The Travelers Companies, Inc. · NYSE:TRV

The Travelers Companies — Investor Day (June 2009)

161 slides from The Travelers Companies's investor day presentation, Jun 4, 2009

  1. Slide 1: Investor Day June 4, 2009

    The Travelers Companies, Inc. Investor Day June 4, 2009

  2. Slide 2: Agenda

    AGENDA 12:15 pm Gabriella Nawi, Senior Vice President - Investor Relations 12:20 pm Jay Fishman, Chairman & Chief Executive Officer 12:40 pm Jay Benet, Vice Chairman & Chief Financial Officer 1:00 pm Brian MacLean, President & Chief Operating Officer Q&A 2:00 pm Break Joe Lacher, Executive Vice Pres

  3. Slide 3: 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

  4. Slide 4: Jay S. Fishman, Chairman and CEO

    Jay S. Fishman Chairman and Chief Executive Officer 3

  5. Slide 5: Long-term Financial Strategy

    Long-term Financial Strategy Balanced Generation of Meaningful approach to top tier earnings and rightsizing capital and capital sustainable and substantially in competitive growing book excess of growth advantages value per share needs over time Create Shareholder Create Shareholder Value Value Obj

  6. Slide 6: Long-term Financial Strategy

    Long-term Financial Strategy Financial Company Employees Community 25

  7. Slide 7: Returns Consistent With Financial Targets

    Returns Consistent With Financial Targets ($ in billions) $4.6 $4.5 $4.2 $4.2 Income from Continuing Operations Operating Income $3.2 $2.9 $2.1 $2.0 $0.8 $0.7 1 2005 2006 2007 2008 1Q'09 ROE 9.5% 17.9% 18.0% 11.4% 10.2% Operating ROE 9.6% 17.9% 17.7% 12.4% 12.4% From January From January 1, 1, 2005

  8. Slide 8: Returns Consistent With Financial Targets

    Returns Consistent With Financial Targets ($ in billions) Operating Income $0.1 After-tax Catastrophes $0.1 $4.5 $0.9 $4.2 $1.5 $3.2 $2.0 $0.1 $0.8 1 2005 2006 2007 2008 1Q'09 Excludes Nuveen which was a discontinued operation 1 47 See Annex for reconciliation of non-GAAP financial measures to the m

  9. Slide 9: Top Line Outperformance

    Top Line Outperformance Net Written Premium Trends 9% 6% 3% 0% -3% -6% -9% 1Q'05 2Q'05 3Q'05 4Q'05 1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Travelers1 Competitor Group2 Outperformed competitor Outperformed competitor group group for for 14 14 quarters quarters by

  10. Slide 10: Well Positioned Strategically & Tactically

    Well Positioned Strategically & Tactically Strategic Positioning Tactical Positioning 69

  11. Slide 11: Well Positioned Strategically

    Well Positioned Strategically Product Product Development Development Best and Best and Customer Customer Brightest Brightest Experience Experience Talent Talent Strategic Positioning Brand Brand Distribution Distribution Development Development Strength Strength Management Management Analytics Anal

  12. Slide 12: Well Positioned Tactically

    Well Positioned Tactically Return Return Adequacy // Adequacy Pricing Pricing Strategy Strategy Expense Expense Marketplace Marketplace Tactical Orientation Orientation Management // Management Positioning a.k.a a.k.a Investment Investment “Gas Pedal” “Gas Pedal” For Future For Future Staffing Staff

  13. Slide 13: Brand Development

    Brand Development TRAVELE eos Insuranee. In- “synch. TRAVELERS — insurance. In-synch: TRAVELERS Nu nm rN TRAVELERS .

  14. Slide 14: Personal Insurance Direct to Consumer

    Personal Insurance Direct to Consumer: Long-Term Strategic Initiative Personal Insurance – Auto Market Share Consumer Purchasing Trends 1989 1997 2007 Independent Independent Captive Independent Captive Agency Agency Captive Agency Agency Agency 41% 35% Agency 32% 36% 47% 63% Direct Direct 5% Direct

  15. Slide 15: Proven Financial Performance

    Personal Personal Unparalleled Unparalleled Insurance Insurance Direct to to Product Product Direct Consumer Consumer Breadth // Breadth Initiative Initiative Talent Talent Brand Brand Financial Financial Development Development Strength Strength Proven Financial Flight Flight Performance Significan

  16. Slide 16: Overview for Remainder of the Day

    Overview for Remainder of the Day ¾ Jay Benet ¾ Brian MacLean • Q&A • Break ¾ Joe Lacher ¾ Marc Schmittlein • Q&A ¾ John Albano ¾ Alan Schnitzer • Q&A ¾ Close 12 15

  17. Slide 17: Jay S. Benet, Vice Chairman & CFO

    Jay S. Benet Vice Chairman & Chief Financial Officer 16

  18. Slide 18: 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 Mar. 31, Dec. 31, ¾ Continued to generate excess capital 2009 2008 Debt $ 6,039 $ 6,181 Leverage Preferred equity 87 89 Common equity 1 25,867 25,374 ¾ Debt

  19. Slide 19: Highly Successful Debt Issuance

    Highly Successful Debt Issuance ¾ On May 28, priced a $500 million public offering of 5.90% 10-year senior notes ¾ Pricing consistent with similar issuance last year despite capital market turmoil: • $500 million 10-year notes on May 13, 2008 at 5.80% • $500 million 10-year notes on May 28, 2009 at

  20. Slide 20: Resumed Share Repurchases in 2Q'09

    Resumed Share Repurchases in 2Q’09 ¾ Capital and liquidity levels have been in excess of targets ¾ Recommenced share repurchases in May 2009 as market tone improved ¾ Repurchased $575 million or 14.4 million shares through June 2, 2009 • Average purchase price per share of $39.96 • Compares to book

  21. Slide 21: Enterprise Risk Management

    Enterprise Risk Management ¾ Embedded in the culture of the organization • Conservative/prudent investing for the long-term • Thoughtful approach to underwriting • Strong corporate governance at Board and management levels ¾ Seasoned, experienced, stable management team ¾ Chief Risk Officer oversees

  22. Slide 22: Enterprise Risk Management: Areas of Focus

    Enterprise Risk Management: Areas of Focus ¾ Credit/reinsurance ¾ Competition • Reinsurance recoverables ¾ Distribution • Exposure aggregation ¾ Economic capital • Credit aggregation ¾ Insurance product • Credit limits ¾ Operational risk ¾ Investment ¾ Treasury ¾ Economic ¾ Legal/regulatory 5 21

  23. Slide 23: Aggregation of Credit Risk

    Aggregation of Credit Risk ¾Travelers is exposed to credit risk through two major activities: • Underwriting activities • Investing activities ¾Travelers mitigates credit exposure from underwriting activities in many ways, including obtaining collateral – primarily letters of credit ¾Travelers Credi

  24. Slide 24: Credit Aggregation

    Credit Aggregation Major Client Net Exposures Greater than $100 Million (1) % Change Prior S&P As of X/XX/XX Net Exposure From Qtr. (or Equiv.) Mkt Cap 3 mo Chg Bond Business Reinsurance U/W Letters U/W & LOC Stuctured Total Net Excluding 4QXX Rank Rank CLIENT RATING $B Stk Prc Surety Insurance Reco

  25. Slide 25: Construction Surety Proprietary Credit Model

    Construction Surety Proprietary Credit Model In-Force Aggregate 1YR Prob of Limit Category Default As of Mar 31, 2009 Excellent 0.03% XX% Above Average 0.34% XX% Average 0.56% XX% 85% Below Average 1.37% XX% High Risk 2.8% to 8.9% XX% 15% 100% Additionalrisk Additional riskmitigation mitigationappli

  26. Slide 26: Premiums and Contractholder Receivables

    Premiums and Contractholder Receivables Agency and direct billed premiums receivable Ability to cancel policies Premiums receivables overdue of $89 million or 1.9% Allowance for bad debts $75 million or 1.6% Projected ultimate receivables from loss 84% collateralized, principally by letters of credi

  27. Slide 27: Reserve Comparisons

    Reserve Comparisons ¾ The following exhibits provide a comparison of certain Travelers net paid-to- incurred ratios and net IBNR-to-incurred ratios with the industry and a peer group • Travelers information is based on the 2008 combined annual statutory statement of the company’s domestic insurance

  28. Slide 28: Net Paid to Incurred Ratios – 2008 Industry Comparison

    Net Paid to Incurred Ratios – 2008 Industry Comparison Accident Workers' Compensation Accident Private Passenger Auto Liability Accident Commercial Auto Liability Year Peer(1) TRV Industry Year Peer(1) TRV Industry Year Peer(1) TRV Industry 1999 82.9% 78.1% 86.0% 1999 99.6% 100.0% 99.6% 1999 97.8% 9

  29. Slide 29: Net IBNR to Incurred Ratios – 2008 Industry Comparison

    Net IBNR to Incurred Ratios – 2008 Industry Comparison Accident Workers' Compensation Accident Private Passenger Auto Liability Accident Commercial Auto Liability Year Peer (1) TRV Industry Year Peer (1) TRV Industry Year Peer (1) TRV Industry 1999 5.5% 7.0% 5.0% 1999 0.4% -0.1% 0.2% 1999 0.3% 0.6%

  30. Slide 30: Continuing to Grow Book Value Per Share

    Continuing to Grow Book Value Per Share Including Impact of FAS 115 ($ in billions, except per share amounts) $50 Cumulative Share Repurchases: $6.2 Cumulative Common Dividends: $2.9 $45.12 R: 9% $45 CA G $43.12 $42.22 QTD Change = 5% $40 $36.86 Y-o-Y Change = 2% $35 $31.94 $31.35 Y-o-Y Change = 15%

  31. Slide 31: Components of Operating Return on Equity

    Components of Operating Return on Equity ¾ For the first quarter of 2009 9.6% 17.9% 17.7% 12.4% 12.4% Investment income from the fixed 11.1% income portfolio, net of interest 11.0% 10.6% expense on holding company 1.4% 1.6% 1.4% 8.1% 6.5% debt, produced an operating return on equity of 8.2%, down 6.

  32. Slide 32: Components of Return on Equity Including Net Realized Investment Gains/(Losses)

    Components of Return on Equity 1 Including Net Realized Investment Gains/(Losses) 9.5% 17.9% 18.0% 11.4% 10.2% 11.1% 10.9% 10.4% 1.4% 1.5% 1.4% 8.1% 6.4% Including net realized 6.8% 6.7% 5.9% investment gains/(losses), average annual return on 4.4% 9.0% 9.7% 9.4% 8.7% equity was approximately 8.2% 1

  33. Slide 33: 2009 Annual Guidance

    2009 Annual Guidance ¾ Travelers expects that its full year 2009 operating income per diluted share will be in the range of $4.55 to $4.95, an increase from the previously announced range of $4.50 to $4.90 due to an increase in assumed share repurchase activity ¾ This guidance includes the reported

  34. Slide 34: Brian MacLean, President & COO

    Brian MacLean President & Chief Operating Officer 33

  35. Slide 35: Marketplace Dynamics

    Marketplace Dynamics ¾ Pricing is broadly firming ¾ Dramatic flight to quality • Retentions stable and continue to be at historically high levels • Quantity and quality of new business opportunities increasing ¾ Current margins within the company’s target range 1 34

  36. Slide 36: Marketplace Dynamics: Renewal Premium Change

    Marketplace Dynamics: Renewal Premium Change1 Personal Insurance Automobile Homeowners and Other 8% 8% 4% 4% 0% 0% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1 Each percentage represents the estimated change in average premium on policies that renew, including rate and

  37. Slide 37: Marketplace Dynamics: Rate & Renewal Premium Change

    Marketplace Dynamics: Rate & Renewal Premium Change Commercial Lines Select Accounts Commercial Accounts 0% 0% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 Rate2 % RPC3 % Other Business Insurance1 Management Liability 0% 0% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’0

  38. Slide 38: Marketplace Dynamics: Retention

    Marketplace Dynamics: Retention1 Personal Insurance Automobile Homeowners and Other 90% 90% 80% 80% 70% 70% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1 The ratio of expected number of renewal policies that will be retained throughout the annual policy period to the nu

  39. Slide 39: Marketplace Dynamics: Retention

    Marketplace Dynamics: Retention Commercial Lines Select Accounts Commercial Accounts 90% 90% 80% 80% 70% 70% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 Other Business Insurance1 Management Liability 90% 90% 80% 80% 70% 70% 1Q’08 2Q’08 3Q’08 4Q’08 1Q’09 Apr’09 1Q’08 2Q’

  40. Slide 40: Marketplace Dynamics: Submission Flow

    Marketplace Dynamics: Submission Flow Commercial Lines Select Accounts1 Commercial Accounts G r owth r owth 74% 54% G Apr’09 YTD Apr’09 YTD +33% +11% 2006 2007 2008 2006 2007 2008 Other Business Insurance2 Management Liability G r owth rowth 25% 24 % G Apr’09 YTD Apr’09 YTD +10% +23% 2006 2007 2008

  41. Slide 41: Travelers Reporting Segments

    Travelers Reporting Segments 2008 Net Written Premium: $21.7 Billion Personal Insurance $7.0 Billion / 32% Financial, Professional Business & International Insurance Insurance $11.2 Billion / 52% $3.5 Billion / 16% Providing wide Providing wide variety variety of of property/casualty products proper

  42. Slide 42: Travelers Segments – Granular View

    Travelers Segments – Granular View 2008 Net Written Premium: $21.7 Billion Homeow ners and Other Select Accounts Automobile Commerical Accounts International Construction Bond & Financial Technology Products Public Sector National Programs National Property Oil & Gas Northland National Accounts Agri

  43. Slide 43: Travelers Segments – Today's Approach

    Travelers Segments – Today’s Approach Travelers U.S. Domestic 2008 Net Written Premium Select Accounts Individual Underwritten Flow Business ¾ Business Insurance Business ¾ Personal Insurance ¾ Financial & Professional Insurance1 ¾ Select Accounts (small Insurance Personal commercial) Insurance ¾ 52

  44. Slide 44: Travelers Key Competitive Advantages

    Travelers Key Competitive Advantages Unparalleled Product Breadth & Sophistication Customer Focus / Significant Scale Claim Effectiveness & Local Access Ease of Doing Business Unique and Unique and sustainable sustainable competitive competitive advantages have advantages have fueled fueled our our

  45. Slide 45: Sustainable Competitive Advantages

    Sustainable Competitive Advantages ¾ Benefits of product breadth • Responds to agents’ and customers’ needs with an abundance of related products across markets • Creates culture driving continuous product development • Increases cross-sell opportunities • Facilitates ability to leverage knowledge a

  46. Slide 46: Travelers Key Competitive Advantages

    Travelers Key Competitive Advantages Unparalleled Product Breadth & Sophistication Customer Focus / Industry Leading Significant Scale Claim Effectiveness Analytics & Local Access Ease of Doing Business Unique and Unique and sustainable sustainable competitive competitive advantages have advantages

  47. Slide 47: Sustainable Competitive Advantages

    Sustainable Competitive Advantages Industry Leading Analytics Metrics Produced Views Views Company-wide: Accessibleby: Accessible by: ¾ Profitability ¾Region ¾ Region ¾ Production ¾Office ¾ Office ¾ Pricing segmentation ¾Line ¾ LineofofBusiness Business ¾Industry ¾ Industry//Program Program ¾ Loss t

  48. Slide 48: Sustainable Competitive Advantages

    Sustainable Competitive Advantages Industry Leading Analytics Countrywide – CAG Field Controllable Income Statement Country-wide Income Statement Jane Smith – (xxx) xxx-xxxx Southwest Region CAG Field – Controllable Income Statement Region Income Statement John Smith – (xxx) xxx-xxxx Office Income S

  49. Slide 49: Sustainable Competitive Advantages

    Sustainable Competitive Advantages Industry Leading Analytics ¾ Providing profitability analysis based upon risk adjusted capital Select CAG - Field First Party Oper. Comb. % Net Oper. Comb. % Net Oper. Comb. % Net Profit % Ratio Grow th Profit % Ratio Grow th Profit % Ratio Grow th Property-NWP 12

  50. Slide 50: Competitive Advantages Driving Profitability

    Competitive Advantages Driving Profitability Above 18% ROE Within 13-18% ROE Below 13% ROE 1Q 2009 Policy View 31% 89% 89% ofof current current new new and and renewal renewal business business 18% at at or or above above target target 58% return return levels levels 13% 11% Note: Target ROE bands a

  51. Slide 51: Direct to Consumer

    Leveraging Travelers Competitive Advantages Strategic Investments SM Travelers 1st Choice+ ® Risk Management PLUS+ Online® Wrap+ ® Direct TravComp to e-CARMA Consumer Surety Peer Analysis Tool Claim U Concierge Claim TravelersExpress SM CAT Response TravelersExpressPlus SM Specialized Risk Control B

  52. Slide 52: Leveraging Travelers Competitive Advantages

    Leveraging Travelers Competitive Advantages Strategic Investments – Claim University ¾ Investment in the company’s talent, furthering its expertise ¾ Resulting in higher level of service and higher customer satisfaction 18 51

  53. Slide 53: Leveraging Travelers Competitive Advantages

    Leveraging Travelers Competitive Advantages Strategic Investments – Claim Effectiveness ¾ Redesigned catastrophe response process effectively executed in 2008 • Reduced dependence on independent adjusters • Improved response time • Eliminated inefficiencies • Improved customer satisfaction Catastrop

  54. Slide 54: Current margins within the company's target range

    ¾ Current margins within the company’s target range • 89% of current business at or above target return levels ¾ Pricing is broadly firming ¾ Dramatic flight to quality • We are and will continue to invest to widen the gap • Market placing more value on our competitive strengths 20 53

  55. Slide 55: 21

    21 54

  56. Slide 56: Joe Lacher, EVP Personal Insurance & Select Accounts

    Joe Lacher Executive Vice President Personal Insurance & Select Accounts 55

  57. Slide 57: Flow Businesses

    Flow Businesses Personal Insurance Select Accounts 2008 Net Written Premium: Hom eow ners 2008 Net Written Premium: and Other $7.0 Billion $2.8 Billion Select Accounts Autom obile Commerical Accounts International Construction Bond & Financial Technology Products Public Sector National Programs Nati

  58. Slide 58: Flow Business Characteristics

    Flow Business Characteristics ¾ Small transaction size and high volume ¾ Portfolio risks more important than individual risks ¾ Scale Matters • Data Credibility • Outcome predictability • Efficiency ¾ Need sophistication and ease of delivery ¾ Requires integrated execution 2 57

  59. Slide 59: Flow Business Success Drivers

    Flow Business Success Drivers ¾ Claim effectiveness Loss management ¾ Product sophistication Efficiency ¾ Ease of doing business / Customer experience Accessibility ¾ Breadth and depth of distribution ¾ Information advantage Outstandingexecution Outstanding executionand andintegration integrationof

  60. Slide 60: Personal Insurance Update

    Personal Insurance Update ¾ Expanding product sophistication and strength • QuantumHomeSM – an important competitive advantage • QuantumAutoSM – strategy, progress and current view ¾ Leading claim effectiveness – loss management and customer experience ¾ Building distribution breadth and depth • Exp

  61. Slide 61: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength ¾ Weak industry performance • Poor profitability • Limited execution effectiveness ¾ Very strong Travelers results • Leverage scale, sophistication and analytics • Portfolio mix managed to reduce volatility and enhance risk-return performance • Overweight relative

  62. Slide 62: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Industry Underperformance ¾ Perennially poor industry profits • Only 4 years of underwriting profit in past 20 years ¾ Commonly viewed as loss leader ¾ Limited focus and investment in pricing sophistication 160% Homeowners Combined Ratio1 140% 120% 100% 80% 90 96

  63. Slide 63: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Travelers vs. Industry ¾ Consistently outperformed the industry ¾ Results achieved through sophisticated analytics, catastrophe management and disciplined execution ¾ Introduction of QuantumHomeSM in 2006 improves leadership position Homeowners Combined Ratio1 Net

  64. Slide 64: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Drivers of strong results ¾ Managed with focus on long term • Low frequency weather driven loss content • Results volatile on an annual / quarterly basis – less volatile over longer term • Political bias against disruptive actions ¾ Analytics advantage • Identify

  65. Slide 65: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Travelers vs. Industry 50.0% Product Reach Pre – QuantumHomeSM Percentage of Polices 37.5% QuantumHomeSM Expanded Reach 25.0% 12.5% 0.0% Lower . Policy .Risk Distribution . .Higher Example: Territory Intimacy ¾ Leveraging scale and analytics Pre-Quantum: 5 territo

  66. Slide 66: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Effective Catastrophe Risk & Return Management ¾ Historic East Coast concentration ¾ Growth driven outside East Coast states US TRV Pols / Pop 2009 YTD Population Policies Index Growth Warm Water Coastal 12% 5% 42% Cool Water Coastal 10% 18% 180% Coastal 22% 23% 1

  67. Slide 67: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Effective Catastrophe Risk & Return Management ¾ Portfolio managed based on risk - return evaluation • Under-concentrated in warm water coastal • Over-concentrated in balance of coastal states • Growing non-coastal portfolio US TRV Pols / Pop 2009 YTD Population P

  68. Slide 68: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Personal Insurance Homeowner Position Homeowners ¾ Top 15 market PI players represent 66% Total Direct Written of homeowner market PI Premium as a % Rank Carrier of Total DWP1 ¾ Homeowner represents a very different 1 State Farm 33% percentage of PI business 2 All

  69. Slide 69: Homeowners – Building Upon Strength

    Homeowners – Building Upon Strength Personal Insurance Homeowner Position Homeowners ¾ In a market with poor results and lack of Total Direct Written focus, Travelers is leveraging strengths: PI Premium as a % Rank Carrier of Total DWP1 • Analytics and data 9 Travelers 44% • Risk - return management

  70. Slide 70: Product Sophistication

    Product Sophistication Auto – Core Capability Strength Product Breadth PL Auto Travelers ¾ Focus has been on building core Marketplace 2000 2002 2004 2006 capabilities 1X 12X 100X 1000X 1X 12X 100X Q U A ¾ Leverages analytics and data $120 Billion Preferred Preferred and and N Standard T Standard U

  71. Slide 71: Product Sophistication

    Product Sophistication Auto – Current View ¾ Industry experiencing some profit pressure • Industry combined ratio increased from 97% in 2007 to 100% in 20081 • Loss inflation has outpaced rate increases ¾ Our results reflect this trend • Current returns (excluding Direct initiative impact) are at bo

  72. Slide 72: Claim Effectiveness

    Claim Effectiveness ¾ Faster • Identification, intervention and resolution speed ¾ Closer • More direct claimant contact and in-house management ¾ Tighter • Minimize non-indemnity related leakage 16 71

  73. Slide 73: Claim Effectiveness

    Claim Effectiveness Faster – Identification, Intervention & Resolution Issue Estimate Notice Property Jan 2004 336 hrs Current 63 hrs 11 days Auto Jan 2004 189 hrs Closer Contact 100% Current 6 days ment 53 hrs ro ve m p 2 xI 50% Percent of Claims Handled Face-to-Face 0% Before Current Best Office E

  74. Slide 74: Claim Effectiveness

    Claim Effectiveness Leveraging Multi-Line Advantage Proper Payment • Medical bill re-pricing Workers’ Fraud detection Triggers • Compensation 350k injuries Medical Involvement Automobile All • Nurse oversight 100k injuries Injury • Medical equipment review Triggers Claims • Pharmaceutical management

  75. Slide 75: Claim Effectiveness

    Claim Effectiveness Personal Auto Severity Property Damage / Collision Bodily Injury Index of Average Claim Payment Travelers1 Adjusted Industry2 Claiminitiatives Claim initiativesoffsetting offsettingbroader broaderseverity severity trend trend 1 Travelers Data – Calendar Year Paid Closed 12 month

  76. Slide 76: What's next

    What’s next ¾ Successfully enhanced core capabilities 9 Product sophistication 9 Claim effectiveness 9 Platform 9 Analytics ¾ Forward focus • Continue to strengthen core • Expand breadth and depth of distribution 20 75

  77. Slide 77: Distribution – Agency Appointments

    Distribution – Agency Appointments Written Premium ¾ Systematic strategy of agent “Same Stores” vs. “New Stores” appointments 29% Written Premium • YE 2005 had 10,000 agents • Added 8,000 since YE 2005 71% ¾ Enhanced geographic diversification strategy • 70% of appointments in West 2005 2006 2007 20

  78. Slide 78: Distribution – Expanding Breadth

    Distribution – Expanding Breadth Building Direct Capability ¾ Attractive independent agent marketplace ¾ Direct channel provides growing opportunity 1989 1997 2007 Independent Independent Independent Agency Captive Captive Captive Agency Agency 32% Agency Agency Agency 36% 35% 47% 41% 63% Direct 5%

  79. Slide 79: Distribution – Expanding Breadth

    Distribution – Expanding Breadth Building Direct Capability ¾ Recent investments facilitate readiness for direct build • Quantum • Claim initiatives • Systems, operational and information infrastructure ¾ Focus is on longer term • Strategic importance clear • Near term focus on disciplined execution

  80. Slide 80: Distribution – Expanding Breadth

    Distribution – Expanding Breadth Building Direct Capability ¾ Entering multi year development process ¾ During development phase, anticipate impact on results of: • 2009: additional 2½ points on Auto and 1 point on Homeowners and Other combined Ratio • Beyond 2009: earnings reduction of $100 – 150 M

  81. Slide 81: Personal Insurance

    Personal Insurance ¾ Strong product portfolio • Leading sophistication in auto and home • Unique and leverageable strength in homeowners ¾ Claim effectiveness is an advantage • Produces and controls predictable loss cost outcomes • Enhances customer experience ¾ Focus on distribution expansion • Inc

  82. Slide 82: Marc Schmittlein, President – Select Accounts

    Marc Schmittlein President – Select Accounts 81

  83. Slide 83: Flow Businesses

    Flow Businesses Personal Insurance Select Accounts 2008 Net Written Premium: Hom eow ners 2008 Net Written Premium: and Other $7.0 Billion $2.8 Billion Select Accounts Autom obile Commerical Accounts International Construction Bond & Financial Technology Products Public Sector National Programs Nati

  84. Slide 84: Select Accounts

    Select Accounts 2008 Net Written Premium: $2.8 Billion Homeow ners and Other Select Accounts Automobile Commerical Accounts International Construction Bond & Financial Technology Products Public Sector National Programs National Property Oil & Gas Northland National Accounts Agribusiness Inland Mari

  85. Slide 85: Industry Leading Market Share and Profitability

    Industry Leading Market Share and Profitability ¾ Travelers is the market leader in small commercial • Leading business platform • Broad based agency plant with deep relationships Top Commercial Multi-Peril Direct Written Premium Writers1 ($ in Billions) 2008 Direct Written Net Combined Rank Company

  86. Slide 86: Travelers Excels at Both Ends of the Small Commercial Market

    Travelers Excels at Both “Ends” of the Small Commercial Market No – Touch Low – Touch Total (Express) (Plus) 2008 Net Written $2.8 Billion $1.3 Billion $1.5 Billion Premium Average Premium $3,600 $2,300 $7,600 Per Policy ¾ Express success driven by: • Automated business and underwriting rules • Pric

  87. Slide 87: Leveraging the Strengths of the Travelers Franchise

    Leveraging the Strengths of the Travelers Franchise ¾ Quantum Auto pricing sophistication & analytics (Personal Lines) ¾ Workers’ compensation underwriting & claim expertise (National Accounts / Claim) ¾ IndustryEdge® coverage & industry underwriting specialization (Middle Market) ¾ Commercial autom

  88. Slide 88: Formula for Success

    Formula for Success Product and Pricing Sophistication Platform Class Breadth Line of Business Breadth Distribution AA “simple” “simple” formula, formula, but but all all five five components components are needed are needed and and working working effectively effectively 6 87

  89. Slide 89: Formula for Success

    Formula for Success Product and Pricing Sophistication / Platform TravelersExpressSM : PRE-LAUNCH (2006 & Prior) Refer to Low Underwriter Touch 83% F L O 3 Days W Agency Authority Issue 17% No Touch Only 17% Only 17% automatically automatically generated generated bindable bindable quotes; quotes; I

  90. Slide 90: Formula for Success

    Formula for Success Product and Pricing Sophistication / Platform TravelersExpressSM : POST-LAUNCH Refer to Low Underwriter Touch 18% 1 Day Refer to Underwriter F L CMP TravelersExpressSM O WC W Auto 82% Straight-thru Issue Processing No Touch Small Commercial Small Commercial Paradigm Paradigm Shif

  91. Slide 91: Class

    Formula for Success Class Breadth / Line of Business Breadth Mix of New Business TravelersExpressSM Results Pre-Launch Post-Launch Industry1 (2006) (2008) All B.O.B.S Other Class 28% 30% B.O.B.S. All B.O.B.S. All Other 46% Other 70% 72% 54% Achieving broader reach in both Auto Auto class & line 11%

  92. Slide 92: Formula for Success

    Formula for Success Class Breadth / Line of Business Breadth TravelersExpressSM Results Premiums1 Increased 14% %Δ Auto 16% Achieving broader Achieving broader reach across reach across industry industry WC lines lines 44% Auto 6% WC Sustaining growth growth inin Sustaining CMP commercial multi-peri

  93. Slide 93: Workers' Compensation

    Workers’ Compensation Identifying Opportunity Through Segmentation ¾ Select average workers’ compensation policy size: $2,600 ¾ Analytics allow Travelers to identify growth opportunities by segment ¾ Analytics integrated with current view of state environments for maximum profit potential Workers’ C

  94. Slide 94: Workers' Compensation

    Workers’ Compensation Identifying Opportunity Through Segmentation ¾ Select average workers’ compensation policy size: $2,600 ¾ Analytics allow Travelers to identify growth opportunities by segment ¾ Analytics integrated with current view of state environments for maximum profit potential Workers’ C

  95. Slide 95: Workers' Compensation

    Workers’ Compensation Identifying Opportunity Through Segmentation ¾ Segment and state optimization allows for differentiated rate and overall results Workers’ Compensation Written Premium Growth Excluding Rate Change Yields Yields Favorable Favorable Results Results “Worse-Unfavorable” “Worse-Unfav

  96. Slide 96: Formula for Success

    Formula for Success Distribution Total Agents & New Agent Appointments 7,800 New Agent Appointments Total Agents 4,800 2005 YE 2006 2007 2008 2009 YTD1 % of New Business 2% 7% 13% 19% By New Appointments The TravelersExpress TravelersExpressSMSM platform is attracting The platform is attracting prod

  97. Slide 97: TravelersExpress Results

    TravelersExpressSM Results Quote Flow Average Monthly Quote Volume: Year-Over-Year Growth Year a r 30% g Ove er agin v wthA +34% te Gro New Quo Business +31% +43% +22% 2005 2006 2007 2008 2009 YTD Strong quote Strong quote momentum momentum validates validates SM business model TravelersExpressSM Tr

  98. Slide 98: TravelersExpress Results

    TravelersExpressSM Results New Business New Business Premium as a Percentage of Expiring Premium 30% 25% 25% 25% +34% 20% +31% 15% 17% +32% 17% +30% 10% 2005 2006 2007 2008 2009 YTD 1 Increasing quote Increasing quote flow flow drives drives new new business business 1 2009 data thru April 16 97

  99. Slide 99: TravelersExpress Results

    TravelersExpressSM Results Policies in Force Policies in Force 625,000 +34% PIF Count growing 8% 525,000 +31% annually since 2006 +32% +30% 425,000 2005 2006 2007 2008 2009 YTD Policies in Policies in force force achieving achieving new new highs highs each each month month 17 98

  100. Slide 100: Select Accounts

    Select Accounts Significant Investments – Meaningful Barrier to Competitors Success Add New Agents Umbrella Express Automobile Express Workers’ Comp. Express Technology Segment CMP Express Platform 750 New Classes 2005 2006 2007 2008 2009 2010 TravelersExpressSM Product Manage risk, Manage risk, max

  101. Slide 101: Select Accounts

    Select Accounts Where Do We Go From Here? Pricing// Pricing Platform Platform Product Product Sophistication Sophistication TravelersExpressSM (No-Touch) Lineof Line of Business Business ClassBreadth Class Breadth Express Breadth Breadth Grow Grow Distribution Distribution Working to Working to achi

  102. Slide 102: Select Accounts

    Select Accounts Where Do We Go From Here? – Advancing Product & Pricing Sophistication Low-Touch Low- Plus Touch Advantage Low- Touch No-Touch: Auto No-Touch: CMP Available Express CMP Portfolio for Issue WC CMP No-Touch WC UMB Issue Pre-Merger 2005-2008 2009-2010 Continually drive Continually drive

  103. Slide 103: Select Accounts

    Select Accounts Growing Market Share Profitably ¾ Scale matters for success ¾ Having a winning formula is critical ¾ All elements need to be there and work together ¾ Achieving strong results in a challenging environment ¾ Well positioned for the future with continued evolution of our winning formul

  104. Slide 104: 22

    22 103

  105. Slide 105: John Albano, EVP – Business Insurance

    John Albano Executive Vice President – Business Insurance 104

  106. Slide 106: Business Insurance - Individually Underwritten Accounts

    Business Insurance - Individually Underwritten Accounts 2008 Net Written Premium: $8.5 Billion Homeow ners and Other Select Accounts Automobile Com m ercial Accounts International Construction Bond & Financial Technology Products Public Sector National Program s National Property Oil & Gas Northland

  107. Slide 107: Executing on Continuously Expanding Capabilities

    Executing on Continuously Expanding Capabilities + Flight to Quality = Outstanding Results Outstanding Results 2 106

  108. Slide 108: Individually Underwritten Accounts

    Individually Underwritten Accounts Characteristics Travelers Domestic 2008 Net Written Premium ¾ Low volume, high premium dollar Individually Flow Underwritten Business 48% ¾ Underwriting and pricing driven by loss Select experience and exposure Accounts Business ¾ Tailored coverages 41% Insurance1

  109. Slide 109: Business Insurance Individually Underwritten Accounts

    Business Insurance Individually Underwritten Accounts Boiler Ocean Marine National Accounts Inland Marine National Prop Northland Agribusiness Excess Cas National Programs Global U/W Oil & Gas Public Sector Technology Construction Commercial Accounts Specialization and Specialization and sophisticat

  110. Slide 110: Driving Profitable Growth

    Driving Profitable Growth ($ in Billions) Net Written Premium Travelers / St. Paul merger $9 Multiple renewal rights w th transactions ga nic Gr o O r 6 Travelers / Aetna merger 3 G r owth siv e M&A s Impre 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 5 109 Note: Net

  111. Slide 111: Why Agents Place and Keep Individual Account Business With Carriers

    Why Agents Place and Keep Individual Account Business With Carriers Product Breadth & Appetite A Competitive Price G E Local Claim Effectiveness N Relationships T S Local Knowledge Financial Strength These key These key drivers drivers provide provide the the foundation foundation for for our execut

  112. Slide 112: Executing on Continuously Expanding Capabilities

    Executing on Continuously Expanding Capabilities 7 111

  113. Slide 113: Superior Execution

    Superior Execution Building on Our Strengths Unparalleled Product Breadth & Sophistication Customer Focus / Industry Leading Significant Scale Claim Effectiveness Analytics & Local Access Ease of Doing Business 8 112

  114. Slide 114: Superior Execution

    Superior Execution Product Breadth, Expertise & Specialization New & Updated Product Rollouts 2006 & Prior 2007 2008 2009 • Auto Dealers • Underground Utilities • Architects • Building Service Contractors • Electrical Equipment • Concrete Contractors • Engineers • Excavation Contractors • Electronic

  115. Slide 115: Superior Execution

    Superior Execution Analytics ¾ Predictive modeling and analytics enhance pricing and performance • Size and scale of data unparalleled in industry • Cohesive information systems and metrics provide data at granular level • Predictive modeling enhances pricing and product development Experienced Unde

  116. Slide 116: Claim Effectiveness: Travelers Workers' Compensation Advantage

    Superior Execution Claim Effectiveness: Travelers Workers’ Compensation Advantage ¾ Travelers is a leading writer and service provider of workers’ compensation ¾ Scale provides cost effective local presence and expertise ¾ Advanced analytics provide a competitive advantage ¾ Lower payout than the in

  117. Slide 117: Submission Flow

    Superior Execution Local Knowledge and Relationships Submission Flow Full Year April Year-to-Date th % G rowth o w 10 Gr 31 % 2006 2007 2008 2008 2009 Dramatic new Dramatic new business business submission submission flow flow Increase continues Increase continues into into 2009 2009 12 116 Note: Su

  118. Slide 118: Superior Execution

    Superior Execution Financial Strength Allows for Investment ¾ Product ¾ Platforms ¾ Attracting and retaining talent ¾ Customer service ¾ Ease of doing business ¾ Claim handling ¾ Risk control ¾ Metrics, measurement and information Continuous investment Continuous investment and and improvement impro

  119. Slide 119: Executing on Continuously Expanding Capabilities

    Executing on Continuously Expanding Capabilities + Flight to Quality = Outstanding Results Outstanding Results 14 118

  120. Slide 120: Top Commercial Lines Carriers

    Top Commercial Lines Carriers Market Share ($ in Billions) Direct Written Market Rank Company Premium Share 1 AIG $ 22.4 9.1% 2 Liberty Mutual 15.5 6.3% 3 Travelers 15.1 6.1% 4 Zurich 11.5 4.7% 5 CNA 7.5 3.0% 6 Hartford 7.2 3.0% 7 ACE 7.1 2.9% 8 Chubb 7.1 2.9% 9 Nationwide 5.1 2.1% 10 Allianz of Ame

  121. Slide 121: Flight to Quality

    Flight to Quality Net Gain in Accounts from Top Competitors – Commercial Accounts Only1 Net Gain in Accounts1 280 Sep’08 – Apr’09 257 246 Jan’08 – Aug’08 240 200 162 160 203 120 110 105 32 78 86 80 96 36 47 95 40 73 43 42 39 0 14 Carrier 1 Carrier 2 Carrier 3 Carrier 4 Carrier 5 Carrier 6 Significan

  122. Slide 122: Flight to Quality

    Flight to Quality Change in New Business Pricing Relative to Renewal New Business Pricing - Commercial Accounts 4% Points of Difference New and Renewal 2% Relative -% Baseline (2%) (4%) 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Maintaining pricing Maintaining pricing discipline discipline 17 121

  123. Slide 123: Flight to Quality

    Flight to Quality Commercial Lines Agency Preferences Travelers indentified as top tier partner by 67% of Commercial Lines Agents1 80% 60% 40% 20% 0% Travelers Hartford Liberty Chubb CNA Significant advantage Significant advantage over over competitors competitors 1 Source: Goldman Sachs January 200

  124. Slide 124: Flight to Quality

    Flight to Quality Consistently Higher Renewal Retentions Commercial Accounts: Retention 90% 86% 82% 78% 74% 1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Travelers Carrier 1 Carrier 2 Carrier 3 Retaining business Retaining business at at historically historically high

  125. Slide 125: Flight to Quality

    Flight to Quality Strengthening Rate Business Insurance – Individually Underwritten Accounts 0% Jul’08 Apr’09 Jul’08 Apr’09 Rate1,3 % Renewal Premium Change2,3 % Strengthening rate Strengthening rate while while maintaining maintaining strong retentions strong retentions 1 Each percentage represents

  126. Slide 126: Flight to Quality

    Flight to Quality Underwriting Discipline ¾ Transaction decisions made by an experienced underwriter ¾ Additional underwriting review for the majority of new business ¾ Most accounts are pre-inspected by risk control prior to quoting ¾ Although submission flow is up, quote ratio is at or below histo

  127. Slide 127: Flight to Quality

    Flight to Quality Growth Excluding Renewal Premium Change Business Insurance – Individually Underwritten Accounts Growth Excluding Renewal Premium Change Percentage 4% 3% 2% 1% 0% 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Apr'09 Organic growth Organic growth improving improving 22 126 Note: Statistics are subje

  128. Slide 128: Flight to Quality

    Flight to Quality Results Have Outpaced Competitors Net Written Premium Trends 9% 6% 3% 0% -3% -6% -9% 1Q'05 2Q'05 3Q'05 4Q'05 1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 Travelers1 Competitor Group2 Outperformed competitor Outperformed competitor group group for fo

  129. Slide 129: Executing on Continuously Expanding Capabilities

    Executing on Continuously Expanding Capabilities + Flight to Quality = Outstanding Results Outstanding Results 24 128

  130. Slide 130: Alan Schnitzer, EVP Financial, Professional & International Insurance

    Alan Schnitzer Executive Vice President Financial, Professional & International Insurance 129

  131. Slide 131: Bond & Financial Products

    Bond & Financial Products 2008 Net Written Premium: $2.2 Billion Homeow ners and Other Select Accounts Automobile Commerical Accounts International Construction Bond & Financial Technology Products Public Sector National Programs National Property Oil & Gas Northland National Accounts Agribusiness I

  132. Slide 132: An Industry Leading Franchise

    An Industry Leading Franchise ¾ Total Bond & Financial Products 2008 net written premiums: $2.2 billion ¾ An important market for management liability products (2/3 non-financial, 1/3 financial) with broad market penetration – 2008 net written premium of $1.2 billion ¾ The largest writer of surety b

  133. Slide 133: Portfolio Profile

    Portfolio Profile As of December 31, 2008 By Business Unit By Product Fiduciary Private & Crime Non-Profit Construction Surety – Surety Contract D&O Financial Institutions E&O Surety – PCL Comm’l Non PL Surety Contract EPL PC Diversified Risk Diversified Risk Profile Profile = Management Liability –

  134. Slide 134: Travelers Domestic D&O Written Premium

    Travelers Domestic D&O Written Premium As of December 31, 2008 Insurance Companies Other FI Large FI Mutual Funds/ Investment Non-Fin’l Advisors Financial Public Institutions Community Company Banks Liability Private & Non-Profit Diversified Risk Diversified Risk Profile Profile 5 133

  135. Slide 135: Franchise Value: Competitive Advantages

    Franchise Value Competitive Advantages Local Service Bond & Expertise Financial Enterprise Products Product Relationship Stability Factors that Factors that drive drive success success 6 134

  136. Slide 136: Franchise Value: Expertise

    Franchise Value Competitive Advantages Local Service Bond & Expertise Financial Enterprise Products Product Relationship Stability ¾ Highly trained, sophisticated specialists – by industry, risk, coverage • 1,100 specialists in the field – Important resource for generalist agents/brokers – Highly va

  137. Slide 137: Franchise Value: Local

    Franchise Value Competitive Advantages Local Service Bond & Expertise Financial Enterprise Products Product Relationship Stability ¾ Deployed at the point of sale – near agents, brokers, customers • 66 locations deployed throughout 17 regions ¾ Provides underwriting and marketing insight into local

  138. Slide 138: Franchise Value: Relationship

    Franchise Value Competitive Advantages Local Service Bond & Expertise Financial Enterprise Products Product Relationship Stability ¾ Average tenure of top 10 Construction Surety accounts is 30 years ¾ Average tenure of top 10 Commercial Surety accounts is 17 ½ years ¾ Achieving “trusted advisor” sta

  139. Slide 139: Franchise Value: Product

    Franchise Value Competitive Advantages Local Service Bond & Expertise Financial Enterprise Products Product Relationship Stability ¾ Leveraging the information advantage: drives business flow and risk appraisal 10 138

  140. Slide 140: Construction Surety

    Construction Surety Competitive Advantages ¾ Peer group analysis and reports • Travelers has the largest database of financial statements of non-residential contractors in the industry – approximately 7,000 active accounts • Provide customers with detailed key financial benchmarks relative to repres

  141. Slide 141: Contractor Peer Group: Balance Sheet Comparison

    Contractor Peer Group Balance Sheet Comparison 12 140

  142. Slide 142: Contractor Peer Group: Income Statement Comparison

    Contractor Peer Group Income Statement Comparison 13 141

  143. Slide 143: Contractor Peer Group: Credit Model Analysis

    Contractor Peer Group Credit Model Analysis 14 142

  144. Slide 144: Contractor Peer Group: Gross Profit Analysis

    Contractor Peer Group Gross Profit Analysis 15 143

  145. Slide 145: Risk Management PLUS+ Online

    Competitive Advantages Risk Management PLUS+ Online ® ¾ We maintain a web-based platform where risk management information and services are quickly and easily accessible to insureds via the internet 24/7 ¾ Access to ALL on-line Management Liability and Professional Liability resources with the purch

  146. Slide 146: Management Liability products

    Competitive Advantages Management Liability products Expanded Distribution Initiatives Territorial Assessment Cyber Liability New Modular Policy & Suites (Private Co, Public Co, Financial Inst) Broad Form + Policy Managed Care E&O Policy Executive Choice+ Public D&O Form Mutual Fund – Investment Adv

  147. Slide 147: Submission Flow

    Submission Flow Management Liability Year Over Year Rolling Twelve Months1 th w th ow o Gr Gr % % 17 21 2007 2008 2007-2008 2008-2009 Increased opportunity Increased opportunity without without changing changing risk risk profile profile 1Date range of 4/1/07 – 3/31/08 vs. 4/1/08 – 3/31/09 18 146

  148. Slide 148: Expanded Distribution Initiatives

    Expanded Distribution Initiatives Management Liability 80% Quote/Submission Ratio X 14000 Written/Submission Ratio X Submissions Per Month X X 12000 X X X X 10000 60% X X X 8000 X X X 6000 Territorial Assessment Launch Beginnings of Enhanced Execution X Full Execution X 40% X X 4000 X X Xx Xx 2000 x

  149. Slide 149: Expanded Distribution Initiatives

    Expanded Distribution Initiatives Management Liability 80% Quote/Submission Ratio 14000 Written/Submission Ratio X Submissions Per Month X 12000 X X 10000 60% X 8000 X X 6000 Territorial Assessment Launch Beginnings of Enhanced Execution X 40% X 4000 X Xx 2000 x 20% 0 D 08 D 07 Ju 8 Ju 7 N 8 N 7 M 9

  150. Slide 150: Expanded Distribution Initiatives

    Expanded Distribution Initiatives Management Liability 80% Quote/Submission Ratio 14000 Written/Submission Ratio Submissions Per Month 12000 10000 60% 8000 6000 Territorial Assessment Launch Beginnings of Enhanced Execution Full Execution 40% 4000 2000 20% 0 D 08 D 07 Ju 8 Ju 7 N 8 N 7 M 9 A 9 M 8 A

  151. Slide 151: Expanded Distribution Initiatives

    Expanded Distribution Initiatives Management Liability 80% Quote/Submission Ratio 14000 Written/Submission Ratio Submissions Per Month 12000 Achieving 10000Results 60% 8000 6000 Territorial Assessment Launch Beginnings of Enhanced Execution Full Execution 40% 4000 Maintaining underwriting 2000 disci

  152. Slide 152: Managing Risk Today, Investing in Tomorrow

    Managing Risk Today + Investing in Tomorrow = Solid results Solid results today, today, Well positioned Well positioned for for the the future future 23 151

  153. Slide 153: 24

    24 152

  154. Slide 154: Annex

    TRAVELERS) Annex

  155. Slide 155: Glossary of Financial Measures

    Glossary of Financial Measures The following measures are used by the Company’s management to evaluate financial performance against historical results and establish targets on a consolidated basis. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules b

  156. Slide 156: Glossary of Financial Measures - Continued

    Glossary of Financial Measures - Continued 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 the after-tax impact of net unrealized investment gains and losses (i.

  157. Slide 157: Reconciliation of Operating Income to Net Income

    Reconciliation of Operating Income to Net Income and Reconciliation of Adjusted Common Shareholders’ Equity to Common Shareholders’ Equity ($ in millions, after-tax) Three Months Ended March 31, Twelve Months Ended December 31, ($ in millions; after-tax) 2009 2008 2007 2006 2005 Reconciliation of op

  158. Slide 158: Reconciliation of Tangible and Adjusted Common Shareholders' Equity

    Reconciliation of Tangible and Adjusted Common Shareholders’ Equity to Common Shareholders’ Equity ($ in millions, except per share amounts) As of March 31, December 31, 2009 2008 Tangible common shareholders' equity $ 21,919 $ 21,402 Goodwill and other intangibles, net of tax 3,948 3,972 Adjusted c

  159. Slide 159: Reconciliation of Underwriting Gain (Loss) to Net Income

    Reconciliation of Underwriting Gain (Loss) to Net Income ($ in millions, except per share amounts) Three Months Ended March 31, Twelve Months Ended December 31, 2009 2008 2007 2006 2005 Underwriting gain (loss) $ 353 $ 1,076 $ 1,699 $ 1,542 $ (344) Net investment income 474 2,299 2,915 2,712 2,438 O

  160. Slide 160: 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 and financial supplements are publicly available on the Travelers website (www.tr

  161. Slide 161: Travelers

    a a TRAVELERS J

The Travelers Companies — Investor Day (June 2009) on 6ix