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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
FORM 10-Q
_________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
___________________________________________________________________
 
Commission file number: 001-10898
___________________________________________________________________
The Travelers Companies, Inc.
(Exact name of registrant as specified in its charter)
 ____________________________________________________________________
Minnesota 41-0518860
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
485 Lexington Avenue
New York, NY 10017
(Address of principal executive offices) (Zip Code)
 (917) 778-6000
(Registrant’s telephone number, including area code)
_________________________________________________________

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes ý    No o 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).         
Yes ý    No o 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filer
Non-accelerated filerSmaller reporting company
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
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes    No ý 
The number of shares of the Registrant’s Common Stock, without par value, outstanding at April 14, 2022 was 239,961,002.




The Travelers Companies, Inc.
 
Quarterly Report on Form 10-Q
 
For Quarterly Period Ended March 31, 2022
_________________________________________________________
 
TABLE OF CONTENTS
 
  Page
  
   
Item 1. 
   
 
Consolidated Statement of Income (Unaudited) — Three Months Ended March 31, 2022 and 2021
   
 
Consolidated Statement of Comprehensive Income (Loss) (Unaudited) — Three Months Ended March 31, 2022 and 2021
   
 
Consolidated Balance Sheet — March 31, 2022 (Unaudited) and December 31, 2021
   
 
Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) — Three Months Ended March 31, 2022 and 2021
   
 
Consolidated Statement of Cash Flows (Unaudited) — Three Months Ended March 31, 2022 and 2021
   
 
   
Item 2.
   
Item 3.
   
Item 4.
   
  
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 5.
   
Item 6.
   
 
   

2


PART 1 — FINANCIAL INFORMATION
 
Item 1.  FINANCIAL STATEMENTS
 
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(in millions, except per share amounts)
 
Three Months Ended
March 31,
20222021
Revenues
Premiums$8,014 $7,386 
Net investment income637 701 
Fee income103 101 
Net realized investment gains (losses)(23)44 
Other revenues78 81 
Total revenues8,809 8,313 
Claims and expenses
Claims and claim adjustment expenses5,039 4,970 
Amortization of deferred acquisition costs1,310 1,207 
General and administrative expenses1,191 1,163 
Interest expense87 82 
Total claims and expenses7,627 7,422 
Income before income taxes1,182 891 
Income tax expense164 158 
Net income$1,018 $733 
Net income per share
Basic$4.20 $2.89 
Diluted$4.15 $2.87 
Weighted average number of common shares outstanding
Basic240.9 252.1 
Diluted243.7 254.1 
Cash dividends declared per common share$0.88 $0.85 

 









The accompanying notes are an integral part of the consolidated financial statements.
3


THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(in millions)
 
Three Months Ended
March 31,
20222021
Net income$1,018 $733 
Other comprehensive loss
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income(4,829)(1,596)
Having credit losses recognized in the consolidated statement of income(1) 
Net changes in benefit plan assets and obligations11 25 
Net changes in unrealized foreign currency translation2 26 
Other comprehensive loss before income taxes(4,817)(1,545)
Income tax benefit(1,022)(334)
Other comprehensive loss, net of taxes(3,795)(1,211)
Comprehensive loss$(2,777)$(478)
 


































The accompanying notes are an integral part of the consolidated financial statements.
4


THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
 
March 31,
2022
December 31,
2021
(Unaudited)
Assets
Fixed maturities, available for sale, at fair value (amortized cost $76,158 and $74,751; allowance for expected credit losses of $4 and $3)
$74,386 $77,810 
Equity securities, at fair value (cost $761 and $749)
880 893 
Real estate investments975 979 
Short-term securities3,467 3,836 
Other investments3,956 3,857 
Total investments83,664 87,375 
Cash752 761 
Investment income accrued570 615 
Premiums receivable (net of allowance for expected credit
    losses of $89 and $107)
8,593 8,085 
Reinsurance recoverables (net of allowance for estimated uncollectible
  reinsurance of $135 and $141)
8,734 8,452 
Ceded unearned premiums1,266 902 
Deferred acquisition costs2,645 2,542 
Deferred taxes662  
Contractholder receivables (net of allowance for expected credit
   losses of $19 and $21)
3,901 3,890 
Goodwill4,001 4,008 
Other intangible assets301 306 
Other assets3,503 3,530 
Total assets$118,592 $120,466 
Liabilities  
Claims and claim adjustment expense reserves$57,572 $56,907 
Unearned premium reserves17,193 16,469 
Contractholder payables3,920 3,911 
Payables for reinsurance premiums694 384 
Deferred taxes 289 
Debt7,291 7,290 
Other liabilities6,391 6,329 
Total liabilities93,061 91,579 
Shareholders’ equity  
Common stock (1,750.0 shares authorized; 240.0 and 241.2 shares issued and outstanding)
24,348 24,154 
Retained earnings42,359 41,555 
Accumulated other comprehensive income (loss)(2,602)1,193 
Treasury stock, at cost (544.8 and 541.5 shares)
(38,574)(38,015)
Total shareholders’ equity25,531 28,887 
Total liabilities and shareholders’ equity$118,592 $120,466 





The accompanying notes are an integral part of the consolidated financial statements.
5


THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(in millions)
 
Three Months Ended
March 31,
20222021
Common stock  
Balance, beginning of period$24,154 $23,743 
Employee share-based compensation135 108 
Compensation amortization under share-based plans and other changes
59 54 
Balance, end of period24,348 23,905 
Retained earnings  
Balance, beginning of period41,555 38,771 
Net income1,018 733 
Dividends(214)(216)
Other (3)
Balance, end of period42,359 39,285 
Accumulated other comprehensive income (loss), net of tax  
Balance, beginning of period1,193 2,502 
Other comprehensive loss(3,795)(1,211)
Balance, end of period(2,602)1,291 
Treasury stock, at cost  
Balance, beginning of period(38,015)(35,815)
Treasury stock acquired — share repurchase authorizations(500)(356)
Net shares acquired related to employee share-based compensation plans
(59)(41)
Balance, end of period(38,574)(36,212)
Total shareholders’ equity$25,531 $28,269 
Common shares outstanding  
Balance, beginning of period241.2 252.4 
Treasury stock acquired — share repurchase authorizations(2.9)(2.4)
Net shares issued under employee share-based compensation plans
1.7 1.5 
Balance, end of period240.0 251.5 
 











The accompanying notes are an integral part of the consolidated financial statements.
6


THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(in millions)
Three Months Ended March 31,
20222021
Cash flows from operating activities  
Net income$1,018 $733 
Adjustments to reconcile net income to net cash provided by operating activities:  
Net realized investment (gains) losses23 (44)
Depreciation and amortization234 235 
Deferred federal income tax expense40 56 
Amortization of deferred acquisition costs1,310 1,207 
Equity in income from other investments(118)(200)
Premiums receivable(509)(333)
Reinsurance recoverables(282)12 
Deferred acquisition costs(1,413)(1,258)
Claims and claim adjustment expense reserves679 777 
Unearned premium reserves727 509 
Other(443)(504)
Net cash provided by operating activities1,266 1,190 
Cash flows from investing activities  
Proceeds from maturities of fixed maturities1,879 2,064 
Proceeds from sales of investments:  
Fixed maturities1,044 1,238 
Equity securities63 25 
Other investments81 79 
Purchases of investments:  
Fixed maturities(4,409)(4,754)
Equity securities(63)(19)
Real estate investments(9)(5)
Other investments(135)(97)
Net sales of short-term securities367 524 
Securities transactions in the course of settlement613 269 
Acquisitions, net of cash acquired(4)(38)
Other(84)(60)
Net cash used in investing activities(657)(774)
Cash flows from financing activities  
Treasury stock acquired — share repurchase authorizations(500)(356)
Treasury stock acquired — net employee share-based compensation(59)(41)
Dividends paid to shareholders(213)(214)
Issuance of common stock — employee share options159 134 
Net cash used in financing activities(613)(477)
Effect of exchange rate changes on cash(5)3 
Net decrease in cash(9)(58)
Cash at beginning of year761 721 
Cash at end of period$752 $663 
Supplemental disclosure of cash flow information  
Income taxes paid$10 $58 
Interest paid$59 $59 



The accompanying notes are an integral part of the consolidated financial statements.
7

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.     BASIS OF PRESENTATION AND ACCOUNTING POLICIES
 
Basis of Presentation
 
The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited.  In the opinion of the Company’s management, all adjustments necessary for a fair presentation have been reflected.  Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted.  All material intercompany transactions and balances have been eliminated.  The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the Company’s 2021 Annual Report).
 
The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.  Actual results could differ from those estimates. Certain reclassifications have been made to the 2021 financial statements to conform to the 2022 presentation.

Adoption of Accounting Standards

For information regarding accounting standards that the Company adopted during the periods presented, see note 1 of notes to the consolidated financial statements in the Company’s 2021 Annual Report.


2.    SEGMENT INFORMATION

Nature of Operations
 
The Company’s results are reported in the following three business segments — Business Insurance, Bond & Specialty Insurance and Personal Insurance. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of products and services based on the type of customer, how the business is marketed and the manner in which risks are underwritten. For more information regarding the Company’s nature of operations, see the “Nature of Operations section of note 1 of notes to the consolidated financial statements in the Company’s 2021 Annual Report.
8

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2.    SEGMENT INFORMATION, Continued
The following tables summarize the components of the Company’s revenues, income and total assets by reportable business segments:
(For the three months ended March 31, in millions) Business
Insurance
Bond & Specialty
Insurance
Personal
Insurance
Total
Reportable
Segments
2022    
Premiums$4,071 $820 $3,123 $8,014 
Net investment income468 59 110 637 
Fee income96  7 103 
Other revenues53 4 21 78 
Total segment revenues (1)
$4,688 $883 $3,261 $8,832 
Segment income (1)
$669 $217 $225 $1,111 
2021    
Premiums$3,799 $743 $2,844 $7,386 
Net investment income523 59 119 701 
Fee income95  6 101 
Other revenues53 5 23 81 
Total segment revenues (1)
$4,470 $807 $2,992 $8,269 
Segment income (1)
$317 $137 $314 $768 
_________________________________________________________
(1)Segment revenues for reportable business segments exclude net realized investment gains (losses) and revenues included in "interest expense and other." Segment income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses) and income (loss) from "interest expense and other."



9

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2.    SEGMENT INFORMATION, Continued
Business Segment Reconciliations
 Three Months Ended
March 31,
(in millions)20222021
Revenue reconciliation  
Earned premiums  
Business Insurance:  
Domestic:  
Workers’ compensation$830 $811 
Commercial automobile713 695 
Commercial property608 531 
General liability688 607 
Commercial multi-peril967 870 
Other17 14 
Total Domestic3,823 3,528 
International248 271 
Total Business Insurance4,071 3,799 
Bond & Specialty Insurance:  
Domestic:  
Fidelity and surety274 266 
General liability373 331 
Other55 56 
Total Domestic702 653 
International118 90 
Total Bond & Specialty Insurance820 743 
Personal Insurance:  
Domestic:  
Automobile1,458 1,370 
Homeowners and Other1,496 1,308 
Total Domestic2,954 2,678 
International169 166 
Total Personal Insurance3,123 2,844 
Total earned premiums8,014 7,386 
Net investment income637 701 
Fee income103 101 
Other revenues78 81 
Total segment revenues8,832 8,269 
Net realized investment gains (losses)(23)44 
Total revenues$8,809 $8,313 
Income reconciliation, net of tax  
Total segment income$1,111 $768 
Interest Expense and Other (1)
(74)(69)
Core income1,037 699 
Net realized investment gains (losses)(19)34 
Net income$1,018 $733 
_________________________________________________________
(1) The primary component of Interest Expense and Other was after-tax interest expense of $69 million and $65 million for the three months ended March 31, 2022 and 2021, respectively.

10

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2.    SEGMENT INFORMATION, Continued
(in millions)March 31,
2022
December 31,
2021
Asset reconciliation  
Business Insurance$89,036 $90,353 
Bond & Specialty Insurance10,171 10,146 
Personal Insurance18,527 18,983 
Total assets by reportable segment117,734 119,482 
Other assets (1)
858 984 
Total consolidated assets$118,592 $120,466 
 _________________________________________________________
(1)The primary components of other assets at both March 31, 2022 and December 31, 2021 were accrued over-funded benefit plan assets related to the Company’s qualified domestic pension plan and other intangible assets.

3.      INVESTMENTS
 
Fixed Maturities
 
The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:
 Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value
(at March 31, 2022, in millions)GainsLosses
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
$3,356 $ $7 $190 $3,173 
Obligations of U.S. states, municipalities and political subdivisions:
Local general obligation19,345  275 821 18,799 
Revenue11,585  172 396 11,361 
State general obligation1,180  19 46 1,153 
Pre-refunded3,882  93  3,975 
Total obligations of U.S. states, municipalities and political subdivisions35,992  559 1,263 35,288 
Debt securities issued by foreign governments1,073   32 1,041 
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
1,791  23 54 1,760 
Corporate and all other bonds33,946 4 257 1,075 33,124 
Total$76,158 $4 $846 $2,614 $74,386 

11

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3.    INVESTMENTS, Continued
 Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value
(at December 31, 2021, in millions)GainsLosses
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
$3,574 $ $20 $32 $3,562 
Obligations of U.S. states, municipalities and political subdivisions: 
Local general obligation18,668  1,045 46 19,667 
Revenue11,274  693 27 11,940 
State general obligation1,158  67 2 1,223 
Pre-refunded3,825  207  4,032 
Total obligations of U.S. states, municipalities and political subdivisions34,925  2,012 75 36,862 
Debt securities issued by foreign governments1,041  7 7 1,041 
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
1,754  68 5 1,817 
Corporate and all other bonds33,457 3 1,249 175 34,528 
Total$74,751 $3 $3,356 $294 $77,810 
 
Pre-refunded bonds of $3.98 billion and $4.03 billion at March 31, 2022 and December 31, 2021, respectively, were bonds for which U.S. states or municipalities have established irrevocable trusts, almost exclusively comprised of U.S. Treasury securities and obligations of U.S. government and government agencies and authorities.  These trusts were created to fund the payment of principal and interest due under the bonds.
 
Proceeds from sales of fixed maturities classified as available for sale were $1.04 billion and $1.24 billion during the three months ended March 31, 2022 and 2021, respectively. Gross gains of $5 million and $15 million and gross losses of $2 million and $1 million were realized on those sales during the three months ended March 31, 2022 and 2021, respectively.
 
Equity Securities
 
The cost and fair value of investments in equity securities were as follows:
  Fair
(at March 31, 2022, in millions)CostGross GainsGross LossesValue
Common stock$705 $118 $7 $816 
Non-redeemable preferred stock56 9 1 64 
Total$761 $127 $8 $880 
 
  Fair
(at December 31, 2021, in millions)CostGross GainsGross LossesValue
Common stock$694 $137 $4 $827 
Non-redeemable preferred stock55 11  66 
Total$749 $148 $4 $893 
 
For the three months ended March 31, 2022 and 2021, the Company recognized $(14) million and $23 million of net gains (losses) on equity securities still held as of March 31, 2022 and 2021, respectively.

12

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3.    INVESTMENTS, Continued
Unrealized Investment Losses
 
The following tables summarize, for all fixed maturities classified as available for sale in an unrealized loss position at March 31, 2022 and December 31, 2021, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position.  The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of notes to the consolidated financial statements in the Company’s 2021 Annual Report.  The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in note 1 of notes to the consolidated financial statements in the Company’s 2021 Annual Report to determine whether a credit loss impairment exists.
 Less than 12 months12 months or longerTotal
(at March 31, 2022, in millions)Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fixed maturities      
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
$2,344 $167 $228 $23 $2,572 $190 
Obligations of U.S. states, municipalities and political subdivisions10,923 1,100 1,177 163 12,100 1,263 
Debt securities issued by foreign governments
633 21 145 11 778 32 
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
1,336 53 21 1 1,357 54 
Corporate and all other bonds15,170 836 1,964 239 17,134 1,075 
Total $30,406 $2,177 $3,535 $437 $33,941 $2,614 
 
 Less than 12 months12 months or longerTotal
(at December 31, 2021, in millions)Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fixed maturities  
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
$2,438 $32 $5  $ $2,443 $