The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Merrill Lynch Insurance Investors Conference 2008
19 slides from The Travelers Companies's conference presentation, Feb 13, 2008
Slide 1: The Travelers Companies, Inc. Merrill Lynch Insurance Investors Conference
The Travelers Companies, Inc. Merrill Lynch Insurance Investors Conference February 13, 2008
Slide 2: Explanatory Note
Explanatory Note This presentation 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. Specifically, earnings
Slide 3: Travelers: A High Performing Company with Sustainable Competitive Advantages
Travelers: A High Performing Company with Sustainable Competitive Advantages ¾ An industry leader, with consistent strong performance Operating Income Per Income Diluted Share ROE 2007 $4.5 Billion $6.71 17.7% 2006 $4.2 Billion $5.90 17.9% 2005 $2.0 Billion $2.90 9.6% ¾ Very strong balance sheet • N
Slide 4: Comparison of 2007 Performance and 2008 Guidance
Comparison of 2007 Performance and 2008 Guidance 2007 operating income per diluted share 1 $6.71 Operating return on equity 17.7% Net favorable prior year reserve development (0.52) Lower than expected level of catastrophe losses (0.36) Timing impact of transition to fixed, value based agent compens
Slide 5: Total Return Since Travelers / St. Paul Merger
Total Return1 Since Travelers / St. Paul Merger 3/31/2004 to 12/31/2007 3/31/2004 to 2/12/2008 112.8% Goldman Sachs Group 112.8% Goldman Sachs Group 79.1% Goldman x Sachs Group 79.1% Goldman Sachs Group 69.8% The Chubb Companies 69.8% The Chubb Companies 62.0% The Chubb Companies 62.0% The Chubb Com
Slide 6: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital ¾ At or above target levels for all rating agencies ¾ Under review for upgrade from Moody’s (11/20/2007) December 31, ¾ Continue to generate excess capital and repurchase shares 2007 2006 • $1.0 billion of sh
Slide 7: Travelers Operating Strengths
Travelers Operating Strengths ¾ Seasoned management team with experience through cycles ¾ Unparalleled product breadth and underwriting specialization ¾ Strong agency relationships with leading market position ¾ Ease of doing business ¾ Claim effectiveness ¾ Sophisticated business analytics 6
Slide 8: Travelers - Illustrative Business Statistics
Travelers - Illustrative Business Statistics Retention 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 Select Accounts 83% 83% 82% 79% 81% 82% 82% 83% Commercial Accounts 86% 86% 87% 86% 86% 86% 85% 86% Continued Continued Other Business Insurance 81% 80% 82% 81% 82% 80% 80% 81% historically high hi
Slide 9: Retention: Commercial Lines Middle Market
Retention: Commercial Lines Middle Market 88% 84% 80% 76% 72% 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 Travelers Peer 1 Peer 2 8 Source: Company specific reports
Slide 10: Unique Product Breadth
Unique Product Breadth Construction Technology Public Sector Oil & Gas Select Commercial Agribusiness Accounts Accounts Industry National Property Focused Inland Marine Underwriting Ocean Marine Boiler & Machinery Excess Casualty Global Accounts Target Risk Personal Underwriting Insurance Northland
Slide 11: Powerful Relationship with Independent Agents
Powerful Relationship with Independent Agents Average Share of Middle Market Agency Preference 2 Written Premium With Top 3 Carriers 1 ¾ Percentage of agents who responded that Travelers was one of the top 5 companies they do business with: CommercialLines Commercial Lines 80%of of #1.Travelers: #1.
Slide 12: Create Shareholder Value
Our Mission Create Shareholder Create Shareholder Value Value ModelininPlace Model Place 11
Slide 13: Management Liability Appendix
Management Liability Appendix 12
Slide 14: Management Liability – Portfolio Profile
Management Liability – Portfolio Profile ($ in millions) A well-diversified portfolio of management liability products Management liability premiums estimated to be potentially exposed to sub-prime issues: 2007 Gross Written Premium Exposed 1 Not Exposed Total Coverage Directors & Officers (D&O) $ 8
Slide 15: Management Liability - Exposed Policy Information
Management Liability - Exposed Policy Information ¾ Claims-made policies • Contains cumulative exposure vs. occurrence policies • Defense costs inside limits ¾ Profile of exposed policies Average Gross Percentage Excess Gross Policy Average of GWP Attachment Limits Policy Limits Primary / Excess Poi
Slide 16: Management Liability - Exposed Policy Analysis
Management Liability - Exposed Policy Analysis ¾ In-depth review of exposed policies • Step 1: Individual accounts with reported claims or notices of potential claims • Step 2: Individual accounts with heightened risk (accounts with credit-related announcements or individual accounts with particular
Slide 17: Management Liability - Exposed Policies Reported Claims or Notices of Potential Claims
Management Liability - Exposed Policies Reported Claims or Notices of Potential Claims (as of 12-31-07) ($ in millions) Average Average Gross Excess Number Limit Attachment Primary D&O 3 $ 12 Other 2 6 Subtotal / Average 5 10 Excess D&O 16 11 $ 60 1 D&O: A-side only 5 18 134 Other 4 6 23 Subtotal /
Slide 18: Disclosure
Disclosure • For further information please see Travelers reports filed with the SEC pursuant to the Securities Exchange Act of 1934 which are available at the SEC’s website (www.sec.gov) • Copies of this presentation are publicly available on the Travelers website (www.travelers.com) 17
Slide 19: End Slide
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