filings.toolsItem 16. FORM 10-K SUMMARY
23K characters. Original on sec.gov ·
Item 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, The Travelers Companies, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THE TRAVELERS COMPANIES, INC. (Registrant) | |||
| Date: | February 13, 2020 | By | /s/ CHRISTINE K. KALLA |
| Christine K. Kalla Executive Vice President and General Counsel (Authorized Signatory) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of The Travelers Companies, Inc. and in the capacities and on the dates indicated.
| Date | |||
| By | /s/ ALAN D. SCHNITZER | Director, Chairman and Chief Executive Officer (Principal Executive Officer) | February 13, 2020 |
| Alan D. Schnitzer | |||
| By | /s/ DANIEL S. FREY | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 13, 2020 |
| Daniel S. Frey | |||
| By | /s/ DOUGLAS K. RUSSELL | Senior Vice President and Corporate Controller (Principal Accounting Officer) | February 13, 2020 |
| Douglas K. Russell | |||
| By | * | Director | February 13, 2020 |
| Alan L. Beller | |||
| By | * | Director | February 13, 2020 |
| Janet M. Dolan | |||
| By | * | Director | February 13, 2020 |
| Patricia L. Higgins | |||
| By | * | Director | February 13, 2020 |
| William J. Kane | |||
| By | * | Director | February 13, 2020 |
| Clarence Otis Jr. | |||
| By | * | Director | February 13, 2020 |
| Philip T. Ruegger III | |||
| By | * | Director | February 13, 2020 |
| Todd C. Schermerhorn | |||
| By | * | Director | February 13, 2020 |
| Donald J. Shepard | |||
| By | * | Director | February 13, 2020 |
| Laurie J. Thomsen | |||
| *By | /s/ CHRISTINE K. KALLA | February 13, 2020 | |
| Christine K. Kalla, Attorney-in-fact |
FINANCIAL STATEMENT SCHEDULES
SCHEDULE II
THE TRAVELERS COMPANIES, INC.
(Parent Company Only)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)
CONDENSED STATEMENT OF INCOME
| For the year ended December 31, | 2019 | 2018 | 2017 | |||||||||
| Revenues | ||||||||||||
| Net investment income | $ | 41 | $ | 32 | $ | 24 | ||||||
| Net realized investment gains (losses) (1) | 33 | (13 | ) | 66 | ||||||||
| Total revenues | 74 | 19 | 90 | |||||||||
| Expenses | ||||||||||||
| Interest | 297 | 304 | 321 | |||||||||
| Other | 21 | 20 | 25 | |||||||||
| Total expenses | 318 | 324 | 346 | |||||||||
| Loss before income taxes and net income of subsidiaries | (244 | ) | (305 | ) | (256 | ) | ||||||
| Income tax benefit | (77 | ) | (114 | ) | (130 | ) | ||||||
| Loss before net income of subsidiaries | (167 | ) | (191 | ) | (126 | ) | ||||||
| Net income of subsidiaries | 2,789 | 2,714 | 2,190 | |||||||||
| Net income | $ | 2,622 | $ | 2,523 | $ | 2,064 |
(1) The parent company had no other-than-temporary impairment gains or losses recognized in net realized investment gains (losses) or in other comprehensive income during the years ended December 31, 2019, 2018 and 2017.
The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE II
THE TRAVELERS COMPANIES, INC.
(Parent Company Only)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
| For the year ended December 31, | 2019 | 2018 | 2017 | |||||||||
| Net income | $ | 2,622 | $ | 2,523 | $ | 2,064 | ||||||
| Other comprehensive income (loss)—parent company: | ||||||||||||
| Changes in net unrealized gains on investment securities having no credit losses recognized in the consolidated statement of income | 4 | — | (44 | ) | ||||||||
| Net changes in benefit plan assets and obligations | 35 | (53 | ) | 22 | ||||||||
| Other comprehensive income (loss) before income taxes and other comprehensive income (loss) of subsidiaries | 39 | (53 | ) | (22 | ) | |||||||
| Income tax expense (benefit) | 12 | (17 | ) | 2 | ||||||||
| Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries | 27 | (36 | ) | (24 | ) | |||||||
| Other comprehensive income (loss) of subsidiaries | 2,472 | (1,434 | ) | 436 | ||||||||
| Other comprehensive income (loss) | 2,499 | (1,470 | ) | 412 | ||||||||
| Comprehensive income | $ | 5,121 | $ | 1,053 | $ | 2,476 |
The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE II
THE TRAVELERS COMPANIES, INC.
(Parent Company Only)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)
CONDENSED BALANCE SHEET
| At December 31, | 2019 | 2018 | ||||||
| Assets | ||||||||
| Fixed maturities | $ | 91 | $ | 84 | ||||
| Equity securities | 209 | 171 | ||||||
| Short-term securities | 1,390 | 1,371 | ||||||
| Investment in subsidiaries | 30,028 | 26,993 | ||||||
| Other assets | 336 | 649 | ||||||
| Total assets | $ | 32,054 | $ | 29,268 | ||||
| Liabilities | ||||||||
| Debt | $ | 5,865 | $ | 5,871 | ||||
| Other liabilities | 239 | 496 | ||||||
| Total liabilities | 6,104 | 6,367 | ||||||
| Shareholders’ equity | ||||||||
| Common stock (1,750.0 shares authorized; 255.5 and 263.7 shares issued, 255.5 and 263.6 shares outstanding) | 23,469 | 23,144 | ||||||
| Retained earnings | 36,984 | 35,211 | ||||||
| Accumulated other comprehensive income (loss) | 640 | (1,859 | ) | |||||
| Treasury stock, at cost (522.1 and 510.9 shares) | (35,143 | ) | (33,595 | ) | ||||
| Total shareholders’ equity | 25,950 | 22,901 | ||||||
| Total liabilities and shareholders’ equity | $ | 32,054 | $ | 29,268 |
The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE II
THE TRAVELERS COMPANIES, INC.
(Parent Company Only)
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(in millions)
CONDENSED STATEMENT OF CASH FLOWS
| For the year ended December 31, | 2019 | 2018 | 2017 | |||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | $ | 2,622 | $ | 2,523 | $ | 2,064 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Equity in net income of subsidiaries | (2,789 | ) | (2,714 | ) | (2,190 | ) | ||||||
| Dividends received from consolidated subsidiaries | 2,459 | 2,258 | 2,289 | |||||||||
| Deferred federal income tax expense (benefit) | (2 | ) | 28 | 40 | ||||||||
| Change in income taxes payable | 3 | 100 | 3 | |||||||||
| Other | (79 | ) | (35 | ) | (174 | ) | ||||||
| Net cash provided by operating activities | 2,214 | 2,160 | 2,032 | |||||||||
| Cash flows from investing activities | ||||||||||||
| Net sales (purchases) of short-term securities | (19 | ) | (141 | ) | 397 | |||||||
| Other investments, net | (8 | ) | (7 | ) | (34 | ) | ||||||
| Acquisition, net of cash acquired | — | — | (477 | ) | ||||||||
| Net cash used in investing activities | (27 | ) | (148 | ) | (114 | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Treasury stock acquired—share repurchase authorization | (1,500 | ) | (1,270 | ) | (1,378 | ) | ||||||
| Treasury stock acquired—net employee share-based compensation | (48 | ) | (51 | ) | (62 | ) | ||||||
| Dividends paid to shareholders | (844 | ) | (814 | ) | (785 | ) | ||||||
| Payment of debt | (500 | ) | (600 | ) | (657 | ) | ||||||
| Issuance of debt | 492 | 591 | 789 | |||||||||
| Issuance of common stock—employee share options | 213 | 132 | 173 | |||||||||
| Net cash used in financing activities | (2,187 | ) | (2,012 | ) | (1,920 | ) | ||||||
| Net decrease in cash | — | — | (2 | ) | ||||||||
| Cash at beginning of year | — | — | 2 | |||||||||
| Cash at end of year | $ | — | $ | — | $ | — | ||||||
| Supplemental disclosure of cash flow information | ||||||||||||
| Cash received during the year for taxes | $ | 78 | $ | 283 | $ | 173 | ||||||
| Cash paid during the year for interest | $ | 291 | $ | 300 | $ | 320 |
The condensed financial statements should be read in conjunction with the notes to the condensed financial information of the registrant, as well as the consolidated financial statements and notes thereto.
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE II
THE TRAVELERS COMPANIES, INC.
(Parent Company Only)
NOTES TO THE CONDENSED FINANCIAL INFORMATION OF REGISTRANT
| 1. | GUARANTEES |
The Travelers Companies, Inc. (TRV) fully and unconditionally guarantees the payment of all principal, premiums, if any, and interest on certain debt obligations of its subsidiaries TPC and TIGHI. The guarantees pertain to the $200 million 7.75% notes due 2026 and the $500 million 6.375% notes due 2033.
TRV also has contingent obligations for guarantees in connection with the selling of businesses to third parties, certain insurance obligations of a subsidiary and various indemnifications including indemnifications to service providers in the normal course of business. The guarantees and indemnification clauses are often standard contractual terms and include indemnifications for breaches of representations and warranties and in some cases obligations arising from certain liabilities. The terms of these provisions vary in duration and nature.
Certain of the guarantees and indemnifications described above have no stated or notional amounts or limitation to the maximum potential future payments. Accordingly, TRV is unable to provide an estimate of the maximum potential payments for such arrangements, and the likelihood for any payment under these guarantees is remote.
SCHEDULE III
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
Supplementary Insurance Information
2017-2019
(in millions)
| Segment | Deferred Acquisition Costs | Claims and Claim Adjustment Expense Reserves | Unearned Premiums | Earned Premiums | Net Investment Income (1) | Claims and Claim Adjustment Expenses | Amortization of Deferred Acquisition Costs | Other Operating Expenses (2) | Net Written Premiums | |||||||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||||||||||||||||
| Business Insurance | $ | 1,161 | $ | 42,252 | $ | 7,540 | $ | 15,300 | $ | 1,816 | $ | 10,963 | $ | 2,503 | $ | 2,627 | $ | 15,629 | ||||||||||||||||||
| Bond & Specialty Insurance | 309 | 3,316 | 1,845 | 2,565 | 233 | 1,094 | 478 | 483 | 2,739 | |||||||||||||||||||||||||||
| Personal Insurance | 803 | 6,268 | 5,219 | 10,407 | 419 | 7,076 | 1,620 | 1,220 | 10,783 | |||||||||||||||||||||||||||
| Total—Reportable Segments | 2,273 | 51,836 | 14,604 | 28,272 | 2,468 | 19,133 | 4,601 | 4,330 | 29,151 | |||||||||||||||||||||||||||
| Other | — | 13 | — | — | — | — | — | 379 | — | |||||||||||||||||||||||||||
| Consolidated | $ | 2,273 | $ | 51,849 | $ | 14,604 | $ | 28,272 | $ | 2,468 | $ | 19,133 | $ | 4,601 | $ | 4,709 | $ | 29,151 | ||||||||||||||||||
| 2018 | ||||||||||||||||||||||||||||||||||||
| Business Insurance | $ | 1,102 | $ | 41,132 | $ | 7,112 | $ | 14,722 | $ | 1,833 | $ | 10,171 | $ | 2,388 | $ | 2,623 | $ | 14,956 | ||||||||||||||||||
| Bond & Specialty Insurance | 277 | 3,255 | 1,619 | 2,420 | 233 | 772 | 454 | 459 | 2,528 | |||||||||||||||||||||||||||
| Personal Insurance | 741 | 6,266 | 4,824 | 9,917 | 408 | 7,348 | 1,539 | 1,185 | 10,224 | |||||||||||||||||||||||||||
| Total—Reportable Segments | 2,120 | 50,653 | 13,555 | 27,059 | 2,474 | 18,291 | 4,381 | 4,267 | 27,708 | |||||||||||||||||||||||||||
| Other | — | 15 | — | — | — | — | — | 382 | — | |||||||||||||||||||||||||||
| Consolidated | $ | 2,120 | $ | 50,668 | $ | 13,555 | $ | 27,059 | $ | 2,474 | $ | 18,291 | $ | 4,381 | $ | 4,649 | $ | 27,708 | ||||||||||||||||||
| 2017 | ||||||||||||||||||||||||||||||||||||
| Business Insurance | $ | 1,060 | $ | 40,352 | $ | 6,857 | $ | 14,146 | $ | 1,786 | $ | 9,521 | $ | 2,286 | $ | 2,563 | $ | 14,270 | ||||||||||||||||||
| Bond & Specialty Insurance | 258 | 3,421 | 1,515 | 2,307 | 228 | 899 | 432 | 464 | 2,359 | |||||||||||||||||||||||||||
| Personal Insurance | 707 | 5,860 | 4,543 | 9,230 | 383 | 7,047 | 1,448 | 1,111 | 9,590 | |||||||||||||||||||||||||||
| Total—Reportable Segments | 2,025 | 49,633 | 12,915 | 25,683 | 2,397 | 17,467 | 4,166 | 4,138 | 26,219 | |||||||||||||||||||||||||||
| Other | — | 17 | — | — | — | — | — | 401 | — | |||||||||||||||||||||||||||
| Consolidated | $ | 2,025 | $ | 49,650 | $ | 12,915 | $ | 25,683 | $ | 2,397 | $ | 17,467 | $ | 4,166 | $ | 4,539 | $ | 26,219 |
| (1) | See note 2 of notes to the consolidated financial statements for discussion of the method used to allocate net investment income and invested assets to the identified segments. |
| (2) | Expense allocations are determined in accordance with prescribed statutory accounting practices. These practices make a reasonable allocation of all expenses to those product lines with which they are associated. |
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE V
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
(in millions)
| Balance at beginning of period | Charged to costs and expenses | Charged to other accounts | Deductions (1) | Balance at end of period | ||||||||||||||||
| 2019 | ||||||||||||||||||||
| Reinsurance recoverables | $ | 110 | $ | — | $ | — | $ | 18 | $ | 92 | ||||||||||
| Allowance for uncollectible: | ||||||||||||||||||||
| Premiums receivable from underwriting activities | $ | 54 | $ | 59 | $ | — | $ | 58 | $ | 55 | ||||||||||
| Deductibles | $ | 24 | $ | (2 | ) | $ | — | $ | — | $ | 22 | |||||||||
| 2018 | ||||||||||||||||||||
| Reinsurance recoverables | $ | 111 | $ | — | $ | — | $ | 1 | $ | 110 | ||||||||||
| Allowance for uncollectible: | ||||||||||||||||||||
| Premiums receivable from underwriting activities | $ | 58 | $ | 50 | $ | — | $ | 54 | $ | 54 | ||||||||||
| Deductibles | $ | 26 | $ | (1 | ) | $ | — | $ | 1 | $ | 24 | |||||||||
| 2017 | ||||||||||||||||||||
| Reinsurance recoverables | $ | 116 | $ | — | $ | — | $ | 5 | $ | 111 | ||||||||||
| Allowance for uncollectible: | ||||||||||||||||||||
| Premiums receivable from underwriting activities | $ | 61 | $ | 38 | $ | — | $ | 41 | $ | 58 | ||||||||||
| Deductibles | $ | 34 | $ | (2 | ) | $ | — | $ | 6 | $ | 26 |
| (1) | Credited to the related asset account. |
See the Report of Independent Registered Public Accounting Firm.
SCHEDULE VI
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
Supplementary Information Concerning Property-Casualty Insurance Operations (1)
2017-2019
(in millions)
| Claims and Claim Adjustment Expenses Incurred Related to: | Amortization of Deferred Acquisition Costs | Paid Claims and Claim Adjustment Expenses | ||||||||||||||||||||||||||||||||||||||||||
| Affiliation with Registrant(2) | Deferred Acquisition Costs | Claims and Claim Adjustment Expense Reserves | Discount From Reserves for Unpaid Claims(3) | Unearned Premiums | Earned Premiums | Net Investment Income | Current Year | Prior Year | Net Written Premiums | |||||||||||||||||||||||||||||||||||
| 2019 | $ | 2,273 | $ | 51,836 | $ | 1,155 | $ | 14,604 | $ | 28,272 | $ | 2,468 | $ | 18,854 | $ | 164 | $ | 4,601 | $ | 17,794 | $ | 29,151 | ||||||||||||||||||||||
| 2018 | $ | 2,120 | $ | 50,653 | $ | 1,158 | $ | 13,555 | $ | 27,059 | $ | 2,474 | $ | 18,614 | $ | (406 | ) | $ | 4,381 | $ | 17,060 | $ | 27,708 | |||||||||||||||||||||
| 2017 | $ | 2,025 | $ | 49,633 | $ | 1,102 | $ | 12,915 | $ | 25,683 | $ | 2,397 | $ | 17,846 | $ | (458 | ) | $ | 4,166 | $ | 16,043 | $ | 26,219 |
| (1) | Excludes accident and health insurance business. |
| (2) | Consolidated property-casualty insurance operations. |
| (3) | For a discussion of types of reserves discounted and discount rates used, see note 7 of notes to the consolidated financial statements. |
See the Report of Independent Registered Public Accounting Firm.
Previous: Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES