2013 Travelers Leadership Conference Proprietary and Confidential

Bill CunninghamExecutive VP, Business Insurance

2013 Travelers Leadership Conference

PROPRIETARY AND CONFIDENTIAL:

TRAVELERS HAS SHARED THIS MATERIAL WITH YOU SOLELY FOR THE PURPOSE OF HELPINGYOU UNDERSTAND OUR PERSPECTIVES AND STRATEGIES, SO THAT YOU CAN BETTER SERVICEOUR MUTUAL CUSTOMERS AND PROSPECTS. YOU MAY NOT USE THIS MATERIAL WITHINYOUR ORGANIZATION FOR ANY OTHER PURPOSE, OR DISTRIBUTE IT TO ANYONE OUTSIDEYOUR COMPANY, WITHOUT OUR ADVANCED WRITTEN CONSENT.

WITHOUT LIMITING THE FOREGOING, UNDER NO CIRCUMSTANCES MAY YOU SHARE THISMATERIAL WITH ANY COMPETITOR OF TRAVELERS OR WITH ANYONE ACTING ON BEHALF OFA TRAVELERS COMPETITOR.

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You’re Our Best!

In 2012:

Top 3% of our agents / brokers 

57% of Written Premium

85% Retention

$1.1B of New Business

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How Are We Doing on Communication and Execution?

TLC Survey Results: 2012 2013

Very Good to Excellent: 38% 63%

Good: 37% 27%

Overall: 75% 90%

25 pt. Improvement

25 pt. Improvement

We’re Committed to Listening to You

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What is our view of the environment?

How are we feeling about our progress?

What are our plans for the next 12 months?

Where are we investing?

Key Questions From You…

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FirstParty

National Accounts

Middle          Market

$3.1 B $6.0 B $1.7 B $0.9 B$3.8 B

National Accounts Group includes written fees and claim volume under administration

SmallCommercial

Specialized Distribution

2012 Gross Written Premium

Business Insurance Size and Scale

Total Business Insurance = $15.5 B

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The Challenging Environment Continues

P&C Industry Catastrophes Losses as Percentage of Premium

P&C Industry Combined Ratio

10‐Year Treasury Yields

P&C Industry Return on Equity

.

Source: ISO; Insurance Information Institute Source: 2006-2011: SNL Financial; 2012E: Conning 4Q’12 Forecast & Analysis

Source: Federal Reserve Board of Governors Source: Conning 4Q’12 Forecast & Analysis

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13% ROE13% ROE

Statistics are subject to change based on a number of factors, including changes in actuarial estimates.

Investment Yields are driving down ROE

The Challenging Environment Continues

A 100% Combined Ratio ain’t  what it used to be!

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Estimated Average Annual

Loss Trend

BI Renewal Rate excludes National Accounts Group.Statistics are subject to change based on a number of factors, including changes in actuarial estimates.

Our Progress:Improving Underwriting Margins

BI Renewal Rate

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BI Combined Ratio ex. PYD: GAAP combined ratios excluding PYD as reported at year‐end.CR for  a 13% ROE: Statistics are subject to change based on a number of factors, including changes in actuarial estimates.

Our Progress:Need for Continued Rate Improvement

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Represents average estimated ultimate loss ratio for individual accounts over time.Note: Statistics are subject to change based on a number of factors, including changes in actuarial estimates.

11%

Commercial Accounts 2012

70 – 90%

Thoughtful Execution:Loss Ratio Bands

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Represents average estimated ultimate loss ratio for individual accounts over time.Note: Statistics are subject to change based on a number of factors, including changes in actuarial estimates.

11%~1,100 accounts11% average rate

70 – 90%

Thoughtful Execution:Loss Ratio Bands

Account Specific Rate Actions

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Source: Conning 4Q’12 Forecast & Analysis.

Industry Commercial Lines Combined Ratios

Line of Business Insights

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Data as of 12/31/2012Excludes National Accounts losses under management and Residual Market premium collected as a servicing carrier.

Travelers Business Insurance Portfolio

Balanced Portfolio

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Travelers Commercial Auto:Environmental Pressure

Severity Loss Trend Increasing

Loss Cost Pressure Caused By:

– Vehicle age and maintenance

– Vehicle miles driven

– Used car prices

– Weather

– Driver experience

– Technology distracting drivers and pedestrians

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Travelers Commercial Auto:Rate vs. Loss Trend

Current View of Loss Trend

Pricing Has Not Kept Pace with Loss Trend Over TimeProprietary and Confidential

Travelers Commercial Auto

Derived using statutory IEE and Schedule P data

More Progress Needed

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Commercial Auto Pressure:Our Response

Risk Management:

Fleet Safety influencing driver behavior 

− 20,000 fleet safety surveys conducted

Customer Webinars

− 3,500 participants

Virginia Tech Partnership on use of technology and safe driving

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Commercial Auto Pressure:Our Response

Underwriting:

Pricing

Increasing deductibles

Focusing on preferred classes

‘Total Account’ decision‐making

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FirstParty

National Accounts

SmallCommercial

Specialized Distribution

Middle          Market

Cyber First

Global Companion Coverage

Med First

Travelers Deluxe Property

Umbrella of Services

Deluxe Equip. BreakdownCross‐Sell Program

Industry‐Specific Large Property Programs

New Boiler Prospecting/ Retention Services

New Builders’ Risk Product 

New Industry‐focused  Inland Products

New Manuscript Property Policy

Ocean Express®  Cargo Enhancement

Ocean Express® for Boat Repairers

2nd Gen for CMP

2nd Gen forWorkers Comp

Cyber First Essentials

EPL+

Global Technology 

Streamlined Access to All Products 

Industry Expertise

Mobile Claim Status

2nd Gen Risk Control Analyzer

Medical Center of Excellence

Investing in the FutureBreadth of Products and Services

Launch of Environmental Practice

Contractors Pollution Liability

Premises Pollution Liability

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FirstParty

National Accounts

Middle          Market

SmallCommercial

Specialized Distribution

Investing in the FutureBreadth of Products and Services

Talent

Platform & Capability Enhancements

Umbrella of Services

FirstParty

National Accounts

SmallCommercial

Specialized Distribution

Middle          Market

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Our Continued Investments:Our Talent

Underwriting Professional Development Program

564 new underwriting trainees hired since 2006

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2,200 site visitors on average per month

15,000 online courses completed across Travelers

900+ agents completed CE‐credit courses

New Producer Training – 7 courses offered;150 participants

Our Continued Investments:Your Talent

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Our Continued Investments:Platform & Capability Enhancements:  Small Commercial

Legacy Platform 2010 2012

TravelersExpress© for Master PacSM

Low Medium HighUser Satisfaction

+18%

+6%

+20%

+21%

+15%

User Experience is Key to Success

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Our Continued Investments:Umbrella of Services:  Middle Market

Value‐Added Services… … Making a Difference

2 Point Lift in Retention

Winning New Business 50% More Often

e‐CARMA TravCompTours

RiskControl 

Consultants

ClaimAccount Executives

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Keep the Momentum Going

Improve underwriting margins

Continue thoughtful execution and effective communications

Continue investing

More new business opportunities with you

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