	62.3		%	69.3		%	70.1		%	67.2		%	67.3		%
Underwriting expense ratio	29.9		%	29.7		%	29.4		%	28.5		%	29.0		%	29.0		%	28.1		%	29.6		%	28.7		%
Combined ratio	96.6		%	95.3		%	98.6		%	88.0		%	91.3		%	98.3		%	98.2		%	96.8		%	96.0		%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development	(4.2)		%	(2.4)		%	0.8		%	(1.2)		%	(1.9)		%	(3.5)		%	(0.2)		%	(1.9)		%	(1.9)		%
Catastrophes, net of reinsurance	11.3		%	6.3		%	6.4		%	0.5		%	2.0		%	9.0		%	5.9		%	7.9		%	5.7		%
Underlying combined ratio	89.5		%	91.4		%	91.4		%	88.7		%	91.2		%	92.8		%	92.5		%	90.8		%	92.2		%

(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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Billing and policy fees and other	$	27	$	27	$	27	$	26	$	27	$	27	$	27	$	81	$	81
Fee income:
Loss and loss adjustment expenses	$	38	$	39	$	36	$	37	$	35	$	39	$	38	$	113	$	112
Underwriting expenses	63		65		61		63		68		61		66		189		195
Total fee income	$	101	$	104	$	97	$	100	$	103	$	100	$	104	$	302	$	307
Non-insurance general and administrative expenses	$	70	$	77	$	81	$	75	$	82	$	87	$	83	$	228	$	252

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Core Income - Consolidated

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Revenues
Premiums	$	7,386		$	7,616		$	7,829		$	8,024		$	8,014		$	8,317		$	8,615		$	22,831		$	24,946
Net investment income	701			818			771			743			637			707			593			2,290			1,937
Fee income	101			104			97			100			103			100			104			302			307
Other revenues	81			88			100			86			78			107			84			269			269
Total revenues	8,269			8,626			8,797			8,953			8,832			9,231			9,396			25,692			27,459
Claims and expenses
Claims and claim adjustment expenses	4,970			5,045			5,464			4,819			5,039			5,803			6,088			15,479			16,930
Amortization of deferred acquisition costs	1,207			1,254			1,281			1,301			1,310			1,365			1,406			3,742			4,081
General and administrative expenses	1,163			1,174			1,187			1,153			1,191			1,223			1,193			3,524			3,607
Interest expense	82			83			87			88			87			88			88			252			263
Total claims and expenses	7,422			7,556			8,019			7,361			7,627			8,479			8,775			22,997			24,881
Core income before income taxes	847			1,070			778			1,592			1,205			752			621			2,695			2,578
Income tax expense	148			191			123			303			168			127			95			462			390
Core income	$	699		$	879		$	655		$	1,289		$	1,037		$	625		$	526		$	2,233		$	2,188
Other statistics
Effective tax rate on net investment income	15.9		%	16.7		%	16.3		%	16.0		%	15.4		%	15.8		%	14.8		%	16.3		%	15.4		%
Net investment income (after-tax)	$	590		$	682		$	645		$	624		$	539		$	595		$	505		$	1,917		$	1,639
Catastrophes, net of reinsurance:
Pre-tax	$	835		$	475		$	501		$	36		$	160		$	746		$	512		$	1,811		$	1,418
After-tax	$	659		$	376		$	395		$	29		$	127		$	587		$	404		$	1,430		$	1,118
Prior year reserve development - favorable (unfavorable):
Pre-tax	$	317		$	182		$	(56)		$	95		$	153		$	291		$	20		$	443		$	464
After-tax	$	249		$	144		$	(44)		$	75		$	122		$	229		$	16		$	349		$	367

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                      

Selected Statistics - Property and Casualty Operations

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Statutory underwriting
Gross written premiums	$	8,407	$	8,597	$	8,876	$	8,364	$	9,283	$	9,536	$	9,812	$	25,880	$	28,631
Net written premiums	$	7,505	$	8,135	$	8,324	$	8,002	$	8,367	$	9,020	$	9,198	$	23,964	$	26,585
Net earned premiums	$	7,386	$	7,616	$	7,829	$	8,029	$	8,016	$	8,316	$	8,615	$	22,831	$	24,947
Losses and loss adjustment expenses	4,920		5,003		5,415		4,773		4,994		5,758		6,034		15,338		16,786
Underwriting expenses	2,276		2,361		2,385		2,269		2,441		2,568		2,533		7,022		7,542
Statutory underwriting gain (loss)	190		252		29		987		581		(10)		48		471		619
Policyholder dividends	11		10		10		10		11		6		14		31		31
Statutory underwriting gain (loss) after policyholder dividends	$	179	$	242	$	19	$	977	$	570	$	(16)	$	34	$	440	$	588
Other statutory statistics
Reserves for losses and loss adjustment expenses	$	47,153	$	47,893	$	48,662	$	48,589	$	49,027	$	49,676	$	50,139	$	48,662	$	50,139
Increase (decrease) in reserves	$	906	$	740	$	769	$	(73)	$	438	$	649	$	463	$	2,415	$	1,550
Statutory capital and surplus	$	22,403	$	22,797	$	22,987	$	23,906	$	24,168	$	23,776	$	23,375	$	22,987	$	23,375
Net written premiums/surplus (1)	1.33:1		1.35:1		1.36:1		1.34:1		1.36:1		1.42:1		1.48:1		1.36:1		1.48:1

(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.

The Travelers Companies, Inc.                                                 

Written and Earned Premiums - Property and Casualty Operations

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Written premiums
Gross	$	8,407	$	8,597	$	8,876	$	8,364	$	9,283	$	9,536	$	9,812	$	25,880	$	28,631
Ceded	(902)		(462)		(552)		(369)		(916)		(516)		(614)		(1,916)		(2,046)
Net	$	7,505	$	8,135	$	8,324	$	7,995	$	8,367	$	9,020	$	9,198	$	23,964	$	26,585
Earned premiums
Gross	$	7,895	$	8,164	$	8,376	$	8,574	$	8,565	$	8,897	$	9,216	$	24,435	$	26,678
Ceded	(509)		(548)		(547)		(550)		(551)		(580)		(601)		(1,604)		(1,732)
Net	$	7,386	$	7,616	$	7,829	$	8,024	$	8,014	$	8,317	$	8,615	$	22,831	$	24,946

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Segment Income - Business Insurance

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Revenues
Premiums	$	3,799		$	3,880		$	3,970		$	4,085		$	4,071		$	4,218		$	4,353		$	11,649		$	12,642
Net investment income	523			615			575			552			468			521			426			1,713			1,415
Fee income	95			97			90			93			96			93			96			282			285
Other revenues	53			57			69			56			53			85			56			179			194
Total revenues	4,470			4,649			4,704			4,786			4,688			4,917			4,931			13,823			14,536
Claims and expenses
Claims and claim adjustment expenses	2,788			2,539			2,703			2,368			2,514			2,698			2,959			8,030			8,171
Amortization of deferred acquisition costs	627			642			653			659			668			691			708			1,922			2,067
General and administrative expenses	683			688			684			691			697			714			704			2,055			2,115
Total claims and expenses	4,098			3,869			4,040			3,718			3,879			4,103			4,371			12,007			12,353
Segment income before income taxes	372			780			664			1,068			809			814			560			1,816			2,183
Income tax expense	55			137			106			201			140			148			89			298			377
Segment income	$	317		$	643		$	558		$	867		$	669		$	666		$	471		$	1,518		$	1,806
Other statistics
Effective tax rate on net investment income	15.8		%	16.7		%	16.3		%	16.0		%	15.3		%	15.8		%	14.6		%	16.3		%	15.3		%
Net investment income (after-tax)	$	441		$	511		$	481		$	464		$	396		$	439		$	364		$	1,433		$	1,199
Catastrophes, net of reinsurance:
Pre-tax	$	506		$	149		$	181		$	(43)		$	79		$	234		$	216		$	836		$	529
After-tax	$	399		$	119		$	143		$	(34)		$	63		$	184		$	170		$	661		$	417
Prior year reserve development - favorable (unfavorable):
Pre-tax	$	134		$	73		$	(108)		$	74		$	113		$	202		$	(61)		$	99		$	254
After-tax	$	105		$	58		$	(86)		$	58		$	90		$	159		$	(48)		$	77		$	201

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Segment Income by Major Component and Combined Ratio - Business Insurance

($ in millions, net of tax)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Underwriting gain (loss)	$	(116)		$	137		$	80		$	412		$	291		$	220		$	117		$	101		$	628
Net investment income	441			511			481			464			396			439			364			1,433			1,199
Other income (expense)	(8)			(5)			(3)			(9)			(18)			7			(10)			(16)			(21)
Segment income	$	317		$	643		$	558		$	867		$	669		$	666		$	471		$	1,518		$	1,806
Combined ratio (1) (2)
Loss and loss adjustment expense ratio	72.2		%	64.3		%	67.0		%	56.9		%	60.7		%	63.0		%	66.9		%	67.8		%	63.6		%
Underwriting expense ratio	31.3		%	31.0		%	30.5		%	30.1		%	30.2		%	30.2		%	29.4		%	30.9		%	29.9		%
Combined ratio	103.5		%	95.3		%	97.5		%	87.0		%	90.9		%	93.2		%	96.3		%	98.7		%	93.5		%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development	(3.5)		%	(1.9)		%	2.7		%	(1.8)		%	(2.8)		%	(4.8)		%	1.4		%	(0.9)		%	(2.0)		%
Catastrophes, net of reinsurance	13.3		%	3.9		%	4.6		%	(1.0)		%	1.9		%	5.6		%	4.9		%	7.2		%	4.1		%
Underlying combined ratio	93.7		%	93.3		%	90.2		%	89.8		%	91.8		%	92.4		%	90.0		%	92.4		%	91.4		%

(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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Billing and policy fees and other	$	4	$	3	$	4	$	3	$	3	$	4	$	4	$	11	$	11
Fee income:
Loss and loss adjustment expenses	$	38	$	39	$	36	$	37	$	35	$	39	$	38	$	113	$	112
Underwriting expenses	57		58		54		56		61		54		58		169		173
Total fee income	$	95	$	97	$	90	$	93	$	96	$	93	$	96	$	282	$	285
Non-insurance general and administrative expenses	$	60	$	65	$	68	$	63	$	70	$	73	$	70	$	193	$	213

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Selected Statistics - Business Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Statutory underwriting
Gross written premiums	$	4,776	$	4,356	$	4,453	$	4,244	$	5,148	$	4,786	$	4,864	$	13,585	$	14,798
Net written premiums	$	4,125	$	3,980	$	4,021	$	3,973	$	4,502	$	4,373	$	4,370	$	12,126	$	13,245
Net earned premiums	$	3,799	$	3,880	$	3,970	$	4,090	$	4,073	$	4,217	$	4,353	$	11,649	$	12,643
Losses and loss adjustment expenses	2,741		2,500		2,657		2,326		2,472		2,656		2,911		7,898		8,039
Underwriting expenses	1,251		1,226		1,205		1,190		1,313		1,325		1,281		3,682		3,919
Statutory underwriting gain (loss)	(193)		154		108		574		288		236		161		69		685
Policyholder dividends	8		6		8		7		8		4		7		22		19
Statutory underwriting gain (loss) after policyholder dividends	$	(201)	$	148	$	100	$	567	$	280	$	232	$	154	$	47	$	666

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Net Written Premiums - Business Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net written premiums by market
Domestic
Select Accounts	$	729	$	726	$	685	$	693	$	819	$	807	$	739	$	2,140	$	2,365
Middle Market	2,384		2,087		2,252		2,210		2,616		2,329		2,465		6,723		7,410
National Accounts	290		213		228		256		303		240		247		731		790
National Property and Other	445		647		638		535		497		690		702		1,730		1,889
Total Domestic	3,848		3,673		3,803		3,694		4,235		4,066		4,153		11,324		12,454
International	277		307		218		272		267		307		217		802		791
Total	$	4,125	$	3,980	$	4,021	$	3,966	$	4,502	$	4,373	$	4,370	$	12,126	$	13,245
Net written premiums by product line
Domestic
Workers’ compensation	$	948	$	754	$	751	$	722	$	1,008	$	823	$	787	$	2,453	$	2,618
Commercial automobile	762		715		716		705		781		759		762		2,193		2,302
Commercial property	466		678		656		608		551		763		756		1,800		2,070
General liability	714		615		685		685		789		678		738		2,014		2,205
Commercial multi-peril	940		908		953		967		1,085		1,041		1,067		2,801		3,193
Other	18		3		42		7		21		2		43		63		66
Total Domestic	3,848		3,673		3,803		3,694		4,235		4,066		4,153		11,324		12,454
International	277		307		218		272		267		307		217		802		791
Total	$	4,125	$	3,980	$	4,021	$	3,966	$	4,502	$	4,373	$	4,370	$	12,126	$	13,245

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                

Segment Income - Bond & Specialty Insurance

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Revenues
Premiums	$	743		$	776		$	806		$	813		$	820		$	851		$	877		$	2,325		$	2,548
Net investment income	59			64			63			61			59			64			65			186			188
Other revenues	5			7			5			6			4			4			6			17			14
Total revenues	807			847			874			880			883			919			948			2,528			2,750
Claims and expenses
Claims and claim adjustment expenses	374			335			375			389			354			331			334			1,084			1,019
Amortization of deferred acquisition costs	134			142			147			147			149			155			162			423			466
General and administrative expenses	130			135			135			132			141			148			148			400			437
Total claims and expenses	638			612			657			668			644			634			644			1,907			1,922
Segment income before income taxes	169			235			217			212			239			285			304			621			828
Income tax expense	32			48			43			42			22			57			62			123			141
Segment income	$	137		$	187		$	174		$	170		$	217		$	228		$	242		$	498		$	687
Other statistics
Effective tax rate on net investment income	15.0		%	15.7		%	15.3		%	15.1		%	15.1		%	15.4		%	15.6		%	15.3		%	15.4		%
Net investment income (after-tax)	$	50		$	55		$	53		$	52		$	50		$	55		$	54		$	158		$	159
Catastrophes, net of reinsurance:
Pre-tax	$	24		$	3		$	3		$	10		$	1		$	4		$	11		$	30		$	16
After-tax	$	19		$	2		$	2		$	8		$	1		$	3		$	9		$	23		$	13
Prior year reserve development - favorable:
Pre-tax	$	15		$	44		$	22		$	24		$	35		$	73		$	63		$	81		$	171
After-tax	$	12		$	35		$	18		$	19		$	28		$	57		$	50		$	65		$	135

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                

Segment Income by Major Component and Combined Ratio - Bond & Specialty Insurance

($ in millions, net of tax)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Underwriting gain	$	84		$	128		$	118		$	114		$	165		$	171		$	185		$	330		$	521
Net investment income	50			55			53			52			50			55			54			158			159
Other income	3			4			3			4			2			2			3			10			7
Segment income	$	137		$	187		$	174		$	170		$	217		$	228		$	242		$	498		$	687
Combined ratio (1)
Loss and loss adjustment expense ratio	49.9		%	42.6		%	46.3		%	47.4		%	42.8		%	38.5		%	37.3		%	46.2		%	39.5		%
Underwriting expense ratio	35.3		%	35.5		%	34.8		%	34.1		%	35.2		%	35.5		%	35.2		%	35.2		%	35.3		%
Combined ratio	85.2		%	78.1		%	81.1		%	81.5		%	78.0		%	74.0		%	72.5		%	81.4		%	74.8		%
Impact on combined ratio:
Net favorable prior year reserve development	(2.1)		%	(5.7)		%	(2.6)		%	(3.0)		%	(4.3)		%	(8.6)		%	(7.2)		%	(3.5)		%	(6.7)		%
Catastrophes, net of reinsurance	3.1		%	0.4		%	0.3		%	1.2		%	0.1		%	0.4		%	1.3		%	1.3		%	0.6		%
Underlying combined ratio	84.2		%	83.4		%	83.4		%	83.3		%	82.2		%	82.2		%	78.4		%	83.6		%	80.9		%

(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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Non-insurance general and administrative expenses	$	2	$	1	$	1	$	2	$	1	$	1	$	1	$	4	$	3

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Selected Statistics - Bond & Specialty Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Statutory underwriting
Gross written premiums	$	834	$	919	$	984	$	988	$	1,009	$	1,036	$	1,043	$	2,737	$	3,088
Net written premiums	$	723	$	854	$	894	$	905	$	882	$	962	$	964	$	2,471	$	2,808
Net earned premiums	$	743	$	776	$	806	$	813	$	820	$	851	$	877	$	2,325	$	2,548
Losses and loss adjustment expenses	371		331		373		385		351		328		328		1,075		1,007
Underwriting expenses	270		287		300		288		319		319		326		857		964
Statutory underwriting gain	102		158		133		140		150		204		223		393		577
Policyholder dividends	3		4		2		3		3		2		7		9		12
Statutory underwriting gain after policyholder dividends	$	99	$	154	$	131	$	137	$	147	$	202	$	216	$	384	$	565

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Net Written Premiums - Bond & Specialty Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net written premiums by market
Domestic
Management Liability	$	444	$	497	$	532	$	510	$	505	$	533	$	554	$	1,473	$	1,592
Surety	200		232		241		215		257		287		284		673		828
Total Domestic	644		729		773		725		762		820		838		2,146		2,420
International	79		125		121		180		120		142		126		325		388
Total	$	723	$	854	$	894	$	905	$	882	$	962	$	964	$	2,471	$	2,808
Net written premiums by product line
Domestic
Fidelity & surety	$	256	$	287	$	307	$	273	$	320	$	346	$	350	$	850	$	1,016
General liability	340		389		401		400		389		419		424		1,130		1,232
Other	48		53		65		52		53		55		64		166		172
Total Domestic	644		729		773		725		762		820		838		2,146		2,420
International	79		125		121		180		120		142		126		325		388
Total	$	723	$	854	$	894	$	905	$	882	$	962	$	964	$	2,471	$	2,808

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Segment Income (Loss) - Personal Insurance

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Revenues
Premiums	$	2,844		$	2,960		$	3,053		$	3,126		$	3,123		$	3,248		$	3,385		$	8,857		$	9,756
Net investment income	119			139			133			130			110			122			102			391			334
Fee income	6			7			7			7			7			7			8			20			22
Other revenues	23			24			26			24			21			18			22			73			61
Total revenues	2,992			3,130			3,219			3,287			3,261			3,395			3,517			9,341			10,173
Claims and expenses
Claims and claim adjustment expenses	1,808			2,171			2,386			2,062			2,171			2,774			2,795			6,365			7,740
Amortization of deferred acquisition costs	446			470			481			495			493			519			536			1,397			1,548
General and administrative expenses	344			343			360			323			345			352			333			1,047			1,030
Total claims and expenses	2,598			2,984			3,227			2,880			3,009			3,645			3,664			8,809			10,318
Segment income (loss) before income taxes	394			146			(8)			407			252			(250)			(147)			532			(145)
Income tax expense (benefit)	80			25			(6)			80			27			(57)			(36)			99			(66)
Segment income (loss)	$	314		$	121		$	(2)		$	327		$	225		$	(193)		$	(111)		$	433		$	(79)
Other statistics
Effective tax rate on net investment income	16.4		%	17.1		%	16.8		%	16.5		%	15.9		%	16.3		%	15.4		%	16.8		%	15.9		%
Net investment income (after-tax)	$	99		$	116		$	111		$	108		$	93		$	101		$	87		$	326		$	281
Catastrophes, net of reinsurance:
Pre-tax	$	305		$	323		$	317		$	69		$	80		$	508		$	285		$	945		$	873
After-tax	$	241		$	255		$	250		$	55		$	63		$	400		$	225		$	746		$	688
Prior year reserve development - favorable (unfavorable):
Pre-tax	$	168		$	65		$	30		$	(3)		$	5		$	16		$	18		$	263		$	39
After-tax	$	132		$	51		$	24		$	(2)		$	4		$	13		$	14		$	207		$	31

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Segment Income (Loss) by Major Component and Combined Ratio - Personal Insurance

($ in millions, net of tax)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Underwriting gain (loss)	$	198		$	(12)		$	(130)		$	203		$	119		$	(305)		$	(212)		$	56		$	(398)
Net investment income	99			116			111			108			93			101			87			326			281
Other income	17			17			17			16			13			11			14			51			38
Segment income (loss)	$	314		$	121		$	(2)		$	327		$	225		$	(193)		$	(111)		$	433		$	(79)
Combined ratio (1)
Loss and loss adjustment expense ratio	63.6		%	73.3		%	78.2		%	66.0		%	69.5		%	85.4		%	82.6		%	71.8		%	79.3		%
Underwriting expense ratio	26.7		%	26.4		%	26.4		%	25.1		%	25.8		%	25.8		%	24.6		%	26.5		%	25.4		%
Combined ratio	90.3		%	99.7		%	104.6		%	91.1		%	95.3		%	111.2		%	107.2		%	98.3		%	104.7		%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development	(5.9)		%	(2.2)		%	(1.0)		%	0.1		%	(0.1)		%	(0.5)		%	(0.5)		%	(3.0)		%	(0.4)		%
Catastrophes, net of reinsurance	10.8		%	10.9		%	10.4		%	2.3		%	2.6		%	15.6		%	8.4		%	10.6		%	8.9		%
Underlying combined ratio	85.4		%	91.0		%	95.2		%	88.7		%	92.8		%	96.1		%	99.3		%	90.7		%	96.2		%

(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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Billing and policy fees and other	$	23	$	24	$	23	$	23	$	24	$	23	$	23	$	70	$	70
Fee income	$	6	$	7	$	7	$	7	$	7	$	7	$	8	$	20	$	22
Non-insurance general and administrative expenses	$	2	$	3	$	4	$	3	$	3	$	4	$	4	$	9	$	11

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Selected Statistics - Personal Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Statutory underwriting
Gross written premiums	$	2,797	$	3,322	$	3,439	$	3,132	$	3,126	$	3,714	$	3,905	$	9,558	$	10,745
Net written premiums	$	2,657	$	3,301	$	3,409	$	3,124	$	2,983	$	3,685	$	3,864	$	9,367	$	10,532
Net earned premiums	$	2,844	$	2,960	$	3,053	$	3,126	$	3,123	$	3,248	$	3,385	$	8,857	$	9,756
Losses and loss adjustment expenses	1,808		2,172		2,385		2,062		2,171		2,774		2,795		6,365		7,740
Underwriting expenses	755		848		880		791		809		924		926		2,483		2,659
Statutory underwriting gain (loss)	$	281	$	(60)	$	(212)	$	273	$	143	$	(450)	$	(336)	$	9	$	(643)
Policies in force (in thousands)
Automobile	3,056		3,098		3,141		3,179		3,212		3,243		3,283		3,141		3,283
Homeowners and Other	5,944		6,076		6,168		6,230		6,284		6,338		6,367		6,168		6,367

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Net Written Premiums - Personal Insurance

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net written premiums by product line
Domestic
Automobile	$	1,375	$	1,467	$	1,529	$	1,456	$	1,496	$	1,629	$	1,743	$	4,371	$	4,868
Homeowners and Other	1,144		1,634		1,698		1,504		1,344		1,868		1,952		4,476		5,164
Total Domestic	2,519		3,101		3,227		2,960		2,840		3,497		3,695		8,847		10,032
International	138		200		182		164		143		188		169		520		500
Total	$	2,657	$	3,301	$	3,409	$	3,124	$	2,983	$	3,685	$	3,864	$	9,367	$	10,532

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Selected Statistics - Personal Insurance - Automobile

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Statutory underwriting
Gross written premiums	$	1,481		$	1,604		$	1,656		$	1,567		$	1,605		$	1,755		$	1,857		$	4,741		$	5,217
Net written premiums	$	1,466		$	1,597		$	1,648		$	1,562		$	1,591		$	1,749		$	1,849		$	4,711		$	5,189
Net earned premiums	$	1,478		$	1,525		$	1,557		$	1,581		$	1,568		$	1,620		$	1,679		$	4,560		$	4,867
Losses and loss adjustment expenses	845			1,026			1,180			1,280			1,188			1,311			1,510			3,051			4,009
Underwriting expenses	370			389			399			369			382			408			408			1,158			1,198
Statutory underwriting gain (loss)	$	263		$	110		$	(22)		$	(68)		$	(2)		$	(99)		$	(239)		$	351		$	(340)
Other statistics
Combined ratio (1):
Loss and loss adjustment expense ratio	57.2		%	67.2		%	75.9		%	80.9		%	75.8		%	80.9		%	90.0		%	66.9		%	82.4		%
Underwriting expense ratio	24.6		%	24.4		%	24.1		%	23.2		%	23.5		%	23.4		%	22.2		%	24.4		%	23.0		%
Combined ratio	81.8		%	91.6		%	100.0		%	104.1		%	99.3		%	104.3		%	112.2		%	91.3		%	105.4		%
Impact on combined ratio:
Net (favorable) unfavorable prior year reserve development	(5.2)		%	(2.1)		%	(0.4)		%	0.6		%	0.3		%	0.3		%	0.4		%	(2.6)		%	0.4		%
Catastrophes, net of reinsurance	0.4		%	1.7		%	3.4		%	(0.3)		%	0.2		%	2.2		%	7.9		%	1.9		%	3.5		%
Underlying combined ratio	86.6		%	92.0		%	97.0		%	103.8		%	98.8		%	101.8		%	103.9		%	92.0		%	101.5		%
Catastrophes, net of reinsurance:
Pre-tax	$	6		$	26		$	53		$	(5)		$	4		$	35		$	133		$	85		$	172
After-tax	$	5		$	21		$	41		$	(4)		$	3		$	28		$	105		$	67		$	136
Prior year reserve development - favorable (unfavorable):
Pre-tax	$	78		$	33		$	6		$	(10)		$	(4)		$	(6)		$	(8)		$	117		$	(18)
After-tax	$	61		$	26		$	5		$	(8)		$	(3)		$	(4)		$	(6)		$	92		$	(13)
Policies in force (in thousands)	3,056			3,098			3,141			3,179			3,212			3,243			3,283
Change from prior year quarter	2.9		%	3.5		%	4.2		%	5.0		%	5.1		%	4.7		%	4.5		%
Change from prior quarter	0.9		%	1.4		%	1.4		%	1.2		%	1.0		%	1.0		%	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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Billing and policy fees and other	$	14	$	14	$	14	$	14	$	14	$	14	$	14	$	42	$	42
Fee income	$	3	$	4	$	4	$	4	$	4	$	3	$	4	$	11	$	11

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Selected Statistics - Personal Insurance - Homeowners and Other

($ in millions)	1Q2021			2Q2021			3Q2021			4Q2021			1Q2022			2Q2022			3Q2022			YTD 3Q2021			YTD 3Q2022
Statutory underwriting
Gross written premiums	$	1,316		$	1,718		$	1,783		$	1,565		$	1,521		$	1,959		$	2,048		$	4,817		$	5,528
Net written premiums	$	1,191		$	1,704		$	1,761		$	1,562		$	1,392		$	1,936		$	2,015		$	4,656		$	5,343
Net earned premiums	$	1,366		$	1,435		$	1,496		$	1,545		$	1,555		$	1,628		$	1,706		$	4,297		$	4,889
Losses and loss adjustment expenses	963			1,146			1,205			782			983			1,463			1,285			3,314			3,731
Underwriting expenses	385			459			481			422			427			516			518			1,325			1,461
Statutory underwriting gain (loss)	$	18		$	(170)		$	(190)		$	341		$	145		$	(351)		$	(97)		$	(342)		$	(303)
Other statistics
Combined ratio (1):
Loss and loss adjustment expense ratio	70.5		%	79.8		%	80.5		%	50.7		%	63.2		%	89.9		%	75.4		%	77.1		%	76.3		%
Underwriting expense ratio	28.9		%	28.5		%	28.8		%	27.1		%	28.0		%	28.1		%	26.9		%	28.7		%	27.7		%
Combined ratio	99.4		%	108.3		%	109.3		%	77.8		%	91.2		%	118.0		%	102.3		%	105.8		%	104.0		%
Impact on combined ratio:
Net favorable prior year reserve development	(6.6)		%	(2.2)		%	(1.6)		%	(0.4)		%	(0.6)		%	(1.3)		%	(1.5)		%	(3.4)		%	(1.2)		%
Catastrophes, net of reinsurance	21.9		%	20.6		%	17.6		%	4.8		%	4.9		%	29.0		%	8.9		%	20.0		%	14.4		%
Underlying combined ratio	84.1		%	89.9		%	93.3		%	73.4		%	86.9		%	90.3		%	94.9		%	89.2		%	90.8		%
Catastrophes, net of reinsurance:
Pre-tax	$	299		$	297		$	264		$	74		$	76		$	473		$	152		$	860		$	701
After-tax	$	236		$	234		$	209		$	59		$	60		$	372		$	120		$	679		$	552
Prior year reserve development - favorable:
Pre-tax	$	90		$	32		$	24		$	7		$	9		$	22		$	26		$	146		$	57
After-tax	$	71		$	25		$	19		$	6		$	7		$	17		$	20		$	115		$	44
Policies in force (in thousands)	5,944			6,076			6,168			6,230			6,284			6,338			6,367
Change from prior year quarter	7.4		%	7.0		%	6.5		%	6.4		%	5.7		%	4.3		%	3.2		%
Change from prior quarter	1.5		%	2.2		%	1.5		%	1.0		%	0.9		%	0.9		%	0.5		%

(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)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Billing and policy fees and other	$	9	$	10	$	9	$	9	$	10	$	9	$	9	$	28	$	28
Fee income	$	3	$	3	$	3	$	3	$	3	$	4	$	4	$	9	$	11

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Interest Expense and Other

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Revenues
Other revenues	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Claims and expenses
Interest expense	82		83		87		88		87		88		88		252		263
General and administrative expenses	6		8		8		7		8		9		8		22		25
Total claims and expenses	88		91		95		95		95		97		96		274		288
Loss before income tax benefit	(88)		(91)		(95)		(95)		(95)		(97)		(96)		(274)		(288)
Income tax benefit	(19)		(19)		(20)		(20)		(21)		(21)		(20)		(58)		(62)
Loss	$	(69)	$	(72)	$	(75)	$	(75)	$	(74)	$	(76)	$	(76)	$	(216)	$	(226)

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Consolidated Balance Sheet

($ and shares in millions)	September 30,<br>2022		December 31,<br>2021
Assets
Fixed maturities, available for sale, at fair value (amortized cost $76,471 and $74,751; allowance for expected credit losses of $3 and $3)	$	68,450	$	77,810
Equity securities, at fair value (cost $757 and $749)	774		893
Real estate investments	954		979
Short-term securities	3,927		3,836
Other investments	4,008		3,857
Total investments	78,113		87,375
Cash	773		761
Investment income accrued	583		615
Premiums receivable (net of allowance for expected credit losses of $86 and $107)	8,886		8,085
Reinsurance recoverables (net of allowance for estimated uncollectible reinsurance of $133 and $141)	8,202		8,452
Ceded unearned premiums	1,199		902
Deferred acquisition costs	2,858		2,542
Deferred taxes	2,175		—
Contractholder receivables (net of allowance for expected credit losses of $18 and $21)	3,749		3,890
Goodwill	3,922		4,008
Other intangible assets	287		306
Other assets	3,570		3,530
Total assets	$	114,317	$	120,466
Liabilities
Claims and claim adjustment expense reserves	$	58,138	$	56,907
Unearned premium reserves	18,364		16,469
Contractholder payables	3,767		3,911
Payables for reinsurance premiums	629		384
Deferred taxes	—		289
Debt	7,291		7,290
Other liabilities	6,222		6,329
Total liabilities	94,411		91,579
Shareholders’ equity
Common stock (1,750.0 shares authorized; 234.3 and 241.2 shares issued and outstanding)	24,472		24,154
Retained earnings	42,917		41,555
Accumulated other comprehensive income (loss)	(7,908)		1,193
Treasury stock, at cost (550.8 and 541.5 shares)	(39,575)		(38,015)
Total shareholders’ equity	19,906		28,887
Total liabilities and shareholders’ equity	$	114,317	$	120,466

The Travelers Companies, Inc.                                                 

Investment Portfolio

(at carrying value, $ in millions)	September 30,<br>2022		Pre-tax Book<br>Yield (1)		December 31,<br>2021		Pre-tax Book<br>Yield (1)
Investment portfolio
Taxable fixed maturities	$	40,863	2.79	%	$	44,743	2.60	%
Tax-exempt fixed maturities	27,587		2.90	%	33,067		2.81	%
Total fixed maturities	68,450		2.84	%	77,810		2.69	%
Non-redeemable preferred stocks	58		3.07	%	66		3.04	%
Common stocks	716				827
Total equity securities	774				893
Real estate investments	954				979
Short-term securities	3,927		3.06	%	3,836		0.10	%
Private equities	2,752				2,672
Hedge funds	228				231
Real estate partnerships	851				768
Other investments	177				186
Total other investments	4,008				3,857
Total investments	$	78,113			$	87,375
Net unrealized investment gains (losses), net of tax, included in shareholders’ equity	$	(6,317)			$	2,415

(1)  Yields are provided for those investments with an embedded book yield.

The Travelers Companies, Inc.                                                 

Investment Portfolio - Fixed Maturities Data

(at carrying value, $ in millions)	September 30,<br>2022		December 31,<br>2021
Fixed maturities
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	4,034	$	3,562
Obligations of U.S. states and political subdivisions:
Pre-refunded	3,104		4,032
All other	28,024		32,830
Total	31,128		36,862
Debt securities issued by foreign governments	941		1,041
Mortgage-backed securities - principally obligations of U.S. Government agencies	1,820		1,817
Corporate and all other bonds	30,527		34,528
Total fixed maturities	$	68,450	$	77,810

Fixed Maturities

Quality Characteristics (1)

	September 30, 2022				December 31, 2021
	Amount		% of Total		Amount		% of Total
Quality Ratings
Aaa	$	29,937	43.7	%	$	33,323	42.8	%
Aa	15,948		23.3		18,140		23.3
A	12,770		18.7		14,757		19.0
Baa	8,877		13.0		10,483		13.5
Total investment grade	67,532		98.7		76,703		98.6
Ba	588		0.8		742		0.9
B	270		0.4		293		0.4
Caa and lower	60		0.1		72		0.1
Total below investment grade	918		1.3		1,107		1.4
Total fixed maturities	$	68,450	100.0	%	$	77,810	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	4.8				4.2

(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.

The Travelers Companies, Inc.                                                 

Investment Income

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Gross investment income
Fixed maturities
Short-term securities	3		1		2		1		2		9		23		6		34
Other	218		335		281		243		142		197		46		834		385
	712		829		780		752		649		718		603		2,321		1,970
Investment expenses	11		11		9		9		12		11		10		31		33
Net investment income, pre-tax	701		818		771		743		637		707		593		2,290		1,937
Income taxes	111		136		126		119		98		112		88		373		298
Net investment income, after-tax
Effective tax rate	15.9	%	16.7	%	16.3	%	16.0	%	15.4	%	15.8	%	14.8	%	16.3	%	15.4	%
Average invested assets (1)	81,209		82,594		84,647		85,806		86,345		86,660		87,315		82,854		86,818
Average yield pre-tax (1)	3.5	%	4.0	%	3.6	%	3.5	%	2.9	%	3.3	%	2.7	%	3.7	%	3.0	%
Average yield after-tax	2.9	%	3.3	%	3.0	%	2.9	%	2.5	%	2.7	%	2.3	%	3.1	%	2.5	%

All values are in US Dollars.

(1)  Excludes net unrealized investment gains (losses), and is adjusted for cash, receivables for investment sales, payables on investment purchases and accrued investment income.

The Travelers Companies, Inc.                                                 

Net Realized Investment Gains (Losses) and Net Unrealized Investment Gains (Losses) included in Shareholders' Equity

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Net realized investment gains (losses)
Fixed maturities	$	14	$	24	$	12	$	17	$	2	$	(21)	$	(42)	$	50	$	(61)
Equity securities	26		32		(1)		38		(19)		(64)		(26)		57		(109)
Other	4		5		(3)		3		(6)		(10)		(25)		6		(41)
Realized investment gains (losses) before tax	44		61		8		58		(23)		(95)		(93)		113		(211)
Related taxes	10		14		1		14		(4)		(21)		(21)		25		(46)
Net realized investment gains (losses)	$	34	$	47	$	7	$	44	$	(19)	$	(74)	$	(72)	$	88	$	(165)
Gross investment gains	$	50	$	72	$	24	$	66	$	13	$	16	$	15	$	146	$	44
Gross investment losses before impairments	(6)		(11)		(15)		(7)		(35)		(91)		(94)		(32)		(220)
Net investment gains (losses) before impairments	44		61		9		59		(22)		(75)		(79)		114		(176)
Net impairment (charges) recoveries	—		—		(1)		(1)		(1)		(20)		(14)		(1)		(35)
Net realized investment gains (losses) before tax	44		61		8		58		(23)		(95)		(93)		113		(211)
Related taxes	10		14		1		14		(4)		(21)		(21)		25		(46)
Net realized investment gains (losses)	$	34	$	47	$	7	$	44	$	(19)	$	(74)	$	(72)	$	88	$	(165)
($ in millions)	March 31,<br>2021		June 30,<br>2021		September 30,<br>2021		December 31,<br>2021		March 31,<br>2022		June 30,<br>2022		September 30,<br>2022
Net unrealized investment gains (losses), net of tax, included in shareholders’ equity, by asset type
Fixed maturities	$	3,577	$	4,113	$	3,428	$	3,062	$	(1,768)	$	(4,814)	$	(8,018)
Other	2		(1)		(2)		(2)		(2)		(3)		(3)
Unrealized investment gains (losses) before tax	3,579		4,112		3,426		3,060		(1,770)		(4,817)		(8,021)
Related taxes	762		873		727		645		(379)		(1,025)		(1,704)
Balance, end of period	$	2,817	$	3,239	$	2,699	$	2,415	$	(1,391)	$	(3,792)	$	(6,317)

The Travelers Companies, Inc.                                                 

Reinsurance Recoverables

($ in millions)	September 30, 2022		December 31, 2021
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses (1)	$	3,918	$	3,931
Gross structured settlements (2)	2,808		2,900
Mandatory pools and associations (3)	1,609		1,762
Gross reinsurance recoverables (4)	8,335		8,593
Allowance for estimated uncollectible reinsurance (5)	(133)		(141)
Net reinsurance recoverables	$	8,202	$	8,452

(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	September 30, 2022
Swiss Re Group	A+ second highest of 16 ratings	$	560
Munich Re Group	A+ second highest of 16 ratings	341
Berkshire Hathaway	A++ highest of 16 ratings	321
Alleghany Group	A+ second highest of 16 ratings	216
Axa Group	A+ second highest of 16 ratings	174

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	September 30, 2022
Fidelity & Guaranty Life Group	A- fourth highest of 16 ratings	$	705
Genworth Financial Group	B seventh highest of 16 ratings	310
John Hancock Group	A+ second highest of 16 ratings	238
Symetra Financial Corporation	A third highest of 16 ratings	216
Brighthouse Financial, Inc.	A third highest of 16 ratings	210

(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 September 30, 2022, after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance, $5.84 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.

The Travelers Companies, Inc.                                                 

Net Reserves for Losses and Loss Adjustment Expense

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Statutory Reserves for Losses and Loss Adjustment Expenses
Business Insurance
Beginning of period	$	36,999	$	37,694	$	38,010	$	38,342	$	38,233	$	38,450	$	38,618	$	36,999	$	38,233
Incurred	2,741		2,500		2,657		2,326		2,472		2,656		2,911		7,898		8,039
Paid	(2,056)		(2,196)		(2,288)		(2,438)		(2,242)		(2,411)		(2,516)		(6,540)		(7,169)
Foreign exchange and other	10		12		(37)		3		(13)		(77)		(108)		(15)		(198)
End of period	$	37,694	$	38,010	$	38,342	$	38,233	$	38,450	$	38,618	$	38,905	$	38,342	$	38,905
Bond & Specialty Insurance
Beginning of period	$	3,571	$	3,691	$	3,770	$	3,892	$	3,938	$	4,079	$	4,118	$	3,571	$	3,938
Incurred	371		331		373		385		351		328		328		1,075		1,007
Paid	(256)		(254)		(235)		(341)		(197)		(242)		(345)		(745)		(784)
Foreign exchange and other	5		2		(16)		2		(13)		(47)		(59)		(9)		(119)
End of period	$	3,691	$	3,770	$	3,892	$	3,938	$	4,079	$	4,118	$	4,042	$	3,892	$	4,042
Personal Insurance
Beginning of period	$	5,677	$	5,768	$	6,113	$	6,428	$	6,418	$	6,498	$	6,940	$	5,677	$	6,418
Incurred	1,808		2,172		2,385		2,062		2,171		2,774		2,795		6,365		7,740
Paid	(1,730)		(1,837)		(2,051)		(2,075)		(2,103)		(2,306)		(2,486)		(5,618)		(6,895)
Foreign exchange and other	13		10		(19)		3		12		(26)		(57)		4		(71)
End of period	$	5,768	$	6,113	$	6,428	$	6,418	$	6,498	$	6,940	$	7,192	$	6,428	$	7,192
Total
Beginning of period	$	46,247	$	47,153	$	47,893	$	48,662	$	48,589	$	49,027	$	49,676	$	46,247	$	48,589
Incurred	4,920		5,003		5,415		4,773		4,994		5,758		6,034		15,338		16,786
Paid	(4,042)		(4,287)		(4,574)		(4,854)		(4,542)		(4,959)		(5,347)		(12,903)		(14,848)
Foreign exchange and other	28		24		(72)		8		(14)		(150)		(224)		(20)		(388)
End of period	$	47,153	$	47,893	$	48,662	$	48,589	$	49,027	$	49,676	$	50,139	$	48,662	$	50,139
Prior Year Reserve Development: Unfavorable (Favorable)
Business Insurance
Asbestos	$	—	$	—	$	225	$	—	$	—	$	—	$	212	$	225	$	212
All other	(134)		(73)		(117)		(74)		(113)		(202)		(151)		(324)		(466)
Total Business Insurance (1)	(134)		(73)		108		(74)		(113)		(202)		61		(99)		(254)
Bond & Specialty Insurance	(15)		(44)		(22)		(24)		(35)		(73)		(63)		(81)		(171)
Personal Insurance	(168)		(65)		(30)		3		(5)		(16)		(18)		(263)		(39)
Total	$	(317)	$	(182)	$	56	$	(95)	$	(153)	$	(291)	$	(20)	$	(443)	$	(464)

(1)  Excludes accretion of discount.

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Asbestos Reserves

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Asbestos reserves
Beginning reserves:
Gross	$	1,668	$	1,616	$	1,565	$	1,777	$	1,687	$	1,635	$	1,547	$	1,668	$	1,687
Ceded	(330)		(327)		(315)		(369)		(346)		(331)		(322)		(330)		(346)
Net	1,338		1,289		1,250		1,408		1,341		1,304		1,225		1,338		1,341
Incurred losses and loss expenses:
Gross	—		—		287		—		—		—		287		287		287
Ceded	—		—		(62)		—		—		—		(75)		(62)		(75)
Paid loss and loss expenses:
Gross	52		51		75		89		52		85		68		178		205
Ceded	(3)		(12)		(8)		(23)		(16)		(8)		(25)		(23)		(49)
Foreign exchange and other:
Gross	—		—		—		(1)		—		(3)		(1)		—		(4)
Ceded	—		—		—		—		(1)		1		—		—		—
Ending reserves:
Gross	1,616		1,565		1,777		1,687		1,635		1,547		1,765		1,777		1,765
Ceded	(327)		(315)		(369)		(346)		(331)		(322)		(372)		(369)		(372)
Net	$	1,289	$	1,250	$	1,408	$	1,341	$	1,304	$	1,225	$	1,393	$	1,408	$	1,393

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Capitalization

($ in millions)	September 30,<br>2022			December 31,<br>2021
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			750
Total long-term debt	7,254			7,254
Unamortized fair value adjustment	38			39
Unamortized debt issuance costs	(101)			(103)
	7,191			7,190
Total debt	7,291			7,290
Common equity (excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity)	26,223			26,472
Total capital (excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity)	$	33,514		$	33,762
Total debt to capital (excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity)	21.8		%	21.6		%

(1)  Redeemable anytime with “make-whole” premium.

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Statutory Capital and Surplus to GAAP Shareholders' Equity Reconciliation

($ in millions)	September 30,<br>2022 (1)		December 31,<br>2021
Statutory capital and surplus	$	23,375	$	23,906
GAAP adjustments
Goodwill and intangible assets	3,553		3,557
Investments	(7,722)		3,261
Noninsurance companies	(4,422)		(4,230)
Deferred acquisition costs	2,858		2,542
Deferred federal income tax	1,070		(1,274)
Current federal income tax	(1)		(39)
Reinsurance recoverables	87		87
Furniture, equipment & software	713		770
Agents balances	152		147
Other	243		160
Total GAAP adjustments	(3,469)		4,981
GAAP shareholders’ equity	$	19,906	$	28,887

(1) Estimated and Preliminary

See Glossary of Financial Measures and Description of Reportable Business Segments on pages 35 and 36.

The Travelers Companies, Inc.                                                 

Statement of Cash Flows

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Cash flows from operating activities
Net income	$	733	$	934	$	662	$	1,333	$	1,018	$	551	$	454	$	2,329	$	2,023
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	(44)		(61)		(8)		(58)		23		95		93		(113)		211
Depreciation and amortization	235		215		212		208		234		210		195		662		639
Deferred federal income tax expense (benefit)	56		1		4		1		40		(68)		(102)		61		(130)
Amortization of deferred acquisition costs	1,207		1,254		1,281		1,301		1,310		1,365		1,406		3,742		4,081
Equity in income from other investments	(200)		(313)		(261)		(219)		(118)		(177)		(24)		(774)		(319)
Premiums receivable	(333)		(385)		256		204		(509)		(562)		210		(462)		(861)
Reinsurance recoverables	12		142		(134)		(121)		(282)		198		269		20		185
Deferred acquisition costs	(1,258)		(1,343)		(1,354)		(1,272)		(1,413)		(1,504)		(1,502)		(3,955)		(4,419)
Claims and claim adjustment expense reserves	777		536		986		89		679		593		422		2,299		1,694
Unearned premium reserves	509		459		492		(211)		727		671		635		1,460		2,033
Other	(504)		410		407		437		(443)		3		428		313		(12)
Net cash provided by operating activities	1,190		1,849		2,543		1,692		1,266		1,375		2,484		5,582		5,125
Cash flows from investing activities
Proceeds from maturities of fixed maturities	2,064		2,283		2,176		2,329		1,879		1,818		1,784		6,523		5,481
Proceeds from sales of investments:
Fixed maturities	1,238		1,244		382		301		1,044		1,657		1,250		2,864		3,951
Equity securities	25		20		29		28		63		21		20		74		104
Real estate investments	—		—		7		24		—		—		10		7		10
Other investments	79		116		80		152		81		92		69		275		242
Purchases of investments:
Fixed maturities	(4,754)		(4,708)		(4,894)		(3,797)		(4,409)		(3,589)		(4,102)		(14,356)		(12,100)
Equity securities	(19)		(22)		(334)		(32)		(63)		(23)		(26)		(375)		(112)
Real estate investments	(5)		(9)		(8)		(6)		(9)		(7)		(12)		(22)		(28)
Other investments	(97)		(124)		(115)		(184)		(135)		(117)		(162)		(336)		(414)
Net sales (purchases) of short-term securities	524		(718)		948		917		367		(110)		(364)		754		(107)
Securities transactions in the course of settlement	269		(40)		178		(426)		613		(377)		(22)		407		214
Acquisitions, net of cash acquired	(38)		—		—		—		(4)		—		—		(38)		(4)
Other	(60)		(53)		(86)		(80)		(84)		(75)		(132)		(199)		(291)
Net cash used in investing activities	(774)		(2,011)		(1,637)		(774)		(657)		(710)		(1,687)		(4,422)		(3,054)

The Travelers Companies, Inc.                                                 

Statement of Cash Flows (Continued)

($ in millions)	1Q2021		2Q2021		3Q2021		4Q2021		1Q2022		2Q2022		3Q2022		YTD 3Q2021		YTD 3Q2022
Cash flows from financing activities
Treasury stock acquired - share repurchase authorizations	(356)		(400)		(600)		(800)		(500)		(500)		(500)		(1,356)		(1,500)
Treasury stock acquired - net employee share-based compensation	(41)		(1)		(1)		(1)		(59)		—		(1)		(43)		(60)
Dividends paid to shareholders	(214)		(222)		(219)		(214)		(213)		(223)		(220)		(655)		(656)
Issuance of debt	—		739		—		—		—		—		—		739		—
Issuance of common stock - employee share options	134		72		50		37		159		35		11		256		205
Net cash provided by (used in) financing activities	(477)		188		(770)		(978)		(613)		(688)		(710)		(1,059)		(2,011)
Effect of exchange rate changes on cash	3		—		(7)		3		(5)		(19)		(24)		(4)		(48)
Net increase (decrease) in cash	(58)		26		129		(57)		(9)		(42)		63		97		12
Cash at beginning of period	721		663		689		818		761		752		710		721		761
Cash at end of period	$	663	$	689	$	818	$	761	$	752	$	710	$	773	$	818	$	773
Income taxes paid	$	58	$	284	$	201	$	164	$	10	$	542	$	111	$	543	$	663
Interest paid	$	59	$	104	$	59	$	115	$	59	$	115	$	60	$	222	$	234

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, 2021		June 30, 2021		September 30, 2021		December 31, 2021		March 31, 2022		June 30, 2022		September 30, 2022
Shareholders’ equity	$	28,269	$	29,156	$	28,474	$	28,887	$	25,531	$	22,874	$	19,906
Adjustments:
Net unrealized investment (gains) losses, net of tax, included in shareholders’ equity	(2,817)		(3,239)		(2,699)		(2,415)		1,391		3,792		6,317
Net realized investment (gains) losses, net of tax	(34)		(81)		(88)		(132)		19		93		165
Impact of changes in tax laws and/or tax rates (1)	—		(8)		(8)		(8)		—		—		—
Adjusted shareholders’ equity	$	25,418	$	25,828	$	25,679	$	26,332	$	26,941	$	26,759	$	26,388
(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 2022 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

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.

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