Item 1. FINANCIAL STATEMENTS

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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,
	2026		2025
Revenues
Premiums	$	10,605	$	10,710
Net investment income	1,008		930
Fee income	121		119
Net realized investment gains (losses)	49		(61)
Other revenues	141		112
Total revenues	11,924		11,810
Claims and expenses
Claims and claim adjustment expenses	6,382		8,006
Amortization of deferred acquisition costs	1,766		1,778
General and administrative expenses	1,541		1,459
Interest expense	116		99
Total claims and expenses	9,805		11,342
Income before income taxes	2,119		468
Income tax expense	408		73
Net income	$	1,711	$	395
Net income per share
Basic	$	7.89	$	1.73
Diluted	$	7.78	$	1.70
Weighted average number of common shares outstanding
Basic	215.2		226.9
Diluted	218.4		230.4

Cash dividends declared per common share	$	1.10	$	1.05

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

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHE****NSIVE INCOME (Unaudited)

(in millions)


	Three Months Ended March 31,
	2026		2025
Net income	$	1,711	$	395
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income	(1,146)		436
Having credit losses recognized in the consolidated statement of income	—		1
Net changes in benefit plan assets and obligations	(8)		—
Net changes in unrealized foreign currency translation	327		61
Other comprehensive income (loss) before income taxes	(827)		498
Income tax expense (benefit)	(249)		99
Other comprehensive income (loss), net of taxes	(578)		399
Comprehensive income	$	1,133	$	794

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

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions)


	March 31, 2026		December 31, 2025
	(Unaudited)
Assets
Fixed maturities, available for sale, at fair value (amortized cost $93,742 and $91,717; allowance for expected credit losses of $3 and $3)	$	90,736	$	89,833
Equity securities, at fair value (cost $428 and $457)	591		618
Real estate investments	899		900
Short-term securities	6,660		5,716
Other investments	4,092		4,115
Total investments	102,978		101,182
Cash (including restricted cash of $134 and $132)	615		842
Investment income accrued	801		877
Premiums receivable (net of allowance for expected credit losses of $60 and $58)	11,423		10,992
Reinsurance recoverables (net of allowance for estimated uncollectible reinsurance of $130 and $129)	7,988		7,886
Ceded unearned premiums	1,877		1,283
Deferred acquisition costs	3,587		3,518
Deferred taxes	1,101		887
Contractholder receivables (net of allowance for expected credit losses of $14 and $16)	3,051		3,010
Goodwill	4,060		4,066
Other intangible assets	331		336
Other assets	4,497		4,279
Assets held for sale	—		4,550
Total assets	$	142,309	$	143,708
Liabilities
Claims and claim adjustment expense reserves	$	66,912	$	65,737
Unearned premium reserves	22,772		22,431
Contractholder payables	3,065		3,026
Payables for reinsurance premiums	1,123		529
Debt	9,268		9,267
Other liabilities	7,183		7,282
Liabilities held for sale	—		2,542
Total liabilities	110,323		110,814
Shareholders’ equity
Common stock (1,750.0 shares authorized; 212.6 and 217.5 shares issued and outstanding)	26,092		25,910
Retained earnings	56,404		54,931
Accumulated other comprehensive loss	(3,078)		(2,500)
Treasury stock, at cost (582.5 and 575.9 shares)	(47,432)		(45,447)
Total shareholders’ equity	31,986		32,894
Total liabilities and shareholders’ equity	$	142,309	$	143,708

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

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)


	Three Months Ended March 31,
	2026		2025
Common stock
Balance, beginning of period	$	25,910	$	25,452
Employee share-based compensation	95		49
Compensation amortization under share-based plans and other changes	87		83
Balance, end of period	26,092		25,584
Retained earnings
Balance, beginning of period	54,931		49,630


Net income	1,711		395
Dividends	(238)		(241)

Balance, end of period	56,404		49,784
Accumulated other comprehensive loss, net of tax
Balance, beginning of period	(2,500)		(4,967)


Other comprehensive income (loss)	(578)		399
Balance, end of period	(3,078)		(4,568)
Treasury stock, at cost
Balance, beginning of period	(45,447)		(42,251)
Treasury stock acquired — share repurchase authorizations	(1,800)		(250)
Net shares acquired related to employee share-based compensation plans	(185)		(108)
Balance, end of period	(47,432)		(42,609)
Total shareholders’ equity	$	31,986	$	28,191
Common shares outstanding
Balance, beginning of period	217.5		226.6
Treasury stock acquired — share repurchase authorizations	(6.0)		(1.0)
Net shares issued under employee share-based compensation plans	1.1		1.0
Balance, end of period	212.6		226.6

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

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(in millions)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities
Net income	$	1,711	$	395
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment (gains) losses	(49)		61
Depreciation and amortization	193		188
Deferred federal income tax expense	51		31
Amortization of deferred acquisition costs	1,766		1,778
Equity in income from other investments	(23)		(53)
Premiums receivable	(434)		(459)
Reinsurance recoverables	(108)		(97)
Deferred acquisition costs	(1,837)		(1,822)
Claims and claim adjustment expense reserves	1,211		1,818
Unearned premium reserves	351		419
Other	(634)		(899)
Net cash provided by operating activities	2,198		1,360
Cash flows from investing activities
Proceeds from maturities of fixed maturities	3,014		2,801
Proceeds from sales of investments:
Fixed maturities	251		253
Equity securities	52		68

Other investments	60		63
Purchases of investments:
Fixed maturities	(5,356)		(4,296)
Equity securities	(25)		(25)
Real estate investments	(12)		(7)
Other investments	(69)		(96)
Net (purchases) sales of short-term securities	(945)		239
Securities transactions in the course of settlement	430		308

Proceeds from the divestiture of the Canadian business	2,384		—
Other	(119)		(116)
Net cash used in investing activities	(335)		(808)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorizations	(1,785)		(250)
Treasury stock acquired — net employee share-based compensation	(149)		(102)
Dividends paid to shareholders	(237)		(240)


Issuance of common stock — employee share options	86		57
Net cash used in financing activities	(2,085)		(535)
Effect of exchange rate changes on cash and restricted cash	(5)		8
Net increase (decrease) in cash and restricted cash	(227)		25
Cash and restricted cash at beginning of year	842		699
Cash and restricted cash at end of period	$	615	$	724
Supplemental disclosure of cash flow information
Income taxes paid	$	12	$	24
Interest paid	$	94	$	61

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

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, 2025 (the Company’s 2025 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 as of 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. To the extent that the Company changes its accounting for, or presentation of, items in the financial statements, the presentation of such amounts in prior periods is changed to conform to the current period presentation, if appropriate, and disclosed, if material.

On May 27, 2025, the Company entered into an agreement to sell its Canadian personal insurance business and the majority of its Canadian commercial insurance business to Definity Financial Corporation for approximately US$2.4 billion. The assets and liabilities of the Canadian personal insurance business and the majority of its Canadian commercial insurance business were classified as held for sale in the consolidated balance sheet as of December 31, 2025. The Company retained its surety business in Canada. The sale closed on January 2, 2026.

The major classes of assets and liabilities classified as held for sale were as follows:


	December 31, 2025
Assets
Fixed maturities, available for sale, at fair value	$	3,243
Premiums receivable	263
Reinsurance recoverables	285
Goodwill	208
Remaining assets held for sale	551
Total assets held for sale	$	4,550
Liabilities
Claims and claim adjustment expense reserves	$	1,909
Unearned premium reserves	514
Remaining liabilities held for sale	119
Total liabilities held for sale	$	2,542

Accounting Standards Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (FASB) issued updated guidance on the accounting for internal-use software costs. The updated guidance removes all references to software development project stages so that the guidance is neutral to different software development methods and allows for the application of iterative software development methods such as agile. The updated guidance requires that an entity capitalize software costs when both: 1) management has authorized and committed to the funding of the software project, and 2) it is probable that the project will be completed, and the software will be used to perform its intended function. Additionally, the updated guidance clarifies that internal and external training costs and maintenance costs must be expensed as incurred.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES, Continued

The updated guidance is effective for the quarter ended March 31, 2028, and can be applied on a prospective, modified, or retrospective transition approach. Early adoption is permitted. The adoption of this guidance is not expected to have a material effect on the Company’s results of operations, financial position, or liquidity.

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 the notes to the consolidated financial statements in the Company’s 2025 Annual Report.

The following tables summarize the components of the Company’s revenues, income (loss) 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
2026
Premiums	$	5,493	$	1,018	$	4,094	$	10,605
Net investment income	708		113		187		1,008
Fee income	111		—		10		121
Other revenues	104		5		32		141
Total segment revenues (1)	6,416		1,136		4,323		11,875
Claims and claim adjustment expenses	3,531		441		2,410		6,382
Amortization of deferred acquisition costs	938		194		634		1,766
General and administrative expenses	912		219		397		1,528
Income tax expense	196		28		178		402
Segment income (1)	$	839	$	254	$	704	$	1,797

2025
Premiums	$	5,465	$	995	$	4,250	$	10,710
Net investment income	656		102		172		930
Fee income	108		—		11		119
Other revenues	82		6		24		112
Total segment revenues (1)	6,311		1,103		4,457		11,871
Claims and claim adjustment expenses	3,705		434		3,867		8,006
Amortization of deferred acquisition costs	917		187		674		1,778
General and administrative expenses	847		205		396		1,448
Income tax expense (benefit)	159		57		(106)		110
Segment income (loss) (1)	$	683	$	220	$	(374)	$	529

(1)Segment revenues for reportable business segments exclude net realized investment gains (losses) and revenues included in “interest expense and other.” Segment income (loss) for reportable business segments excludes the after-tax impact of net realized investment gains (losses) and income (loss) from “interest expense and other.”

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2. SEGMENT INFORMATION, Continued

Prior year reserve development and catastrophe losses by reportable business segments were as follows:


(for the three months ended March 31, in millions)	Business Insurance		Bond & Specialty Insurance		Personal Insurance		Total Reportable Segments
2026
Net favorable prior year reserve development	$	162	$	65	$	186	$	413
Catastrophe losses	$	379	$	8	$	374	$	761
2025
Net favorable prior year reserve development	$	74	$	67	$	237	$	378
Catastrophe losses	$	509	$	19	$	1,738	$	2,266

The following table presents the Company’s amortization and depreciation expense by reportable business segment (excluding the amortization of deferred acquisition costs, which is disclosed separately in the table above with segment income (loss) by reportable business segment).


(for the three months ended March 31, in millions)	2026		2025
Business Insurance	$	114	$	113
Bond & Specialty Insurance	27		23
Personal Insurance	50		50
Total	$	191	$	186

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)	2026		2025
Revenue reconciliation
Earned premiums
Business Insurance:
Domestic:
Workers’ compensation	$	831	$	823
Commercial automobile	1,024		942
Commercial property	907		937
General liability	890		861
Commercial multi-peril	1,465		1,400
Other	17		19
Total Domestic	5,134		4,982
International	359		483
Total Business Insurance	5,493		5,465
Bond & Specialty Insurance:
Domestic:
Fidelity and surety	385		358
General liability	455		452
Other	59		58
Total Domestic	899		868
International	119		127
Total Bond & Specialty Insurance	1,018		995
Personal Insurance:
Domestic:
Automobile	1,892		1,964
Homeowners and Other	2,202		2,121
Total Domestic	4,094		4,085
International	—		165
Total Personal Insurance	4,094		4,250
Total earned premiums	10,605		10,710
Net investment income	1,008		930
Fee income	121		119
Other revenues	141		112
Total segment revenues	11,875		11,871

Net realized investment gains (losses)	49		(61)
Total revenues	$	11,924	$	11,810
Income reconciliation, net of tax
Total segment income	$	1,797	$	529
Interest Expense and Other (1)	(101)		(86)
Core income	1,696		443
Net realized investment gains (losses)	15		(48)

Net income	$	1,711	$	395

(1)The primary component of Interest Expense and Other was after-tax interest expense of $92 million and $78 million for the three months ended March 31, 2026 and 2025, respectively.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2. SEGMENT INFORMATION, Continued


(in millions)	March 31, 2026		December 31, 2025
Asset reconciliation
Business Insurance	$	106,397	$	106,084
Bond & Specialty Insurance	13,790		13,676
Personal Insurance	20,969		22,787
Total assets by reportable segment	141,156		142,547
Other assets (1)	1,153		1,161
Total consolidated assets	$	142,309	$	143,708

(1)The primary components of other assets as of both March 31, 2026 and December 31, 2025 were the 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 Cost		Allowance for Expected Credit Losses		Gross Unrealized				Fair Value
(as of March 31, 2026, in millions)			Gains		Losses
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	3,475	$	—	$	2	$	94	$	3,383
Obligations of U.S. states, municipalities and political subdivisions:
Local general obligation	22,523		—		93		1,394		21,222
Revenue	10,171		—		35		645		9,561
State general obligation	861		—		3		36		828
Pre-refunded	369		—		3		3		369
Total obligations of U.S. states, municipalities and political subdivisions	33,924		—		134		2,078		31,980
Debt securities issued by foreign governments	362		—		1		5		358
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	12,839		—		165		156		12,848
Corporate and all other bonds	43,142		3		222		1,194		42,167
Total	$	93,742	$	3	$	524	$	3,527	$	90,736

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3. INVESTMENTS, Continued


	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized				Fair Value
(as of December 31, 2025, in millions)			Gains		Losses
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	3,927	$	—	$	11	$	81	$	3,857
Obligations of U.S. states, municipalities and political subdivisions:
Local general obligation	21,724		—		161		1,096		20,789
Revenue	9,810		—		58		543		9,325
State general obligation	871		—		6		29		848
Pre-refunded	414		—		4		2		416
Total obligations of U.S. states, municipalities and political subdivisions	32,819		—		229		1,670		31,378
Debt securities issued by foreign governments	313		—		2		3		312
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	13,094		—		268		130		13,232
Corporate and all other bonds	41,564		3		458		965		41,054
Total (1)	$	91,717	$	3	$	968	$	2,849	$	89,833

(1)Excludes fixed maturities classified as held for sale of $3,221 million of amortized cost and $3,243 million of fair value as of December 31, 2025.

Pre-refunded bonds of $369 million and $416 million as of March 31, 2026 and December 31, 2025, respectively, were bonds for which U.S. states or municipalities have established irrevocable trusts that are 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 the sales of fixed maturities classified as available for sale were $251 million and $253 million during the three months ended March 31, 2026 and 2025, respectively. Gross gains of $1 million were realized on those sales during both the three months ended March 31, 2026 and 2025. Gross losses of $19 million and $12 million were realized on those sales during the three months ended March 31, 2026 and 2025, respectively. Included in net realized investment gains (losses) for the three months ended March 31, 2026 and 2025 were $0 million and $18 million, respectively, of losses resulting from the early redemption of fixed maturities by the issuer prior to the bonds’ maturity date.

Equity Securities

The cost and fair value of investments in equity securities were as follows:



(as of March 31, 2026, in millions)	Cost		Gross Gains		Gross Losses		Fair Value
Common stock	$	397	$	168	$	7	$	558
Non-redeemable preferred stock	31		2		—		33
Total	$	428	$	170	$	7	$	591


(as of December 31, 2025, in millions)	Cost		Gross Gains		Gross Losses		Fair Value
Common stock	$	419	$	177	$	12	$	584
Non-redeemable preferred stock	38		1		5		34
Total (1)	$	457	$	178	$	17	$	618

(1)Excludes equity securities classified as held for sale of $69 million of cost and $104 million of fair value as of December 31, 2025.

For the three months ended March 31, 2026 and 2025, the Company recognized $5 million and $22 million of net losses on equity securities still held as of March 31, 2026 and 2025, respectively.

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 as of March 31, 2026 and December 31, 2025, 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 the notes to the consolidated financial statements in the Company’s 2025 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 the notes to the consolidated financial statements in the Company’s 2025 Annual Report to determine whether a credit loss impairment exists.


	Less than 12 months				12 months or longer				Total
(as of March 31, 2026, 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	$	1,166	$	16	$	1,401	$	78	$	2,567	$	94
Obligations of U.S. states, municipalities and political subdivisions	10,195		198		13,253		1,880		23,448		2,078
Debt securities issued by foreign governments	178		3		57		2		235		5
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	2,654		24		1,319		132		3,973		156
Corporate and all other bonds	11,925		155		15,564		1,039		27,489		1,194
Total	$	26,118	$	396	$	31,594	$	3,131	$	57,712	$	3,527


	Less than 12 months				12 months or longer				Total
(as of December 31, 2025, 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	$	611	$	5	$	1,684	$	76	$	2,295	$	81
Obligations of U.S. states, municipalities and political subdivisions	2,234		28		16,428		1,642		18,662		1,670
Debt securities issued by foreign governments	34		—		75		3		109		3
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	437		2		1,835		128		2,272		130
Corporate and all other bonds	2,351		13		17,428		952		19,779		965
Total	$	5,667	$	48	$	37,450	$	2,801	$	43,117	$	2,849

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3. INVESTMENTS, Continued

The following tables summarize, for all fixed maturities reported at fair value for which fair value was less than 80% of amortized cost as of March 31, 2026 and December 31, 2025, the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20% of amortized cost.


	Period For Which Fair Value is Less Than 80% of Amortized Cost
(as of March 31, 2026, in millions)	3 months or less		Greater than 3 months, 6 months or less		Greater than 6 months, 12 months or less		Greater than 12 months		Total
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	—	$	—	$	—	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	399		2		—		382		783
Debt securities issued by foreign governments	—		—		—		—		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	—		—		—		—		—
Corporate and all other bonds	2		—		—		5		7
Total	$	401	$	2	$	—	$	387	$	790


	Period For Which Fair Value is Less Than 80% of Amortized Cost
(as of December 31, 2025, in millions)	3 months or less		Greater than 3 months, 6 months or less		Greater than 6 months, 12 months or less		Greater than 12 months		Total
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	—	$	—	$	—	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	18		—		10		550		578
Debt securities issued by foreign governments	—		—		—		—		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	—		—		—		—		—
Corporate and all other bonds	1		—		4		—		5
Total	$	19	$	—	$	14	$	550	$	583

Increases in the applicable interest rates resulted in the gross unrealized investment losses disclosed in the tables above; however, the net unrealized loss is considered temporary in nature as the decrease in value is not due to credit impairments and there is no impact on expected contractual cash flows from fixed maturities.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3. INVESTMENTS, Continued

Impairment Charges

The following table presents changes in the allowance for expected credit losses on fixed maturities classified as available for sale for the category of Corporate and All Other Bonds (no other categories of fixed maturities currently have an allowance for expected credit losses).


	Fixed Maturities
	Corporate and All Other Bonds
	As of and For the Three Months Ended
(in millions)	March 31, 2026		March 31, 2025

Balance, beginning of period	$	3	$	2
Additions for expected credit losses on securities where no credit losses were previously recognized	—		2
Additions (reductions) for expected credit losses on securities where credit losses were previously recognized	—		—
Reductions due to sales/defaults of credit-impaired securities	—		—
Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell	—		—
Balance, end of period	$	3	$	4

Total net impairment charges, including credit impairments, reported in net realized investment gains (losses) in the consolidated statement of income were $4 million and $2 million for the three months ended March 31, 2026 and 2025, respectively. Credit losses related to the fixed maturity portfolio for both the three months ended March 31, 2026 and 2025 represented less than 1% of the fixed maturity portfolio on a pre-tax basis and less than 1% of shareholders’ equity on an after-tax basis.

Other Investments

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.

4. FAIR VALUE MEASUREMENTS

The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, 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 fair value accounting guidance 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 Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety. 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 Company’s own assumptions about the inputs that market participants would use.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4. FAIR VALUE MEASUREMENTS, Continued

Valuation of Investments Reported at Fair Value in Financial Statements

The Company utilized a pricing service to estimate fair value measurements for approximately 99% of its fixed maturities as of both March 31, 2026 and December 31, 2025.

While the vast majority of the Company’s fixed maturities are included in Level 2, the Company holds a number of corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using either another internal pricing matrix, a present value income approach or a broker quote (collectively, the other methodologies). The other methodologies include some unobservable inputs that are significant to the valuation. Due to the limited amount of observable market information available in the estimation of fair value, the Company includes the fair value estimates for bonds that are valued using the other methodologies in Level 3.

For certain investments in non-public common and preferred equity securities, the fair value estimate is determined either internally or by an external fund manager based on the impact of recent observable transactions on the investment, recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals. Due to the significant unobservable inputs in these valuations, the Company included the fair value estimate of $30 million and $32 million for these investments as of March 31, 2026 and December 31, 2025, respectively, in the amounts disclosed in Level 3.

For more information regarding the valuation of the Company’s fixed maturities, equity securities and other investments, see note 4 of the notes to the consolidated financial statements in the Company’s 2025 Annual Report.

Fair Value Hierarchy

The following tables present the level within the fair value hierarchy at which the Company’s financial assets and financial liabilities are measured on a recurring basis.


(as of March 31, 2026, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	3,383	$	3,383	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	31,980		—		31,980		—
Debt securities issued by foreign governments	358		—		358		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	12,848		—		12,848		—
Corporate and all other bonds	42,167		—		41,907		260
Total fixed maturities	90,736		3,383		87,093		260
Equity securities
Common stock	558		550		—		8
Non-redeemable preferred stock	33		7		4		22
Total equity securities	591		557		4		30
Other investments	8		8		—		—
Total	$	91,335	$	3,948	$	87,097	$	290

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4. FAIR VALUE MEASUREMENTS, Continued


(as of December 31, 2025, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	3,857	$	3,857	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	31,378		—		31,378		—
Debt securities issued by foreign governments	312		—		312		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	13,232		—		13,232		—
Corporate and all other bonds	41,054		25		40,698		331
Total fixed maturities	89,833		3,882		85,620		331
Equity securities
Common stock	584		576		—		8
Non-redeemable preferred stock	34		7		3		24
Total equity securities	618		583		3		32
Other investments	9		9		—		—
Assets held for sale	3,347		104		3,243		—
Total	$	93,807	$	4,578	$	88,866	$	363

There was no significant activity in Level 3 of the hierarchy during the three months ended March 31, 2026.

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following tables present the carrying value and fair value of the Company’s financial assets and financial liabilities disclosed, but not carried, at fair value, and the level within the fair value hierarchy at which such assets and liabilities are categorized.


(as of March 31, 2026, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets
Short-term securities	$	6,660	$	6,660	$	598	$	6,011	$	51
Financial liabilities
Debt	$	9,168	$	8,330	$	—	$	8,330	$	—
Commercial paper	100		100		—		100		—


(as of December 31, 2025, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets
Short-term securities	$	5,716	$	5,716	$	1,398	$	4,267	$	51
Financial liabilities
Debt	$	9,167	$	8,538	$	—	$	8,538	$	—
Commercial paper	100		100		—		100		—

The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the three months ended March 31, 2026 or the year ended December 31, 2025.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5. ALLOWANCE FOR EXPECTED CREDIT LOSSES

Premiums Receivable

The following table presents the balances of premiums receivable, net of the allowance for expected credit losses, as of March 31, 2026 and 2025, and the changes in the allowance for expected credit losses for the three months ended March 31, 2026 and 2025.


	As of and For the Three Months Ended March 31, 2026				As of and For the Three Months Ended March 31, 2025
(in millions)	Premiums Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Premiums Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses

Balance, beginning of period	$	10,992	$	58	$	11,110	$	58

Current period change for expected credit losses			18				16
Write-offs of uncollectible premiums receivable			16				16

Balance, end of period	$	11,423	$	60	$	11,575	$	58

Reinsurance Recoverables

The following table presents the balances of reinsurance recoverables, net of the allowance for estimated uncollectible reinsurance, as of March 31, 2026 and 2025, and the changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31, 2026 and 2025.


	As of and For the Three Months Ended March 31, 2026				As of and For the Three Months Ended March 31, 2025
(in millions)	Reinsurance Recoverables, Net of Allowance for Estimated Uncollectible Reinsurance		Allowance for Estimated Uncollectible Reinsurance		Reinsurance Recoverables, Net of Allowance for Estimated Uncollectible Reinsurance		Allowance for Estimated Uncollectible Reinsurance

Balance, beginning of period	$	7,886	$	129	$	8,000	$	119


Current period change for estimated uncollectible reinsurance			1				9
Write-offs of uncollectible reinsurance recoverables			—				—

Balance, end of period	$	7,988	$	130	$	8,105	$	128

Of the total reinsurance recoverables as of March 31, 2026, $5.97 billion, or 90%, were rated by A.M. Best Company, after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance. The Company utilizes updated A.M. Best credit ratings on a quarterly basis when determining the allowance. Of the total rated by A.M. Best Company, 94% were rated A- or better. The remaining 10% of reinsurance recoverables comprised the following: 5% related to captive insurance companies, 1% related to the Company’s participation in voluntary pools and 4% were balances from other companies not rated by A.M. Best Company. Certain of the Company’s reinsurance recoverables are collateralized by letters of credit, funds held or trust agreements.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5. ALLOWANCE FOR EXPECTED CREDIT LOSSES, Continued

Contractholder Receivables

The following table presents the balances of contractholder receivables, net of the allowance for expected credit losses, as of March 31, 2026 and 2025, and the changes in the allowance for expected credit losses for the three months ended March 31, 2026 and 2025.


	As of and For the Three Months Ended March 31, 2026				As of and For the Three Months Ended March 31, 2025
(in millions)	Contractholder Receivables, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Contractholder Receivables, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses

Balance, beginning of period	$	3,010	$	16	$	3,171	$	18

Current period change for expected credit losses			(2)				(1)
Write-offs of uncollectible contractholder receivables			—				—

Balance, end of period	$	3,051	$	14	$	3,193	$	17

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table presents the carrying amount of the Company’s goodwill by segment. Business Insurance and Bond & Specialty Insurance include goodwill associated with the Company’s international business which is subject to the impact of changes in foreign currency exchange rates.


(in millions)	March 31, 2026		December 31, 2025
Business Insurance	$	2,551	$	2,601
Bond & Specialty Insurance	837		838
Personal Insurance	646		809
Other	26		26
Less amounts classified as held for sale	—		208
Total	$	4,060	$	4,066

Other Intangible Assets

The following tables present a summary of the Company’s other intangible assets by major asset class.


(as of March 31, 2026, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	184	$	95	$	89
Contract-based	201		195		6
Marketing-related	18		7		11
Total subject to amortization	403		297		106
Not subject to amortization	225		—		225
Total	$	628	$	297	$	331

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

6. GOODWILL AND OTHER INTANGIBLE ASSETS, Continued


(as of December 31, 2025, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	186	$	93	$	93
Contract-based	204		198		6
Marketing-related	18		6		12
Total subject to amortization	408		297		111
Not subject to amortization	226		—		226
Less amounts classified as held for sale	5		4		1
Total	$	629	$	293	$	336

7. INSURANCE CLAIM RESERVES

Claims and claim adjustment expense reserves were as follows:


(in millions)	March 31, 2026		December 31, 2025
Property-casualty	$	66,908	$	67,643
Accident and health	4		3
Less amounts classified as held for sale	—		1,909
Total	$	66,912	$	65,737

The following table presents a reconciliation of beginning and ending property casualty reserve balances for claims and claim adjustment expenses.


	Three Months Ended March 31,
(in millions)	2026		2025
Claims and claim adjustment expense reserves at beginning of year	$	67,643	$	64,088
Less reinsurance recoverables on unpaid losses	7,797		7,669

Net reserves at beginning of year	59,846		56,419
Estimated claims and claim adjustment expenses for claims arising in the current year	6,739		8,338
Estimated decrease in claims and claim adjustment expenses for claims arising in prior years	(385)		(360)
Total increases	6,354		7,978
Claims and claim adjustment expense payments for claims arising in:
Current year	1,174		1,856
Prior years	4,146		4,415
Total payments	5,320		6,271
Net reserves disposed of related to the divestiture of the Canadian business	(1,627)		—
Unrealized foreign exchange (gain) loss	(32)		59
Net reserves at end of period	59,221		58,185
Plus reinsurance recoverables on unpaid losses	7,687		7,787
Claims and claim adjustment expense reserves at end of period	$	66,908	$	65,972

Gross claims and claim adjustment expense reserves as of March 31, 2026 increased by $1.18 billion over December 31, 2025, primarily reflecting the impacts of (i) catastrophe losses in the first three months of 2026 and (ii) loss cost trends for the current accident year, partially offset by (iii) claim payments made during the first three months of 2026 and (iv) net favorable prior year reserve development.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

7. INSURANCE CLAIM RESERVES, Continued

Prior Year Reserve Development

The following disclosures regarding reserve development are on a “net of reinsurance” basis.

For the three months ended March 31, 2026 and 2025, estimated claims and claim adjustment expenses incurred included $385 million and $360 million, respectively, of net favorable development for claims arising in prior years, including $413 million and $378 million, respectively, of net favorable prior year reserve development, and $11 million of accretion of discount in each period.

Business Insurance. Net favorable prior year reserve development in the first quarter of 2026 totaled $162 million, primarily driven by better than expected loss experience in the commercial property and workers’ compensation product lines for multiple accident years. Net favorable prior year reserve development in the first quarter of 2025 totaled $74 million, primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years.

Bond & Specialty Insurance. Net favorable prior year reserve development in the first quarter of 2026 totaled $65 million, primarily driven by better than expected loss experience in the fidelity and surety product line for multiple accident years. Net favorable prior year reserve development in the first quarter of 2025 totaled $67 million, primarily driven by better than expected loss experience in the general liability product line for management liability coverages for multiple accident years and in the fidelity and surety product line for recent accident years.

Personal Insurance. Net favorable prior year reserve development in the first quarter of 2026 totaled $186 million, primarily driven by better than expected loss experience in both the automobile and homeowners and other product lines for recent accident years. Net favorable prior year reserve development in the first quarter of 2025 totaled $237 million, primarily driven by better than expected loss experience in both the automobile and homeowners and other product lines for recent accident years.

8. OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in the Company’s accumulated other comprehensive income (loss) (AOCI) for the three months ended March 31, 2026.


	Changes in Net Unrealized Gains (Losses) on Investment Securities
(in millions)	Having No Credit Losses Recognized in the Consolidated Statement of Income		Having Credit Losses Recognized in the Consolidated Statement of Income		Net Benefit Plan Assets and Obligations Recognized in Shareholders’ Equity		Net Unrealized Foreign Currency Translation		Total Accumulated Other Comprehensive Income (Loss)

Balance, December 31, 2025	$	(1,664)	$	186	$	(150)	$	(872)	$	(2,500)
Other comprehensive income (loss) (OCI) before reclassifications, net of tax	(902)		—		—		(28)		(930)
Amounts reclassified from AOCI, net of tax	2		—		(6)		356		352
Net OCI, current period	(900)		—		(6)		328		(578)
Balance, March 31, 2026	$	(2,564)	$	186	$	(156)	$	(544)	$	(3,078)

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

8. OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), Continued

The following table presents the pre-tax components of the Company’s other comprehensive income (loss) and the related income tax expense (benefit).


	Three Months Ended March 31,
(in millions)	2026		2025
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income	$	(1,146)	$	436
Income tax expense (benefit)	(246)		96
Net of taxes	(900)		340
Having credit losses recognized in the consolidated statement of income	—		1
Income tax expense (benefit)	—		—
Net of taxes	—		1
Net changes in benefit plan assets and obligations	(8)		—
Income tax expense (benefit)	(2)		—
Net of taxes	(6)		—
Net changes in unrealized foreign currency translation	327		61
Income tax expense (benefit)	(1)		3
Net of taxes	328		58
Total other comprehensive income (loss)	(827)		498
Total income tax expense (benefit)	(249)		99
Total other comprehensive income (loss), net of taxes	$	(578)	$	399

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

8. OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), Continued

The following table presents the pre-tax and related income tax (expense) benefit components of the amounts reclassified from the Company’s AOCI to the Company’s consolidated statement of income.


	Three Months Ended March 31,
(in millions)	2026		2025
Reclassification adjustments related to unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income (1) (2)	$	7	$	31
Income tax benefit (3)	5		6
Net of taxes	2		25
Having credit losses recognized in the consolidated statement of income (1)	—		—
Income tax benefit (3)	—		—
Net of taxes	—		—
Reclassification adjustment related to benefit plan assets and obligations:
Claims and claim adjustment expenses (benefit) (4)	(1)		—
General and administrative expenses (benefit) (4)	(1)		—
Other (2)	(4)		—
Total	(6)		—
Income tax expense (3)	—		—
Net of taxes	(6)		—
Reclassification adjustment related to foreign currency translation (1) (2)	356		—
Income tax benefit (3)	—		—
Net of taxes	356		—
Total reclassifications	357		31
Total income tax benefit	5		6
Total reclassifications, net of taxes	$	352	$	25

(1)(Increases) decreases in net realized investment gains (losses) on the consolidated statement of income.

(2)(Increases) decreases in net realized investment gains (losses) on the consolidated statement of income related to accumulated other comprehensive income (loss), net of taxes, includes the following related to the Canadian operations divested by the Company in the first quarter of 2026: a $(16) million reclassification adjustment related to unrealized gains (losses) on investment securities, a $(4) million reclassification adjustment related to benefit plan assets and obligations and a $356 million reclassification adjustment related to foreign currency translation.

(3)(Increases) decreases in income tax expense on the consolidated statement of income.

(4)Increases (decreases) in respective expenses on the consolidated statement of income.

9. COMMON SHARE REPURCHASES

During the three months ended March 31, 2026, the Company repurchased 6.0 million common shares under its share repurchase authorizations for a total cost of $1.80 billion. The average cost per share repurchased was $300.30. In addition, the Company acquired 0.6 million shares for a total cost of $185 million during the three months ended March 31, 2026 that were not part of the publicly announced share repurchase authorizations. These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards, and shares used by employees to cover the exercise price, as well as the related payroll withholding taxes, with respect to certain stock options that were exercised. Included in the cost of treasury stock acquired pursuant to common share repurchases is the 1% federal excise tax imposed on common share repurchase activity, net of common share issuances, as part of the Inflation Reduction Act of 2022. As of March 31, 2026, the Company had $5.22 billion of capacity remaining under its share repurchase authorizations.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

10. EARNINGS PER SHARE

The following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations for the periods presented.


	Three Months Ended March 31,
(in millions, except per share amounts)	2026		2025
Basic and Diluted
Net income, as reported	$	1,711	$	395
Participating share-based awards — allocated income	(12)		(3)
Net income available to common shareholders — basic and diluted	$	1,699	$	392
Common Shares
Basic
Weighted average shares outstanding	215.2		226.9
Diluted
Weighted average shares outstanding	215.2		226.9
Weighted average effects of dilutive securities — stock options and performance shares	3.2		3.5
Total	218.4		230.4
Net Income per Common Share
Basic	$	7.89	$	1.73
Diluted	$	7.78	$	1.70

11. SHARE-BASED INCENTIVE COMPENSATION

The following information relates to fully vested stock option awards as of March 31, 2026.


Stock Options	Number	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining	Aggregate Intrinsic Value ($ in millions)
Vested at end of period (1)	5,478,656	$	174.08	5.6 years	$	644
Exercisable at end of period	4,219,228	$	152.72	4.7 years	$	586

(1)Represents awards for which the requisite service has been rendered, including those that are retirement eligible.

The total compensation cost for all share-based incentive compensation awards recognized in earnings was $87 million and $83 million for the three months ended March 31, 2026 and 2025, respectively. The related tax benefits recognized in the consolidated statement of income were $13 million for both the three months ended March 31, 2026 and 2025.

The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards as of March 31, 2026 was $425 million, which is expected to be recognized over a weighted-average period of 2.2 years.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

12. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS

The following table summarizes the components of net periodic benefit cost (benefit) for the Company’s pension and postretirement benefit plans recognized in the consolidated statement of income for the three months ended March 31, 2026 and 2025.


	Pension Plans				Postretirement Benefit Plans
(for the three months ended March 31, in millions)	2026		2025		2026		2025
Net Periodic Benefit Cost (Benefit):
Service cost	$	30	$	28	$	—	$	—
Non-service cost (benefit):
Interest cost on benefit obligation	42		44		1		1
Expected return on plan assets	(74)		(70)		—		—

Amortization of unrecognized:
Prior service benefit	—		—		—		(1)
Net actuarial (gain) loss	1		4		(3)		(3)
Total non-service cost (benefit)	(31)		(22)		(2)		(3)
Net periodic benefit cost (benefit)	$	(1)	$	6	$	(2)	$	(3)

The following table indicates the line items in which the respective service cost and non-service cost (benefit) are presented in the consolidated statement of income for the three months ended March 31, 2026 and 2025.


	Pension Plans				Postretirement Benefit Plans
(for the three months ended March 31, in millions)	2026		2025		2026		2025
Service Cost:
Claims and claim adjustment expenses	$	11	$	11	$	—	$	—
General and administrative expenses	19		17		—		—
Total service cost	30		28		—		—
Non-Service Cost (Benefit):
Claims and claim adjustment expenses	(12)		(8)		(1)		(1)
General and administrative expenses	(19)		(14)		(1)		(2)
Total non-service cost (benefit)	(31)		(22)		(2)		(3)
Net periodic benefit cost (benefit)	$	(1)	$	6	$	(2)	$	(3)

13. LEASES

The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease, and a right-of-use asset and lease liability is recognized as part of other assets and other liabilities, respectively, in the consolidated balance sheet.

Most leases include an option to extend or renew the lease term. The exercise of the renewal option is at the Company’s discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercising those options. The Company, in determining the present value of lease payments, utilizes either the rate implicit in the lease, if that rate is readily determinable, or the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

13. LEASES, Continued

Lease expense is included in general and administrative expenses in the consolidated statement of income. Additional information regarding the Company’s real estate operating leases is as follows:


	Three Months Ended March 31,
(in millions)	2026			2025
Lease cost
Operating leases	$	15		$	16
Short-term leases (1)	1			1

Lease expense	16			17
Less: sublease income (2)	—			—
Net lease cost	$	16		$	17

Other information on operating leases

Cash payments to settle a lease liability reported in cash flows	$	18		$	18
Right-of-use assets obtained in exchange for new lease liabilities	$	8		$	7
Weighted average discount rate	4.13		%	3.87		%
Weighted average remaining lease term	5.5 years			5.6 years

(1)Leases with a term of twelve months or less are not recorded on the consolidated balance sheet.

(2)Sublease income consists of rent from third parties of office space and is recognized as part of other revenues in the consolidated statement of income.

14. CONTINGENCIES, COMMITMENTS AND GUARANTEES

Contingencies

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 the Company’s properties is subject are described below.

Asbestos Claims and Litigation

In the ordinary course of its insurance business, the Company has received and continues to receive claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos-related exposures that are the subject of related coverage litigation. The Company is defending asbestos-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 comprehensive resolution strategies to manage asbestos loss exposure, including settling litigation under appropriate circumstances. Currently, it is not possible to predict legal outcomes and their impact on future loss development for claims and litigation relating to asbestos claims. Any such development could be affected by future court decisions and interpretations, as well as future changes, if any, in applicable legislation. Because of these uncertainties, additional liabilities may arise for amounts in excess of the Company’s current insurance reserves. In addition, the Company’s estimate of ultimate claims and claim adjustment expenses may change. These additional liabilities or changes in estimates, or a range of either, cannot now be reasonably estimated and could result in income statement charges that could be material to the Company’s results of operations in future periods.

Other Proceedings Not Arising Under Insurance Contracts or Reinsurance Agreements

The Company is involved in other lawsuits, including lawsuits alleging extra-contractual damages relating to insurance contracts or reinsurance agreements, that do not arise under insurance contracts or reinsurance agreements. The legal costs associated with such lawsuits are expensed in the period in which the costs are incurred. Based upon currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Company’s results of operations or would have a material adverse effect on the Company’s financial position or liquidity.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

14. CONTINGENCIES, COMMITMENTS AND GUARANTEES, Continued

Other Commitments and Guarantees

Commitments

Investment Commitments — The Company has unfunded commitments to private equity limited partnerships, real estate partnerships and other investments. These commitments totaled $1.47 billion and $1.41 billion as of March 31, 2026 and December 31, 2025, respectively.

Guarantees

The maximum amount of the Company’s contingent obligation for indemnifications related to the sale of businesses that are quantifiable was $352 million as of March 31, 2026.

The maximum amount of the Company’s obligation related to the guarantee of certain insurance policy obligations of a former insurance subsidiary was $480 million as of March 31, 2026, all of which is indemnified by a third party. For more information regarding the Company’s guarantees, see note 17 of the notes to the consolidated financial statements in the Company’s 2025 Annual Report.

15. NONCASH INVESTING AND FINANCING ACTIVITIES

The Company issued common stock during the three months ended March 31, 2026 and 2025 in connection with its stock compensation plan which resulted in noncash financing transactions totaling $36 million and $6 million, respectively, from the net share settlement of employee stock options. There were no other material noncash investing or financing activities during the three months ended March 31, 2026 and 2025.

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

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