TRAVELERS COMPANIES, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the Company's financial condition
and results of operations.

FINANCIAL HIGHLIGHTS

2022 First Quarter Consolidated Results of Operations

•Net income of $1.02 billion, or $4.20 per share basic and $4.15 per share
diluted
•Net earned premiums of $8.01 billion
•Catastrophe losses of $160 million ($127 million after-tax)
•Net favorable prior year reserve development of $153 million ($122 million
after-tax)
•Combined ratio of 91.3%
•Net investment income of $637 million ($539 million after-tax)
•Net realized investment losses of $23 million ($19 million after-tax)
•Operating cash flows of $1.27 billion

2022 First Quarter Consolidated Financial Condition

•Total investments of $83.66 billion; fixed maturities and short-term securities
comprised 93% of total investments
•Total assets of $118.59 billion
•Total debt of $7.29 billion, resulting in a debt-to-total capital ratio of
22.2% (21.3% excluding net unrealized investment gains, net of tax)
•Total capital returned to shareholders of $773 million, comprising $559 million
of share repurchases and $214 million of dividends
•Shareholders' equity of $25.53 billion
•Net unrealized investment losses of $1.77 billion ($1.39 billion after-tax)
•Book value per common share of $106.40
•Holding company liquidity of $1.55 billion


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                 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued

CONSOLIDATED OVERVIEW

Consolidated Results of Operations

                                                           Three Months 

Ended

                                                               March 31,
(in millions, except ratio and per share amounts)          2022           2021

Revenues
Premiums                                               $   8,014       $ 7,386
Net investment income                                        637           701
Fee income                                                   103           101
Net realized investment gains (losses)                       (23)           44
Other revenues                                                78            81
Total revenues                                             8,809         8,313

Claims and expenses
Claims and claim adjustment expenses                       5,039         

4,970

Amortization of deferred acquisition costs                 1,310         

1,207

General and administrative expenses                        1,191         1,163
Interest expense                                              87            82
Total claims and expenses                                  7,627         7,422
Income before income taxes                                 1,182           891
Income tax expense                                           164           158
Net income                                             $   1,018       $   733

Net income per share
Basic                                                  $    4.20       $  2.89
Diluted                                                $    4.15       $  2.87

Combined ratio
Loss and loss adjustment expense ratio                      62.3  %       66.7  %
Underwriting expense ratio                                  29.0          29.9
Combined ratio                                              91.3  %       96.6  %



The following discussions of the Company's net income and segment income are
presented on an after-tax basis.  Discussions of the components of net income
and segment income are presented on a pre-tax basis, unless otherwise noted.
Discussions of net income per common share are presented on a diluted basis.

Overview

Diluted net income per share of $4.15 in the first quarter of 2022 increased by
45% over diluted net income per share of $2.87 in the same period of 2021.  Net
income of $1.02 billion in the first quarter of 2022 increased by 39% over net
income of $733 million in the same period of 2021.  The higher rate of increase
in diluted net income per share reflected the impact of share repurchases in
recent periods. The increase in income before income taxes in the first quarter
of 2022 primarily reflected the pre-tax impacts of (i) lower catastrophe losses,
partially offset by (ii) lower net favorable prior year reserve development,
(iii) lower underwriting margins excluding catastrophe losses and prior year
reserve development ("underlying underwriting margins"), (iv) net realized
investment losses compared to net realized investment gains in the same period
of 2021 and (v) lower net investment income. Catastrophe losses in the first
quarters of 2022 and 2021 were $160 million and $835 million, respectively. Net
favorable prior year reserve development in the first quarters of 2022 and 2021
was $153 million and $317 million, respectively. The lower underlying
underwriting margins in the first quarter of 2022 were driven by Personal
Insurance, partially offset by Business Insurance and Bond & Specialty
Insurance. Underlying underwriting margins in the first quarter of 2021 included
a net favorable impact from COVID-19 and related economic conditions. Income tax
expense in the first quarter of 2022 was higher than in the same period of 2021,
primarily reflecting the impact of the increase in income before income taxes,
partially offset by a $47 million reduction in income tax expense in the first
quarter of 2022 as a result of the resolution of prior year tax matters.
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                 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued


For discussion regarding the potential future impacts of COVID-19 and related
economic conditions on the Company, see "Outlook" herein and "The ongoing impact
of COVID-19 and related risks could materially affect our results of operations,
financial position and/or liquidity" included in "Part I-Item 1A-Risk Factors"
in the Company's 2021 Annual Report.

The Company has insurance operations in Canada, the United Kingdom, the Republic
of Ireland and throughout other parts of the world as a corporate member of
Lloyd's, as well as in Brazil and Colombia through joint ventures.  Because
these operations are conducted in local currencies other than the U.S. dollar,
the Company is subject to changes in foreign currency exchange rates. For the
three months ended March 31, 2022 and 2021, changes in foreign currency exchange
rates impacted reported line items in the statement of income by insignificant
amounts.  The impact of these changes was not material to the Company's net
income or segment income for the periods reported.

Revenues

Earned Premiums
Earned premiums in the first quarter of 2022 were $8.01 billion, $628 million or
9% higher than in the same period of 2021.  In Business Insurance, earned
premiums in the first quarter of 2022 increased by 7% over the same period of
2021.  Earned premiums in Business Insurance in the first quarter of 2021 were
negatively impacted by lower net written premiums in the preceding twelve months
due to a modest reduction in exposures and a decrease in new business volume, in
each case impacted by COVID-19 and related economic conditions. In Bond &
Specialty Insurance, earned premiums in the first quarter of 2022 increased by
10% over the same period of 2021.  In Personal Insurance, earned premiums in the
first quarter of 2022 increased by 10% over the same period of 2021.  Earned
premiums in Bond & Specialty Insurance and Personal Insurance in the first
quarter of 2021 were not materially impacted by COVID-19 and related economic
conditions. Factors contributing to the changes in earned premiums in each
segment are discussed in more detail in the segment discussions that follow.

Net Investment Income
The following table sets forth information regarding the Company's investments.
                                         Three Months Ended
                                             March 31,
(dollars in millions)                   2022           2021
Average investments (1)              $ 86,345       $ 81,209
Pre-tax net investment income             637            701
After-tax net investment income           539            590
Average pre-tax yield (2)                 2.9  %         3.5  %
Average after-tax yield (2)               2.5  %         2.9  %

_________________________________________________________

(1)Excludes net unrealized investment gains and losses and reflects cash,
receivables for investment sales, payables on investment purchases and accrued
investment income.
(2)Excludes net realized and net unrealized investment gains and losses.

Net investment income in the first quarter of 2022 was $637 million, $64 million
or 9% lower than in the same period of 2021.  Net investment income from fixed
maturity investments in the first quarter of 2022 was $505 million, $14 million
higher than in the same period of 2021. The increase primarily resulted from a
higher average level of fixed maturity investments, partially offset by lower
long-term interest rates. Net investment income from short-term securities in
the first quarter of 2022 was $2 million, $1 million lower than in the same
period of 2021, primarily resulting from a lower level of short-term
investments, partially offset by higher short-term interest rates. The Company's
remaining investment portfolios had net investment income of $142 million in the
first quarter of 2022, $76 million lower than in the same period of 2021. The
decline in net investment income from these portfolios in the first quarter of
2022 compared with the same period of 2021 primarily reflected the impact of
lower returns from private equity partnerships as compared to strong returns in
the same period of 2021. Included in other investments are private equity, hedge
fund and real estate partnerships that are accounted for under the equity method
of accounting and typically report their financial statement information to the
Company one month to three months following the end of the reporting period.
Accordingly, net investment income from these other investments is generally
reflected in the Company's financial statements on a quarter lag basis.

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                 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued

Fee Income
Fee income in the first quarter of 2022 was $103 million, $2 million higher than
in the same period of 2021. The National Accounts market in Business Insurance
is the primary source of the Company's fee-based business and is discussed in
the Business Insurance segment discussion that follows.
Net Realized Investment Gains (Losses)
The following table sets forth information regarding the Company's net realized
investment gains (losses).
                                                                               Three Months Ended
                                                                                    March 31,
(in millions)                                                                2022               2021
Credit impairment gains (losses):
Fixed maturities                                                         $       (1)         $      -
Other investments                                                                 -                 -

Net realized investment gains (losses) on equity securities still
held

                                                                            (14)               23

Other net realized investment gains (losses), including from sales

     (8)               21
Total                                                                    $      (23)         $     44



Net realized investment gains (losses) on equity securities still held of $(14)
million in the first quarter of 2022 were driven by the impact of changes in
fair value attributable to unfavorable equity markets. Net realized investment
gains on equity securities still held of $23 million in the first quarter of
2021 were driven by the impact of changes in fair value attributable to
favorable equity markets.

Other Revenues
Other revenues in the first quarters of 2022 and 2021 included revenues from
Simply Business and installment premium charges.

Claims and Expenses

Claims and Claim Adjustment Expenses
Claims and claim adjustment expenses in the first quarter of 2022 were $5.04
billion, $69 million or 1% higher than in the same period of 2021, primarily
reflecting the impacts of (i) higher business volumes, (ii) loss cost trends,
including elevated severity in the current quarter in both the automobile and
homeowners and other product lines in Personal Insurance, (iii) lower net
favorable prior year reserve development and (iv) a comparison to a low level of
loss activity in the prior year quarter in the automobile product line in
Personal Insurance, partially offset by (v) lower catastrophe losses.
Catastrophe losses in the first quarter of 2022 primarily resulted from wind
storms in multiple states. Catastrophe losses in the first quarter of 2021
primarily resulted from winter storms and wind storms in several regions of the
United States. The impacts of COVID-19 and related economic conditions on claims
and claim adjustment expenses in the first quarter of 2021 are discussed in more
detail in the segment discussions that follow.

Factors contributing to net favorable prior year reserve development during the
first quarters of 2022 and 2021 are discussed in more detail in note 7 of notes
to the unaudited consolidated financial statements.

Significant Catastrophe Losses
There were no significant catastrophes incurred during the three months ended
March 31, 2022. The following table presents the amount of losses recorded by
the Company for significant catastrophes that occurred in the three months ended
March 31, 2021, the amount of net unfavorable (favorable) prior year reserve
development recognized in the three months ended March 31, 2022 and 2021 for
significant catastrophes that occurred in 2021 and 2020, and the estimate of
ultimate losses for those catastrophes at March 31, 2022 and December 31, 2021.
For purposes of the table, a significant catastrophe is an event for which the
Company estimates its ultimate losses will be $100 million or more after
reinsurance and before taxes. The Company's threshold for disclosing
catastrophes is primarily determined at the reportable segment level and for
2022 ranged from $20 million to $30 million of losses before reinsurance and
taxes. For the Company's definition of a catastrophe, refer to "Part II-Item
7-Management's Discussion and Analysis of Financial Condition and Results of
Operations- Consolidated Overview" in the Company's 2021 Annual Report.
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