☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Minnesota | 41-0518860 | ||||
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common stock, without par value | TRV |
New York Stock Exchange
|
Large accelerated filer |
x
|
Accelerated filer | ¨ | ||||||||
Non-accelerated filer |
¨
|
Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Item Number | Page | |||||||
Location |
% of
Total |
|||||||
Domestic: | ||||||||
California | 10.3 | % | ||||||
New York | 9.0 | |||||||
Texas | 7.9 | |||||||
Pennsylvania | 4.2 | |||||||
Florida | 4.1 | |||||||
New Jersey | 3.9 | |||||||
Illinois | 3.9 | |||||||
Georgia | 3.7 | |||||||
Massachusetts | 3.0 | |||||||
All other domestic (1)
|
43.9 | |||||||
Total Domestic | 93.9 | |||||||
International: | ||||||||
Canada | 3.9 | |||||||
All other international | 2.2 | |||||||
Total International | 6.1 | |||||||
Consolidated total | 100.0 | % |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | % of Total 2020 | ||||||||||||||||||||||
By market: | ||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||
Select Accounts | $ | 2,821 | $ | 2,911 | $ | 2,828 | 18.3 | % | ||||||||||||||||||
Middle Market | 8,511 | 8,630 | 8,214 | 55.1 | ||||||||||||||||||||||
National Accounts | 996 | 1,051 | 1,025 | 6.5 | ||||||||||||||||||||||
National Property and Other | 2,086 | 1,965 | 1,805 | 13.5 | ||||||||||||||||||||||
Total Domestic | 14,414 | 14,557 | 13,872 | 93.4 | ||||||||||||||||||||||
International | 1,017 | 1,072 | 1,084 | 6.6 | ||||||||||||||||||||||
Total Business Insurance by market | $ | 15,431 | $ | 15,629 | $ | 14,956 | 100.0 | % | ||||||||||||||||||
By product line: | ||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||
Workers’ compensation | $ | 3,349 | $ | 3,806 | $ | 3,840 | 21.7 | % | ||||||||||||||||||
Commercial automobile | 2,790 | 2,736 | 2,518 | 18.1 | ||||||||||||||||||||||
Commercial property | 2,163 | 2,014 | 1,867 | 14.0 | ||||||||||||||||||||||
General liability | 2,447 | 2,416 | 2,227 | 15.8 | ||||||||||||||||||||||
Commercial multi-peril | 3,608 | 3,542 | 3,390 | 23.4 | ||||||||||||||||||||||
Other | 57 | 43 | 30 | 0.4 | ||||||||||||||||||||||
Total Domestic | 14,414 | 14,557 | 13,872 | 93.4 | ||||||||||||||||||||||
International | 1,017 | 1,072 | 1,084 | 6.6 | ||||||||||||||||||||||
Total Business Insurance by product line | $ | 15,431 | $ | 15,629 | $ | 14,956 | 100.0 | % |
Location | % of Total | |||||||
Domestic: | ||||||||
California | 12.5 | % | ||||||
New York | 9.1 | |||||||
Texas | 6.8 | |||||||
Illinois | 4.6 | |||||||
Florida | 4.1 | |||||||
New Jersey | 3.9 | |||||||
Pennsylvania | 3.8 | |||||||
Massachusetts | 3.0 | |||||||
All other domestic (1)
|
46.7 | |||||||
Total Domestic | 94.5 | |||||||
International: | ||||||||
Canada | 2.7 | |||||||
All other international | 2.8 | |||||||
Total International | 5.5 | |||||||
Total Business Insurance | 100.0 | % |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | % of Total 2020 | ||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||
Fidelity and surety | $ | 1,072 | $ | 1,089 | $ | 1,049 | 36.3 | % | ||||||||||||||||||
General liability | 1,311 | 1,148 | 1,037 | 44.5 | ||||||||||||||||||||||
Other | 231 | 234 | 204 | 7.8 | ||||||||||||||||||||||
Total Domestic | 2,614 | 2,471 | 2,290 | 88.6 | ||||||||||||||||||||||
International | 337 | 268 | 238 | 11.4 | ||||||||||||||||||||||
Total Bond & Specialty Insurance | $ | 2,951 | $ | 2,739 | $ | 2,528 | 100.0 | % |
Location |
% of
Total |
|||||||
Domestic: | ||||||||
California | 10.8 | % | ||||||
Texas | 6.8 | |||||||
New York | 6.4 | |||||||
Florida | 4.8 | |||||||
Illinois | 4.0 | |||||||
Pennsylvania | 3.4 | |||||||
All other domestic (1)
|
52.5 | |||||||
Total Domestic | 88.7 | |||||||
International: | ||||||||
United Kingdom | 6.4 | |||||||
Canada | 3.8 | |||||||
All other international | 1.1 | |||||||
Total International | 11.3 | |||||||
Total Bond & Specialty Insurance | 100.0 | % |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | % of Total 2020 | ||||||||||||||||||||||
Domestic:
|
||||||||||||||||||||||||||
Agency:
|
||||||||||||||||||||||||||
Automobile
|
$ | 5,080 | $ | 5,124 | $ | 4,972 | 44.8 | % | ||||||||||||||||||
Homeowners and Other
|
5,185 | 4,540 | 4,148 | 45.7 | ||||||||||||||||||||||
Total Agency | 10,265 | 9,664 | 9,120 | 90.5 | ||||||||||||||||||||||
Direct-to-Consumer
|
433 | 412 | 396 | 3.8 | ||||||||||||||||||||||
Total Domestic | 10,698 | 10,076 | 9,516 | 94.3 | ||||||||||||||||||||||
International
|
652 | 707 | 708 | 5.7 | ||||||||||||||||||||||
Total Personal Insurance | $ | 11,350 | $ | 10,783 | $ | 10,224 | 100.0 | % |
Location | % of Total | |||||||
Domestic: | ||||||||
New York | 9.7 | % | ||||||
Texas (1)
|
9.6 | |||||||
California | 7.0 | |||||||
Georgia | 5.3 | |||||||
Pennsylvania | 5.1 | |||||||
New Jersey | 4.3 | |||||||
Florida | 3.9 | |||||||
Virginia | 3.6 | |||||||
Colorado | 3.4 | |||||||
Maryland | 3.2 | |||||||
South Carolina | 3.1 | |||||||
Massachusetts | 3.0 | |||||||
All other domestic (2)
|
33.2 | |||||||
Total Domestic | 94.4 | |||||||
International: | ||||||||
Canada | 5.6 | |||||||
Total International | 5.6 | |||||||
Total Personal Insurance | 100.0 | % |
A.M. Best | Moody’s | S&P | Fitch | ||||||||||||||||||||||||||||||||
Travelers Reinsurance Pool (a)(b) | A++ |
(1st of 16)
|
Aa2 |
(3rd of 21)
|
AA |
(3rd of 21)
|
AA (3rd of 21)
|
||||||||||||||||||||||||||||
Travelers C&S Co. of America | A++ |
(1st of 16)
|
Aa2 |
(3rd of 21)
|
AA |
(3rd of 21)
|
AA (3rd of 21)
|
||||||||||||||||||||||||||||
First Floridian Auto and Home Ins. Co.
|
A- |
(4th of 16)
|
— | — |
AA (3rd of 21)
|
||||||||||||||||||||||||||||||
Travelers Insurance Company of Canada
|
A++ |
(1st of 16)
|
— | AA- |
(4th of 21)
|
— | |||||||||||||||||||||||||||||
The Dominion of Canada General Insurance Company
|
A |
(3rd of 16)
|
— | — | — | ||||||||||||||||||||||||||||||
Travelers Insurance Company Limited
|
A++ |
(1st of 16)
|
— | AA |
(3rd of 21)
|
— | |||||||||||||||||||||||||||||
Travelers Insurance Designated Activity Company
|
A++ |
(1st of 16)
|
— | AA- |
(4th of 21)
|
— |
A.M. Best | Moody’s | S&P | Fitch | ||||||||||||||||||||||||||||||||
Senior debt |
a+ (5th of 22)
|
A2 |
(6th of 21)
|
A |
(6th of 22)
|
A |
(6th of 22)
|
||||||||||||||||||||||||||||
Junior subordinated debentures |
a- (7th of 22)
|
A3 |
(7th of 21)
|
BBB+ |
(8th of 22)
|
BBB+ |
(8th of 22)
|
||||||||||||||||||||||||||||
Commercial paper |
AMB-1+ (1st of 5)
|
P-1 |
(1st of 4)
|
A-1 |
(2nd of 10)
|
F1 |
(2nd of 8)
|
Location | % of Total | |||||||
Domestic: | ||||||||
Connecticut | 24.1 | % | ||||||
New York | 7.3 | |||||||
Minnesota | 7.2 | |||||||
Texas | 6.6 | |||||||
California | 5.3 | |||||||
Florida | 3.8 | |||||||
Georgia | 3.4 | |||||||
Colorado | 3.0 | |||||||
All other domestic (1)
|
30.2 | |||||||
Total Domestic | 90.9 | |||||||
International: | ||||||||
Canada | 5.0 | |||||||
United Kingdom | 4.0 | |||||||
All other international | 0.1 | |||||||
Total International | 9.1 | |||||||
Consolidated total | 100.0 | % |
Accident year | The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid. | |||||||
Adjusted unassigned surplus | Unassigned surplus as of the most recent statutory annual report reduced by twenty-five percent of that year’s unrealized appreciation in value or revaluation of assets or unrealized profits on investments, as defined in that report. | |||||||
Admitted insurer | A company licensed to transact insurance business within a state. | |||||||
Agent | A licensed individual who sells and services insurance policies, receiving a commission from the insurer for selling the business and a fee for servicing it. An independent agent represents multiple insurance companies and searches the market for the best product for its client. | |||||||
Annuity | A contract that pays a periodic benefit over the remaining life of a person (the annuitant), the lives of two or more persons or for a specified period of time. | |||||||
Assigned risk pools | Reinsurance pools which cover risks for those unable to purchase insurance in the voluntary market. Possible reasons for this inability include the risk being too great or the profit being too small under the required insurance rate structure. The costs of the risks associated with these pools are charged back to insurance carriers in proportion to their direct writings. | |||||||
Assumed reinsurance | Insurance risks acquired from a ceding company. | |||||||
Book value per share | Total common shareholders’ equity divided by the number of common shares outstanding. | |||||||
Broker | One who negotiates contracts of insurance or reinsurance on behalf of an insured party, receiving a commission from the insurer or reinsurer for placement and other services rendered. | |||||||
Capacity | The percentage of statutory capital and surplus, or the dollar amount of exposure, that an insurer or reinsurer is willing or able to place at risk. Capacity may apply to a single risk, a program, a line of business or an entire book of business. Capacity may be constrained by legal restrictions, corporate restrictions or indirect restrictions. | |||||||
Captive | A closely-held insurance company whose primary purpose is to provide insurance coverage to the company’s owners or their affiliates. | |||||||
Case reserves | Claim department estimates of anticipated future payments to be made on each specific individual reported claim. | |||||||
Casualty insurance | Insurance which is primarily concerned with the losses caused by injuries to third persons, i.e., not the insured, and the legal liability imposed on the insured resulting therefrom. It includes, but is not limited to, employers’ liability, workers’ compensation, public liability, automobile liability, personal liability and aviation liability insurance. It excludes certain types of losses that by law or custom are considered as being exclusively within the scope of other types of insurance, such as fire or marine. | |||||||
Catastrophe |
A severe loss designated a catastrophe by internationally recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada. Catastrophes include hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis, volcanic eruptions, solar flares and other naturally-occurring events. Catastrophes can also be man-made, such as terrorist attacks and other intentionally destructive acts including those involving nuclear, biological, chemical and radiological events, cyber events, civil unrest, explosions and destruction of infrastructure. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and core income and claims and claim adjustment expense reserves upon occurrence. A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools.
The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is exceeded and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company. Additionally, an aggregate threshold is applied for International business across all reportable segments. The threshold for 2020 ranged from approximately $20 million to $30 million of losses before reinsurance and taxes.
|
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Catastrophe loss |
Loss and directly identified loss adjustment expenses from catastrophes, as well as related reinsurance reinstatement premiums and assessments from various pools.
|
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Catastrophe reinsurance | A form of excess-of-loss reinsurance which, subject to a specified limit, indemnifies the ceding company for the amount of loss in excess of a specified retention with respect to an accumulation of losses and related reinsurance reinstatement premiums resulting from a catastrophic event. The actual reinsurance document is called a “catastrophe cover.” These reinsurance contracts are typically designed to cover property insurance losses but can be written to cover casualty insurance losses such as from workers’ compensation policies. | |||||||
Cede; ceding company | When an insurer reinsures its liability with another insurer or a “cession,” it “cedes” business and is referred to as the “ceding company.” | |||||||
Ceded reinsurance | Insurance risks transferred to another company as reinsurance. See “Reinsurance.” | |||||||
Claim | Request by an insured for indemnification by an insurance company for loss incurred from an insured peril. | |||||||
Claim adjustment expenses | See “Loss adjustment expenses (LAE).” | |||||||
Claims and claim adjustment expenses
|
See “Loss” and “Loss adjustment expenses (LAE).” | |||||||
Claims and claim adjustment expense reserves
|
See “Loss reserves.” | |||||||
Cohort | A group of items or individuals that share a particular statistical or demographic characteristic. For example, all claims for a given product in a given market for a given accident year would represent a cohort of claims. | |||||||
Combined ratio |
For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators. The combined ratio as used in this report is the equivalent of, and is calculated in the same manner as, the SAP combined ratio except that the SAP underwriting expense ratio is based on net written premium and the underwriting expense ratio as used in this report is based on net earned premiums.
|
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The combined ratio is an indicator of the Company’s underwriting discipline, efficiency in acquiring and servicing its business and overall underwriting profitability. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss. | ||||||||
Other companies’ method of computing a similarly titled measure may not be comparable to the Company’s method of computing this ratio. | ||||||||
Commercial multi-peril policies | Refers to policies which cover both property and third-party liability exposures. | |||||||
Commutation agreement | An agreement between a reinsurer and a ceding company whereby the reinsurer pays an agreed-upon amount in exchange for a complete discharge of all obligations, including future obligations, between the parties for reinsurance losses incurred. | |||||||
Core income (loss) |
Consolidated net income (loss) excluding the after-tax impact of net realized investment gains (losses), discontinued operations, the effect of a change in tax laws and tax rates at enactment date, and cumulative effect of changes in accounting principles when applicable. Financial statement users consider core income when analyzing the results and trends of insurance companies.
|
|||||||
Debt-to-total capital ratio | The ratio of debt to total capitalization. | |||||||
Debt-to-total capital ratio excluding net unrealized gain (loss) on investments
|
The ratio of debt to total capitalization excluding the after-tax impact of net unrealized investment gains and losses included in shareholders' equity. | |||||||
Deductible | The amount of loss that an insured retains. | |||||||
Deferred acquisition costs (DAC) | Incremental direct costs of acquired and renewal insurance contracts, consisting of commissions (other than contingent commissions) and premium-related taxes that are deferred and amortized to achieve a matching of revenues and expenses when reported in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). | |||||||
Deficiency | With regard to reserves for a given liability, a deficiency exists when it is estimated or determined that the reserves are insufficient to pay the ultimate settlement value of the related liabilities. Where the deficiency is the result of an estimate, the estimated amount of deficiency (or even the finding of whether or not a deficiency exists) may change as new information becomes available. | |||||||
Demand surge | Significant short-term increases in building material and labor costs due to a sharp increase in demand for those materials and services, commonly as a result of a large catastrophe resulting in significant widespread property damage. | |||||||
Direct written premiums | The amounts charged by an insurer to insureds in exchange for coverages provided in accordance with the terms of an insurance contract. The amounts exclude the impact of all reinsurance premiums, either assumed or ceded. |
Earned premiums or premiums earned
|
That portion of property casualty premiums written that applies to the expired portion of the policy term. Earned premiums are recognized as revenues under both SAP and GAAP. | |||||||
Excess and surplus lines insurance
|
Insurance for risks not covered by standard insurance due to the unique nature of the risk. Risks could be placed in excess and surplus lines markets due to any number of characteristics, such as loss experience, unique or unusual exposures, or insufficient experience in business. Excess and surplus lines are less regulated by the states, allowing greater flexibility to design specific insurance coverage and negotiate pricing based on the risks to be secured. | |||||||
Excess liability | Additional casualty coverage above a layer of insurance exposures. | |||||||
Excess-of-loss reinsurance | Reinsurance that indemnifies the reinsured against all or a specified portion of losses over a specified dollar amount or “retention.” | |||||||
Exposure | The measure of risk used in the pricing of an insurance product. The change in exposure is the amount of change in premium on policies that renew attributable to the change in portfolio risk. | |||||||
Facultative reinsurance | The reinsurance of all or a portion of the insurance provided by a single policy. Each policy reinsured is separately negotiated. | |||||||
Fair Access to Insurance Requirements (FAIR) Plan
|
A residual market mechanism which provides property insurance to those unable to obtain such insurance through the regular (voluntary) market. FAIR plans are set up on a state-by-state basis to cover only those risks in that state. For more information, see “residual market (involuntary business).” | |||||||
Fidelity and surety programs | Fidelity insurance coverage protects an insured for loss due to embezzlement or misappropriation of funds by an employee. Surety is a three-party agreement in which the insurer agrees to pay a third party or make complete an obligation in response to the default, acts or omissions of an insured. | |||||||
Gross written premiums | The direct and assumed contractually determined amounts charged to the policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. | |||||||
Ground-up analysis |
A method to estimate ultimate claim costs for a given cohort of claims such as an accident year/product line component. It involves analyzing the exposure and claim activity at an individual insured level and then through the use of deterministic or stochastic scenarios and/or simulations, estimating the ultimate losses for those insureds. The total losses for the cohort are then the sum of the losses for each individual insured.
|
|||||||
In practice, the method is sometimes simplified by performing the individual insured analysis only for the larger insureds, with the costs for the smaller insureds estimated via sampling approaches (extrapolated to the rest of the smaller insured population) or aggregate approaches (using assumptions consistent with the ground-up larger insured analysis). | ||||||||
Guaranteed-cost products | An insurance policy where the premiums charged will not be adjusted for actual loss experience during the covered period. | |||||||
Guaranty fund | A state-regulated mechanism that is financed by assessing insurers doing business in those states. Should insolvencies occur, these funds are available to meet some or all of the insolvent insurer’s obligations to policyholders. |
Holding company liquidity | Total cash, short-term invested assets and other readily marketable securities held by the holding company. | |||||||
Incurred but not reported (IBNR) reserves
|
Reserves for estimated losses and LAE that have been incurred but not yet reported to the insurer. This includes amounts for unreported claims, development on known cases and re-opened claims. | |||||||
Inland marine | A broad type of insurance generally covering articles that may be transported from one place to another, as well as bridges, tunnels and other instrumentalities of transportation. It includes goods in transit, generally other than transoceanic, and may include policies for movable objects such as personal effects, personal property, jewelry, furs, fine art and others. | |||||||
Insurance Regulatory Information System (IRIS) ratios
|
Financial ratios calculated by the NAIC to assist state insurance departments in monitoring the financial condition of insurance companies. | |||||||
Large deductible policy | An insurance policy where the customer assumes at least $25,000 or more of each loss. Typically, the insurer is responsible for paying the entire loss under those policies and then seeks reimbursement from the insured for the deductible amount. | |||||||
Lloyd’s | An insurance marketplace based in London, England, where brokers, representing clients with insurable risks, deal with Lloyd’s underwriters, who represent investors. The investors are grouped together into syndicates that provide capital to insure the risks. | |||||||
Loss | An occurrence that is the basis for submission and/or payment of a claim. Losses may be covered, limited or excluded from coverage, depending on the terms of the policy. | |||||||
Loss adjustment expenses (LAE) | The expenses of settling claims, including legal and other fees and the portion of general expenses allocated to claim settlement costs. | |||||||
Loss and LAE ratio |
For SAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses less certain administrative services fee income to net earned premiums as defined in the statutory financial statements required by insurance regulators. The loss and LAE ratio as used in this report is calculated in the same manner as the SAP ratio.
|
|||||||
The loss and LAE ratio is an indicator of the Company’s underwriting discipline and underwriting profitability. | ||||||||
Other companies’ method of computing a similarly titled measure may not be comparable to the Company’s method of computing this ratio. | ||||||||
Loss reserves | Liabilities established by insurers and reinsurers to reflect the estimated cost of claims incurred that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance it has written. Reserves are established for losses and for LAE, and consist of case reserves and IBNR reserves. As the term is used in this document, “loss reserves” is meant to include reserves for both losses and LAE. | |||||||
Loss reserve development | The increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims. Loss reserve development may be related to prior year or current year development. | |||||||
Losses incurred | The total losses sustained by an insurance company under a policy or policies, whether paid or unpaid. Incurred losses include a provision for IBNR. | |||||||
National Association of Insurance Commissioners (NAIC)
|
An organization of the insurance commissioners or directors of all 50 states, the District of Columbia and the five U.S. territories organized to promote consistency of regulatory practice and statutory accounting standards throughout the United States. | |||||||
Net written premiums | Direct written premiums plus assumed reinsurance premiums less premiums ceded to reinsurers. | |||||||
New business volume | The amount of written premiums related to new policyholders and additional products sold to existing policyholders. | |||||||
Pool | An organization of insurers or reinsurers through which particular types of risks are underwritten with premiums, losses and expenses being shared in agreed-upon percentages. | |||||||
Premiums | The amount charged during the year on policies and contracts issued, renewed or reinsured by an insurance company. | |||||||
Probable maximum loss (PML) | The maximum amount of loss that the Company would be expected to incur on a policy if a loss were to occur, giving effect to collateral, reinsurance and other factors. | |||||||
Property insurance | Insurance that provides coverage to a person or business with an insurable interest in tangible property for that person’s or business’s property loss, damage or loss of use. | |||||||
Quota share reinsurance | Reinsurance wherein the insurer cedes an agreed-upon fixed percentage of liabilities, premiums and losses for each policy covered on a pro rata basis. | |||||||
Rates | Amounts charged per unit of insurance. | |||||||
Redundancy | With regard to reserves for a given liability, a redundancy exists when it is estimated or determined that the reserves are greater than what will be needed to pay the ultimate settlement value of the related liabilities. Where the redundancy is the result of an estimate, the estimated amount of redundancy (or even the finding of whether or not a redundancy exists) may change as new information becomes available. | |||||||
Reinstatement premiums | Additional premiums payable to reinsurers to restore coverage limits that have been exhausted as a result of reinsured losses under certain excess-of-loss reinsurance treaties. | |||||||
Reinsurance | The practice whereby one insurer, called the reinsurer, in consideration of a premium paid to that insurer, agrees to indemnify another insurer, called the ceding company, for part or all of the liability of the ceding company under one or more policies or contracts of insurance which it has issued. | |||||||
Reinsurance agreement | A contract specifying the terms of a reinsurance transaction. | |||||||
Renewal premium change | The estimated change in average premium on policies that renew, including rate and exposure changes. Such statistics are subject to change based on a number of factors, including changes in estimates. |
Renewal rate change | The estimated change in average premium on policies that renew, excluding exposure changes. Such statistics are subject to change based on a number of factors, including changes in estimates. | |||||||
Residual market (involuntary business)
|
Insurance market which provides coverage for risks for those unable to purchase insurance in the voluntary market. Possible reasons for this inability include the risks being too great or the profit potential too small under the required insurance rate structure. Residual markets are frequently created by state legislation either because of lack of available coverage such as: property coverage in a windstorm prone area or protection of the accident victim as in the case of workers’ compensation. The costs of the residual market are usually charged back to the direct insurance carriers in proportion to the carriers’ voluntary market shares for the type of coverage involved. | |||||||
Retention | The amount of exposure a policyholder company retains on any one risk or group of risks. The term may apply to an insurance policy, where the policyholder is an individual, family or business, or a reinsurance policy, where the policyholder is an insurance company. | |||||||
Retention rate | The percentage of prior period premiums (excluding renewal premium changes), accounts or policies available for renewal in the current period that were renewed. Such statistics are subject to change based on a number of factors, including changes in estimates. | |||||||
Retrospective premiums | Premiums related to retrospectively rated policies. | |||||||
Retrospective rating | A plan or method which permits adjustment of the final premium or commission on the basis of actual loss experience, subject to certain minimum and maximum limits. | |||||||
Return on equity | The ratio of net income (loss) less preferred dividends to average shareholders’ equity. | |||||||
Risk-based capital (RBC) | A measure adopted by the NAIC and enacted by states for determining the minimum statutory policyholders’ surplus requirements of insurers. Insurers having total adjusted capital less than that required by the RBC calculation will be subject to varying degrees of regulatory action depending on the level of capital inadequacy. | |||||||
Risk retention group | An alternative form of insurance in which members of a similar profession or business band together to self insure their risks. | |||||||
Runoff business | An operation which has been determined to be nonstrategic; includes non-renewals of in-force policies and a cessation of writing new business, where allowed by law. | |||||||
Salvage | The amount of money an insurer recovers through the sale of property transferred to the insurer as a result of a loss payment. | |||||||
Second-injury fund | The employer of an injured, impaired worker is responsible only for the workers’ compensation benefit for the most recent injury; the second-injury fund would cover the cost of any additional benefits for aggravation of a prior condition. The cost is shared by the insurance industry and self-insureds, funded through assessments to insurance companies and self-insureds based on either premiums or losses. | |||||||
Segment income (loss) |
Determined in the same manner as core income (loss) on a segment basis. Management uses segment income (loss) to analyze each segment’s performance and as a tool in making business decisions. Financial statement users also consider segment income when analyzing the results and trends of insurance companies.
|
|||||||
Self-insured retentions | That portion of the risk retained by an insured for its own account. | |||||||
Servicing carrier | An insurance company that provides, for a fee, various services including policy issuance, claims adjusting and customer service for insureds in a reinsurance pool. | |||||||
Statutory accounting practices (SAP)
|
The practices and procedures prescribed or permitted by domiciliary state insurance regulatory authorities in the United States for recording transactions and preparing financial statements. SAP generally reflect a modified going concern basis of accounting. | |||||||
Statutory capital and surplus | The excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with SAP. Admitted assets are assets of an insurer prescribed or permitted by a state to be recognized on the statutory balance sheet. Statutory capital and surplus is also referred to as “statutory surplus” or “policyholders’ surplus.” | |||||||
Statutory net income | As determined under SAP, total revenues less total expenses and income taxes. | |||||||
Structured settlement | Periodic payments to an injured person or survivor for a determined number of years or for life, typically in settlement of a claim under a liability policy, usually funded through the purchase of an annuity. | |||||||
Subrogation | A principle of law incorporated in insurance policies, which enables an insurance company, after paying a claim under a policy, to recover the amount of the loss from another person or entity who is legally liable for it. | |||||||
Tenure impact | As new business volume increases and accounts for a greater percentage of earned premiums, the loss and LAE ratio generally worsens initially, as the loss and LAE ratio for new business is generally higher than the ratio for business that has been retained for longer periods. As poorer performing business leaves and pricing segmentation improves on renewal of the business that is retained, the loss and LAE ratio is expected to improve in future years. | |||||||
Third-party liability | A liability owed to a claimant (third party) who is not one of the two parties to the insurance contract. Insured liability claims are referred to as third-party claims. | |||||||
Total capitalization | The sum of total shareholders’ equity and debt. | |||||||
Treaty reinsurance | The reinsurance of a specified type or category of risks defined in a reinsurance agreement (a “treaty”) between a primary insurer or other reinsured and a reinsurer. Typically, in treaty reinsurance, the primary insurer or reinsured is obligated to offer and the reinsurer is obligated to accept a specified portion of all that type or category of risks originally written by the primary insurer or reinsured. | |||||||
Umbrella coverage | A form of insurance protection against losses in excess of amounts covered by other liability insurance policies or amounts not covered by the usual liability policies. | |||||||
Unassigned surplus | The undistributed and unappropriated amount of statutory capital and surplus. | |||||||
Underlying combined ratio | The underlying combined ratio is the sum of the underlying loss and LAE ratio and the underlying underwriting expense ratio. The underlying combined ratio is an indicator of the Company’s underwriting discipline and underwriting profitability for the current accident year. | |||||||
Underlying loss and LAE ratio | The underlying loss and LAE ratio is the loss and LAE ratio, adjusted to exclude the impact of catastrophes and prior year reserve development. The underlying loss and LAE ratio is an indicator of the Company’s underwriting discipline and underwriting profitability for the current accident year. | |||||||
Underlying underwriting expense ratio
|
The underlying underwriting expense ratio is the underwriting expense ratio adjusted to exclude the impact of catastrophes. | |||||||
Underlying underwriting margin | Net earned premiums and fee income less claims and claim adjustment expenses (excluding catastrophe losses and prior year reserve development) and insurance-related expenses. | |||||||
Underwriter | An employee of an insurance company who examines, accepts or rejects risks and classifies accepted risks in order to charge an appropriate premium for each accepted risk. The underwriter is expected to select business that will produce an average risk of loss no greater than that anticipated for the class of business. | |||||||
Underwriting | The insurer’s or reinsurer’s process of reviewing applications for insurance coverage, and the decision as to whether to accept all or part of the coverage and determination of the applicable premiums; also refers to the acceptance of that coverage. | |||||||
Underwriting expense ratio |
For SAP, the underwriting expense ratio is the ratio of underwriting expenses incurred (including commissions paid), less certain administrative services fee income and billing and policy fees, to net written premiums as defined in the statutory financial statements required by insurance regulators. The underwriting expense ratio as used in this report is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income, billing and policy fees and other, to net earned premiums.
|
|||||||
The underwriting expense ratio is an indicator of the Company’s efficiency in acquiring and servicing its business. | ||||||||
Other companies’ method of computing a similarly titled measure may not be comparable to the Company’s method of computing this ratio. | ||||||||
Underwriting gain or loss | Net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. | |||||||
Unearned premium | The portion of premiums written that is allocable to the unexpired portion of the policy term. | |||||||
Voluntary market | The market in which a person seeking insurance obtains coverage without the assistance of residual market mechanisms. | |||||||
Wholesale broker | An independent or exclusive agent that represents both admitted and non-admitted insurers in market areas, which include standard, non-standard, specialty and excess and surplus lines of insurance. The wholesaler does not deal directly with the insurance consumer. The wholesaler deals with the retail agent or broker. |
Workers’ compensation | A system (established under state and federal laws) under which employers provide insurance for benefit payments to their employees for work-related injuries, deaths and diseases, regardless of fault. |
As of December 31, | ||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||
The Travelers Companies, Inc. | $ | 100.00 | $ | 110.95 | $ | 125.79 | $ | 113.65 | $ | 132.98 | $ | 140.11 | ||||||||||||||||||||||||||
S&P 500 Index | 100.00 | 111.95 | 136.38 | 130.39 | 171.44 | 202.96 | ||||||||||||||||||||||||||||||||
S&P 500 Property & Casualty Insurance Index | 100.00 | 115.71 | 141.61 | 134.96 | 169.88 | 180.63 |
Period Beginning | Period Ending |
Total number
of shares purchased |
Average
price paid per share |
Total number of
shares purchased as part of publicly announced plans or programs |
Approximate
dollar value of shares that may yet be purchased under the plans or programs (in millions) |
|||||||||||||||||||||||||||
Oct. 1, 2020 | Oct. 31, 2020 | 269 | $ | 118.18 | — | $ | 1,361 | |||||||||||||||||||||||||
Nov. 1, 2020 | Nov. 30, 2020 | 3,579 | $ | 133.11 | — | $ | 1,361 | |||||||||||||||||||||||||
Dec. 1, 2020 | Dec. 31, 2020 | 1,464,569 | $ | 136.80 | 1,462,251 | $ | 1,161 | |||||||||||||||||||||||||
Total | 1,468,417 | $ | 136.78 | 1,462,251 | $ | 1,161 |
At and for the year ended December 31, | ||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||
Total revenues | $ | 31,981 | $ | 31,581 | $ | 30,282 | $ | 28,902 | $ | 27,625 | ||||||||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | $ | 2,056 | $ | 3,014 | ||||||||||||||||||||||
Total investments | $ | 84,423 | $ | 77,884 | $ | 72,278 | $ | 72,502 | $ | 70,488 | ||||||||||||||||||||||
Total assets | 116,764 | 110,122 | 104,233 | 103,483 | 100,245 | |||||||||||||||||||||||||||
Claims and claim adjustment expense reserves | 54,521 | 51,849 | 50,668 | 49,650 | 47,979 | |||||||||||||||||||||||||||
Total long-term debt | 6,450 | 5,958 | 5,964 | 5,971 | 5,887 | |||||||||||||||||||||||||||
Total liabilities | 87,563 | 84,179 | 81,339 | 79,752 | 77,024 | |||||||||||||||||||||||||||
Total shareholders' equity | 29,201 | 25,943 | 22,894 | 23,731 | 23,221 | |||||||||||||||||||||||||||
Net income per share | ||||||||||||||||||||||||||||||||
Basic | $ | 10.56 | $ | 10.01 | $ | 9.37 | $ | 7.39 | $ | 10.39 | ||||||||||||||||||||||
Diluted | $ | 10.52 | $ | 9.92 | $ | 9.28 | $ | 7.33 | $ | 10.28 | ||||||||||||||||||||||
Year-end common shares outstanding | 252.4 | 255.5 | 263.6 | 271.4 | 279.6 | |||||||||||||||||||||||||||
Per common share amounts | ||||||||||||||||||||||||||||||||
Cash dividends | $ | 3.37 | $ | 3.23 | $ | 3.03 | $ | 2.83 | $ | 2.62 | ||||||||||||||||||||||
Book value | $ | 115.68 | $ | 101.55 | $ | 86.84 | $ | 87.46 | $ | 83.05 |
(for the year ended December 31, in millions except per share amounts) | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 29,044 | $ | 28,272 | $ | 27,059 | ||||||||||||||
Net investment income | 2,227 | 2,468 | 2,474 | |||||||||||||||||
Fee income | 429 | 459 | 432 | |||||||||||||||||
Net realized investment gains | 2 | 113 | 114 | |||||||||||||||||
Other revenues | 279 | 269 | 203 | |||||||||||||||||
Total revenues | 31,981 | 31,581 | 30,282 | |||||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 19,123 | 19,133 | 18,291 | |||||||||||||||||
Amortization of deferred acquisition costs | 4,773 | 4,601 | 4,381 | |||||||||||||||||
General and administrative expenses | 4,509 | 4,365 | 4,297 | |||||||||||||||||
Interest expense | 339 | 344 | 352 | |||||||||||||||||
Total claims and expenses | 28,744 | 28,443 | 27,321 | |||||||||||||||||
Income before income taxes | 3,237 | 3,138 | 2,961 | |||||||||||||||||
Income tax expense | 540 | 516 | 438 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Net income per share | ||||||||||||||||||||
Basic | $ | 10.56 | $ | 10.01 | $ | 9.37 | ||||||||||||||
Diluted | $ | 10.52 | $ | 9.92 | $ | 9.28 | ||||||||||||||
Combined ratio | ||||||||||||||||||||
Loss and loss adjustment expense ratio | 65.1 | % | 66.9 | % | 66.8 | % | ||||||||||||||
Underwriting expense ratio | 29.9 | 29.6 | 30.1 | |||||||||||||||||
Combined ratio | 95.0 | % | 96.5 | % | 96.9 | % |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Average investments(1)
|
$ | 78,070 | $ | 74,866 | $ | 73,031 | ||||||||||||||
Pre-tax net investment income | 2,227 | 2,468 | 2,474 | |||||||||||||||||
After-tax net investment income | 1,908 | $ | 2,097 | 2,102 | ||||||||||||||||
Average pre-tax yield(2)
|
2.9 | % | 3.3 | % | 3.4 | % | ||||||||||||||
Average after-tax yield(2)
|
2.4 | % | 2.8 | % | 2.9 | % |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Credit impairment losses: | ||||||||||||||||||||
Fixed maturities | $ | (15) | $ | (4) | $ | (1) | ||||||||||||||
Other investments | (40) | — | — | |||||||||||||||||
Net realized investment gains (losses) on equity securities still held | 25 | 61 | (29) | |||||||||||||||||
Other net realized investment gains, including from sales | 32 | 56 | 144 | |||||||||||||||||
Total | $ | 2 | $ | 113 | $ | 114 |
Losses Incurred / Unfavorable (Favorable)
Prior Year Reserve Development for the Year Ended December 31, |
Estimated Ultimate Losses at
December 31, |
|||||||||||||||||||||||||||||||||||||
(in millions, pre-tax and net of reinsurance)(1)
|
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
2018 | ||||||||||||||||||||||||||||||||||||||
PCS Serial Number: | ||||||||||||||||||||||||||||||||||||||
15 — Winter storm | 1 | $ | (4) | 144 | 141 | 140 | 144 | |||||||||||||||||||||||||||||||
17 — Severe wind and hail storms | (1) | (6) | 111 | 104 | 105 | 111 | ||||||||||||||||||||||||||||||||
33 — Severe wind and hail storms | — | 2 | 117 | 119 | 119 | 117 | ||||||||||||||||||||||||||||||||
52 — Hurricane Florence | (1) | (18) | 106 | 87 | 88 | 106 | ||||||||||||||||||||||||||||||||
57 — Hurricane Michael | (12) | 2 | 158 | 148 | 160 | 158 | ||||||||||||||||||||||||||||||||
59 — California wildfire—Camp fire (2)
|
(192) | 2 | 334 | 144 | 336 | 334 | ||||||||||||||||||||||||||||||||
60 — California wildfire—Woolsey fire | — | 10 | 119 | 129 | 129 | 119 | ||||||||||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||||||||
PCS Serial Number: | ||||||||||||||||||||||||||||||||||||||
33 — Severe wind storms | 8 | 250 | n/a | 258 | 250 | n/a | ||||||||||||||||||||||||||||||||
61 — Severe wind storms and tornadoes | 8 | 109 | n/a | 117 | 109 | n/a | ||||||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||||||||
PCS Serial Number: | ||||||||||||||||||||||||||||||||||||||
16 — Tennessee tornado activity
|
151 | n/a | n/a | 151 | n/a | n/a | ||||||||||||||||||||||||||||||||
19 — Severe storms
|
134 | n/a | n/a | 134 | n/a | n/a | ||||||||||||||||||||||||||||||||
20 — Severe storms
|
165 | n/a | n/a | 165 | n/a | n/a | ||||||||||||||||||||||||||||||||
33 — Civil unrest
|
100 | n/a | n/a | 100 | n/a | n/a | ||||||||||||||||||||||||||||||||
44 — Tropical Storm Isaias
|
140 | n/a | n/a | 140 | n/a | n/a | ||||||||||||||||||||||||||||||||
46 — Midwest derecho | 212 | n/a | n/a | 212 | n/a | n/a | ||||||||||||||||||||||||||||||||
68 — California wildfire - Glass fire (3)
|
145 | n/a | n/a | 145 | n/a | n/a |
Gross Written Premiums | |||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Business Insurance | $ | 17,060 | $ | 17,151 | $ | 16,255 | |||||||||||
Bond & Specialty Insurance | 3,184 | 2,931 | 2,665 | ||||||||||||||
Personal Insurance | 11,519 | 10,981 | 10,332 | ||||||||||||||
Total | $ | 31,763 | $ | 31,063 | $ | 29,252 |
Net Written Premiums | |||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Business Insurance | $ | 15,431 | $ | 15,629 | $ | 14,956 | |||||||||||
Bond & Specialty Insurance | 2,951 | 2,739 | 2,528 | ||||||||||||||
Personal Insurance | 11,350 | 10,783 | 10,224 | ||||||||||||||
Total | $ | 29,732 | $ | 29,151 | $ | 27,708 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Earned premiums | $ | 15,294 | $ | 15,300 | $ | 14,722 | ||||||||||||||
Net investment income | 1,633 | 1,816 | 1,833 | |||||||||||||||||
Fee income | 405 | 437 | 412 | |||||||||||||||||
Other revenues | 176 | 155 | 112 | |||||||||||||||||
Total revenues | 17,508 | 17,708 | 17,079 | |||||||||||||||||
Total claims and expenses | 15,986 | 16,093 | 15,182 | |||||||||||||||||
Segment income before income taxes | 1,522 | 1,615 | 1,897 | |||||||||||||||||
Income tax expense | 213 | 223 | 259 | |||||||||||||||||
Segment income | $ | 1,309 | $ | 1,392 | $ | 1,638 | ||||||||||||||
Loss and loss adjustment expense ratio | 69.4 | % | 70.3 | % | 67.8 | % | ||||||||||||||
Underwriting expense ratio | 30.9 | 30.6 | 31.3 | |||||||||||||||||
Combined ratio | 100.3 | % | 100.9 | % | 99.1 | % |
Gross Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Select Accounts | $ | 2,848 | $ | 2,945 | $ | 2,841 | ||||||||||||||
Middle Market | 9,017 | 9,073 | 8,537 | |||||||||||||||||
National Accounts | 1,540 | 1,603 | 1,601 | |||||||||||||||||
National Property and Other | 2,460 | 2,279 | 2,036 | |||||||||||||||||
Total Domestic | 15,865 | 15,900 | 15,015 | |||||||||||||||||
International | 1,195 | 1,251 | 1,240 | |||||||||||||||||
Total Business Insurance | $ | 17,060 | $ | 17,151 | $ | 16,255 |
Net Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Select Accounts | $ | 2,821 | $ | 2,911 | $ | 2,828 | ||||||||||||||
Middle Market | 8,511 | 8,630 | 8,214 | |||||||||||||||||
National Accounts | 996 | 1,051 | 1,025 | |||||||||||||||||
National Property and Other | 2,086 | 1,965 | 1,805 | |||||||||||||||||
Total Domestic | 14,414 | 14,557 | 13,872 | |||||||||||||||||
International | 1,017 | 1,072 | 1,084 | |||||||||||||||||
Total Business Insurance | $ | 15,431 | $ | 15,629 | $ | 14,956 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Earned premiums | $ | 2,823 | $ | 2,565 | $ | 2,420 | ||||||||||||||
Net investment income | 213 | 233 | 233 | |||||||||||||||||
Other revenues | 27 | 26 | 23 | |||||||||||||||||
Total revenues | 3,063 | 2,824 | 2,676 | |||||||||||||||||
Total claims and expenses | 2,483 | 2,055 | 1,685 | |||||||||||||||||
Segment income before income taxes | 580 | 769 | 991 | |||||||||||||||||
Income tax expense | 107 | 151 | 198 | |||||||||||||||||
Segment income | $ | 473 | $ | 618 | $ | 793 | ||||||||||||||
Loss and loss adjustment expense ratio | 51.5 | % | 42.2 | % | 31.5 | % | ||||||||||||||
Underwriting expense ratio | 35.9 | 37.3 | 37.5 | |||||||||||||||||
Combined ratio | 87.4 | % | 79.5 | % | 69.0 | % |
Gross Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Management Liability | $ | 1,920 | $ | 1,720 | $ | 1,523 | ||||||||||||||
Surety | 910 | 926 | 887 | |||||||||||||||||
Total Domestic | 2,830 | 2,646 | 2,410 | |||||||||||||||||
International | 354 | 285 | 255 | |||||||||||||||||
Total Bond & Specialty Insurance | $ | 3,184 | $ | 2,931 | $ | 2,665 |
Net Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Management Liability | $ | 1,769 | $ | 1,605 | $ | 1,455 | ||||||||||||||
Surety | 845 | 866 | 835 | |||||||||||||||||
Total Domestic | 2,614 | 2,471 | 2,290 | |||||||||||||||||
International | 337 | 268 | 238 | |||||||||||||||||
Total Bond & Specialty Insurance | $ | 2,951 | $ | 2,739 | $ | 2,528 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Earned premiums | $ | 10,927 | $ | 10,407 | $ | 9,917 | ||||||||||||||
Net investment income | 381 | 419 | 408 | |||||||||||||||||
Fee income | 24 | 22 | 20 | |||||||||||||||||
Other revenues | 76 | 87 | 66 | |||||||||||||||||
Total revenues | 11,408 | 10,935 | 10,411 | |||||||||||||||||
Total claims and expenses | 9,905 | 9,916 | 10,072 | |||||||||||||||||
Segment income before income taxes | 1,503 | 1,019 | 339 | |||||||||||||||||
Income tax expense | 308 | 195 | 42 | |||||||||||||||||
Segment income | $ | 1,195 | $ | 824 | $ | 297 | ||||||||||||||
Loss and loss adjustment expense ratio | 62.8 | % | 68.0 | % | 74.1 | % | ||||||||||||||
Underwriting expense ratio | 26.9 | 26.2 | 26.5 | |||||||||||||||||
Combined ratio | 89.7 | % | 94.2 | % | 100.6 | % |
Gross Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Agency: | ||||||||||||||||||||
Automobile | $ | 5,106 | $ | 5,154 | $ | 4,998 | ||||||||||||||
Homeowners and Other | 5,310 | 4,685 | 4,213 | |||||||||||||||||
Total Agency | 10,416 | 9,839 | 9,211 | |||||||||||||||||
Direct-to-Consumer | 436 | 418 | 398 | |||||||||||||||||
Total Domestic | 10,852 | 10,257 | 9,609 | |||||||||||||||||
International | 667 | 724 | 723 | |||||||||||||||||
Total Personal Insurance | $ | 11,519 | $ | 10,981 | $ | 10,332 |
Net Written Premiums | ||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Domestic: | ||||||||||||||||||||
Agency: | ||||||||||||||||||||
Automobile | $ | 5,080 | $ | 5,124 | $ | 4,972 | ||||||||||||||
Homeowners and Other | 5,185 | 4,540 | 4,148 | |||||||||||||||||
Total Agency | 10,265 | 9,664 | 9,120 | |||||||||||||||||
Direct-to-Consumer | 433 | 412 | 396 | |||||||||||||||||
Total Domestic | 10,698 | 10,076 | 9,516 | |||||||||||||||||
International | 652 | 707 | 708 | |||||||||||||||||
Total Personal Insurance | $ | 11,350 | $ | 10,783 | $ | 10,224 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Income (loss) | $ | (291) | $ | (297) | $ | (298) |
(at and for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Beginning reserves: | ||||||||||||||||||||
Gross | $ | 1,601 | $ | 1,608 | $ | 1,538 | ||||||||||||||
Ceded | (322) | (327) | (257) | |||||||||||||||||
Net | 1,279 | 1,281 | 1,281 | |||||||||||||||||
Incurred losses and loss expenses: | ||||||||||||||||||||
Gross | 362 | 268 | 343 | |||||||||||||||||
Ceded | (67) | (48) | (118) | |||||||||||||||||
Net | 295 | 220 | 225 | |||||||||||||||||
Paid loss and loss expenses: | ||||||||||||||||||||
Gross | 295 | 277 | 273 | |||||||||||||||||
Ceded | (58) | (53) | (48) | |||||||||||||||||
Net | 237 | 224 | 225 | |||||||||||||||||
Foreign exchange and other: | ||||||||||||||||||||
Gross | — | 2 | — | |||||||||||||||||
Ceded | 1 | — | — | |||||||||||||||||
Net | 1 | 2 | — | |||||||||||||||||
Ending reserves: | ||||||||||||||||||||
Gross | 1,668 | 1,601 | 1,608 | |||||||||||||||||
Ceded | (330) | (322) | (327) | |||||||||||||||||
Net | $ | 1,338 | $ | 1,279 | $ | 1,281 |
2020 | 2019 | |||||||||||||||||||||||||
(at December 31, in millions) | Carrying Value |
Weighted Average Credit
Quality (1) |
Carrying Value |
Weighted Average Credit
Quality (1) |
||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
|
$ | 2,149 | Aaa/Aa1 | $ | 2,095 | Aaa/Aa1 | ||||||||||||||||||||
Obligations of states, municipalities and political subdivisions:
|
0 | |||||||||||||||||||||||||
Local general obligation | 18,657 | Aaa/Aa1 | 16,315 | Aaa/Aa1 | ||||||||||||||||||||||
Revenue | 12,715 | Aaa/Aa1 | 10,315 | Aaa/Aa1 | ||||||||||||||||||||||
State general obligation | 1,444 | Aaa/Aa1 | 1,231 | Aaa/Aa1 | ||||||||||||||||||||||
Pre-refunded | 3,544 | Aaa/Aa1 | 2,056 | Aaa/Aa1 | ||||||||||||||||||||||
Total obligations of states, municipalities and political subdivisions
|
36,360 | 29,917 | ||||||||||||||||||||||||
Debt securities issued by foreign governments | 1,054 | Aaa/Aa1 | 1,173 | Aaa/Aa1 | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
2,361 | Aaa/Aa1 | 3,280 | Aaa/Aa1 | ||||||||||||||||||||||
All other corporate bonds and redeemable preferred stock:
|
||||||||||||||||||||||||||
Financial: | ||||||||||||||||||||||||||
Bank | 3,993 | A1 | 3,841 | A1 | ||||||||||||||||||||||
Insurance | 1,380 | Aa3 | 1,183 | Aa3 | ||||||||||||||||||||||
Finance/leasing | 22 | Ba3 | 42 | Ba3 | ||||||||||||||||||||||
Brokerage and asset management | 94 | Aa3 | 103 | A1 | ||||||||||||||||||||||
Total financial | 5,489 | 5,169 | ||||||||||||||||||||||||
Industrial | 17,883 | A3 | 18,128 | A3 | ||||||||||||||||||||||
Public utility | 4,255 | A2 | 3,953 | A3 | ||||||||||||||||||||||
Canadian municipal securities | 1,653 | Aa2 | 1,416 | Aa2 | ||||||||||||||||||||||
Sovereign corporate securities (2)
|
609 | Aaa | 582 | Aaa | ||||||||||||||||||||||
Commercial mortgage-backed securities and project loans (3)
|
1,418 | Aaa | 1,509 | Aaa | ||||||||||||||||||||||
Asset-backed and other | 772 | Aa1 | 912 | Aa1 | ||||||||||||||||||||||
Total all other corporate bonds and redeemable preferred stock
|
32,079 | 31,669 | ||||||||||||||||||||||||
Total fixed maturities | $ | 74,003 | Aa2 | $ | 68,134 | Aa2 |
(at December 31, 2020, in millions) |
Carrying
Value |
Percent of Total
Carrying Value |
||||||||||||
Quality Rating: | ||||||||||||||
Aaa | $ | 31,653 | 42.8 | % | ||||||||||
Aa | 18,327 | 24.8 | ||||||||||||
A | 12,944 | 17.5 | ||||||||||||
Baa | 9,738 | 13.1 | ||||||||||||
Total investment grade | 72,662 | 98.2 | ||||||||||||
Below investment grade | 1,341 | 1.8 | ||||||||||||
Total fixed maturities | $ | 74,003 | 100.0 | % |
(at December 31, 2020, in millions) |
State General
Obligation |
Local General
Obligation |
Revenue |
Total Carrying
Value |
Weighted Average
Credit Quality(1) |
|||||||||||||||||||||||||||
State: | ||||||||||||||||||||||||||||||||
Texas | $ | 61 | $ | 3,212 | $ | 1,746 | $ | 5,019 | Aaa/Aa1 | |||||||||||||||||||||||
California | — | 1,544 | 493 | 2,037 | Aaa/Aa1 | |||||||||||||||||||||||||||
Washington | 113 | 1,388 | 445 | 1,946 | Aaa/Aa1 | |||||||||||||||||||||||||||
Virginia | 62 | 986 | 827 | 1,875 | Aaa | |||||||||||||||||||||||||||
Minnesota | 89 | 1,294 | 247 | 1,630 | Aaa/Aa1 | |||||||||||||||||||||||||||
North Carolina | 204 | 807 | 512 | 1,523 | Aaa | |||||||||||||||||||||||||||
Massachusetts | — | 175 | 1,140 | 1,315 | Aaa/Aa1 | |||||||||||||||||||||||||||
Colorado | — | 852 | 417 | 1,269 | Aa1 | |||||||||||||||||||||||||||
Maryland | 33 | 856 | 190 | 1,079 | Aaa/Aa1 | |||||||||||||||||||||||||||
Georgia | 166 | 702 | 154 | 1,022 | Aaa/Aa1 | |||||||||||||||||||||||||||
Wisconsin | 177 | 589 | 113 | 879 | Aa1 | |||||||||||||||||||||||||||
Florida | 48 | 157 | 671 | 876 | Aa1 | |||||||||||||||||||||||||||
Missouri | — | 596 | 263 | 859 | Aa1 | |||||||||||||||||||||||||||
Tennessee | 63 | 675 | 94 | 832 | Aa1 | |||||||||||||||||||||||||||
All others (2)
|
428 | 4,824 | 5,403 | 10,655 | Aaa/Aa1 | |||||||||||||||||||||||||||
Total | $ | 1,444 | $ | 18,657 | $ | 12,715 | $ | 32,816 | Aaa/Aa1 |
(at December 31, 2020, in millions) |
Carrying
Value |
Weighted Average
Credit Quality(1) |
||||||||||||
Source: | ||||||||||||||
Higher education | $ | 3,286 | Aaa/Aa1 | |||||||||||
Water | 3,255 | Aaa/Aa1 | ||||||||||||
Sewer | 1,230 | Aaa/Aa1 | ||||||||||||
Power utilities | 866 | Aa1 | ||||||||||||
Industrial | 594 | Aa3 | ||||||||||||
Special tax | 541 | Aa1 | ||||||||||||
Fuel sales | 315 | Aa1 | ||||||||||||
Highway tolls | 209 | Aa2 | ||||||||||||
General fund | 205 | Aa1 | ||||||||||||
Transit | 195 | Aa1 | ||||||||||||
Health care | 194 | Aa2 | ||||||||||||
Airport and marina | 144 | A2 | ||||||||||||
Other revenue sources | 1,681 | Aaa/Aa1 | ||||||||||||
Total | $ | 12,715 | Aaa/Aa1 |
(at December 31, 2020, in millions) |
Carrying
Value |
Weighted Average Credit
Quality (1) |
||||||||||||
Foreign Government: | ||||||||||||||
Canada | $ | 798 | Aaa/Aa1 | |||||||||||
United Kingdom | 238 | Aa3 | ||||||||||||
All others (2)
|
18 | A2 | ||||||||||||
Total | $ | 1,054 | Aaa/Aa1 |
Corporate Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities Issued
by Foreign Governments |
Financial | Sovereign Corporates | All Other | |||||||||||||||||||||||||||||||||||||||||||||||
(at December 31, 2020, in millions) |
Carrying
Value |
Weighted Average
Credit Quality (1) |
Carrying
Value |
Weighted Average
Credit Quality (1) |
Carrying
Value |
Weighted Average
Credit Quality (1) |
Carrying
Value |
Weighted Average
Credit Quality (1) |
||||||||||||||||||||||||||||||||||||||||||
Eurozone Periphery | ||||||||||||||||||||||||||||||||||||||||||||||||||
Spain | $ | — | — | $ | 73 | A2 | $ | — | — | $ | 14 | Baa3 | ||||||||||||||||||||||||||||||||||||||
Ireland | — | — | — | — | — | — | 122 | Baa2 | ||||||||||||||||||||||||||||||||||||||||||
Italy | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Greece | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Portugal | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Subtotal | — | 73 | — | 136 | ||||||||||||||||||||||||||||||||||||||||||||||
Eurozone Non-Periphery | ||||||||||||||||||||||||||||||||||||||||||||||||||
Germany | — | — | — | — | 648 | Aaa/Aa1 | 561 | A3 | ||||||||||||||||||||||||||||||||||||||||||
France | 100 | Aa2 | 1 | A2 | — | — | 608 | A2 | ||||||||||||||||||||||||||||||||||||||||||
Netherlands | — | — | 141 | A1 | 101 | Aaa | 377 | A1 | ||||||||||||||||||||||||||||||||||||||||||
Austria | — | — | — | — | 202 | Aa2 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Finland | — | — | 116 | Aa1 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Belgium | — | — | — | — | — | — | 144 | Baa2 | ||||||||||||||||||||||||||||||||||||||||||
Subtotal | 100 | 258 | 951 | 1,690 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 100 | $ | 331 | $ | 951 | $ | 1,826 |
(at December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Fixed maturities | $ | 5,175 | $ | 2,853 | $ | (137) | ||||||||||||||
Other investments | — | — | — | |||||||||||||||||
Unrealized investment gains (losses) before tax | 5,175 | 2,853 | (137) | |||||||||||||||||
Tax expense (benefit) | 1,101 | 607 | (24) | |||||||||||||||||
Net unrealized investment gains (losses) included in shareholders' equity at end of year | $ | 4,074 | $ | 2,246 | $ | (113) |
Dollars (in billions) | ||||||||||||||
Likelihood of Exceedance (1) |
Single U.S. and
Canadian Hurricane |
Single U.S. and
Canadian Earthquake |
||||||||||||
2.0% (1-in-50) | $ | 1.3 | $ | 0.5 | ||||||||||
1.0% (1-in-100) | $ | 1.7 | $ | 0.8 | ||||||||||
0.4% (1-in-250) | $ | 2.3 | $ | 1.2 | ||||||||||
0.1% (1-in-1,000) | $ | 5.2 | $ | 1.8 |
Percentage of Common Equity (2) | ||||||||||||||
Likelihood of Exceedance |
Single U.S. and
Canadian Hurricane |
Single U.S. and
Canadian Earthquake |
||||||||||||
2.0% (1-in-50) | 5 | % | 2 | % | ||||||||||
1.0% (1-in-100) | 7 | % | 3 | % | ||||||||||
0.4% (1-in-250) | 9 | % | 5 | % | ||||||||||
0.1% (1-in-1,000) | 21 | % | 7 | % |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses | $ | 3,731 | $ | 3,476 | ||||||||||
Gross structured settlements | 2,964 | 2,965 | ||||||||||||
Mandatory pools and associations | 1,801 | 1,886 | ||||||||||||
Gross reinsurance recoverables | 8,496 | 8,327 | ||||||||||||
Allowance for estimated uncollectible reinsurance | (146) | (92) | ||||||||||||
Net reinsurance recoverables | $ | 8,350 | $ | 8,235 |
Reinsurer Group |
Reinsurance
Recoverable |
A.M. Best Rating of Group’s Predominant
Reinsurer |
||||||||||||||||||
Swiss Re Group | $ | 535 | A+ | second highest of 16 ratings | ||||||||||||||||
Berkshire Hathaway | 333 | A++ | highest of 16 ratings | |||||||||||||||||
Munich Re Group | 290 | A+ | second highest of 16 ratings | |||||||||||||||||
Alleghany Group | 204 | A+ | second highest of 16 ratings | |||||||||||||||||
Axa Group | 177 | A+ | second highest of 16 ratings |
Group |
Structured
Settlements |
A.M. Best Rating of Group’s Predominant
Insurer |
||||||||||||||||||
Fidelity & Guaranty Life Group | $ | 757 | A- | fourth highest of 16 ratings | ||||||||||||||||
Genworth Financial Group (1)
|
323 | B | seventh highest of 16 ratings | |||||||||||||||||
John Hancock Group | 271 | A+ | second highest of 16 ratings | |||||||||||||||||
Brighthouse Financial, Inc. | 234 | A | third highest of 16 ratings | |||||||||||||||||
Symetra Financial Corporation | 229 | A | third highest of 16 ratings |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Debt: | ||||||||||||||
Short-term | $ | 100 | $ | 600 | ||||||||||
Long-term | 6,504 | 6,004 | ||||||||||||
Net unamortized fair value adjustments and debt issuance costs | (54) | (46) | ||||||||||||
Total debt | 6,550 | 6,558 | ||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock and retained earnings, less treasury stock | 26,699 | 25,303 | ||||||||||||
Accumulated other comprehensive income | 2,502 | 640 | ||||||||||||
Total shareholders’ equity | 29,201 | 25,943 | ||||||||||||
Total capitalization | $ | 35,751 | $ | 32,501 |
(at December 31, dollars in millions) | 2020 | 2019 | ||||||||||||
Total capitalization | $ | 35,751 | $ | 32,501 | ||||||||||
Less: net unrealized gains on investments, net of taxes, included in shareholders' equity | 4,074 | 2,246 | ||||||||||||
Total capitalization excluding net unrealized gains on investments, net of taxes, included in shareholders' equity | $ | 31,677 | $ | 30,255 | ||||||||||
Debt-to-total capital ratio | 18.3 | % | 20.2 | % | ||||||||||
Debt-to-total capital ratio excluding net unrealized gains on investments, net of taxes, included in shareholders' equity | 20.7 | % | 21.7 | % |
Payments Due by Period (in millions) | Total |
Less than
1 Year |
1-3
Years |
3-5
Years |
After 5
Years |
|||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
Senior notes | $ | 6,250 | $ | — | $ | — | $ | — | $ | 6,250 | ||||||||||||||||||||||
Junior subordinated debentures | 254 | — | — | — | 254 | |||||||||||||||||||||||||||
Total debt principal | 6,504 | — | — | — | 6,504 | |||||||||||||||||||||||||||
Interest | 6,570 | 325 | 651 | 651 | 4,943 | |||||||||||||||||||||||||||
Total long-term debt obligations (1)
|
13,074 | 325 | 651 | 651 | 11,447 | |||||||||||||||||||||||||||
Real estate and other operating leases (2)
|
410 | 112 | 163 | 84 | 51 | |||||||||||||||||||||||||||
Purchase obligations | ||||||||||||||||||||||||||||||||
Information systems administration and maintenance commitments (3)
|
319 | 158 | 159 | 2 | — | |||||||||||||||||||||||||||
Other purchase commitments (4)
|
194 | 74 | 92 | 25 | 3 | |||||||||||||||||||||||||||
Total purchase obligations | 513 | 232 | 251 | 27 | 3 | |||||||||||||||||||||||||||
Long-term unfunded investment commitments (5)
|
1,722 | 392 | 544 | 556 | 230 | |||||||||||||||||||||||||||
Estimated claims and claim-related payments
|
||||||||||||||||||||||||||||||||
Claims and claim adjustment expenses (6)
|
52,747 | 11,866 | 13,159 | 6,994 | 20,728 | |||||||||||||||||||||||||||
Claims from large deductible policies (7)
|
— | — | — | — | — | |||||||||||||||||||||||||||
Loss-based assessments (8)
|
112 | 14 | 33 | 14 | 51 | |||||||||||||||||||||||||||
Reinsurance contracts accounted for as deposits (9)
|
1 | — | 1 | — | — | |||||||||||||||||||||||||||
Payout from ceded funds withheld (10)
|
62 | 6 | 10 | 10 | 36 | |||||||||||||||||||||||||||
Total estimated claims and claim-related payments
|
52,922 | 11,886 | 13,203 | 7,018 | 20,815 | |||||||||||||||||||||||||||
Liabilities related to unrecognized tax benefits (11)
|
94 | 94 | — | — | — | |||||||||||||||||||||||||||
Total | $ | 68,735 | $ | 13,041 | $ | 14,812 | $ | 8,336 | $ | 32,546 |
(in millions) | Total |
Less than 1
Year |
1-3
Years |
3-5
Years |
After 5
Years |
|||||||||||||||||||||||||||
Reinsurance recoverables | $ | 5,313 | $ | 1,007 | $ | 1,016 | $ | 623 | $ | 2,667 |
(in millions) | Total |
Less than 1
Year |
1-3
Years |
3-5
Years |
After 5
Years |
|||||||||||||||||||||||||||
Claims and claim adjustment expenses, net
|
$ | 47,434 | $ | 10,859 | $ | 12,143 | $ | 6,371 | $ | 18,061 |
(in millions) | Total |
Less than 1
Year |
1-3
Years |
3-5
Years |
After 5
Years |
|||||||||||||||||||||||||||
Contractholder payables/receivables | $ | 4,242 | $ | 1,200 | $ | 1,208 | $ | 592 | $ | 1,242 |
December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
(in millions) | Case | IBNR | Total | Case | IBNR | Total | ||||||||||||||||||||||||||||||||
General liability | $ | 5,267 | $ | 8,098 | $ | 13,365 | $ | 4,898 | $ | 7,451 | $ | 12,349 | ||||||||||||||||||||||||||
Commercial property | 1,006 | 366 | 1,372 | 1,035 | 312 | 1,347 | ||||||||||||||||||||||||||||||||
Commercial multi-peril | 2,354 | 2,311 | 4,665 | 2,148 | 2,065 | 4,213 | ||||||||||||||||||||||||||||||||
Commercial automobile | 2,551 | 2,231 | 4,782 | 2,533 | 1,872 | 4,405 | ||||||||||||||||||||||||||||||||
Workers’ compensation | 10,271 | 9,514 | 19,785 | 10,233 | 9,279 | 19,512 | ||||||||||||||||||||||||||||||||
Fidelity and surety | 215 | 317 | 532 | 261 | 259 | 520 | ||||||||||||||||||||||||||||||||
Personal automobile | 1,901 | 1,514 | 3,415 | 2,019 | 1,509 | 3,528 | ||||||||||||||||||||||||||||||||
Personal homeowners and other | 901 | 1,168 | 2,069 | 838 | 871 | 1,709 | ||||||||||||||||||||||||||||||||
International and other | 2,565 | 1,960 | 4,525 | 2,620 | 1,633 | 4,253 | ||||||||||||||||||||||||||||||||
Property-casualty | 27,031 | 27,479 | 54,510 | 26,585 | 25,251 | 51,836 | ||||||||||||||||||||||||||||||||
Accident and health | 11 | — | 11 | 13 | — | 13 | ||||||||||||||||||||||||||||||||
Claims and claim adjustment expense reserves
|
$ | 27,042 | $ | 27,479 | $ | 54,521 | $ | 26,598 | $ | 25,251 | $ | 51,849 |
Page | |||||
Consolidated Financial Statements: | |||||
Schedules: | |||||
Schedule II - Condensed Financial Information of Registrant (Parent Company Only)
|
|||||
Schedule III - Supplementary Insurance Information
|
|||||
Schedule V - Valuation and Qualifying Accounts
|
|||||
Schedule VI - Supplementary Information Concerning Property-Casualty Insurance Operations
|
/s/ KPMG LLP | ||
KPMG LLP |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Premiums | $ | 29,044 | $ | 28,272 | $ | 27,059 | ||||||||||||||
Net investment income | 2,227 | 2,468 | 2,474 | |||||||||||||||||
Fee income | 429 | 459 | 432 | |||||||||||||||||
Net realized investment gains | 2 | 113 | 114 | |||||||||||||||||
Other revenues | 279 | 269 | 203 | |||||||||||||||||
Total revenues | 31,981 | 31,581 | 30,282 | |||||||||||||||||
Claims and expenses | ||||||||||||||||||||
Claims and claim adjustment expenses | 19,123 | 19,133 | 18,291 | |||||||||||||||||
Amortization of deferred acquisition costs | 4,773 | 4,601 | 4,381 | |||||||||||||||||
General and administrative expenses | 4,509 | 4,365 | 4,297 | |||||||||||||||||
Interest expense | 339 | 344 | 352 | |||||||||||||||||
Total claims and expenses | 28,744 | 28,443 | 27,321 | |||||||||||||||||
Income before income taxes | 3,237 | 3,138 | 2,961 | |||||||||||||||||
Income tax expense | 540 | 516 | 438 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Net income per share | ||||||||||||||||||||
Basic | $ | 10.56 | $ | 10.01 | $ | 9.37 | ||||||||||||||
Diluted | $ | 10.52 | $ | 9.92 | $ | 9.28 | ||||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||
Basic | 253.5 | 260.0 | 267.4 | |||||||||||||||||
Diluted | 254.6 | 262.3 | 269.8 | |||||||||||||||||
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Changes in net unrealized gains (losses) on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income
|
2,331 | 2,994 | (1,489) | |||||||||||||||||
Having credit losses recognized in the consolidated statement of income | (9) | (4) | (27) | |||||||||||||||||
Net changes in benefit plan assets and obligations | 18 | 33 | (56) | |||||||||||||||||
Net changes in unrealized foreign currency translation | 12 | 117 | (247) | |||||||||||||||||
Other comprehensive income (loss) before income taxes | 2,352 | 3,140 | (1,819) | |||||||||||||||||
Income tax expense (benefit) | 490 | 641 | (349) | |||||||||||||||||
Other comprehensive income (loss), net of taxes | 1,862 | 2,499 | (1,470) | |||||||||||||||||
Comprehensive income | $ | 4,559 | $ | 5,121 | $ | 1,053 |
At December 31, | 2020 | 2019 | ||||||||||||
Assets | ||||||||||||||
Fixed maturities, available for sale, at fair value (amortized cost $68,830 and $65,281; allowance for expected credit losses of $2 at December 31, 2020)
|
$ | 74,003 | $ | 68,134 | ||||||||||
Equity securities, at fair value (cost $387 and $376)
|
453 | 425 | ||||||||||||
Real estate investments | 1,026 | 963 | ||||||||||||
Short-term securities | 5,511 | 4,943 | ||||||||||||
Other investments | 3,430 | 3,419 | ||||||||||||
Total investments | 84,423 | 77,884 | ||||||||||||
Cash | 721 | 494 | ||||||||||||
Investment income accrued | 603 | 618 | ||||||||||||
Premiums receivable (net of allowance for expected credit losses
of $105 at December 31, 2020)
|
7,829 | 7,909 | ||||||||||||
Reinsurance recoverables (net of allowance for estimated uncollectible
reinsurance of $146 at December 31, 2020)
|
8,350 | 8,235 | ||||||||||||
Ceded unearned premiums | 772 | 689 | ||||||||||||
Deferred acquisition costs | 2,358 | 2,273 | ||||||||||||
Contractholder receivables (net of allowance for expected credit losses
of $19 at December 31, 2020)
|
4,242 | 4,599 | ||||||||||||
Goodwill | 3,976 | 3,961 | ||||||||||||
Other intangible assets | 317 | 330 | ||||||||||||
Other assets | 3,173 | 3,130 | ||||||||||||
Total assets | $ | 116,764 | $ | 110,122 | ||||||||||
Liabilities | ||||||||||||||
Claims and claim adjustment expense reserves | $ | 54,521 | $ | 51,849 | ||||||||||
Unearned premium reserves | 15,222 | 14,604 | ||||||||||||
Contractholder payables | 4,261 | 4,619 | ||||||||||||
Payables for reinsurance premiums | 356 | 363 | ||||||||||||
Deferred taxes | 558 | 137 | ||||||||||||
Debt | 6,550 | 6,558 | ||||||||||||
Other liabilities | 6,095 | 6,049 | ||||||||||||
Total liabilities | 87,563 | 84,179 | ||||||||||||
Shareholders’ equity | ||||||||||||||
Common stock (1,750.0 shares authorized; 252.4 and 255.5 shares
issued and outstanding)
|
23,743 | 23,469 | ||||||||||||
Retained earnings | 38,771 | 36,977 | ||||||||||||
Accumulated other comprehensive income | 2,502 | 640 | ||||||||||||
Treasury stock, at cost (527.3 and 522.1 shares)
|
(35,815) | (35,143) | ||||||||||||
Total shareholders’ equity | 29,201 | 25,943 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 116,764 | $ | 110,122 |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Common stock | ||||||||||||||||||||
Balance, beginning of year | $ | 23,469 | $ | 23,144 | $ | 22,886 | ||||||||||||||
Employee share-based compensation | 123 | 180 | 108 | |||||||||||||||||
Compensation amortization under share-based plans and other changes | 151 | 145 | 150 | |||||||||||||||||
Balance, end of year | 23,743 | 23,469 | 23,144 | |||||||||||||||||
Retained earnings | . | |||||||||||||||||||
Balance, beginning of year | 36,977 | 35,204 | 33,462 | |||||||||||||||||
Cumulative effect of adoption of updated accounting guidance
for credit losses at January 1, 2020 |
(43) | — | — | |||||||||||||||||
Cumulative effect of adoption of updated accounting guidance
for equity financial instruments at January 1, 2018
|
— | — | 22 | |||||||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
|
— | — | 24 | |||||||||||||||||
Net income | 2,697 | 2,622 | 2,523 | |||||||||||||||||
Dividends | (864) | (848) | (818) | |||||||||||||||||
Other | 4 | (1) | (9) | |||||||||||||||||
Balance, end of year | 38,771 | 36,977 | 35,204 | |||||||||||||||||
Accumulated other comprehensive income (loss), net of tax | ||||||||||||||||||||
Balance, beginning of year | 640 | (1,859) | (343) | |||||||||||||||||
Cumulative effect of adoption of updated accounting guidance
for equity financial instruments at January 1, 2018
|
— | — | (22) | |||||||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
|
— | — | (24) | |||||||||||||||||
Other comprehensive income (loss) | 1,862 | 2,499 | (1,470) | |||||||||||||||||
Balance, end of year | 2,502 | 640 | (1,859) | |||||||||||||||||
Treasury stock, at cost | ||||||||||||||||||||
Balance, beginning of year | (35,143) | (33,595) | (32,274) | |||||||||||||||||
Treasury stock acquired — share repurchase authorization | (625) | (1,500) | (1,270) | |||||||||||||||||
Net shares acquired related to employee share-based compensation plans | (47) | (48) | (51) | |||||||||||||||||
Balance, end of year | (35,815) | (35,143) | (33,595) | |||||||||||||||||
Total shareholders’ equity | $ | 29,201 | $ | 25,943 | $ | 22,894 | ||||||||||||||
Common shares outstanding | ||||||||||||||||||||
Balance, beginning of year | 255.5 | 263.6 | 271.4 | |||||||||||||||||
Treasury stock acquired — share repurchase authorization | (4.9) | (10.8) | (9.6) | |||||||||||||||||
Net shares issued under employee share-based compensation plans | 1.8 | 2.7 | 1.8 | |||||||||||||||||
Balance, end of year | 252.4 | 255.5 | 263.6 |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Net realized investment gains | (2) | (113) | (114) | |||||||||||||||||
Depreciation and amortization | 789 | 763 | 803 | |||||||||||||||||
Deferred federal income tax benefit | (29) | (33) | (13) | |||||||||||||||||
Amortization of deferred acquisition costs | 4,773 | 4,601 | 4,381 | |||||||||||||||||
Equity in income from other investments | (130) | (251) | (365) | |||||||||||||||||
Premiums receivable | 94 | (384) | (393) | |||||||||||||||||
Reinsurance recoverables | (162) | 157 | (100) | |||||||||||||||||
Deferred acquisition costs | (4,854) | (4,747) | (4,488) | |||||||||||||||||
Claims and claim adjustment expense reserves | 2,622 | 1,047 | 1,246 | |||||||||||||||||
Unearned premium reserves | 592 | 1,008 | 710 | |||||||||||||||||
Other | 129 | 535 | 190 | |||||||||||||||||
Net cash provided by operating activities | 6,519 | 5,205 | 4,380 | |||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Proceeds from maturities of fixed maturities | 7,387 | 6,845 | 7,086 | |||||||||||||||||
Proceeds from sales of investments: | ||||||||||||||||||||
Fixed maturities | 3,057 | 2,187 | 3,546 | |||||||||||||||||
Equity securities | 111 | 140 | 178 | |||||||||||||||||
Real estate investments | — | — | 74 | |||||||||||||||||
Other investments | 281 | 459 | 511 | |||||||||||||||||
Purchases of investments: | ||||||||||||||||||||
Fixed maturities | (14,073) | (10,711) | (13,526) | |||||||||||||||||
Equity securities | (112) | (94) | (117) | |||||||||||||||||
Real estate investments | (113) | (107) | (74) | |||||||||||||||||
Other investments | (487) | (497) | (537) | |||||||||||||||||
Net sales (purchases) of short-term securities | (566) | (957) | 908 | |||||||||||||||||
Securities transactions in the course of settlement | (47) | 158 | (56) | |||||||||||||||||
Other | (330) | (325) | (322) | |||||||||||||||||
Net cash used in investing activities | (4,892) | (2,902) | (2,329) | |||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired — share repurchase authorization | (625) | (1,500) | (1,270) | |||||||||||||||||
Treasury stock acquired — net employee share-based compensation | (47) | (48) | (51) | |||||||||||||||||
Dividends paid to shareholders | (861) | (844) | (814) | |||||||||||||||||
Payment of debt | (500) | (500) | (600) | |||||||||||||||||
Issuance of debt | 490 | 492 | 591 | |||||||||||||||||
Issuance of common stock-employee share options | 127 | 213 | 132 | |||||||||||||||||
Net cash used in financing activities | (1,416) | (2,187) | (2,012) | |||||||||||||||||
Effect of exchange rate changes on cash | 16 | 5 | (10) | |||||||||||||||||
Net increase in cash | 227 | 121 | 29 | |||||||||||||||||
Cash at beginning of year | 494 | 373 | 344 | |||||||||||||||||
Cash at end of year | $ | 721 | $ | 494 | $ | 373 | ||||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Income taxes paid | $ | 578 | $ | 428 | $ | 408 | ||||||||||||||
Interest paid | $ | 339 | $ | 338 | $ | 347 |
(for the year ended December 31, in millions) |
Business
Insurance |
Bond &
Specialty Insurance |
Personal
Insurance |
Total
Reportable Segments |
||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||
Premiums | $ | 15,294 | $ | 2,823 | $ | 10,927 | $ | 29,044 | ||||||||||||||||||
Net investment income | 1,633 | 213 | 381 | 2,227 | ||||||||||||||||||||||
Fee income | 405 | — | 24 | 429 | ||||||||||||||||||||||
Other revenues | 176 | 27 | 76 | 279 | ||||||||||||||||||||||
Total segment revenues (1)
|
$ | 17,508 | $ | 3,063 | $ | 11,408 | $ | 31,979 | ||||||||||||||||||
Amortization and depreciation | $ | 3,069 | $ | 579 | $ | 1,908 | $ | 5,556 | ||||||||||||||||||
Income tax expense | 213 | 107 | 308 | 628 | ||||||||||||||||||||||
Segment income (1)
|
1,309 | 473 | 1,195 | 2,977 | ||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||
Premiums | $ | 15,300 | $ | 2,565 | $ | 10,407 | $ | 28,272 | ||||||||||||||||||
Net investment income | 1,816 | 233 | 419 | 2,468 | ||||||||||||||||||||||
Fee income | 437 | — | 22 | 459 | ||||||||||||||||||||||
Other revenues | 155 | 26 | 87 | 268 | ||||||||||||||||||||||
Total segment revenues (1)
|
$ | 17,708 | $ | 2,824 | $ | 10,935 | $ | 31,467 | ||||||||||||||||||
Amortization and depreciation | $ | 3,037 | $ | 533 | $ | 1,787 | $ | 5,357 | ||||||||||||||||||
Income tax expense | 223 | 151 | 195 | 569 | ||||||||||||||||||||||
Segment income (1)
|
1,392 | 618 | 824 | 2,834 | ||||||||||||||||||||||
2018 | ||||||||||||||||||||||||||
Premiums | $ | 14,722 | $ | 2,420 | $ | 9,917 | $ | 27,059 | ||||||||||||||||||
Net investment income | 1,833 | 233 | 408 | 2,474 | ||||||||||||||||||||||
Fee income | 412 | — | 20 | 432 | ||||||||||||||||||||||
Other revenues | 112 | 23 | 66 | 201 | ||||||||||||||||||||||
Total segment revenues (1)
|
$ | 17,079 | $ | 2,676 | $ | 10,411 | $ | 30,166 | ||||||||||||||||||
Amortization and depreciation | $ | 2,943 | $ | 515 | $ | 1,719 | $ | 5,177 | ||||||||||||||||||
Income tax expense | 259 | 198 | 42 | 499 | ||||||||||||||||||||||
Segment income (1)
|
1,638 | 793 | 297 | 2,728 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Business Insurance: | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Select Accounts | $ | 2,821 | $ | 2,911 | $ | 2,828 | ||||||||||||||
Middle Market | 8,511 | 8,630 | 8,214 | |||||||||||||||||
National Accounts | 996 | 1,051 | 1,025 | |||||||||||||||||
National Property and Other | 2,086 | 1,965 | 1,805 | |||||||||||||||||
Total Domestic | 14,414 | 14,557 | 13,872 | |||||||||||||||||
International | 1,017 | 1,072 | 1,084 | |||||||||||||||||
Total Business Insurance | 15,431 | 15,629 | 14,956 | |||||||||||||||||
Bond & Specialty Insurance: | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Management Liability | 1,769 | 1,605 | 1,455 | |||||||||||||||||
Surety | 845 | 866 | 835 | |||||||||||||||||
Total Domestic | 2,614 | 2,471 | 2,290 | |||||||||||||||||
International | 337 | 268 | 238 | |||||||||||||||||
Total Bond & Specialty Insurance | 2,951 | 2,739 | 2,528 | |||||||||||||||||
Personal Insurance: | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Agency: | ||||||||||||||||||||
Automobile | 5,080 | 5,124 | 4,972 | |||||||||||||||||
Homeowners and Other | 5,185 | 4,540 | 4,148 | |||||||||||||||||
Total Agency | 10,265 | 9,664 | 9,120 | |||||||||||||||||
Direct-to-Consumer | 433 | 412 | 396 | |||||||||||||||||
Total Domestic | 10,698 | 10,076 | 9,516 | |||||||||||||||||
International | 652 | 707 | 708 | |||||||||||||||||
Total Personal Insurance | 11,350 | 10,783 | 10,224 | |||||||||||||||||
Total consolidated net written premiums | $ | 29,732 | $ | 29,151 | $ | 27,708 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Revenue reconciliation | ||||||||||||||||||||
Earned premiums | ||||||||||||||||||||
Business Insurance: | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Workers’ compensation | $ | 3,378 | $ | 3,829 | $ | 3,899 | ||||||||||||||
Commercial automobile | 2,761 | 2,632 | 2,388 | |||||||||||||||||
Commercial property | 2,087 | 1,937 | 1,828 | |||||||||||||||||
General liability | 2,401 | 2,342 | 2,181 | |||||||||||||||||
Commercial multi-peril | 3,552 | 3,453 | 3,333 | |||||||||||||||||
Other | 54 | 40 | 28 | |||||||||||||||||
Total Domestic | 14,233 | 14,233 | 13,657 | |||||||||||||||||
International | 1,061 | 1,067 | 1,065 | |||||||||||||||||
Total Business Insurance | 15,294 | 15,300 | 14,722 | |||||||||||||||||
Bond & Specialty Insurance: | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Fidelity and surety | 1,075 | 1,036 | 1,017 | |||||||||||||||||
General liability | 1,219 | 1,082 | 1,004 | |||||||||||||||||
Other | 237 | 216 | 195 | |||||||||||||||||
Total Domestic | 2,531 | 2,334 | 2,216 | |||||||||||||||||
International | 292 | 231 | 204 | |||||||||||||||||
Total Bond & Specialty Insurance | 2,823 | 2,565 | 2,420 | |||||||||||||||||
Personal Insurance: | ||||||||||||||||||||
Domestic | ||||||||||||||||||||
Automobile | 5,280 | 5,311 | 5,097 | |||||||||||||||||
Homeowners and Other | 4,988 | 4,393 | 4,135 | |||||||||||||||||
Total Domestic | 10,268 | 9,704 | 9,232 | |||||||||||||||||
International | 659 | 703 | 685 | |||||||||||||||||
Total Personal Insurance | 10,927 | 10,407 | 9,917 | |||||||||||||||||
Total earned premiums | 29,044 | 28,272 | 27,059 | |||||||||||||||||
Net investment income | 2,227 | 2,468 | 2,474 | |||||||||||||||||
Fee income | 429 | 459 | 432 | |||||||||||||||||
Other revenues | 279 | 268 | 201 | |||||||||||||||||
Total segment revenues | 31,979 | 31,467 | 30,166 | |||||||||||||||||
Other revenues | — | 1 | 2 | |||||||||||||||||
Net realized investment gains | 2 | 113 | 114 | |||||||||||||||||
Total revenues | $ | 31,981 | $ | 31,581 | $ | 30,282 | ||||||||||||||
Income reconciliation, net of tax | ||||||||||||||||||||
Total segment income | $ | 2,977 | $ | 2,834 | $ | 2,728 | ||||||||||||||
Interest Expense and Other (1)
|
(291) | (297) | (298) | |||||||||||||||||
Core income | 2,686 | 2,537 | 2,430 | |||||||||||||||||
Net realized investment gains | 11 | 85 | 93 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Asset reconciliation: | ||||||||||||||
Business Insurance | $ | 88,422 | $ | 83,896 | ||||||||||
Bond & Specialty Insurance | 9,420 | 8,599 | ||||||||||||
Personal Insurance | 18,328 | 17,015 | ||||||||||||
Total assets for reportable segments | 116,170 | 109,510 | ||||||||||||
Other assets (1)
|
594 | 612 | ||||||||||||
Total consolidated assets | $ | 116,764 | $ | 110,122 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
U.S. | $ | 30,123 | $ | 29,638 | $ | 28,418 | ||||||||||||||
Non-U.S.: | ||||||||||||||||||||
Canada | 1,278 | 1,371 | 1,293 | |||||||||||||||||
Other Non-U.S. | 580 | 572 | 571 | |||||||||||||||||
Total Non-U.S. | 1,858 | 1,943 | 1,864 | |||||||||||||||||
Total revenues | $ | 31,981 | $ | 31,581 | $ | 30,282 |
Amortized | Allowance for Expected Credit Losses | Gross Unrealized | Fair | |||||||||||||||||||||||||||||
(at December 31, 2020, in millions) | Cost | Gains | Losses | Value | ||||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
|
$ | 2,111 | $ | — | $ | 38 | $ | — | $ | 2,149 | ||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions:
|
||||||||||||||||||||||||||||||||
Local general obligation | 17,289 | — | 1,370 | 2 | 18,657 | |||||||||||||||||||||||||||
Revenue | 11,806 | — | 909 | — | 12,715 | |||||||||||||||||||||||||||
State general obligation | 1,343 | — | 101 | — | 1,444 | |||||||||||||||||||||||||||
Pre-refunded | 3,325 | — | 219 | — | 3,544 | |||||||||||||||||||||||||||
Total obligations of states, municipalities and political subdivisions
|
33,763 | — | 2,599 | 2 | 36,360 | |||||||||||||||||||||||||||
Debt securities issued by foreign governments | 1,028 | — | 26 | — | 1,054 | |||||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
2,222 | — | 139 | — | 2,361 | |||||||||||||||||||||||||||
All other corporate bonds | 29,683 | 2 | 2,382 | 9 | 32,054 | |||||||||||||||||||||||||||
Redeemable preferred stock | 23 | — | 2 | — | 25 | |||||||||||||||||||||||||||
Total | $ | 68,830 | $ | 2 | $ | 5,186 | $ | 11 | $ | 74,003 |
Amortized | Gross Unrealized | Fair | ||||||||||||||||||||||||
(at December 31, 2019, in millions) | Cost | Gains | Losses | Value | ||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
|
$ | 2,076 | $ | 19 | $ | — | $ | 2,095 | ||||||||||||||||||
Obligations of states, municipalities and political subdivisions:
|
||||||||||||||||||||||||||
Local general obligation | 15,490 | 829 | 4 | 16,315 | ||||||||||||||||||||||
Revenue | 9,731 | 586 | 2 | 10,315 | ||||||||||||||||||||||
State general obligation | 1,167 | 64 | — | 1,231 | ||||||||||||||||||||||
Pre-refunded | 1,968 | 88 | — | 2,056 | ||||||||||||||||||||||
Total obligations of states, municipalities and political subdivisions
|
28,356 | 1,567 | 6 | 29,917 | ||||||||||||||||||||||
Debt securities issued by foreign governments | 1,167 | 8 | 2 | 1,173 | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
3,192 | 91 | 3 | 3,280 | ||||||||||||||||||||||
All other corporate bonds | 30,442 | 1,195 | 18 | 31,619 | ||||||||||||||||||||||
Redeemable preferred stock | 48 | 2 | — | 50 | ||||||||||||||||||||||
Total | $ | 65,281 | $ | 2,882 | $ | 29 | $ | 68,134 |
(at December 31, 2020, in millions) |
Amortized
Cost |
Fair
Value |
||||||||||||
Due in one year or less | $ | 5,074 | $ | 5,127 | ||||||||||
Due after 1 year through 5 years | 18,476 | 19,660 | ||||||||||||
Due after 5 years through 10 years | 18,200 | 19,936 | ||||||||||||
Due after 10 years | 24,858 | 26,919 | ||||||||||||
66,608 | 71,642 | |||||||||||||
Mortgage-backed securities, collateralized mortgage obligations
and pass-through securities
|
2,222 | 2,361 | ||||||||||||
Total | $ | 68,830 | $ | 74,003 |
(at December 31, 2020, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||||||||||||
Public common stock | $ | 352 | $ | 70 | $ | 12 | $ | 410 | ||||||||||||||||||
Non-redeemable preferred stock | 35 | 8 | — | 43 | ||||||||||||||||||||||
Total | $ | 387 | $ | 78 | $ | 12 | $ | 453 |
(at December 31, 2019, in millions) | Cost | Gross Gains | Gross Losses | Fair Value | ||||||||||||||||||||||
Public common stock | $ | 341 | $ | 45 | $ | 3 | $ | 383 | ||||||||||||||||||
Non-redeemable preferred stock | 35 | 7 | — | 42 | ||||||||||||||||||||||
Total | $ | 376 | $ | 52 | $ | 3 | $ | 425 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||
(at December 31, 2020, 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
|
$ | 92 | $ | — | $ | — | $ | — | $ | 92 | $ | — | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
245 | 2 | — | — | 245 | 2 | ||||||||||||||||||||||||||||||||
Debt securities issued by foreign governments
|
7 | — | — | — | 7 | — | ||||||||||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
20 | — | 1 | — | 21 | — | ||||||||||||||||||||||||||||||||
All other corporate bonds | 681 | 6 | 97 | 3 | 778 | 9 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 1,045 | $ | 8 | $ | 98 | $ | 3 | $ | 1,143 | $ | 11 |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||
(at December 31, 2019, 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
|
$ | 5 | $ | — | $ | 193 | $ | — | $ | 198 | $ | — | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
668 | 6 | 12 | — | 680 | 6 | ||||||||||||||||||||||||||||||||
Debt securities issued by foreign governments
|
257 | 1 | 147 | 1 | 404 | 2 | ||||||||||||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
399 | 2 | 131 | 1 | 530 | 3 | ||||||||||||||||||||||||||||||||
All other corporate bonds | 1,571 | 10 | 662 | 8 | 2,233 | 18 | ||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 2,900 | $ | 19 | $ | 1,145 | $ | 10 | $ | 4,045 | $ | 29 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Fixed maturities | ||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities
|
$ | — | $ | — | $ | — | ||||||||||||||
Obligations of states, municipalities and political subdivisions | — | — | — | |||||||||||||||||
Debt securities issued by foreign governments | — | — | — | |||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
— | — | — | |||||||||||||||||
All other corporate bonds | 15 | 4 | 1 | |||||||||||||||||
Redeemable preferred stock | — | — | — | |||||||||||||||||
Total fixed maturities | 15 | 4 | 1 | |||||||||||||||||
Other investments | 40 | — | — | |||||||||||||||||
Total | $ | 55 | $ | 4 | $ | 1 |
Fixed Maturities | ||||||||||||||||||||
(for the twelve months ended December 31, 2020 in millions) | Mortgage-Backed Securities, Collateralized Mortgage Obligations and Pass-Through Securities | All Other Corporate Bonds | Total | |||||||||||||||||
Balance, January 1, 2020 | $ | — | $ | — | $ | — | ||||||||||||||
Additions for expected credit losses on securities where no credit losses were previously recognized
|
— | 10 | 10 | |||||||||||||||||
Additions (reductions) for expected credit losses on securities where credit losses were previously recognized
|
— | (6) | (6) | |||||||||||||||||
Reductions due to sales/defaults of credit-impaired securities | — | (2) | (2) | |||||||||||||||||
Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell (1)
|
— | — | — | |||||||||||||||||
Balance, December 31, 2020 | $ | — | $ | 2 | $ | 2 |
Fixed Maturities | ||||||||||||||||||||
(for the twelve months ended December 31, 2019 in millions) | Mortgage-Backed Securities, Collateralized Mortgage Obligations and Pass-Through Securities | All Other Corporate Bonds | Total | |||||||||||||||||
Cumulative OTTI Credit Losses Recognized for Securities Held, December 31, 2018
|
$ | 15 | $ | 42 | $ | 57 | ||||||||||||||
Additions for OTTI losses on securities where no credit losses were previously recognized | — | — | — | |||||||||||||||||
Additions (reductions) for OTTI losses on securities where credit losses were previously recognized | — | — | — | |||||||||||||||||
Reductions due to sales/defaults of credit-impaired securities | (9) | (49) | (58) | |||||||||||||||||
Adjustments to book value of credit-impaired securities due to changes in cash flows | 3 | 10 | 13 | |||||||||||||||||
Cumulative OTTI Credit Losses Recognized for Securities Held, December 31, 2019 | $ | 9 | $ | 3 | $ | 12 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Gross investment income | ||||||||||||||||||||
Fixed maturities | $ | 2,011 | $ | 2,070 | $ | 1,980 | ||||||||||||||
Equity securities | 15 | 15 | 16 | |||||||||||||||||
Short-term securities | 44 | 105 | 92 | |||||||||||||||||
Real estate investments | 48 | 55 | 48 | |||||||||||||||||
Other investments | 146 | 263 | 377 | |||||||||||||||||
Gross investment income | 2,264 | 2,508 | 2,513 | |||||||||||||||||
Investment expenses | 37 | 40 | 39 | |||||||||||||||||
Net investment income | $ | 2,227 | $ | 2,468 | $ | 2,474 |
(at and for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Changes in net unrealized investment gains (losses) | ||||||||||||||||||||
Fixed maturities | $ | 2,322 | $ | 2,990 | $ | (1,515) | ||||||||||||||
Other investments | — | — | (1) | |||||||||||||||||
Change in net pre-tax unrealized gains (losses) on investment securities | 2,322 | 2,990 | (1,516) | |||||||||||||||||
Related tax expense (benefit) | 494 | 631 | (319) | |||||||||||||||||
Change in net unrealized gains (losses) on investment securities | 1,828 | 2,359 | (1,197) | |||||||||||||||||
Cumulative effect of adoption of updated accounting guidance
for equity financial instruments at January 1, 2018
|
— | — | (22) | |||||||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
|
— | — | 152 | |||||||||||||||||
Balance, beginning of year | 2,246 | (113) | 954 | |||||||||||||||||
Balance, end of year | $ | 4,074 | $ | 2,246 | $ | (113) |
(at December 31, 2020, 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
|
$ | 2,149 | $ | 2,149 | $ | — | $ | — | ||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
36,360 | — | 36,349 | 11 | ||||||||||||||||||||||
Debt securities issued by foreign governments | 1,054 | — | 1,054 | — | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
2,361 | — | 2,361 | — | ||||||||||||||||||||||
All other corporate bonds | 32,054 | — | 31,899 | 155 | ||||||||||||||||||||||
Redeemable preferred stock | 25 | 3 | 22 | — | ||||||||||||||||||||||
Total fixed maturities | 74,003 | 2,152 | 71,685 | 166 | ||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Public common stock | 410 | 410 | — | — | ||||||||||||||||||||||
Non-redeemable preferred stock | 43 | 18 | 25 | — | ||||||||||||||||||||||
Total equity securities | 453 | 428 | 25 | — | ||||||||||||||||||||||
Other investments | 52 | 17 | — | 35 | ||||||||||||||||||||||
Total | $ | 74,508 | $ | 2,597 | $ | 71,710 | $ | 201 | ||||||||||||||||||
Other liabilities | $ | 5 | $ | — | $ | — | $ | 5 |
(at December 31, 2019, 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
|
$ | 2,095 | $ | 2,095 | $ | — | $ | — | ||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
29,917 | — | 29,905 | 12 | ||||||||||||||||||||||
Debt securities issued by foreign governments | 1,173 | — | 1,173 | — | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
3,280 | — | 3,280 | — | ||||||||||||||||||||||
All other corporate bonds | 31,619 | — | 31,530 | 89 | ||||||||||||||||||||||
Redeemable preferred stock | 50 | — | 50 | — | ||||||||||||||||||||||
Total fixed maturities | 68,134 | 2,095 | 65,938 | 101 | ||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||
Public common stock | 383 | 383 | — | — | ||||||||||||||||||||||
Non-redeemable preferred stock | 42 | 13 | 29 | — | ||||||||||||||||||||||
Total equity securities | 425 | 396 | 29 | — | ||||||||||||||||||||||
Other investments | 36 | 16 | — | 20 | ||||||||||||||||||||||
Total | $ | 68,595 | $ | 2,507 | $ | 65,967 | $ | 121 | ||||||||||||||||||
Other liabilities | $ | 8 | $ | — | $ | — | $ | 8 |
(in millions) |
Fixed
Maturities |
Other
Investments |
Total | |||||||||||||||||
Balance at December 31, 2019 | $ | 101 | $ | 20 | $ | 121 | ||||||||||||||
Total realized and unrealized investment gains (losses): | ||||||||||||||||||||
Reported in net realized investment gains (1)
|
(1) | — | (1) | |||||||||||||||||
Reported in increases in other comprehensive income (loss) | 2 | — | 2 | |||||||||||||||||
Purchases, sales and settlements/maturities: | ||||||||||||||||||||
Purchases | 79 | 16 | 95 | |||||||||||||||||
Sales | — | (1) | (1) | |||||||||||||||||
Settlements/maturities | (15) | — | (15) | |||||||||||||||||
Gross transfers into Level 3 | 3 | — | 3 | |||||||||||||||||
Gross transfers out of Level 3 | (3) | — | (3) | |||||||||||||||||
Balance at December 31, 2020 | $ | 166 | $ | 35 | $ | 201 | ||||||||||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date
|
$ | — | $ | — | $ | — |
(in millions) |
Fixed
Maturities |
Other
Investments |
Total | |||||||||||||||||
Balance at December 31, 2018 | $ | 186 | $ | 36 | $ | 222 | ||||||||||||||
Total realized and unrealized investment gains (losses): | ||||||||||||||||||||
Reported in net realized investment gains (1)
|
— | 3 | 3 | |||||||||||||||||
Reported in increases in other comprehensive income (loss) | 4 | — | 4 | |||||||||||||||||
Purchases, sales and settlements/maturities: | ||||||||||||||||||||
Purchases | 38 | 6 | 44 | |||||||||||||||||
Sales | (1) | (25) | (26) | |||||||||||||||||
Settlements/maturities | (19) | — | (19) | |||||||||||||||||
Gross transfers into Level 3 | — | — | — | |||||||||||||||||
Gross transfers out of Level 3 | (107) | — | (107) | |||||||||||||||||
Balance at December 31, 2019 | $ | 101 | $ | 20 | $ | 121 | ||||||||||||||
Amount of total realized investment gains (losses) for the period included in the consolidated statement of income attributable to changes in the fair value of assets still held at the reporting date
|
$ | — | $ | — | $ | — |
(at December 31, 2020, in millions) |
Carrying
Value |
Fair
Value |
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Short-term securities | $ | 5,511 | $ | 5,511 | $ | 630 | $ | 4,829 | $ | 52 | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Debt | $ | 6,450 | $ | 8,976 | $ | — | $ | 8,976 | $ | — | ||||||||||||||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
(at December 31, 2019, in millions) |
Carrying
Value |
Fair
Value |
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Short-term securities | $ | 4,943 | $ | 4,943 | $ | 685 | $ | 4,204 | $ | 54 | ||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Debt | $ | 6,458 | $ | 8,049 | $ | — | $ | 8,049 | $ | — | ||||||||||||||||||||||
Commercial paper | 100 | 100 | — | 100 | — |
At and For the Twelve Months Ended December 31, 2020 | ||||||||||||||||||||||||||
(in millions) | Premiums Receivable, Net of Allowance for Expected Credit Losses | Allowance for Expected Credit Losses | ||||||||||||||||||||||||
Balance, beginning of period | $ | 7,909 | $ | 49 | ||||||||||||||||||||||
Current period change for expected credit losses | 103 | |||||||||||||||||||||||||
Write-offs of uncollectible premiums receivable | 47 | |||||||||||||||||||||||||
Balance, end of period | $ | 7,829 | $ | 105 | ||||||||||||||||||||||
At and For the Twelve Months Ended December 31, 2020 | ||||||||||||||||||||||||||
(in millions) | Reinsurance Recoverables, Net of Allowance for Estimated Uncollectible Reinsurance | Allowance for Estimated Uncollectible Reinsurance | ||||||||||||||||||||||||
Balance, beginning of period | $ | 8,235 | $ | 92 | ||||||||||||||||||||||
Cumulative effect of adoption of updated accounting guidance for
credit losses at January 1, 2020
|
53 | |||||||||||||||||||||||||
Current period change for estimated uncollectible reinsurance | 1 | |||||||||||||||||||||||||
Write-offs of uncollectible reinsurance recoverables | — | |||||||||||||||||||||||||
Balance, end of period | $ | 8,350 | $ | 146 | ||||||||||||||||||||||
At and For the Twelve Months Ended December 31, 2020 | ||||||||||||||||||||||||||
(in millions) | Contractholder Receivables, Net of Allowance for Expected Credit Losses | Allowance for Expected Credit Losses | ||||||||||||||||||||||||
Balance, beginning of period | $ | 4,599 | $ | 20 | ||||||||||||||||||||||
Current period change for expected credit losses | 1 | |||||||||||||||||||||||||
Write-offs of uncollectible contractholder receivables | 2 | |||||||||||||||||||||||||
Balance, end of period | $ | 4,242 | $ | 19 | ||||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Written premiums | ||||||||||||||||||||
Direct | $ | 30,762 | $ | 30,022 | $ | 28,210 | ||||||||||||||
Assumed | 1,001 | 1,041 | 1,042 | |||||||||||||||||
Ceded | (2,031) | (1,912) | (1,544) | |||||||||||||||||
Total net written premiums | $ | 29,732 | $ | 29,151 | $ | 27,708 | ||||||||||||||
Earned premiums | ||||||||||||||||||||
Direct | $ | 29,978 | $ | 28,994 | $ | 27,536 | ||||||||||||||
Assumed | 1,010 | 1,076 | 1,024 | |||||||||||||||||
Ceded | (1,944) | (1,798) | (1,501) | |||||||||||||||||
Total net earned premiums | $ | 29,044 | $ | 28,272 | $ | 27,059 | ||||||||||||||
Percentage of assumed earned premiums to net earned premiums | 3.5 | % | 3.8 | % | 3.8 | % | ||||||||||||||
Ceded claims and claim adjustment expenses incurred | $ | 1,030 | $ | 1,089 | $ | 1,293 |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses | $ | 3,731 | $ | 3,476 | ||||||||||
Gross structured settlements | 2,964 | 2,965 | ||||||||||||
Mandatory pools and associations | 1,801 | 1,886 | ||||||||||||
Gross reinsurance recoverables | 8,496 | 8,327 | ||||||||||||
Allowance for estimated uncollectible reinsurance | (146) | (92) | ||||||||||||
Net reinsurance recoverables | $ | 8,350 | $ | 8,235 | ||||||||||
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Business Insurance | $ | 2,613 | $ | 2,601 | ||||||||||
Bond & Specialty Insurance | 550 | 550 | ||||||||||||
Personal Insurance | 787 | 784 | ||||||||||||
Other | 26 | 26 | ||||||||||||
Total | $ | 3,976 | $ | 3,961 |
(at December 31, 2020, in millions) |
Gross
Carrying Amount |
Accumulated
Amortization |
Net | |||||||||||||||||
Subject to amortization | ||||||||||||||||||||
Customer-related | $ | 101 | $ | 31 | $ | 70 | ||||||||||||||
Contract-based (1)
|
205 | 184 | 21 | |||||||||||||||||
Total subject to amortization | 306 | 215 | 91 | |||||||||||||||||
Not subject to amortization | 226 | — | 226 | |||||||||||||||||
Total | $ | 532 | $ | 215 | $ | 317 |
(at December 31, 2019, in millions) |
Gross
Carrying Amount |
Accumulated
Amortization |
Net | |||||||||||||||||
Subject to amortization | ||||||||||||||||||||
Customer-related | $ | 99 | $ | 21 | $ | 78 | ||||||||||||||
Contract-based (1)
|
205 | 179 | 26 | |||||||||||||||||
Total subject to amortization | 304 | 200 | 104 | |||||||||||||||||
Not subject to amortization | 226 | — | 226 | |||||||||||||||||
Total | $ | 530 | $ | 200 | $ | 330 |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Property-casualty | $ | 54,510 | $ | 51,836 | ||||||||||
Accident and health | 11 | 13 | ||||||||||||
Total | $ | 54,521 | $ | 51,849 |
(at and for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Claims and claim adjustment expense reserves at beginning of year | $ | 51,836 | $ | 50,653 | $ | 49,633 | ||||||||||||||
Less reinsurance recoverables on unpaid losses | 8,035 | 8,182 | 8,123 | |||||||||||||||||
Cumulative effect of adoption of updated accounting guidance for credit losses at January 1, 2020 | 53 | — | — | |||||||||||||||||
Net reserves at beginning of year | 43,854 | 42,471 | 41,510 | |||||||||||||||||
Estimated claims and claim adjustment expenses for claims arising in the current year
|
19,285 | 18,854 | 18,614 | |||||||||||||||||
Estimated increase (decrease) in claims and claim adjustment expenses for claims arising in prior years
|
(267) | 164 | (406) | |||||||||||||||||
Total increases | 19,018 | 19,018 | 18,208 | |||||||||||||||||
Claims and claim adjustment expense payments for claims arising in: | ||||||||||||||||||||
Current year | 7,497 | 7,734 | 7,697 | |||||||||||||||||
Prior years | 9,092 | 10,060 | 9,363 | |||||||||||||||||
Total payments | 16,589 | 17,794 | 17,060 | |||||||||||||||||
Unrealized foreign exchange loss (gain) | 74 | 106 | (187) | |||||||||||||||||
Net reserves at end of year | 46,357 | 43,801 | 42,471 | |||||||||||||||||
Plus reinsurance recoverables on unpaid losses | 8,153 | 8,035 | 8,182 | |||||||||||||||||
Claims and claim adjustment expense reserves at end of year | $ | 54,510 | $ | 51,836 | $ | 50,653 |
(at December 31, 2020, in millions) |
Net Undiscounted
Claims and Claim Adjustment Expense Reserves |
Discount
(Net of Reinsurance) |
Subtotal:
Net Claims and Claim Adjustment Expense Reserves |
Reinsurance
Recoverables on Unpaid Losses (4) |
Claims and Claim
Adjustment Expense Reserves |
|||||||||||||||||||||||||||
Business Insurance | ||||||||||||||||||||||||||||||||
General liability | $ | 8,438 | $ | (143) | $ | 8,295 | $ | 891 | $ | 9,186 | ||||||||||||||||||||||
Commercial property | 879 | — | 879 | 384 | 1,263 | |||||||||||||||||||||||||||
Commercial multi-peril | 4,109 | — | 4,109 | 245 | 4,354 | |||||||||||||||||||||||||||
Commercial automobile | 3,607 | — | 3,607 | 283 | 3,890 | |||||||||||||||||||||||||||
Workers’ compensation (1)
|
16,454 | (929) | 15,525 | 717 | 16,242 | |||||||||||||||||||||||||||
Bond & Specialty Insurance | ||||||||||||||||||||||||||||||||
General liability | 2,148 | — | 2,148 | 122 | 2,270 | |||||||||||||||||||||||||||
Fidelity and surety | 439 | — | 439 | 5 | 444 | |||||||||||||||||||||||||||
Personal Insurance | ||||||||||||||||||||||||||||||||
Automobile | 2,768 | — | 2,768 | 448 | 3,216 | |||||||||||||||||||||||||||
Homeowners (excluding Other) | 1,405 | — | 1,405 | 172 | 1,577 | |||||||||||||||||||||||||||
International - Canada | 737 | — | 737 | 25 | 762 | |||||||||||||||||||||||||||
Subtotal — claims and allocated claim adjustment expenses for the products presented in the development tables below
|
40,984 | (1,072) | 39,912 | 3,292 | 43,204 | |||||||||||||||||||||||||||
Other insurance contracts (2)
|
4,100 | (5) | 4,095 | 1,968 | 6,063 | |||||||||||||||||||||||||||
Unallocated loss adjustment expense reserves
|
2,240 | — | 2,240 | 13 | 2,253 | |||||||||||||||||||||||||||
Structured settlements (3)
|
— | — | — | 2,911 | 2,911 | |||||||||||||||||||||||||||
Other | 110 | — | 110 | (31) | 79 | |||||||||||||||||||||||||||
Total property-casualty | 47,434 | (1,077) | 46,357 | 8,153 | 54,510 | |||||||||||||||||||||||||||
Accident and health | — | — | — | 11 | 11 | |||||||||||||||||||||||||||
Total | $ | 47,434 | $ | (1,077) | $ | 46,357 | $ | 8,164 | $ | 54,521 |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves Dec 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 1,004 | $ | 1,074 | $ | 1,065 | $ | 998 | $ | 972 | $ | 935 | $ | 913 | $ | 908 | $ | 922 | $ | 920 | $ | 64 | 27,636 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 989 | 985 | 935 | 913 | 892 | 905 | 917 | 920 | 941 | 77 | 24,995 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 965 | 975 | 958 | 940 | 927 | 933 | 975 | 975 | 92 | 22,711 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 976 | 989 | 983 | 948 | 956 | 1,013 | 988 | 127 | 22,465 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 998 | 956 | 923 | 967 | 1,057 | 1,087 | 145 | 21,531 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 1,075 | 1,058 | 1,087 | 1,187 | 1,204 | 281 | 20,325 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 1,133 | 1,143 | 1,196 | 1,234 | 410 | 18,736 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 1,253 | 1,312 | 1,344 | 588 | 18,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 1,447 | 1,486 | 933 | 16,060 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 1,467 | 1,268 | 8,637 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 11,646 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 47 | $ | 187 | $ | 355 | $ | 539 | $ | 660 | $ | 725 | $ | 762 | $ | 799 | $ | 819 | $ | 826 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 32 | 150 | 295 | 489 | 589 | 699 | 754 | 811 | 831 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 35 | 175 | 363 | 498 | 639 | 745 | 816 | 836 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 37 | 163 | 321 | 515 | 640 | 750 | 805 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 36 | 137 | 336 | 558 | 740 | 828 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 35 | 191 | 421 | 649 | 758 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 40 | 180 | 378 | 552 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 42 | 202 | 441 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 51 | 233 | 2011 - | Before | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 61 | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,171 | $ | 5,475 | $ | 2,963 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 8,438 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
3.6 | % | 12.5 | % | 17.5 | % | 18.2 | % | 12.8 | % | 9.8 | % | 5.7 | % | 4.0 | % | 2.2 | % | 0.8 | % |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 896 | $ | 863 | $ | 820 | $ | 809 | $ | 813 | $ | 14 | 22,337 | |||||||||||||||||||||||||||||||
2017 | 1,209 | 1,177 | 1,151 | 1,128 | 4 | 25,121 | ||||||||||||||||||||||||||||||||||||||
2018 | 1,093 | 1,079 | 1,070 | 25 | 25,013 | |||||||||||||||||||||||||||||||||||||||
2019 | 1,069 | 1,034 | (6) | 25,185 | ||||||||||||||||||||||||||||||||||||||||
2020 | 1,107 | 160 | 22,387 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,152 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 441 | $ | 685 | $ | 745 | $ | 767 | $ | 780 | Adjustment Expenses, | |||||||||||||||||||||||||||||||||
2017 | 618 | 1,003 | 1,073 | 1,094 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||
2018 | 561 | 928 | 981 | |||||||||||||||||||||||||||||||||||||||||
2019 | 610 | 957 | 2016 - | Before | ||||||||||||||||||||||||||||||||||||||||
2020 | 580 | 2020 | 2016 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,392 | $ | 760 | $ | 119 | ||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 879 |
Average Annual Percentage Payout of Incurred
Claims by Age, Net of Reinsurance |
||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | |||||||||||||||||||||||||||
54.6 | % | 33.0 | % | 6.2 | % | 2.2 | % | 1.6 | % |
(dollars in millions)
|
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 2,235 | $ | 2,244 | $ | 2,269 | $ | 2,286 | $ | 2,296 | $ | 2,287 | $ | 2,283 | $ | 2,279 | $ | 2,272 | $ | 2,272 | $ | 24 | 125,994 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 1,885 | 1,883 | 1,903 | 1,888 | 1,888 | 1,867 | 1,859 | 1,854 | 1,853 | 31 | 104,964 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 1,615 | 1,623 | 1,620 | 1,609 | 1,591 | 1,600 | 1,599 | 1,598 | 31 | 83,921 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 1,663 | 1,627 | 1,625 | 1,617 | 1,626 | 1,627 | 1,627 | 41 | 78,388 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 1,568 | 1,625 | 1,593 | 1,597 | 1,606 | 1,593 | 64 | 71,812 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 1,662 | 1,623 | 1,598 | 1,590 | 1,601 | 95 | 69,213 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 1,872 | 1,928 | 1,956 | 1,919 | 132 | 71,967 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 1,976 | 2,114 | 2,092 | 245 | 69,513 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2,017 | 2,087 | 467 | 64,425 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2,142 | 856 | 59,815 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 18,784 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 1,060 | $ | 1,573 | $ | 1,803 | $ | 1,979 | $ | 2,088 | $ | 2,156 | $ | 2,193 | $ | 2,222 | $ | 2,234 | $ | 2,239 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 795 | 1,246 | 1,424 | 1,590 | 1,699 | 1,752 | 1,780 | 1,804 | 1,811 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 644 | 987 | 1,167 | 1,304 | 1,410 | 1,475 | 1,516 | 1,532 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 628 | 956 | 1,154 | 1,328 | 1,448 | 1,512 | 1,544 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 595 | 970 | 1,144 | 1,310 | 1,409 | 1,452 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 585 | 950 | 1,133 | 1,278 | 1,373 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 716 | 1,199 | 1,388 | 1,531 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 792 | 1,302 | 1,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 707 | 1,187 | 2011 - | Before | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 791 | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,960 | $ | 3,824 | $ | 285 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 4,109 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
38.8 | % | 23.0 | % | 10.6 | % | 9.0 | % | 6.1 | % | 3.3 | % | 1.9 | % | 1.2 | % | 0.5 | % | 0.2 | % |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 1,278 | $ | 1,303 | $ | 1,371 | $ | 1,409 | $ | 1,417 | $ | 52 | 183,313 | |||||||||||||||||||||||||||||||
2017 | 1,386 | 1,501 | 1,524 | 1,522 | 113 | 191,931 | ||||||||||||||||||||||||||||||||||||||
2018 | 1,645 | 1,742 | 1,745 | 251 | 204,098 | |||||||||||||||||||||||||||||||||||||||
2019 | 1,835 | 1,951 | 547 | 205,355 | ||||||||||||||||||||||||||||||||||||||||
2020 | 1,788 | 1,036 | 130,725 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 8,423 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||
Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 412 | $ | 688 | $ | 931 | $ | 1,158 | $ | 1,265 | Adjustment Expenses, | |||||||||||||||||||||||||||||||||
2017 | 456 | 746 | 1,027 | 1,226 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||
2018 | 515 | 848 | 1,159 | |||||||||||||||||||||||||||||||||||||||||
2019 | 539 | 934 | 2016 - | Before | ||||||||||||||||||||||||||||||||||||||||
2020 | 437 | 2020 | 2016 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,021 | $ | 3,402 | $ | 205 | ||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 3,607 |
Average Annual Percentage Payout of Incurred
Claims by Age, Net of Reinsurance |
||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | |||||||||||||||||||||||||||
28.1 | % | 19.5 | % | 17.8 | % | 14.6 | % | 7.5 | % |
(dollars in millions)
|
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 2,284 | $ | 2,303 | $ | 2,347 | $ | 2,350 | $ | 2,379 | $ | 2,385 | $ | 2,363 | $ | 2,348 | $ | 2,320 | $ | 2,295 | $ | 285 | 137,116 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 2,447 | 2,456 | 2,457 | 2,456 | 2,445 | 2,453 | 2,416 | 2,387 | 2,377 | 340 | 138,346 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2,553 | 2,545 | 2,540 | 2,506 | 2,463 | 2,423 | 2,354 | 2,321 | 367 | 134,518 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 2,554 | 2,553 | 2,547 | 2,476 | 2,430 | 2,393 | 2,352 | 434 | 131,355 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2,644 | 2,585 | 2,505 | 2,441 | 2,372 | 2,279 | 511 | 128,939 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 2,768 | 2,690 | 2,569 | 2,473 | 2,372 | 569 | 123,652 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2,779 | 2,681 | 2,584 | 2,483 | 729 | 121,345 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 2,744 | 2,687 | 2,599 | 922 | 122,416 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 2,680 | 2,714 | 1,023 | 118,868 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2,559 | 1,690 | 86,459 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 24,351 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 420 | $ | 911 | $ | 1,185 | $ | 1,365 | $ | 1,487 | $ | 1,583 | $ | 1,652 | $ | 1,696 | $ | 1,732 | $ | 1,757 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 443 | 940 | 1,217 | 1,394 | 1,536 | 1,629 | 1,689 | 1,735 | 1,768 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 458 | 954 | 1,237 | 1,413 | 1,525 | 1,604 | 1,659 | 1,700 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 455 | 944 | 1,224 | 1,399 | 1,505 | 1,581 | 1,634 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 430 | 893 | 1,154 | 1,310 | 1,411 | 1,470 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 421 | 873 | 1,118 | 1,272 | 1,367 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 433 | 890 | 1,154 | 1,314 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 440 | 919 | 1,169 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 466 | 951 | 2011 - | Before | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 389 | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 13,519 | $ | 10,832 | $ | 5,622 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 16,454 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
17.9 | % | 19.8 | % | 11.2 | % | 7.2 | % | 4.9 | % | 3.5 | % | 2.5 | % | 1.9 | % | 1.5 | % | 1.1 | % |
(dollars in millions)
|
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 565 | $ | 596 | $ | 639 | $ | 632 | $ | 601 | $ | 545 | $ | 520 | $ | 508 | $ | 506 | $ | 504 | $ | 2 | 5,219 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 538 | 591 | 614 | 605 | 601 | 599 | 605 | 593 | 581 | 7 | 4,869 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 510 | 565 | 606 | 630 | 654 | 607 | 586 | 575 | 3 | 4,465 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 549 | 571 | 563 | 518 | 473 | 452 | 450 | 18 | 4,367 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 528 | 524 | 486 | 437 | 395 | 414 | 35 | 4,217 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 512 | 511 | 504 | 520 | 514 | 53 | 4,371 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 534 | 517 | 526 | 493 | 69 | 4,544 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 530 | 548 | 585 | 150 | 4,693 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 588 | 653 | 317 | 4,992 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 772 | 598 | 3,450 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,541 |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 33 | $ | 143 | $ | 249 | $ | 324 | $ | 414 | $ | 447 | $ | 476 | $ | 490 | $ | 496 | $ | 501 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 38 | 160 | 255 | 342 | 383 | 419 | 436 | 453 | 459 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 34 | 154 | 252 | 352 | 400 | 434 | 451 | 462 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 38 | 150 | 239 | 312 | 367 | 407 | 418 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 38 | 141 | 234 | 310 | 338 | 348 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 30 | 141 | 233 | 313 | 378 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 38 | 155 | 262 | 340 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 49 | 182 | 290 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 51 | 189 | 2011 - | Before | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 52 | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,437 | $ | 2,104 | $ | 44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 2,148 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
7.3 | % | 22.5 | % | 19.4 | % | 16.2 | % | 10.9 | % | 6.0 | % | 3.5 | % | 2.5 | % | 1.1 | % | 1.0 | % |
(dollars in millions)
|
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 226 | $ | 239 | $ | 205 | $ | 208 | $ | 215 | $ | 13 | 892 | |||||||||||||||||||||||||||||||
2017 | 244 | 271 | 240 | 241 | 21 | 926 | ||||||||||||||||||||||||||||||||||||||
2018 | 220 | 235 | 220 | 1 | 886 | |||||||||||||||||||||||||||||||||||||||
2019 | 203 | 193 | 45 | 827 | ||||||||||||||||||||||||||||||||||||||||
2020 | 274 | 189 | 580 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,143 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 54 | $ | 121 | $ | 142 | $ | 149 | $ | 174 | Adjustment Expenses, | |||||||||||||||||||||||||||||||||
2017 | 70 | 166 | 194 | 205 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||
2018 | 64 | 171 | 202 | |||||||||||||||||||||||||||||||||||||||||
2019 | 49 | 121 | 2016 - | Before | ||||||||||||||||||||||||||||||||||||||||
2020 | 50 | 2020 | 2016 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 752 | $ | 391 | $ | 48 | ||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 439 |
Average Annual Percentage Payout of Incurred
Claims by Age, Net of Reinsurance |
||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | |||||||||||||||||||||||||||
25.3 | % | 39.4 | % | 11.9 | % | 3.9 | % | 11.6 | % |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 2,779 | $ | 2,791 | $ | 2,772 | $ | 2,752 | $ | 2,745 | $ | 14 | 922,219 | |||||||||||||||||||||||||||||||
2017 | 3,323 | 3,256 | 3,221 | 3,206 | 57 | 1,062,577 | ||||||||||||||||||||||||||||||||||||||
2018 | 3,281 | 3,269 | 3,233 | 155 | 1,050,608 | |||||||||||||||||||||||||||||||||||||||
2019 | 3,362 | 3,361 | 368 | 1,029,935 | ||||||||||||||||||||||||||||||||||||||||
2020 | 2,829 | 807 | 741,369 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 15,374 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 1,610 | $ | 2,203 | $ | 2,466 | $ | 2,616 | $ | 2,686 | Adjustment Expenses, | |||||||||||||||||||||||||||||||||
2017 | 1,912 | 2,575 | 2,887 | 3,046 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||
2018 | 1,889 | 2,582 | 2,880 | |||||||||||||||||||||||||||||||||||||||||
2019 | 1,933 | 2,650 | 2016 - | Before | ||||||||||||||||||||||||||||||||||||||||
2020 | 1,571 | 2020 | 2016 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 12,833 | $ | 2,541 | $ | 227 | ||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 2,768 |
Average Annual Percentage Payout of Incurred
Claims by Age, Net of Reinsurance |
||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | |||||||||||||||||||||||||||
58.0 | % | 21.3 | % | 9.5 | % | 5.2 | % | 2.5 | % |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | IBNR Reserves December 31, 2020 | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||
Incurred Claims and Allocated Claims Adjustment | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 1,556 | $ | 1,547 | $ | 1,525 | $ | 1,511 | $ | 1,506 | $ | 5 | 144,534 | |||||||||||||||||||||||||||||||
2017 | 2,312 | 2,340 | 2,343 | 2,170 | 27 | 170,114 | ||||||||||||||||||||||||||||||||||||||
2018 | 2,610 | 2,574 | 2,381 | 32 | 187,093 | |||||||||||||||||||||||||||||||||||||||
2019 | 2,297 | 2,344 | 65 | 179,977 | ||||||||||||||||||||||||||||||||||||||||
2020 | 3,019 | 737 | 192,501 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 11,420 |
Cumulative Paid Claims and Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||
Accident Year | Unaudited | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||
And Allocated Claim | ||||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 1,049 | $ | 1,392 | $ | 1,455 | $ | 1,479 | $ | 1,489 | Adjustment Expenses, | |||||||||||||||||||||||||||||||||
2017 | 1,471 | 2,059 | 2,197 | 2,089 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||
2018 | 1,657 | 2,298 | 2,255 | |||||||||||||||||||||||||||||||||||||||||
2019 | 1,613 | 2,179 | 2016 - | Before | ||||||||||||||||||||||||||||||||||||||||
2020 | 2,019 | 2020 | 2016 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 10,031 | $ | 1,389 | $ | 16 | ||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 1,405 |
Average Annual Percentage Payout of Incurred
Claims by Age, Net of Reinsurance |
||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | |||||||||||||||||||||||||||
68.6 | % | 25.2 | % | 2.9 | % | (1.7) | % | 0.6 | % |
(dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | IBNR Reserves December 31, 2020 | Cumulative | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | Number of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident | Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | Reported | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 467 | $ | 445 | $ | 453 | $ | 449 | $ | 441 | $ | 434 | $ | 429 | $ | 424 | $ | 414 | $ | 415 | $ | (2) | 55,789 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 442 | 420 | 421 | 404 | 403 | 386 | 380 | 368 | 368 | 1 | 51,227 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 493 | 486 | 477 | 465 | 452 | 450 | 440 | 435 | (4) | 54,237 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 436 | 452 | 452 | 440 | 433 | 430 | 430 | (6) | 52,290 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 366 | 366 | 366 | 362 | 363 | 363 | 7 | 45,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 367 | 416 | 416 | 426 | 426 | 8 | 45,759 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 352 | 387 | 410 | 410 | 16 | 46,808 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 447 | 469 | 471 | 33 | 50,558 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 452 | 447 | 60 | 47,945 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 353 | 132 | 28,763 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,118 |
Accident | Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 179 | $ | 253 | $ | 285 | $ | 319 | $ | 355 | $ | 377 | $ | 396 | $ | 404 | $ | 408 | $ | 412 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 168 | 235 | 266 | 292 | 321 | 339 | 348 | 353 | 359 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 197 | 276 | 309 | 342 | 375 | 394 | 411 | 420 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 193 | 270 | 307 | 336 | 368 | 390 | 407 | Liability for Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 164 | 230 | 258 | 287 | 312 | 327 | And Allocated Claim | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 215 | 288 | 315 | 349 | 373 | Adjustment Expenses, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 185 | 261 | 301 | 326 | Net of Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 222 | 310 | 346 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 219 | 294 | 2011 - | Before | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 146 | 2020 | 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 3,410 | $ | 708 | $ | 29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net liability | $ | 737 |
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
45.7 | % | 17.9 | % | 8.0 | % | 7.5 | % | 7.3 | % | 4.7 | % | 3.7 | % | 1.7 | % | 1.3 | % | 0.9 | % |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Short-term: | ||||||||||||||
Commercial paper | $ | 100 | $ | 100 | ||||||||||
3.90% Senior notes due November 1, 2020
|
— | 500 | ||||||||||||
Total short-term debt | 100 | 600 | ||||||||||||
Long-term: | ||||||||||||||
7.75% Senior notes due April 15, 2026
|
200 | 200 | ||||||||||||
7.625% Junior subordinated debentures due December 15, 2027
|
125 | 125 | ||||||||||||
6.375% Senior notes due March 15, 2033
|
500 | 500 | ||||||||||||
6.75% Senior notes due June 20, 2036
|
400 | 400 | ||||||||||||
6.25% Senior notes due June 15, 2037
|
800 | 800 | ||||||||||||
5.35% Senior notes due November 1, 2040
|
750 | 750 | ||||||||||||
4.60% Senior notes due August 1, 2043
|
500 | 500 | ||||||||||||
4.30% Senior notes due August 25, 2045
|
400 | 400 | ||||||||||||
8.50% Junior subordinated debentures due December 15, 2045
|
56 | 56 | ||||||||||||
3.75% Senior notes due May 15, 2046
|
500 | 500 | ||||||||||||
8.312% Junior subordinated debentures due July 1, 2046
|
73 | 73 | ||||||||||||
4.00% Senior notes due May 30, 2047
|
700 | 700 | ||||||||||||
4.05% Senior notes due March 7, 2048
|
500 | 500 | ||||||||||||
4.10% Senior notes due March 4, 2049
|
500 | 500 | ||||||||||||
2.55% Senior notes due April 27, 2050
|
500 | — | ||||||||||||
Total long-term debt | 6,504 | 6,004 | ||||||||||||
Total debt principal | 6,604 | 6,604 | ||||||||||||
Unamortized fair value adjustment | 41 | 43 | ||||||||||||
Unamortized debt issuance costs | (95) | (89) | ||||||||||||
Total debt | $ | 6,550 | $ | 6,558 | ||||||||||
Unamortized Fair Value
Purchase Adjustment at December 31, |
Effective Interest Rate to Maturity | |||||||||||||||||||||||||||||||
(in millions) | Issue Rate | Maturity Date | 2020 | 2019 | ||||||||||||||||||||||||||||
Junior subordinated debentures | 7.625 | % | Dec. 2027 | $ | 10 | $ | 11 | 6.147 | % | |||||||||||||||||||||||
8.500 | % | Dec. 2045 | 14 | 14 | 6.362 | % | ||||||||||||||||||||||||||
8.312 | % | Jul. 2046 | 17 | 18 | 6.362 | % | ||||||||||||||||||||||||||
Total | $ | 41 | $ | 43 |
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, 2017 | $ | 747 | $ | 207 | $ | (686) | $ | (611) | $ | (343) | ||||||||||||||||||||||
Cumulative effect of adoption of updated accounting guidance for equity financial instruments at January 1, 2018
|
(34) | — | — | — | (34) | |||||||||||||||||||||||||||
Income tax benefit | (12) | — | — | — | (12) | |||||||||||||||||||||||||||
Net of taxes | (22) | — | — | — | (22) | |||||||||||||||||||||||||||
Reclassification of certain tax effects from accumulated other comprehensive income at January 1, 2018
|
145 | 7 | (141) | (35) | (24) | |||||||||||||||||||||||||||
Total effect of adoption of new guidance at January 1, 2018, net of tax
|
123 | 7 | (141) | (35) | (46) | |||||||||||||||||||||||||||
Other comprehensive income (loss) (OCI) before reclassifications, net of tax
|
(1,151) | (21) | (114) | (227) | (1,513) | |||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of tax
|
(25) | — | 68 | — | 43 | |||||||||||||||||||||||||||
Net OCI, current period | (1,176) | (21) | (46) | (227) | (1,470) | |||||||||||||||||||||||||||
Balance, December 31, 2018 | (306) | 193 | (873) | (873) | (1,859) | |||||||||||||||||||||||||||
OCI before reclassifications, net of tax
|
2,406 | (4) | (14) | 106 | 2,494 | |||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of tax
|
(43) | — | 41 | 7 | 5 | |||||||||||||||||||||||||||
Net OCI, current period | 2,363 | (4) | 27 | 113 | 2,499 | |||||||||||||||||||||||||||
Balance, December 31, 2019 | 2,057 | 189 | (846) | (760) | 640 | |||||||||||||||||||||||||||
OCI before reclassifications, net of tax
|
1,876 | (7) | (53) | 21 | 1,837 | |||||||||||||||||||||||||||
Amounts reclassified from AOCI, net of tax
|
(41) | — | 67 | (1) | 25 | |||||||||||||||||||||||||||
Net OCI, current period | 1,835 | (7) | 14 | 20 | 1,862 | |||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 3,892 | $ | 182 | $ | (832) | $ | (740) | $ | 2,502 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Changes in net unrealized gains (losses) on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income
|
$ | 2,331 | $ | 2,994 | $ | (1,489) | ||||||||||||||
Income tax expense (benefit) | 496 | 631 | (313) | |||||||||||||||||
Net of taxes | 1,835 | 2,363 | (1,176) | |||||||||||||||||
Having credit losses recognized in the consolidated statement of income | (9) | (4) | (27) | |||||||||||||||||
Income tax benefit | (2) | — | (6) | |||||||||||||||||
Net of taxes | (7) | (4) | (21) | |||||||||||||||||
Net changes in benefit plan assets and obligations | 18 | 33 | (56) | |||||||||||||||||
Income tax expense (benefit) | 4 | 6 | (10) | |||||||||||||||||
Net of taxes | 14 | 27 | (46) | |||||||||||||||||
Net changes in unrealized foreign currency translation | 12 | 117 | (247) | |||||||||||||||||
Income tax expense (benefit) | (8) | 4 | (20) | |||||||||||||||||
Net of taxes | 20 | 113 | (227) | |||||||||||||||||
Total other comprehensive income (loss) | 2,352 | 3,140 | (1,819) | |||||||||||||||||
Total income tax expense (benefit) | 490 | 641 | (349) | |||||||||||||||||
Total other comprehensive income (loss), net of taxes | $ | 1,862 | $ | 2,499 | $ | (1,470) |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Reclassification adjustments related to unrealized gains (losses) on investment securities: | ||||||||||||||||||||
Having no credit losses recognized in the consolidated statement of income (1)
|
$ | (52) | $ | (55) | $ | (32) | ||||||||||||||
Income tax expense (2)
|
(11) | (12) | (7) | |||||||||||||||||
Net of taxes | (41) | (43) | (25) | |||||||||||||||||
Having credit losses recognized in the consolidated statement of income (1)
|
— | — | — | |||||||||||||||||
Income tax benefit (2)
|
— | — | — | |||||||||||||||||
Net of taxes | — | — | — | |||||||||||||||||
Reclassification adjustment related to benefit plan assets and obligations:
|
||||||||||||||||||||
Claims and claim adjustment expenses (3)
|
35 | 21 | 35 | |||||||||||||||||
General and administrative expenses (3)
|
50 | 31 | 51 | |||||||||||||||||
Total
|
85 | 52 | 86 | |||||||||||||||||
Income tax benefit (2)
|
18 | 11 | 18 | |||||||||||||||||
Net of taxes | 67 | 41 | 68 | |||||||||||||||||
Reclassification adjustment related to foreign currency translation (1)
|
(1) | 7 | — | |||||||||||||||||
Income tax benefit (2)
|
— | — | — | |||||||||||||||||
Net of taxes | (1) | 7 | — | |||||||||||||||||
Total reclassifications | 32 | 4 | 54 | |||||||||||||||||
Total income tax (expense) benefit | 7 | (1) | 11 | |||||||||||||||||
Total reclassifications, net of taxes | $ | 25 | $ | 5 | $ | 43 |
(for the year ended December 31, in millions, except per share amounts) | 2020 | 2019 | 2018 | |||||||||||||||||
Basic and Diluted | ||||||||||||||||||||
Net income, as reported | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Participating securities — allocated income | (19) | (19) | (19) | |||||||||||||||||
Net income available to common shareholders — basic and diluted | $ | 2,678 | $ | 2,603 | $ | 2,504 | ||||||||||||||
Common Shares | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Weighted average shares outstanding | 253.5 | 260.0 | 267.4 | |||||||||||||||||
Diluted | ||||||||||||||||||||
Weighted average shares outstanding | 253.5 | 260.0 | 267.4 | |||||||||||||||||
Weighted average effects of dilutive securities: | ||||||||||||||||||||
Stock options and performance shares | 1.1 | 2.3 | 2.4 | |||||||||||||||||
Total | 254.6 | 262.3 | 269.8 | |||||||||||||||||
Net income Per Common Share | 0 | |||||||||||||||||||
Basic | $ | 10.56 | $ | 10.01 | $ | 9.37 | ||||||||||||||
Diluted | $ | 10.52 | $ | 9.92 | $ | 9.28 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Composition of income tax expense included in the consolidated statement of income
|
||||||||||||||||||||
Current expense: | ||||||||||||||||||||
Federal | $ | 532 | $ | 546 | $ | 424 | ||||||||||||||
Foreign | 35 | 7 | 41 | |||||||||||||||||
State | 4 | 6 | 8 | |||||||||||||||||
Total current tax expense | 571 | 559 | 473 | |||||||||||||||||
Deferred benefit: | ||||||||||||||||||||
Federal | (29) | (33) | (13) | |||||||||||||||||
Foreign | (2) | (10) | (22) | |||||||||||||||||
Total deferred tax benefit | (31) | (43) | (35) | |||||||||||||||||
Total income tax expense included in the consolidated
statement of income
|
540 | 516 | 438 | |||||||||||||||||
Composition of income tax expense (benefit) included
in shareholders’ equity
|
||||||||||||||||||||
Expense (benefit) relating to changes in the unrealized gain (loss) on investments, unrealized loss on foreign exchange and other items in other comprehensive income (loss)
|
490 | 641 | (349) | |||||||||||||||||
Total income tax expense included in the
consolidated financial statements
|
$ | 1,030 | $ | 1,157 | $ | 89 |
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Income (loss) before income taxes | ||||||||||||||||||||
U.S. | $ | 3,095 | $ | 3,211 | $ | 3,039 | ||||||||||||||
Foreign | 142 | (73) | (78) | |||||||||||||||||
Total income before income taxes | 3,237 | 3,138 | 2,961 | |||||||||||||||||
Effective tax rate | ||||||||||||||||||||
Statutory tax rate | 21 | % | 21 | % | 21 | % | ||||||||||||||
Expected federal income tax expense | 680 | 659 | 622 | |||||||||||||||||
Tax effect of: | ||||||||||||||||||||
Nontaxable investment income | (147) | (149) | (150) | |||||||||||||||||
Other, net | 7 | 6 | (34) | |||||||||||||||||
Total income tax expense | $ | 540 | $ | 516 | $ | 438 | ||||||||||||||
Effective tax rate | 17 | % | 16 | % | 15 | % |
(at December 31, in millions) | 2020 | 2019 | ||||||||||||
Deferred tax assets | ||||||||||||||
Claims and claim adjustment expense reserves | $ | 575 | $ | 551 | ||||||||||
Unearned premium reserves | 560 | 539 | ||||||||||||
Compensation-related liabilities | 110 | 97 | ||||||||||||
Net operating losses | 87 | 62 | ||||||||||||
Other | 180 | 181 | ||||||||||||
Total gross deferred tax assets | 1,512 | 1,430 | ||||||||||||
Less: valuation allowance | 21 | 27 | ||||||||||||
Adjusted gross deferred tax assets | 1,491 | 1,403 | ||||||||||||
Deferred tax liabilities | ||||||||||||||
Claims and claim adjustment expense reserve discounting (transition rule) | 96 | 115 | ||||||||||||
Deferred acquisition costs | 445 | 427 | ||||||||||||
Investments | 1,225 | 781 | ||||||||||||
Internally developed software | 93 | 94 | ||||||||||||
Depreciation | 130 | 70 | ||||||||||||
Other | 60 | 53 | ||||||||||||
Total gross deferred tax liabilities | 2,049 | 1,540 | ||||||||||||
Net deferred tax liability | $ | 558 | $ | 137 |
(in millions) | Amount |
Year of
expiration |
||||||||||||
United States | $ | 2 | 2035 - 2036 | |||||||||||
Canada | $ | 13 | 2035 - 2040 | |||||||||||
Republic of Ireland | $ | 138 | None | |||||||||||
United Kingdom | $ | 343 | None |
(in millions) | 2020 | 2019 | ||||||||||||
Balance at January 1 | $ | 37 | $ | 31 | ||||||||||
Additions for tax positions of prior years | 16 | 8 | ||||||||||||
Reductions for tax positions of prior years | — | — | ||||||||||||
Reductions based on tax positions related to current year | — | — | ||||||||||||
Expiration of statute of limitations | (4) | (2) | ||||||||||||
Balance at December 31 | $ | 49 | $ | 37 |
(for the year ended December 31,) | 2020 | 2019 | 2018 | |||||||||||||||||
Assumptions used in estimating fair value of options on grant date | ||||||||||||||||||||
Expected term of stock options | 6 years | 6 years | 6 years | |||||||||||||||||
Expected volatility of Company’s stock | 15.73 | % |
15.47% - 15.91%
|
14.94 | % | |||||||||||||||
Weighted average volatility | 15.73 | % | 15.48 | % | 14.94 | % | ||||||||||||||
Expected annual dividend per share | $3.28 |
$3.08 - $3.28
|
$2.88 | |||||||||||||||||
Risk-free rate | 1.37 | % |
1.70% - 2.54%
|
2.68 | % | |||||||||||||||
Additional information | ||||||||||||||||||||
Weighted average grant-date fair value of
options granted (per share)
|
$ | 14.41 | $ | 16.64 | $ | 20.13 | ||||||||||||||
Total intrinsic value of options exercised
during the year (in millions)
|
$ | 47 | $ | 88 | $ | 67 |
Stock Options | Number |
Weighted
Average Exercise Price |
Weighted
Average Contractual Life Remaining |
Aggregate
Intrinsic Value ($ in millions) |
||||||||||||||||||||||
Outstanding, beginning of year | 9,063,274 | $ | 113.93 | |||||||||||||||||||||||
Original grants | 2,474,036 | 132.58 | ||||||||||||||||||||||||
Exercised | (1,282,155) | 91.75 | ||||||||||||||||||||||||
Forfeited or expired | (179,397) | 130.78 | ||||||||||||||||||||||||
Outstanding, end of year | 10,075,758 | $ | 121.03 | 6.4 years | $ | 196 | ||||||||||||||||||||
Vested at end of year (1)
|
7,648,987 | $ | 117.47 | 5.9 years | $ | 176 | ||||||||||||||||||||
Exercisable at end of year | 4,636,354 | $ | 107.71 | 4.3 years | $ | 152 |
Restricted and Deferred Stock
Units |
Performance Shares | |||||||||||||||||||||||||
Other Equity Instruments | Number |
Weighted
Average Grant-Date Fair Value |
Number |
Weighted Average
Grant-Date Fair Value |
||||||||||||||||||||||
Nonvested, beginning of year | 1,137,661 | $ | 128.59 | 668,747 | $ | 132.76 | ||||||||||||||||||||
Granted | 569,747 | 131.74 | 370,410 | 132.58 | ||||||||||||||||||||||
Vested | (542,207) | (1) | 124.33 | (293,519) | (2) | 140.85 | ||||||||||||||||||||
Forfeited | (78,417) | 131.93 | (48,903) | 131.88 | ||||||||||||||||||||||
Performance-based adjustment | — | — | 27,256 | (3) | 132.80 | |||||||||||||||||||||
Nonvested, end of year | 1,086,784 | $ | 132.12 | 723,991 | $ | 129.45 |
(at and for the year ended December 31, in millions) |
Qualified Domestic
Pension Plan |
Nonqualified and Foreign
Pension Plans |
Total | |||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
Change in projected benefit obligation:
|
||||||||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year
|
$ | 3,954 | $ | 3,444 | $ | 241 | $ | 215 | $ | 4,195 | $ | 3,659 | ||||||||||||||||||||||||||
Benefits earned | 128 | 112 | 5 | 6 | 133 | 118 | ||||||||||||||||||||||||||||||||
Interest cost on benefit obligation | 109 | 134 | 5 | 7 | 114 | 141 | ||||||||||||||||||||||||||||||||
Actuarial loss | 336 | 451 | 20 | 19 | 356 | 470 | ||||||||||||||||||||||||||||||||
Benefits paid | (201) | (187) | (11) | (11) | (212) | (198) | ||||||||||||||||||||||||||||||||
Amendment | — | — | 1 | — | 1 | — | ||||||||||||||||||||||||||||||||
Foreign currency exchange rate change
|
— | — | 4 | 5 | 4 | 5 | ||||||||||||||||||||||||||||||||
Benefit obligation at end of year | $ | 4,326 | $ | 3,954 | $ | 265 | $ | 241 | $ | 4,591 | $ | 4,195 | ||||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year
|
$ | 4,270 | $ | 3,771 | $ | 115 | $ | 103 | $ | 4,385 | $ | 3,874 | ||||||||||||||||||||||||||
Actual return on plan assets | 562 | 686 | 8 | 10 | 570 | 696 | ||||||||||||||||||||||||||||||||
Company contributions | — | — | 9 | 8 | 9 | 8 | ||||||||||||||||||||||||||||||||
Benefits paid | (201) | (187) | (11) | (11) | (212) | (198) | ||||||||||||||||||||||||||||||||
Foreign currency exchange rate change
|
— | — | 4 | 5 | 4 | 5 | ||||||||||||||||||||||||||||||||
Fair value of plan assets at end
of year
|
4,631 | 4,270 | 125 | 115 | 4,756 | 4,385 | ||||||||||||||||||||||||||||||||
Funded status of plan at end
of year
|
$ | 305 | $ | 316 | $ | (140) | $ | (126) | $ | 165 | $ | 190 | ||||||||||||||||||||||||||
Amounts recognized in the consolidated balance sheet consist of:
|
||||||||||||||||||||||||||||||||||||||
Accrued over-funded benefit plan assets
|
$ | 305 | $ | 316 | $ | 1 | $ | 1 | $ | 306 | $ | 317 | ||||||||||||||||||||||||||
Accrued under-funded benefit plan liabilities
|
— | — | (141) | (127) | (141) | (127) | ||||||||||||||||||||||||||||||||
Total | $ | 305 | $ | 316 | $ | (140) | $ | (126) | $ | 165 | $ | 190 | ||||||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive income consist of:
|
||||||||||||||||||||||||||||||||||||||
Net actuarial loss | $ | 1,050 | $ | 1,094 | $ | 63 | $ | 49 | $ | 1,113 | $ | 1,143 | ||||||||||||||||||||||||||
Prior service cost (benefit) | (2) | (3) | 1 | — | (1) | (3) | ||||||||||||||||||||||||||||||||
Total | $ | 1,048 | $ | 1,091 | $ | 64 | $ | 49 | $ | 1,112 | $ | 1,140 |
Postretirement
Benefit Plans |
||||||||||||||
(at and for the year ended December 31, in millions) | 2020 | 2019 | ||||||||||||
Change in projected benefit obligation: | ||||||||||||||
Benefit obligation at beginning of year | $ | 171 | $ | 203 | ||||||||||
Benefits earned | — | — | ||||||||||||
Interest cost on benefit obligation | 4 | 7 | ||||||||||||
Actuarial (gain) loss | 5 | (31) | ||||||||||||
Benefits paid | (10) | (9) | ||||||||||||
Foreign currency exchange rate change | 1 | 1 | ||||||||||||
Benefit obligation at end of year | $ | 171 | $ | 171 | ||||||||||
Change in plan assets: | ||||||||||||||
Fair value of plan assets at beginning of year | $ | 12 | $ | 12 | ||||||||||
Actual return on plan assets | 1 | 1 | ||||||||||||
Company contributions | 8 | 8 | ||||||||||||
Benefits paid | (10) | (9) | ||||||||||||
Fair value of plan assets at end of year | 11 | 12 | ||||||||||||
Funded status of plan at end of year | $ | (160) | $ | (159) | ||||||||||
Amounts recognized in the consolidated balance sheet consist of: | ||||||||||||||
Accrued under-funded benefit plan liability | $ | (160) | $ | (159) | ||||||||||
Amounts recognized in accumulated other comprehensive income consist of: | ||||||||||||||
Net actuarial gain | $ | (41) | $ | (49) | ||||||||||
Prior service benefit | (18) | (21) | ||||||||||||
Total | $ | (59) | $ | (70) |
Pension Plans |
Postretirement Benefit
Plans |
|||||||||||||||||||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost (Benefit): | ||||||||||||||||||||||||||||||||||||||
Service cost | $ | 133 | $ | 118 | $ | 133 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Non-service cost (benefit): | ||||||||||||||||||||||||||||||||||||||
Interest cost on benefit obligation | 114 | 141 | 126 | 4 | 7 | 7 | ||||||||||||||||||||||||||||||||
Expected return on plan assets | (275) | (275) | (264) | — | (1) | — | ||||||||||||||||||||||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||||||||||||||||
Prior service benefit | (1) | (1) | (1) | (3) | (3) | (4) | ||||||||||||||||||||||||||||||||
Net actuarial (gain) loss | 93 | 56 | 91 | (4) | — | — | ||||||||||||||||||||||||||||||||
Total non-service cost (benefit) | (69) | (79) | (48) | (3) | 3 | 3 | ||||||||||||||||||||||||||||||||
Net periodic benefit cost (benefit) | 64 | 39 | 85 | (3) | 3 | 3 | ||||||||||||||||||||||||||||||||
Other Changes in Benefit Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
|
||||||||||||||||||||||||||||||||||||||
Prior service benefit | 1 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net actuarial (gain) loss | 61 | 49 | 160 | 4 | (31) | (18) | ||||||||||||||||||||||||||||||||
Foreign currency exchange rate change | 1 | 1 | (1) | — | — | — | ||||||||||||||||||||||||||||||||
Amortization of prior service benefit | 1 | 1 | 1 | 3 | 3 | 4 | ||||||||||||||||||||||||||||||||
Amortization of net actuarial gain (loss) | (93) | (56) | (91) | 4 | — | — | ||||||||||||||||||||||||||||||||
Total other changes recognized in other comprehensive income
|
(29) | (5) | 69 | 11 | (28) | (14) | ||||||||||||||||||||||||||||||||
Total other changes recognized in net periodic benefit cost and other comprehensive income
|
$ | 35 | $ | 34 | $ | 154 | $ | 8 | $ | (25) | $ | (11) |
Pension Plans |
Postretirement Benefit
Plans |
|||||||||||||||||||||||||||||||||||||
(for the year ended December 31, in millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
Service Cost: | ||||||||||||||||||||||||||||||||||||||
Net investment income | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Claims and claim adjustment expenses | 55 | 48 | 54 | — | — | — | ||||||||||||||||||||||||||||||||
General and administrative expenses | 77 | 69 | 78 | — | — | — | ||||||||||||||||||||||||||||||||
Total service cost | 133 | 118 | 133 | — | — | — | ||||||||||||||||||||||||||||||||
Non-Service Cost (Benefit): | ||||||||||||||||||||||||||||||||||||||
Claims and claim adjustment expenses | (29) | (33) | (19) | (1) | 1 | 1 | ||||||||||||||||||||||||||||||||
General and administrative expenses | (40) | (46) | (29) | (2) | 2 | 2 | ||||||||||||||||||||||||||||||||
Total non-service cost (benefit) | (69) | (79) | (48) | (3) | 3 | 3 | ||||||||||||||||||||||||||||||||
Net periodic benefit cost (benefit) | $ | 64 | $ | 39 | $ | 85 | $ | (3) | $ | 3 | $ | 3 |
(at and for the year ended December 31,) | 2020 | 2019 | ||||||||||||
Assumptions used to determine benefit obligations | ||||||||||||||
Discount rate: | ||||||||||||||
Qualified domestic pension plan | 2.60 | % | 3.28 | % | ||||||||||
Nonqualified domestic pension plan | 2.44 | % | 3.17 | % | ||||||||||
Domestic postretirement benefit plan | 2.27 | % | 3.09 | % | ||||||||||
Cash balance interest crediting rate | 4.01 | % | 4.01 | % | ||||||||||
Future compensation increase rate | 4.00 | % | 4.00 | % | ||||||||||
Assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate: | ||||||||||||||
Qualified domestic pension plan: | ||||||||||||||
Service cost | 3.50 | % | 4.57 | % | ||||||||||
Interest cost | 2.84 | % | 4.02 | % | ||||||||||
Nonqualified domestic pension plan: | ||||||||||||||
Service cost | 3.30 | % | 4.40 | % | ||||||||||
Interest cost | 2.73 | % | 3.95 | % | ||||||||||
Domestic postretirement benefit plan: | ||||||||||||||
Interest cost | 2.67 | % | 3.90 | % | ||||||||||
Expected long-term rate of return on assets: | ||||||||||||||
Pension plan | 6.75 | % | 7.00 | % | ||||||||||
Postretirement benefit plan | 4.00 | % | 4.00 | % | ||||||||||
Assumed health care cost trend rates | ||||||||||||||
Following year: | ||||||||||||||
Medical (before age 65) | 6.75 | % | 7.00 | % | ||||||||||
Medical (age 65 and older) | 7.75 | % | 8.25 | % | ||||||||||
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 4.50 | % | 4.50 | % | ||||||||||
Year that the rate reaches the ultimate trend rate: | ||||||||||||||
Medical (before age 65) | 2026 | 2026 | ||||||||||||
Medical (age 65 and older) | 2027 | 2026 |
(at December 31, 2020, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Invested assets: | ||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
$ | 27 | $ | — | $ | 27 | $ | — | ||||||||||||||||||
Debt securities issued by foreign governments | 30 | — | 30 | — | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
14 | — | 14 | — | ||||||||||||||||||||||
All other corporate bonds | 712 | — | 712 | — | ||||||||||||||||||||||
Total fixed maturities | 783 | — | 783 | — | ||||||||||||||||||||||
Mutual funds | ||||||||||||||||||||||||||
Equity mutual funds | 1,706 | 1,699 | 7 | — | ||||||||||||||||||||||
Bond mutual funds | 949 | 946 | 3 | — | ||||||||||||||||||||||
Total mutual funds | 2,655 | 2,645 | 10 | — | ||||||||||||||||||||||
Equity securities | 1,171 | 1,171 | — | — | ||||||||||||||||||||||
Other investments | 1 | — | — | 1 | ||||||||||||||||||||||
Cash and short-term securities | ||||||||||||||||||||||||||
U.S. Treasury securities | — | — | — | — | ||||||||||||||||||||||
Money market mutual funds | 26 | 26 | — | — | ||||||||||||||||||||||
Other | 120 | 28 | 92 | — | ||||||||||||||||||||||
Total cash and short-term securities | 146 | 54 | 92 | — | ||||||||||||||||||||||
Total | $ | 4,756 | $ | 3,870 | $ | 885 | $ | 1 |
(at December 31, 2019, in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Invested assets: | ||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||
Obligations of states, municipalities and political subdivisions
|
$ | 3 | $ | — | $ | 3 | $ | — | ||||||||||||||||||
Debt securities issued by foreign governments | 30 | — | 30 | — | ||||||||||||||||||||||
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
|
30 | — | 30 | — | ||||||||||||||||||||||
All other corporate bonds | 715 | — | 715 | — | ||||||||||||||||||||||
Total fixed maturities | 778 | — | 778 | — | ||||||||||||||||||||||
Mutual funds | ||||||||||||||||||||||||||
Equity mutual funds | 1,585 | 1,578 | 7 | — | ||||||||||||||||||||||
Bond mutual funds | 869 | 866 | 3 | — | ||||||||||||||||||||||
Total mutual funds | 2,454 | 2,444 | 10 | — | ||||||||||||||||||||||
Equity securities | 1,018 | 1,017 | 1 | — | ||||||||||||||||||||||
Other investments | 2 | — | — | 2 | ||||||||||||||||||||||
Cash and short-term securities | ||||||||||||||||||||||||||
U.S. Treasury securities | 20 | 20 | — | — | ||||||||||||||||||||||
Money market mutual funds | 27 | 27 | — | — | ||||||||||||||||||||||
Other | 86 | 17 | 69 | — | ||||||||||||||||||||||
Total cash and short-term securities | 133 | 64 | 69 | — | ||||||||||||||||||||||
Total | $ | 4,385 | $ | 3,525 | $ | 858 | $ | 2 |
Benefits Expected to be Paid | ||||||||||||||
(in millions) | Pension Plans | Postretirement Benefit Plans | ||||||||||||
2021 | $ | 264 | $ | 11 | ||||||||||
2022 | 268 | 11 | ||||||||||||
2023 | 276 | 12 | ||||||||||||
2024 | 278 | 11 | ||||||||||||
2025 | 278 | 11 | ||||||||||||
2026 through 2030 | 1,411 | 52 |
(for the year ended December 31, in millions) | 2020 | 2019 | ||||||||||||||||||||||||||||||
Lease cost | ||||||||||||||||||||||||||||||||
Operating leases | $ | 95 | $ | 92 | ||||||||||||||||||||||||||||
Short-term leases (1)
|
2 | 10 | ||||||||||||||||||||||||||||||
Lease expense | 97 | 102 | ||||||||||||||||||||||||||||||
Less: sublease income (2)
|
— | — | ||||||||||||||||||||||||||||||
Net lease cost | $ | 97 | $ | 102 | ||||||||||||||||||||||||||||
Other information on operating leases | ||||||||||||||||||||||||||||||||
Cash payments to settle a lease liability reported in cash flows
|
$ | 109 | $ | 104 | ||||||||||||||||||||||||||||
Right-of-use assets obtained in exchange for new lease liabilities | $ | 67 | $ | 60 | ||||||||||||||||||||||||||||
Weighted average discount rate | 2.51 | % | 3.02 | % | ||||||||||||||||||||||||||||
Weighted average remaining lease term | 5.0 years | 5.1 years |
(in millions) | Real Estate Lease Liability | |||||||||||||||||||||||||
2021 | $ | 103 | ||||||||||||||||||||||||
2022 | 86 | |||||||||||||||||||||||||
2023 | 67 | |||||||||||||||||||||||||
2024 | 50 | |||||||||||||||||||||||||
2025 | 30 | |||||||||||||||||||||||||
Thereafter | 51 | |||||||||||||||||||||||||
Total undiscounted lease payments | 387 | |||||||||||||||||||||||||
Less: present value adjustment | 25 | |||||||||||||||||||||||||
Operating lease liability | $ | 362 |
2020 (in millions, except per share amounts) |
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
Total | |||||||||||||||||||||||||||
Total revenues | $ | 7,908 | $ | 7,401 | $ | 8,275 | $ | 8,397 | $ | 31,981 | ||||||||||||||||||||||
Total expenses | 7,188 | 7,486 | 7,289 | 6,781 | 28,744 | |||||||||||||||||||||||||||
Income (loss) before income taxes | 720 | (85) | 986 | 1,616 | 3,237 | |||||||||||||||||||||||||||
Income tax expense (benefit) | 120 | (45) | 159 | 306 | 540 | |||||||||||||||||||||||||||
Net income (loss) | $ | 600 | $ | (40) | $ | 827 | $ | 1,310 | $ | 2,697 | ||||||||||||||||||||||
Net income (loss) per share (1):
|
||||||||||||||||||||||||||||||||
Basic | $ | 2.34 | $ | (0.16) | $ | 3.24 | $ | 5.13 | $ | 10.56 | ||||||||||||||||||||||
Diluted | 2.33 | (0.16) | 3.23 | 5.10 | 10.52 | |||||||||||||||||||||||||||
2019 (in millions, except per share amounts) |
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
Total | |||||||||||||||||||||||||||
Total revenues | $ | 7,671 | $ | 7,834 | $ | 8,013 | $ | 8,063 | $ | 31,581 | ||||||||||||||||||||||
Total expenses | 6,704 | 7,169 | 7,581 | 6,989 | 28,443 | |||||||||||||||||||||||||||
Income before income taxes | 967 | 665 | 432 | 1,074 | 3,138 | |||||||||||||||||||||||||||
Income tax expense | 171 | 108 | 36 | 201 | 516 | |||||||||||||||||||||||||||
Net income | $ | 796 | $ | 557 | $ | 396 | $ | 873 | $ | 2,622 | ||||||||||||||||||||||
Net income per share (1):
|
||||||||||||||||||||||||||||||||
Basic | $ | 3.01 | $ | 2.11 | $ | 1.52 | $ | 3.37 | $ | 10.01 | ||||||||||||||||||||||
Diluted | 2.99 | 2.10 | 1.50 | 3.35 | 9.92 |
/s/ KPMG LLP | ||
KPMG LLP |
Name | Age | Office | ||||||||||||
Alan D. Schnitzer | 55 | Chairman of the Board of Directors and Chief Executive Officer | ||||||||||||
William H. Heyman | 72 | Vice Chairman and Chairman of the Investment Policy Committee | ||||||||||||
Avrohom J. Kess | 52 | Vice Chairman and Chief Legal Officer | ||||||||||||
Daniel S. Frey | 56 | Executive Vice President and Chief Financial Officer | ||||||||||||
Andy F. Bessette | 67 | Executive Vice President and Chief Administrative Officer | ||||||||||||
Michael F. Klein | 53 | Executive Vice President and President, Personal Insurance | ||||||||||||
Thomas M. Kunkel | 62 | Executive Vice President and President, Bond & Specialty Insurance | ||||||||||||
Diane Kurtzman | 51 | Executive Vice President and Chief Human Resources Officer | ||||||||||||
Mojgan M. Lefebvre | 55 | Executive Vice President and Chief Technology & Operations Officer | ||||||||||||
Maria Olivo | 56 | Executive Vice President, Strategic Development and President, International | ||||||||||||
Gregory C. Toczydlowski | 54 | Executive Vice President and President, Business Insurance |
Plan Category |
Number of
securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted average
exercise price of outstanding options, warrants and rights (b) |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
||||||||||||||||||||
Equity compensation plans approved by security holders (1)
|
13,018,146 | (2) | $120.73 per share | (3) | 5,954,479 | (4) |
Exhibit
Number |
Description of Exhibit | |||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
10.1 | ||||||||
10.2* | ||||||||
10.3* | ||||||||
10.4* | ||||||||
10.5* | ||||||||
10.6* | ||||||||
10.7* | ||||||||
10.8* | ||||||||
10.9* |
10.10* | ||||||||
10.11* | ||||||||
10.12* | ||||||||
10.13* | ||||||||
10.14* | ||||||||
10.15* | ||||||||
10.16* | ||||||||
10.17* | ||||||||
10.18* | ||||||||
10.19* | ||||||||
10.20* | ||||||||
10.21* | ||||||||
10.22* | ||||||||
10.23* | ||||||||
10.24* | ||||||||
10.25* | ||||||||
10.26* | ||||||||
10.27* | ||||||||
10.28* | ||||||||
10.29* | ||||||||
10.30†* | ||||||||
10.31†* |
10.32* | ||||||||
10.33*
|
||||||||
10.34* | ||||||||
10.35†* | ||||||||
10.36†* | ||||||||
21.1† | ||||||||
23.1† | ||||||||
24.1† | ||||||||
31.1† | ||||||||
31.2† | ||||||||
32.1† | ||||||||
32.2† | ||||||||
101.1† | The following information from The Travelers Companies, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2020 formatted in Inline XBRL: (i) Consolidated Statement of Income for the years ended December 31, 2020, 2019 and 2018; (ii) Consolidated Statement of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018; (iii) Consolidated Balance Sheet at December 31, 2020 and 2019; (iv) Consolidated Statement of Changes in Shareholders' Equity for the years ended December 31, 2020, 2019 and 2018; (v) Consolidated Statement of Cash Flows for the years ended December 31, 2020, 2019 and 2018; (vi) Notes to Consolidated Financial Statements; (vii) Financial Statement Schedules; and (viii) the cover page. | |||||||
104.1 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1). |
THE TRAVELERS COMPANIES, INC.
(Registrant)
|
|||||||||||
Date: | February 11, 2021 | By | /s/ CHRISTINE K. KALLA | ||||||||
Christine K. Kalla
Executive Vice President and General Counsel (Authorized Signatory) |
Date | |||||||||||
By | /s/ ALAN D. SCHNITZER |
Director, Chairman and Chief Executive Officer (Principal Executive Officer)
|
February 11, 2021 | ||||||||
Alan D. Schnitzer | |||||||||||
By | /s/ DANIEL S. FREY |
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
February 11, 2021 | ||||||||
Daniel S. Frey | |||||||||||
By | /s/ DOUGLAS K. RUSSELL |
Senior Vice President and Corporate Controller (Principal Accounting Officer)
|
February 11, 2021 | ||||||||
Douglas K. Russell | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Alan L. Beller | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Janet M. Dolan | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Patricia L. Higgins | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
William J. Kane | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Clarence Otis Jr. | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Elizabeth E. Robinson | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Philip T. Ruegger III | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Todd C. Schermerhorn | |||||||||||
By | * | Director | February 11, 2021 | ||||||||
Donald J. Shepard | |||||||||||
*By | * | Director | February 11, 2021 | ||||||||
Laurie J. Thomsen | |||||||||||
/s/ CHRISTINE K. KALLA | February 11, 2021 | ||||||||||
Christine K. Kalla,
Attorney-in-fact |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Net investment income | $ | 19 | $ | 41 | $ | 32 | ||||||||||||||
Net realized investment gains (losses) | 27 | 33 | (13) | |||||||||||||||||
Total revenues | 46 | 74 | 19 | |||||||||||||||||
Expenses | ||||||||||||||||||||
Interest | 292 | 297 | 304 | |||||||||||||||||
Other | 18 | 21 | 20 | |||||||||||||||||
Total expenses | 310 | 318 | 324 | |||||||||||||||||
Loss before income taxes and net income of subsidiaries | (264) | (244) | (305) | |||||||||||||||||
Income tax benefit | (61) | (77) | (114) | |||||||||||||||||
Loss before net income of subsidiaries | (203) | (167) | (191) | |||||||||||||||||
Net income of subsidiaries | 2,900 | 2,789 | 2,714 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
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
|
3 | 4 | — | |||||||||||||||||
Net changes in benefit plan assets and obligations | 25 | 35 | (53) | |||||||||||||||||
Other comprehensive income (loss) before income taxes and other comprehensive income (loss) of subsidiaries
|
28 | 39 | (53) | |||||||||||||||||
Income tax expense (benefit) | 9 | 12 | (17) | |||||||||||||||||
Other comprehensive income (loss), net of taxes, before other comprehensive income (loss) of subsidiaries
|
19 | 27 | (36) | |||||||||||||||||
Other comprehensive income (loss) of subsidiaries | 1,843 | 2,472 | (1,434) | |||||||||||||||||
Other comprehensive income (loss) | 1,862 | 2,499 | (1,470) | |||||||||||||||||
Comprehensive income | $ | 4,559 | $ | 5,121 | $ | 1,053 |
At December 31, | 2020 | 2019 | ||||||||||||
Assets | ||||||||||||||
Fixed maturities | $ | 94 | $ | 91 | ||||||||||
Equity securities | 241 | 209 | ||||||||||||
Short-term securities | 1,646 | 1,390 | ||||||||||||
Investment in subsidiaries | 33,015 | 30,028 | ||||||||||||
Other assets | 330 | 336 | ||||||||||||
Total assets | $ | 35,326 | $ | 32,054 | ||||||||||
Liabilities | ||||||||||||||
Debt | $ | 5,856 | $ | 5,865 | ||||||||||
Other liabilities | 262 | 239 | ||||||||||||
Total liabilities | 6,118 | 6,104 | ||||||||||||
Shareholders’ equity | ||||||||||||||
Common stock (1,750.0 shares authorized; 252.4 and 255.5 shares issued and outstanding)
|
23,743 | 23,469 | ||||||||||||
Retained earnings | 38,778 | 36,984 | ||||||||||||
Accumulated other comprehensive income | 2,502 | 640 | ||||||||||||
Treasury stock, at cost (527.3 and 522.1 shares)
|
(35,815) | (35,143) | ||||||||||||
Total shareholders’ equity | 29,208 | 25,950 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 35,326 | $ | 32,054 |
For the year ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income | $ | 2,697 | $ | 2,622 | $ | 2,523 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||||||
Equity in net income of subsidiaries | (2,900) | (2,789) | (2,714) | |||||||||||||||||
Dividends received from consolidated subsidiaries | 1,964 | 2,459 | 2,258 | |||||||||||||||||
Deferred federal income tax expense (benefit) | 3 | (2) | 28 | |||||||||||||||||
Change in income taxes payable | (6) | 3 | 100 | |||||||||||||||||
Other | (79) | (79) | (35) | |||||||||||||||||
Net cash provided by operating activities | 1,679 | 2,214 | 2,160 | |||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Net purchases of short-term securities | (256) | (19) | (141) | |||||||||||||||||
Other investments, net | (7) | (8) | (7) | |||||||||||||||||
Net cash used in investing activities | (263) | (27) | (148) | |||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Treasury stock acquired—share repurchase authorization | (625) | (1,500) | (1,270) | |||||||||||||||||
Treasury stock acquired—net employee share-based compensation | (47) | (48) | (51) | |||||||||||||||||
Dividends paid to shareholders | (861) | (844) | (814) | |||||||||||||||||
Payment of debt | (500) | (500) | (600) | |||||||||||||||||
Issuance of debt | 490 | 492 | 591 | |||||||||||||||||
Issuance of common stock—employee share options | 127 | 213 | 132 | |||||||||||||||||
Net cash used in financing activities | (1,416) | (2,187) | (2,012) | |||||||||||||||||
Net increase in cash | — | — | — | |||||||||||||||||
Cash at beginning of year | — | — | — | |||||||||||||||||
Cash at end of year | $ | — | $ | — | $ | — | ||||||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Cash received during the year for taxes | $ | 81 | $ | 78 | $ | 283 | ||||||||||||||
Cash paid during the year for interest | $ | 291 | $ | 291 | $ | 300 |
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 |
|||||||||||||||||||||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Insurance | $ | 1,152 | $ | 44,162 | $ | 7,556 | $ | 15,294 | $ | 1,633 | $ | 10,804 | $ | 2,518 | $ | 2,664 | $ | 15,431 | ||||||||||||||||||||||||||||||||||||||
Bond & Specialty Insurance | 328 | 3,814 | 2,020 | 2,823 | 213 | 1,464 | 519 | 500 | 2,951 | |||||||||||||||||||||||||||||||||||||||||||||||
Personal Insurance | 878 | 6,534 | 5,646 | 10,927 | 381 | 6,855 | 1,736 | 1,314 | 11,350 | |||||||||||||||||||||||||||||||||||||||||||||||
Total—Reportable Segments | 2,358 | 54,510 | 15,222 | 29,044 | 2,227 | 19,123 | 4,773 | 4,478 | 29,732 | |||||||||||||||||||||||||||||||||||||||||||||||
Other | — | 11 | — | — | — | — | — | 370 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 2,358 | $ | 54,521 | $ | 15,222 | $ | 29,044 | $ | 2,227 | $ | 19,123 | $ | 4,773 | $ | 4,848 | $ | 29,732 | ||||||||||||||||||||||||||||||||||||||
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 |
Balance at
beginning of period |
Charged to
costs and expenses |
Charged to
other accounts |
Deductions (1) |
Balance at
end of period |
||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||
Reinsurance recoverables (2)
|
$ | 92 | $ | 1 | $ | 53 | $ | — | $ | 146 | ||||||||||||||||||||||
Allowance for uncollectible: | ||||||||||||||||||||||||||||||||
Premiums receivable from underwriting activities
|
$ | 55 | $ | 95 | $ | 2 | $ | 47 | $ | 105 | ||||||||||||||||||||||
Deductibles | $ | 22 | $ | 7 | $ | (2) | $ | — | $ | 27 | ||||||||||||||||||||||
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 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 2,358 | $ | 54,510 | $ | 1,138 | $ | 15,222 | $ | 29,044 | $ | 2,227 | $ | 19,285 | $ | (267) | $ | 4,773 | $ | 16,589 | $ | 29,732 | ||||||||||||||||||||||||||||||||||||||||||||||
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 |
Participant: | “NAME” | Grant Date: | “GRANT DATE” | ||||||||
Number of Shares: | “GRANTED” | Grant Price: | $ “GRANT PRICE” | ||||||||
Expiration Date: | “EXPIRATION DATE” | Vesting Date: | 3 years from Grant Date |
Take an approved personal leave of absence approved by the Travelers Group under its Personal Leave Policy, if applicable
|
For the first three months of an approved personal leave, vesting continues. If the approved leave exceeds three months, vesting is suspended until you return to work with the Travelers Group and remain actively employed for 30 calendar days, after which time vesting will be restored retroactively. Vested options may be exercised during approved leave, but no later than the original option expiration date. If you terminate employment for any reason during the first year of an approved leave, the termination of employment provisions will apply. If the leave exceeds one year, all options will be cancelled immediately.
|
||||
Are on an approved family leave, medical leave, dependent care leave, military leave, or other statutory leave of absence or notice leave (including, without limitation, “garden leave” but not including any period corresponding to pay in lieu of notice (by statute or common law), severance pay or other monies on account of the cessation of your employment)
|
Options will continue to vest on schedule, and you may exercise vested options during the leave but no later than the original option expiration date. | ||||
Die while employed or following employment while your option is still outstanding
|
Options fully vest upon death. Your estate may exercise options for up to one year from the date of death but no later than the original option expiration date. | ||||
Are involuntarily terminated without “Cause” (as defined below) or terminate employment for “Good Reason” (as defined below), in each case, within 24 months following a Change of Control (as defined in the Plan), and including, without limitation, if such involuntary termination without “Cause” or termination for “Good Reason” within 24 months following a Change of Control occurs after the onset of a disability or other approved leave or after meeting the Retirement Rule (any such termination, a “COC Termination”) | Unvested options fully vest on the Termination Date. You may exercise your vested options for up to 90 days after the Termination Date (or up to one year after the Termination Date if you are disabled on the Termination Date, or up to three years after the Termination Date if you meet the Retirement Rule) but in any case no later than the original option expiration date. |
If You: | |||||
Meet the Retirement Rule (subject to Exhibit B if applicable)
|
Unvested options fully vest on the Termination Date. Vested options may be exercised for up to five years from the Termination Date in the case of an Early Retirement, but no later than the original option expiration date, and may be exercised until the original option expiration date in the case of a termination meeting the Retirement Rule that is not an Early Retirement; provided, in each case, that you do not engage in any activities that compete with the business operations of the Travelers Group (as determined by the Company in its sole discretion), including, but not limited to, working for another insurance company engaged in the property casualty insurance business as either an employee or independent contractor. You are not subject to this non-compete provision if you are terminated involuntarily or if you are employed in any state where state law prohibits such non-compete provisions, but you remain subject to Sections 7 and 8 of the Award Agreement, and the POE Agreement.
When you exercise any options subject to the Retirement Rule, your exercise will represent and constitute your certification to the Company that you have not engaged in any activities that compete with the business operations of the Travelers Group since your Termination Date. You may be required to provide the Company with other evidence of your compliance with the Retirement Rule as the Company may require. In the event that you are determined to have engaged in competitive activities while receiving the benefit of continued vesting pursuant to the Retirement Rule (other than following an involuntary termination), any outstanding portion of the Option will be immediately forfeited and any portion of the Option previously paid to you will be subject to recoupment by the Company in accordance with Section 8(f) of the Award Agreement.
|
Participant: | “NAME” | Grant Date: | “GRANT DATE” | |||||||||||
Number of Award Shares: | “GRANTED” | Vesting Date: | 3 years from Grant Date |
If You: | |||||
Meet the Retirement Rule (subject to Exhibit B, if applicable)
|
Your restricted stock unit Award Shares will continue to vest and the shares will be issued and distributed to you upon the Vesting Date for the Award, provided that, during the period prior to the Vesting Date, you do not engage in any activities that compete with the business operations of the Travelers Group (as determined by the Company in its sole discretion), including, but not limited to, working for another insurance company engaged in the property casualty insurance business as either an employee or independent contractor. You are not subject to this non-compete provision if you are terminated involuntarily or if you are employed in any state where state law prohibits such non-compete provisions, but you remain subject to Sections 7 and 8 of the Award Agreement, and the POE Agreement.
When called for under the above rules, you will be required to certify to the Company that you have not engaged in any activities that compete with the business operations of the Travelers Group since your Termination Date. You may be required to provide the Company with other evidence of your compliance with the Retirement Rule as the Company may require. In the event that you are determined to have engaged in competitive activities while receiving the benefit of continued vesting pursuant to the Retirement Rule (other than following an involuntary termination), any outstanding portion of the Award will be immediately forfeited and any portion of the Award previously paid to you will be subject to recoupment by the Company in accordance with Section 8(f) of the Award Agreement.
|
Participant: | “NAME” | Grant Date: | “GRANT DATE” | ||||||||
Number of Performance Shares: “GRANTED”
|
|||||||||||
Performance Period: XXXXX XX, 20XX to XXXXX XX, 20XX
|
Take an approved personal leave of absence approved by the Travelers Group under its Personal Leave Policy, if applicable
|
Your rights under the Award continue when you are on such leave of absence for up to three months. Once your approved leave of absence exceeds three months, your rights under the Award are suspended until you return to work with the Travelers Group and remain actively employed for 30 calendar days, after which your rights under the Award will be restored retroactively. If you terminate employment during the leave for any reason, the applicable termination of employment provisions will apply. If your personal leave of absence exceeds one year, your rights under the Award are cancelled and your right to the performance shares is forfeited.
|
||||
Are on an approved family leave, medical leave, dependent care leave, military leave, or other statutory leave of absence or notice leave (including, without limitation, “garden leave,” but not including any period corresponding to pay in lieu of notice (by statute or common law), severance pay or other monies on account of the cessation of your employment)
|
Your rights under the Award continue when you are on such leave of absence. | ||||
Die while employed or following employment while your Award is outstanding
|
Your estate will be entitled to receive a number of shares of Common Stock equal to the initial number of performance shares set forth at the beginning of the Award, plus any performance shares credited as dividend equivalents in connection with the dividends paid or payable as of the date of your death, multiplied by a fraction equal to the number of days in the Performance Period from the first day of the Performance Period to your date of death, divided by the total number of days in the Performance Period. Any such shares will be delivered as soon as administratively possible following your death. No performance shares shall be credited with respect to any cash dividends paid by the Company after the date of the Participant's death but prior to the distribution with respect to performance shares already credited to the Participant's account.
|
Are involuntarily terminated without “Cause” (as defined below) or terminate employment for “Good Reason” (as defined below), in each case, within 24 months following a Change of Control (as defined in the Plan), and including, without limitation, if such involuntary termination without “Cause” or termination for “Good Reason” within 24 months following a Change of Control occurs after the onset of a disability or other approved leave or after meeting the Retirement Rule (any such termination, a “COC Termination”) | You will be entitled to receive the number of shares of Common Stock you would have received, if any, if your employment had not terminated. Any such shares will be received at the time of settlement of the performance shares after the end of the Performance Period. |
If You: | |||||
Meet the Retirement Rule (subject
to Exhibit C, if applicable)
|
You will be entitled to receive a number of shares of Common Stock equal to the shares you would have received, if any, if your employment had not terminated due to retirement in accordance with the Retirement Rule. Any such shares will be received at the time of settlement of the performance shares after the end of the Performance Period. You will have a right to payment under the Retirement Rule provided that, prior to the time of settlement, you do not engage in any activities that compete with the business operations of the Travelers Group (as determined by the Company in its sole discretion), including, but not limited to, working for another insurance company engaged in the property casualty insurance business as either an employee or independent contractor. You are not subject to this non-compete provision if you are terminated involuntarily or if you are employed in any state where state law prohibits such non-compete provisions, but you remain subject to Sections 9 and 10 of the Award Agreement, and the POE Agreement.
When called for under the above rules, as a condition to receiving payment, you will be required to certify to the Company that you have not engaged in any activities that compete with the business operations of the Travelers Group since your Termination Date, and provide such other evidence of your compliance with the Retirement Rule as the Company may require. In the event that you are determined to have engaged in competitive activities while receiving the benefit of continued vesting pursuant to the Retirement Rule (other than following an involuntary termination), any outstanding portion of the Award will be immediately forfeited and any portion of the Award previously paid to you will be subject to recoupment by the Company in accordance with Section 10(f) of the Award Agreement.
|
Performance Period ROE*
|
% of Performance Shares Vested
|
||||
≥16.0% | 200% (Maximum) | ||||
14.5 | 180 | ||||
13.0 | 160 | ||||
12.5 | 150 | ||||
12.0 | 140 | ||||
11.5 | 130 | ||||
11.0 | 120 | ||||
10.5 | 110 | ||||
10.0 | 100 | ||||
8.5 | 75 | ||||
8.0 | 50 (Threshold) | ||||
<8.0 | 0 |
NOTIFICATION AND AGREEMENT OF ANNUAL DEFERRED
STOCK AWARD TO [NAME]
February 2, 2021
|
Name of Subsidiaries of The Travelers Companies, Inc. |
State or
Other Jurisdiction of Incorporation |
|||||||
Travelers Property Casualty Corp. | Connecticut | |||||||
Travelers Insurance Group Holdings Inc. | Delaware | |||||||
The Standard Fire Insurance Company | Connecticut | |||||||
Standard Fire Properties, LLC | Delaware | |||||||
Bayhill Restaurant II Associates | California | |||||||
Standard Fire UK Investments LLC | Delaware | |||||||
The Automobile Insurance Company of Hartford, Connecticut | Connecticut | |||||||
Auto Hartford Investments LLC | Delaware | |||||||
Travelers Personal Security Insurance Company | Connecticut | |||||||
Travelers Property Casualty Insurance Company | Connecticut | |||||||
Travelers Personal Insurance Company | Connecticut | |||||||
Travelers Texas MGA, Inc. | Texas | |||||||
The Travelers Indemnity Company | Connecticut | |||||||
Arch Street North LLC | Delaware | |||||||
Gulf Underwriters Insurance Company | Connecticut | |||||||
Select Insurance Company | Texas | |||||||
First Floridian Auto and Home Insurance Company | Florida | |||||||
Travelers Distribution Alliance, Inc. | Delaware | |||||||
Travelers Indemnity U.K. Investments LLC | Connecticut | |||||||
The Charter Oak Fire Insurance Company | Connecticut | |||||||
American Equity Insurance Company | Arizona | |||||||
American Equity Specialty Insurance Company
|
Connecticut | |||||||
Northland Insurance Company | Connecticut | |||||||
Northfield Insurance Company
|
Iowa | |||||||
Northland Casualty Company
|
Connecticut | |||||||
The Phoenix Insurance Company | Connecticut | |||||||
Constitution State Services LLC | Delaware | |||||||
Phoenix UK Investments LLC | Delaware | |||||||
The Travelers Indemnity Company of America | Connecticut | |||||||
The Travelers Indemnity Company of Connecticut | Connecticut | |||||||
Travelers Property Casualty Company of America | Connecticut | |||||||
The Travelers Home and Marine Insurance Company | Connecticut | |||||||
The Travelers Lloyds Insurance Company | Texas | |||||||
Travelers Marine, LLC | Delaware | |||||||
Travelers Marketplace Holdings, LLC | Delaware | |||||||
InsuraMatch, LLC | Delaware | |||||||
TPC U.K. Investments LLC | Delaware | |||||||
TravCo Insurance Company | Connecticut | |||||||
Travelers Commercial Casualty Company | Connecticut |
Name of Subsidiaries of The Travelers Companies, Inc. |
State or
Other Jurisdiction of Incorporation |
|||||||
TPC Investments, Inc. | Connecticut | |||||||
Travelers (Bermuda) Limited | Bermuda | |||||||
Travelers Casualty and Surety Company | Connecticut | |||||||
8527512 Canada Inc. | Canada | |||||||
The Dominion of Canada General Insurance Company (1) | Canada | |||||||
Farmington Casualty Company | Connecticut | |||||||
Travelers MGA, Inc. | Texas | |||||||
IHP Capital Partners Fund VIII, L.P. | Delaware | |||||||
The Family Business Institute LLC | Delaware | |||||||
Travelers Casualty and Surety Company of America | Connecticut | |||||||
Travelers Global, Inc. | Delaware | |||||||
Travelers Brazil Holding LLC | Delaware | |||||||
Travelers Brazil Acquisition LLC | Delaware | |||||||
Travelers Casualty Insurance Company of America | Connecticut | |||||||
Travelers Casualty Company of Connecticut | Connecticut | |||||||
Travelers Casualty UK Investments LLC | Delaware | |||||||
Travelers Commercial Insurance Company | Connecticut | |||||||
Travelers Excess and Surplus Lines Company | Connecticut | |||||||
Travelers Lloyds of Texas Insurance Company | Texas | |||||||
Travelers Insurance Company of Canada | Canada | |||||||
St. Paul Fire and Marine Insurance Company | Connecticut | |||||||
Fidelity and Guaranty Insurance Company | Iowa | |||||||
Fidelity and Guaranty Insurance Underwriters, Inc. | Wisconsin | |||||||
St. Paul Mercury Insurance Company | Connecticut | |||||||
St. Paul Guardian Insurance Company | Connecticut | |||||||
St. Paul Surplus Lines Insurance Company | Delaware | |||||||
The Travelers Casualty Company | Connecticut | |||||||
Travelers Constitution State Insurance Company | Connecticut | |||||||
Northbrook Holdings, Inc. | Delaware | |||||||
Discover Property & Casualty Insurance Company | Connecticut | |||||||
St. Paul Protective Insurance Company | Connecticut | |||||||
350 Market Street, LLC | Delaware | |||||||
United States Fidelity and Guaranty Company | Connecticut | |||||||
Discover Specialty Insurance Company | Connecticut | |||||||
Camperdown Corporation | Delaware | |||||||
TCI Global Services, Inc. | Delaware | |||||||
SPC Insurance Agency, Inc. | Minnesota | |||||||
Travelers Management Limited | United Kingdom | |||||||
Travelers Insurance Company Limited | United Kingdom | |||||||
Travelers Insurance Designated Activity Company | Ireland | |||||||
Travelers London Limited | United Kingdom | |||||||
F&G UK Underwriters Limited | United Kingdom | |||||||
Travelers Syndicate Management Limited | United Kingdom | |||||||
Aprilgrange Limited | United Kingdom |
Name of Subsidiaries of The Travelers Companies, Inc. |
State or
Other Jurisdiction of Incorporation |
|||||||
Travelers Underwriting Agency Limited | United Kingdom | |||||||
Simply Business Holdings, Inc.
|
Delaware | |||||||
Simply Business, Inc.
|
Massachusetts | |||||||
Harborway Insurance Agency, LLC | Massachusetts | |||||||
Xbridge Limited
|
United Kingdom | |||||||
10762962 Canada Inc.
|
Canada | |||||||
Zensurance Inc. (2)
|
Canada | |||||||
Zensurance Brokers Inc.
|
Canada |
/s/ KPMG LLP | ||
KPMG LLP | ||
New York, New York
February 11, 2021 |
Date | ||||||||||||||
By | /s/ ALAN L. BELLER | February 3, 2021 | ||||||||||||
Alan L. Beller | ||||||||||||||
By | /s/ JANET M. DOLAN | February 3, 2021 | ||||||||||||
Janet M. Dolan | ||||||||||||||
By | /s/ PATRICIA L. HIGGINS | February 3, 2021 | ||||||||||||
Patricia L. Higgins | ||||||||||||||
By | /s/ WILLIAM J. KANE | February 3, 2021 | ||||||||||||
William J. Kane | ||||||||||||||
By | /s/ CLARENCE OTIS JR. | February 3, 2021 | ||||||||||||
Clarence Otis Jr. | ||||||||||||||
By | /s/ ELIZABETH E. ROBINSON | February 3, 2021 | ||||||||||||
Elizabeth E. Robinson | ||||||||||||||
By | /s/ PHILIP T. RUEGGER III | February 3, 2021 | ||||||||||||
Philip T. Ruegger III | ||||||||||||||
By | /s/ TODD C. SCHERMERHORN | February 3, 2021 | ||||||||||||
Todd C. Schermerhorn | ||||||||||||||
By | /s/ DONALD J. SHEPARD | February 3, 2021 | ||||||||||||
Donald J. Shepard | ||||||||||||||
By | /s/ LAURIE J. THOMSEN | February 3, 2021 | ||||||||||||
Laurie J. Thomsen | ||||||||||||||
Date: February 11, 2021 | By: | /s/ ALAN D. SCHNITZER | ||||||||||||
Alan D. Schnitzer
Chairman and Chief Executive Officer |
Date: February 11, 2021 | By: | /s/ DANIEL S. FREY | ||||||||||||
Daniel S. Frey
Executive Vice President and Chief Financial Officer |
Date: February 11, 2021 | By: | /s/ ALAN D. SCHNITZER | ||||||||||||
Name: Alan D. Schnitzer
Title: Chairman and Chief Executive Officer |
Date: February 11, 2021 | By: | /s/ DANIEL S. FREY | ||||||||||||
Name: Daniel S. Frey
Title: Executive Vice President and Chief Financial Officer |