01 - Consolidated Statement of
| 01 - Consolidated Statement of Income (Unaudited) (USD $) | ||||
| In Millions, except Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Revenues | ||||
| Premiums | $5,353 | $5,357 | $10,654 | $10,697 |
| Net investment income | 658 | 778 | 1,200 | 1,593 |
| Fee income | 89 | 90 | 162 | 195 |
| Net realized investment gains (losses) | 13 | 36 | (201) | (26) |
| Other revenues | 49 | 34 | 82 | 68 |
| Total revenues | 6,162 | 6,295 | 11,897 | 12,527 |
| Claims and expenses | ||||
| Claims and claim adjustment expenses | 3,335 | 3,092 | 6,525 | 6,113 |
| Amortization of deferred policy acquisition costs | 953 | 961 | 1,897 | 1,915 |
| General and administrative expenses | 839 | 864 | 1,621 | 1,717 |
| Interest expense, debt | 94 | 91 | 186 | 181 |
| Total claims and expenses | 5,221 | 5,008 | 10,229 | 9,926 |
| Income before income taxes | 941 | 1,287 | 1,668 | 2,601 |
| Income tax expense | 201 | 345 | 266 | 692 |
| Net income | 740 | 942 | 1,402 | 1,909 |
| Net income per share, basic | 1.27 | 1.56 | 2.4 | 3.12 |
| Net income per share, diluted | 1.27 | 1.54 | 2.38 | 3.08 |
| Weighted average number of common shares outstanding | ||||
| Weighted average number of common shares outstanding, basic | 575,800,000 | 598,200,000 | 580,100,000 | 606,700,000 |
| Weighted average number of common shares outstanding, diluted | 579,800,000 | 607,900,000 | 584,900,000 | 616,300,000 |
| Total losses | (75) | (28) | (259) | (66) |
| Portion of losses recognized in accumulated other changes in equity from nonowner sources | 45 | 0 | 45 | 0 |
| Other-than-temporary impairment losses | (30) | (28) | (214) | (66) |
| Other net realized investment gains | 43 | 64 | 13 | 40 |
| Net realized investment gains (losses) | $13 | $36 | ($201) | ($26) |
02 - Consolidated Balance Sheet
| 02 - Consolidated Balance Sheet (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Assets | ||
| Fixed maturities, available for sale at fair value | $62,967 | $61,275 |
| Equity securities, at fair value | 382 | 379 |
| Real estate | 878 | 827 |
| Short-term securities | 6,445 | 5,222 |
| Other investments | 2,771 | 3,035 |
| Total investments | 73,443 | 70,738 |
| Cash | 282 | 350 |
| Investment income accrued | 808 | 823 |
| Premiums receivable | 6,220 | 5,954 |
| Reinsurance recoverables | 13,694 | 14,232 |
| Ceded unearned premiums | 974 | 941 |
| Deferred acquisition costs | 1,822 | 1,774 |
| Deferred tax asset | 1,428 | 1,965 |
| Contractholder receivables | 6,452 | 6,350 |
| Goodwill | 3,365 | 3,366 |
| Other intangible assets | 636 | 688 |
| Other assets | 2,202 | 2,570 |
| Total assets | 111,326 | 109,751 |
| Liabilities | ||
| Claims and claim adjustment expense reserves | 54,372 | 54,723 |
| Unearned premium reserves | 11,184 | 10,957 |
| Contractholder payables | 6,452 | 6,350 |
| Payables for reinsurance premiums | 606 | 528 |
| Debt | 6,532 | 6,181 |
| Other liabilities | 5,260 | 5,693 |
| Total liabilities | 84,406 | 84,432 |
| Shareholders' equity | ||
| Preferred stock savings plan - convertible preferred stock | 83 | 89 |
| Common stock | 19,353 | 19,242 |
| Retained earnings | 14,442 | 13,314 |
| Accumulated other changes in equity from nonowner sources | 258 | (900) |
| Treasury stock, at cost | (7,216) | (6,426) |
| Total shareholders' equity | 26,920 | 25,319 |
| Total liabilities and shareholders' equity | $111,326 | $109,751 |
02.1 - Consolidated Balance She
| 02.1 - Consolidated Balance Sheet Parentheticals (USD $) | ||
| In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
| Balance Sheet Parentheticals | ||
| Fixed maturities, subject to securities lending | $80 | $8 |
| Fixed maturities, amortized cost | 61,828 | 61,569 |
| Equity securities, at cost | $386 | $461 |
| Preferred stock savings plan, shares issued | 300,000 | 300,000 |
| Preferred stock savings plan, shares outstanding | 300,000 | 300,000 |
| Common stock, shares authorized | 1,750,000,000 | 1,750,000,000 |
| Common stock, shares issued | 567,500,000 | 585,100,000 |
| Common stock, shares outstanding | 567,500,000 | 585,100,000 |
| Treasury stock, shares | 148,200,000 | 128,800,000 |
03 - Consolidated Statement of
| 03 - Consolidated Statement of Changes in Shareholders' Equity (Unaudited) (USD $) | ||
| In Millions, except Share data | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Convertible preferred stock - savings plan | ||
| Convertible preferred stock - savings plan, balance, beginning of year | $89 | $112 |
| Convertible preferred stock - savings plan, redemptions during period | (6) | (9) |
| Convertible preferred stock - savings plan, balance, end of period | 83 | 103 |
| Common stock and additional paid-in capital, balance, beginning of year | 19,242 | 18,990 |
| Common stock and additional paid-in capital, employee share-based compensation | 44 | 71 |
| Common stock and additional paid-in capital, compensation amortization under share-based plans and other changes | 67 | 76 |
| Common stock and additional paid in capital, balance, end of period | 19,353 | 19,137 |
| Retained earnings | ||
| Retained earnings, balance, beginning of year | 13,314 | 11,110 |
| Retained earnings, cumulative effect of adoption of FSP FAS 115-2 at April 1, 2009 (see note 1) | 71 | 0 |
| Net income | 1,402 | 1,909 |
| Dividends | (352) | (362) |
| Retained earnings, other | 7 | (2) |
| Retained earnings, balance, end of period | 14,442 | 12,655 |
| Accumulated other changes in equity from nonowner sources, net of tax | ||
| Accumulated other changes in equity from nonowner sources, net of tax, balance, begining of year | (900) | 670 |
| Accumulated other changes in equity from nonowner sources, net of tax, cumulative effect of adoption of FSP FAS 115-2 at April 1, 2009 (see note 1) | (71) | 0 |
| Change in net unrealized gain (loss) on investments having no credit losses recognized in the consolidated statement of income | 1,026 | (557) |
| Change in net unrealized gain (loss) on investments having credit losses recognized in the consolidated statement of income | 53 | 0 |
| Net change in unrealized foreign currency translation and other changes | 150 | (34) |
| Accumulated other changes in equity from nonowner sources, net of taxes, balance, end of period | 258 | 79 |
| Treasury stock (at cost) | ||
| Treasury stock (at cost), balance, beginning of year | (6,426) | (4,266) |
| Treasury stock (at cost), treasury shares acquired - share repurchase authorization | (750) | (1,750) |
| Treasury stock (at cost), net shares acquired related to employee share-based compensation plans | (40) | (35) |
| Treasury stock (at cost). balance, end of period | (7,216) | (6,051) |
| Total common shareholders' equity | 26,837 | 25,820 |
| Total shareholders' equity | 26,920 | 25,923 |
| Common shares outstanding | ||
| Common shares outstanding, balance, beginning of year | 585,100,000 | 627,800,000 |
| Common shares outstanding, shares acquired - share repurchase authorization | (18,500,000) | (36,100,000) |
| Common shares outstanding, net shares issued under employee share-based compensation plans | 900,000 | 1,100,000 |
| Common shares outstanding, balance, end of period | 567,500,000 | 592,800,000 |
| Summary of changes in equity from nonowner sources | ||
| Net income | 1,402 | 1,909 |
| Other changes in equity from nonowner sources, net of tax | 1,229 | (591) |
| Total changes in equity from nonowner sources | $2,631 | $1,318 |
04 - Consolidated Statement of
| 04 - Consolidated Statement of Cash Flows (Unaudited) (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Cash flows from operating activities | ||
| Net income | $1,402 | $1,909 |
| Adjustments to reconcile net income to net cash provided by operating activities | ||
| Net realized investment losses | 201 | 26 |
| Depreciation and amortization expense | 415 | 414 |
| Deferred federal income tax expense (benefit) | (31) | 26 |
| Amortization of deferred policy acquisition costs | 1,897 | 1,915 |
| Equity in (income) loss from other investments | 252 | (33) |
| Change in premiums receivable | (266) | (205) |
| Change in reinsurance recoverables | 538 | 282 |
| Change in deferred acquisition costs | (1,945) | (1,959) |
| Change in claims and claim adjustment expense reserves | (351) | (424) |
| Change in unearned premium reserves | 227 | 112 |
| Other operating activities | (550) | (432) |
| Net cash provided by operating activities | 1,789 | 1,631 |
| Cash flows from investing activities | ||
| Proceeds from maturities of fixed maturities | 2,389 | 2,688 |
| Proceeds from sales of investments, fixed maturities | 1,864 | 2,449 |
| Proceeds from sales of investments, equity securities | 31 | 36 |
| Proceeds from sales of investments, real estate | 0 | 25 |
| Proceeds from sales of investments, other investments | 140 | 424 |
| Purchases of investments, fixed maturities | (4,271) | (4,413) |
| Purchases of investments, equity securities | (18) | (46) |
| Purchases of investments, real estate | (9) | (25) |
| Purchases of investments, other investments | (186) | (285) |
| Net purchases of short-term securities | (1,223) | (347) |
| Securities transactions in course of settlement | 366 | 74 |
| Other investing activities | (205) | (163) |
| Net cash provided by (used in) investing activities | (1,122) | 417 |
| Cash flows from financing activities | ||
| Payment of debt | (141) | (400) |
| Issuance of debt | 494 | 496 |
| Dividends paid to shareholders | (350) | (359) |
| Issuance of common stock - employee share options | 28 | 59 |
| Treasury stock acquired - share repurchase authorization | (750) | (1,765) |
| Treasury stock acquired - net employee share-based compensation | (28) | (28) |
| Excess tax benefits from share-based payment arrangements, financing activities | 2 | 7 |
| Net cash used in financing activities | (745) | (1,990) |
| Effect of exchange rate changes on cash | 10 | 0 |
| Net increase (decrease) in cash | (68) | 58 |
| Cash at beginning of period | 350 | 271 |
| Cash at end of period | 282 | 329 |
| Supplemental disclosure of cash flow information | ||
| Income taxes paid | 363 | 715 |
| Interest paid | $185 | $184 |
05.01 - Basis of Presentation a
| 05.01 - Basis of Presentation and Accounting Policies disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Basis of Presentation and Accounting Policies disclosure [Abstract] | |
| Basis of Presentation and Accounting Policies Disclosure | 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 Companys 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. Certain reclassifications have been made to the 2008 financial statements and notes to conform to the 2009 presentation. The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Companys consolidated financial statements and related notes included in the Companys 2008 Annual Report on Form10-K. 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 consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period. Actual results could differ from those estimates. All material intercompany transactions and balances have been eliminated. Adoption of New Accounting Standards Other-Than-Temporary Impairments In April2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2). FSP FAS 115-2 requires the recognition of an other-than-temporary impairment when an entity has the intent to sell a debt security or when it is more likely than not that an entity will be required to sell the debt security before its anticipated recovery in value. Additionally, FSP FAS 115-2 changes the presentation and amount of other-than-temporary impairment losses recognized in the income statement for instances in which the Company does not intend to sell or it is more likely than not that the Company will not be required to sell a debt security prior to the anticipated recovery of its remaining cost basis. The Company separates the credit loss component of the impairment from the amount related to all other factors and reports the credit loss component in net realized investment gains (losses). The impairment related to all other factors is reported in accumulated other changes in equity from nonowner sources. In addition to the changes in measurement and presentation, FSP FAS 115-2 expands the disclosures related to other-than-temporary impairments and requires all such disclosures to be included in both interim and annual periods. The provisions of FSP FAS 115-2 were effective for interim periods ending after June15, 2009. The adoption of FSP FAS 115-2 on April1, 2009 resulted in an increase in retained earnings of $71 million, which was |
05.02 - Segment Information dis
| 05.02 - Segment Information disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Segment Information disclosure [Abstract] | |
| Segment Information Disclosure | 2. SEGMENT INFORMATION The following tables summarize the components of the Companys revenues, operating income and total assets by reportable business segments: (for the three months ended June30, in millions) Business Insurance Financial, Professional International Insurance Personal Insurance Total Reportable Segments 2009 Premiums $ 2,770 $ 810 $ 1,773 $ 5,353 Net investment income 451 107 100 658 Fee income 89 89 Other revenues 12 7 21 40 Total operating revenues (1) $ 3,322 $ 924 $ 1,894 $ 6,140 Operating income (1) $ 560 $ 133 $ 88 $ 781 2008 Premiums $ 2,781 $ 852 $ 1,724 $ 5,357 Net investment income 540 120 118 778 Fee income 90 90 Other revenues 7 8 19 34 Total operating revenues (1) $ 3,418 $ 980 $ 1,861 $ 6,259 Operating income (1) $ 658 $ 204 $ 122 $ 984 (for the six months ended June30, in millions) Business Insurance Financial, Professional International Insurance Personal Insurance Total Reportable Segments 2009 Premiums $ 5,527 $ 1,611 $ 3,516 $ 10,654 Net investment income 806 211 183 1,200 Fee income 162 162 Other revenues 18 13 42 73 Total operating revenues (1) $ 6,513 $ 1,835 $ 3,741 $ 12,089 Operating income (1) $ 1,107 $ 281 $ 242 $ 1,630 2008 Premiums $ 5,567 $ 1,699 $ 3,431 $ 10,697 Net investment income 1,113 242 238 1,593 Fee income 195 195 Other revenues 13 13 40 66 Total operating revenues (1) $ 6,888 $ 1,954 $ 3,709 $ 12,551 Operating income (1) $ 1,341 $ 412 $ 303 $ 2,056 (1) Operating revenues for reportable business segments exclude net realized investment gains (losses). Operating income for reportable business segments equals net income excluding the after-tax impact of net realized investment gains (losses). Business Segment Reconciliations Three Months Ended June30, Six Months Ended June30, (in millions) 2009 2008 2009 2008 Revenue reconciliation Earned premiums Business Insurance: Commercial multi-peril $ 727 $ 749 $ 1,445 $ 1,504 Workers compensation 623 589 1,256 1,169 Commercial automobile 490 487 969 986 Property 446 476 892 946 General liability 484 478 966 958 Other 2 (1 ) 4 Total Business Insurance 2,770 2,781 5,527 5,567 Financial, Professional International Insurance: General liability 233 225 461 450 Fidelity and surety 252 263 500 519 International 293 332 585 666 Other 32 32 65 64 Total Financial, Pro |
05.03 - Investments disclosure
| 05.03 - Investments disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Investments disclosure [Abstract] | |
| Investments disclosure | 3. INVESTMENTS Fixed Maturities The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows: Amortized Gross Unrealized Fair (at June30, 2009, in millions) Cost Gains Losses Value U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities $ 1,531 $ 97 $ $ 1,628 Obligations of states, municipalities and political subdivisions 38,958 1,299 129 40,128 Debt securities issued by foreign governments 1,673 58 3 1,728 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 5,669 164 312 5,521 All other corporate bonds 13,949 374 403 13,920 Redeemable preferred stock 48 1 7 42 Total $ 61,828 $ 1,993 $ 854 $ 62,967 Amortized Gross Unrealized Fair (at December 31, 2008, in millions) Cost Gains Losses Value U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities $ 1,681 $ 160 $ $ 1,841 Obligations of states, municipalities and political subdivisions 38,598 920 456 39,062 Debt securities issued by foreign governments 1,453 67 1 1,519 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 6,266 157 364 6,059 All other corporate bonds 13,498 121 882 12,737 Redeemable preferred stock 73 1 17 57 Total $ 61,569 $ 1,426 $ 1,720 $ 61,275 Equity Securities The cost and fair value of investments in equity securities were as follows: GrossUnrealized Fair (at June30, 2009, in millions) Cost Gains Losses Value Common stock $ 171 $ 15 $ 18 $ 168 Non-redeemable preferred stock 215 26 27 214 Total $ 386 $ 41 $ 45 $ 382 GrossUnrealized Fair (at December 31, 2008, in millions) Cost Gains Losses Value Common stock $ 189 $ 2 $ 31 $ 160 Non-redeemable preferred stock 272 7 60 219 Total $ 461 $ 9 $ 91 $ 379 Investment Impairments The Company conducts a periodic review to identify and evaluate invested assets having other-than-temporary impairments. Some of the factors considered in identifying other-than-temporary impairments include: (1)for fixed maturity investments, whether the Company intends to sell the investment or whether it is more likely than not that the Company will be required to sell the investment prior to an anticipated recovery in value; (2)for non-fixed maturity investments, the Companys ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value; (3)the likelihood of the recoverability of principal and interest for fixed maturity securities (i.e., whether there is a credit loss), or cost fo |
05.04 - Fair Value Measurements
| 05.04 - Fair Value Measurements disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Fair Value Measurements disclosure [Abstract] | |
| Fair Value Measurements disclosure | 4. FAIR VALUE MEASUREMENTS The Companys estimates of fair value for financial assets and financial liabilities are based on the framework established in FAS 157. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the FAS 157 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Companys significant market assumptions. The three levels of the hierarchy are as follows: Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable (e.g., interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Companys own assumptions about the inputs that market participants would use. Valuation of Investments Reported at Fair Value in Financial Statements The fair value of a financial instrument is the estimated amount at which the instrument could be exchanged in an orderly transaction between knowledgeable, unrelated willing parties, i.e., not in a forced transaction. The estimated fair value of a financial instrument may differ from the amount that could be realized if the security was sold in an immediate sale, e.g., a forced transaction. Additionally, the valuation of fixed maturity investments is more subjective when markets are less liquid due to the lack of market based inputs, which may increase the potential that the estimated fair value (i.e., the carrying amount) of an investment is not reflective of the price at which an actual transaction would occur. For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these prices in the amounts disclosed in Level 1 of the hierarchy. The Company receives the quoted market prices from a third party, nationally recognized pricing service (pricing service). When quoted market prices are unavailable, the Company utilizes a pricing service to determine an estimate of fair value, which is mainly used for its fixed maturity investments. The fair value estimates provided from this pricing service are included in the amount disclosed in Level 2 of the hierarchy. If quoted market prices and an estimate from a pricing service are unavailable, the Company produces an estimate of fair value based on internally developed valuation techniques, which, depending on the level of observab |
05.05 - Goodwill and Other Inta
| 05.05 - Goodwill and Other Intangible Assets disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Goodwill and Other Intangible Assets disclosure [Abstract] | |
| Goodwill and Other Intangible Assets disclosure | 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table presents the carrying amount of the Companys goodwill by segment at June30, 2009 and December31, 2008: (in millions) June30, 2009 December31, 2008 Business Insurance $ 2,168 $ 2,168 Financial, Professional International Insurance 557 556 Personal Insurance 613 613 Other 27 29 Total $ 3,365 $ 3,366 Other Intangible Assets The following presents a summary of the Companys other intangible assets by major asset class at June30, 2009 and December31, 2008: (at June30, 2009, in millions) Gross Carrying Amount Accumulated Amortization Net Intangibles subject to amortization Customer-related $ 1,036 $ 789 $ 247 Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables (1) 191 18 173 Total intangible assets subject to amortization 1,227 807 420 Intangible assets not subject to amortization 216 216 Total other intangible assets $ 1,443 $ 807 $ 636 (at December31, 2008, in millions) Gross Carrying Amount Accumulated Amortization Net Intangibles subject to amortization Customer-related $ 1,036 $ 751 $ 285 Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables (1) 191 4 187 Total intangible assets subject to amortization 1,227 755 472 Intangible assets not subject to amortization 216 216 Total other intangible assets $ 1,443 $ 755 $ 688 (1) The time value of money and the risk margin (cost of capital) components of the intangible asset run off at different rates, and, as such, the amount recognized in income may be a net benefit in some periods and a net expense in other periods. The following presents a summary of the Companys amortization expense for other intangible assets by major asset class: Three Months Ended June30, Six Months Ended June30, (in millions) 2009 2008 2009 2008 Customer-related $ 17 $ 24 $ 38 $ 52 Fair value adjustment on claims and claim adjustment expense reserves and reinsurance recoverables 7 7 14 15 Total amortization expense $ 24 $ 31 $ 52 $ 67 Intangible asset amortization expense is estimated to be $48 million for the remainder of 2009, $86 million in 2010, $69 million in 2011, $52 million in 2012 and $45 million in 2013. |
05.06 - Debt disclosure
| 05.06 - Debt disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Debt disclosure [Abstract] | |
| Debt disclosure | 6. DEBT Convertible Note Maturity. On March3, 2009, the Companys zero coupon convertible notes with an effective yield of 4.17% and a remaining principal balance of $141 million matured and were fully paid. Senior Debt Issuance. On June2, 2009, the Company issued $500 million aggregate principal amount of 5.90% senior notes that will mature on June2, 2019. The net proceeds of the issuance, after original issuance discount and the deduction of underwriting expenses and commissions and other expenses, totaled approximately $494 million. Interest on the senior notes is payable semi-annually in arrears on June2 and December2 of each year, commencing December2, 2009. The senior notes are redeemable in whole at any time or in part from time to time, at the Companys option, at a redemption price equal to the greater of (a)100% of the principal amount of senior notes to be redeemed or (b)the sum of the present values of the remaining scheduled payments of principal and interest on the senior notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current treasury rate (as defined) plus 35 basis points for the senior notes. |
05.07 - Share Repurchase Author
| 05.07 - Share Repurchase Authorization disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Share Repurchase Authorization disclosure [Abstract] | |
| Share Repurchase Authorization disclosure | 7. SHARE REPURCHASE AUTHORIZATION The Companys board of directors has authorized the repurchase of the Companys common shares. Under the authorization, repurchasesmay be madefrom time to time in the open market, pursuant to preset trading plans meeting the requirements of Rule10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorization does not have a stated expiration date. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including corporate and regulatory requirements, price, catastrophe losses and other market conditions. The Company resumed repurchasing common shares during the second quarter of 2009. During the three months and six months ended June30, 2009, the Company repurchased 18.5 million shares under its share repurchase authorization for a total cost of approximately $750 million. The average cost per share repurchased was $40.65. At June30, 2009, the Company had $3.06 billion of capacity remaining under its share repurchase authorization. |
05.08 - Changes in Equity from
| 05.08 - Changes in Equity from Nonowner Sources disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Changes in Equity from Nonowner Sources disclosure [Abstract] | |
| Change in Equity from Nonowner Sources disclosure | 8. CHANGES IN EQUITY FROM NONOWNER SOURCES The Companys total changes in equity from nonowner sources were as follows: Three Months Ended June30, Six Months Ended June30, (in millions, after-tax) 2009 2008 2009 2008 Net income $ 740 $ 942 $ 1,402 $ 1,909 Change in net unrealized gain (loss) on investments: Having no credit losses recognized in the consolidated statement of income 339 (514 ) 1,026 (557 ) Having credit losses recognized in the consolidated statement of income 53 53 Other changes 169 (33 ) 150 (34 ) Total changes in equity from nonowner sources $ 1,301 $ 395 $ 2,631 $ 1,318 |
05.09 - Earnings per Share disc
| 05.09 - Earnings per Share disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Earnings per Share disclosure [Abstract] | |
| Earnings per Share disclosure | 9. EARNINGS PER SHARE Basic earnings per share was computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflected the effect of potentially dilutive securities. On January1, 2009, the Company adopted the provisions of FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, as described in Note 1. The impact of adoption of this FSP reduced previously reported basic earnings per share by $0.01 per share and $0.02 per share for the three and six months ended June30, 2008, respectively, and had no impact on the previously reported diluted earnings per share for those periods. The following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations: Three Months Ended June30, Six Months Ended June30, (in millions, except per share amounts) 2009 2008 2009 2008 Basic Net income, as reported $ 740 $ 942 $ 1,402 $ 1,909 Preferred stock dividends (1 ) (1 ) (2 ) (2 ) Participating share-based awards allocated income (5 ) (7 ) (10 ) (13 ) Net income available to common shareholders basic $ 734 $ 934 $ 1,390 $ 1,894 Diluted Net income available to common shareholders $ 734 $ 934 $ 1,390 $ 1,894 Effect of dilutive securities: Convertible preferred stock 1 1 2 2 Zero coupon convertible notes 1 1 2 Net income available to common shareholders diluted $ 735 $ 936 $ 1,393 $ 1,898 Common shares Basic Weighted average shares outstanding 575.8 598.2 580.1 606.7 Diluted Weighted average shares outstanding 575.8 598.2 580.1 606.7 Weighted average effects of dilutive securities: Stock options and performance shares 1.9 4.7 1.9 4.6 Convertible preferred stock 2.1 2.6 2.1 2.6 Zero coupon convertible notes 2.4 0.8 2.4 Total 579.8 607.9 584.9 616.3 Net Income per Common Share Basic $ 1.27 $ 1.56 $ 2.40 $ 3.12 Diluted $ 1.27 $ 1.54 $ 2.38 $ 3.08 |
Based Incentive Compensation di
| Based Incentive Compensation disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Share-Based Incentive Compensation disclosure [Abstract] | |
| Share-Based Incentive Compensation disclosure | 10. SHARE-BASED INCENTIVE COMPENSATION The following presents information for fully vested stock option awards at June30, 2009: Stock Options Number Weighted Average Exercise Price Weighted Average Contractual Life Remaining Aggregate Intrinsic Value ($in millions) Vested at end of period (1) 28,947,874 $ 44.93 3.6 years $ 32 Exercisable at end of period 26,116,747 $ 44.90 3.1 years $ 30 (1) Represents awards for which the requisite service has been rendered, including those that are retirement eligible. The total compensation cost recognized in earnings for all share-based incentive compensation awards was $28 million for both the three months ended June30, 2009 and 2008, respectively, and $65 million and $66 million for the six months ended June30, 2009 and 2008, respectively. The related tax benefit recognized in the consolidated statement of income was $9 million for both the three months ended June30, 2009 and 2008, and $22 million for both the six months ended June30, 2009 and 2008. The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at June30, 2009 was $159 million, which is expected to be recognized over a weighted-average period of 2.0 years. The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at December31, 2008 was $112 million, which was expected to be recognized over a weighted-average period of 1.7 years. |
05.11 - Pension Plans, Retireme
| 05.11 - Pension Plans, Retirement Benefits and Savings Plans disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Pension Plans, Retirement Benefits and Savings Plans disclosure [Abstract] | |
| Pension Plans, Retirement Benefits and Savings Plans disclosure | 11. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS The following table summarizes the components of net periodic benefit cost for the Companys pension and postretirement benefit plans recognized in the consolidated statement of income. Pension Plans Postretirement Benefit Plans (for the three months ended June30, in millions) 2009 2008 2009 2008 Net Periodic Benefit Cost: Service cost $ 20 $ 19 $ $ Interest cost on benefit obligation 32 30 5 4 Expected return on plan assets (44 ) (38 ) (1 ) (1 ) Amortization of unrecognized: Prior service benefit (2 ) (2 ) Net actuarial loss (gain) 6 2 (1 ) Net benefit expense $ 12 $ 11 $ 4 $ 2 Pension Plans Postretirement Benefit Plans (for the six months ended June30, in millions) 2009 2008 2009 2008 Net Periodic Benefit Cost: Service cost $ 40 $ 38 $ $ Interest cost on benefit obligation 63 59 9 8 Expected return on plan assets (87 ) (76 ) (1 ) (1 ) Amortization of unrecognized: Prior service benefit (3 ) (3 ) Net actuarial loss (gain) 11 4 (2 ) Net benefit expense $ 24 $ 22 $ 8 $ 5 |
05.12 - Contingencies, Commitme
| 05.12 - Contingencies, Commitments and Guarantees disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Contingencies, Commitments and Guarantees disclosure [Abstract] | |
| Contingencies, Commitments and Guarantees disclosure | 12. CONTINGENCIES, COMMITMENTS AND GUARANTEES Contingencies The following section describes the major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or to which any of their properties are subject. Asbestos- and Environmental-Related Proceedings In the ordinary course of its insurance business, the Company receives claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos- and environmental-related exposures that are the subject of related coverage litigation, including, among others, the litigation described below. The Company continues to be subject to aggressive asbestos-related litigation. The conditions surrounding the final resolution of these claims and the related litigation continue to change. The Company is defending its asbestos- and environmental-related litigation vigorously and believes that it has meritorious defenses; however, the outcomes of these disputes are uncertain. In this regard, the Company employs dedicated specialists and aggressive resolution strategies to manage asbestos and environmental loss exposure, including settling litigation under appropriate circumstances. For a discussion of other information regarding the Companys asbestos and environmental exposure, see PartI Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations Asbestos Claims and Litigation, Environmental Claims and Litigation and Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves. Asbestos Direct Action Litigation In October2001 and April2002, two purported class action suits (Wise v. Travelers and Meninger v. Travelers) were filed against Travelers Property Casualty Corp. (TPC) and other insurers (not including The St. Paul Companies,Inc. (SPC)) in state court in West Virginia. These and other cases subsequently filed in West Virginia were consolidated into a single proceeding in the Circuit Court of Kanawha County, West Virginia. The plaintiffs allege that the insurer defendants engaged in unfair trade practices in violation of state statutes by inappropriately handling and settling asbestos claims. The plaintiffs seek to reopen large numbers of settled asbestos claims and to impose liability for damages, including punitive damages, directly on insurers. Similar lawsuits alleging inappropriate handling and settling of asbestos claims were filed in Massachusetts and Hawaii state courts. These suits are collectively referred to as the Statutory and Hawaii Actions. In March2002, the plaintiffs in consolidated asbestos actions pending before a mass tort panel of judges in West Virginia state court amended their complaint to include TPC as a defendant, alleging that TPC and other insurers breached alleged duties to certain users of asbestos products. The plaintiffs seek damages, including punitive damages. Lawsuits seeking similar relief and raising similar allegations, primarily violations of purported common law duties to third parties, have also been asserted in various state courts against TPC and SP |
05.13 - Subsequent Events discl
| 05.13 - Subsequent Events disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Subsequent Events disclosure [Abstract] | |
| Subsequent Events disclosure | 13. SUBSEQUENT EVENTS There were no subsequent events requiring adjustment to the financial statements or disclosure through July30, 2009, the date that the Companys financial statements were issued. |
05.14 - Consolidating Financial
| 05.14 - Consolidating Financial Statements disclosure | |
| 6 Months Ended
Jun. 30, 2009 | |
| Consolidating Financial Statements disclosure [Abstract] | |
| Consolidating Financial Statements of The Travelers Companies, Inc. and Subsidiaries | 14. CONSOLIDATING FINANCIAL STATEMENTS OF THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES The following consolidating financial statements of the Company have been prepared pursuant to Rule3-10 of Regulation S-X. These consolidating financial statements have been prepared from the Companys financial information on the same basis of accounting as the consolidated financial statements. The Travelers Companies,Inc. has fully and unconditionally guaranteed certain debt obligations of TPC, its wholly-owned subsidiary, which totaled $1.19 billion at June30, 2009. Prior to the merger, TPC fully and unconditionally guaranteed the payment of all principal, premiums, if any, and interest on certain debt obligations of its wholly-owned subsidiary, Travelers Insurance Group Holdings,Inc. (TIGHI). The Travelers Companies,Inc. has fully and unconditionally guaranteed such guarantee obligations of TPC. TPC is deemed to have no assets or operations independent of TIGHI. Consolidating financial information for TIGHI has not been presented herein because such financial information would be substantially the same as the financial information provided for TPC. CONSOLIDATING STATEMENT OF INCOME (Unaudited) For the three months ended June30, 2009 (in millions) TPC Other Subsidiaries Travelers(1) Eliminations Consolidated Revenues Premiums $ 3,628 $ 1,725 $ $ $ 5,353 Net investment income 424 227 7 658 Fee income 90 (1 ) 89 Net realized investment gains (losses) 18 (5 ) 13 Other revenues 39 10 49 Total revenues 4,199 1,956 7 6,162 Claims and expenses Claims and claim adjustment expenses 2,221 1,114 3,335 Amortization of deferred acquisition costs 635 318 953 General and administrative expenses 569 266 4 839 Interest expense 17 1 76 94 Total claims and expenses 3,442 1,699 80 5,221 Income (loss) before income taxes 757 257 (73 ) 941 Income tax expense (benefit) 170 55 (24 ) 201 Equity in net income of subsidiaries 789 (789 ) Net income $ 587 $ 202 $ 740 $ (789 ) $ 740 (in millions) TPC Other Subsidiaries Travelers(1) Eliminations Consolidated Net Realized Investment Gains (Losses) Other-than-temporary impairment losses: Total losses $ (49 ) $ (26 ) $ $ $ (75 ) Portion of losses recognized in accumulated other changes in equity from nonowner sources 28 17 45 Other-than-temporary impairment losses (21 ) (9 ) (30 ) Other net realized investment gains 39 4 43 Net realized investment gains (losses) $ 18 $ (5 ) $ $ $ 13 (1) The Travelers Companies,Inc., excluding its subsidiaries. CONSOLIDATING STATEMENT OF INCOME (Unaudited) For the three months ended June30, 2008 (in millions) TPC Other Subsidiaries Travelers(1) Eliminations Consolida |
Common Domain Members
| Common Domain Members (USD $) | |||
| 6 Months Ended
Jun. 30, 2009 | Jul. 27, 2009
| Jun. 30, 2008
| |
| Entity [Domain] | |||
| Entity Registrant Name | Travelers Companies, Inc. | ||
| Entity Central Index Key | 0000086312 | ||
| Document Type | 10-Q | ||
| Document Period End Date | 2009-06-30 | ||
| Amendment Flag | false | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Public Float | $25,642,673,490 | ||
| Entity Common Stock, Shares Outstanding | 567,562,093 |