Record Core Income per Diluted Share of $4.91 and Core Return on Equity of 20.5%

Full Year Net Income of $2.697 billion, up 3%, and Return on Equity of 10.0%

Full Year Core Income of $2.686 billion, up 6%, and Core Return on Equity of 11.3%

• Fourth quarter net income of $1.310 billion and core income of $1.262 billion.
• Consolidated combined ratio improved 5.7 points to a very strong 86.7%; underlying combined ratio improved 3.4 points to a very strong 88.7%.
• Net written premiums of $7.269 billion, up 3% compared to the prior year quarter; full year net written premiums of $29.732 billion, up 2% compared to the prior year.
• Strong renewal rate change in all three segments, including record renewal rate change in Business Insurance and Bond & Specialty Insurance.
• Total capital returned to shareholders of $419 million, including $201 million of share repurchases; full year total capital returned to shareholders of $1.536 billion, including $672 million of share repurchases.
• Book value per share of $115.68, up 14% from year-end 2019; adjusted book value per share of $99.54, up 7% from year-end 2019.
• Board of Directors declares regular quarterly cash dividend of $0.85 per share.

NEW YORK--(BUSINESS WIRE)-- The Travelers Companies, Inc. today reported net income of $1.310 billion, or $5.10 per diluted share, for the quarter ended December 31, 2020, compared to $873 million, or $3.35 per diluted share, in the prior year quarter. Core income in the current quarter was $1.262 billion, or $4.91 per diluted share, compared to $867 million, or $3.32 per diluted share, in the prior year quarter. Core income increased primarily due to a higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), higher net favorable prior year reserve development, higher net investment income and lower catastrophe losses. Net realized investment gains in the current quarter were $50 million pre-tax ($48 million after-tax), compared to $12 million pre-tax ($6 million after-tax) in the prior year quarter. Per diluted share amounts benefited from the impact of share repurchases.

“We are very pleased to report fourth quarter core income of $1.3 billion, or $4.91 per diluted share, and core return on equity of 21%,” said Alan Schnitzer, Chairman and Chief Executive Officer. “The results benefited from strong underlying underwriting income, driven by record net earned premiums of $7.5 billion and an underlying combined ratio which improved 3.4 points from the prior year quarter to an excellent 88.7%. That brings full year core income to $2.7 billion, or $10.48 per diluted share, and full year core return on equity exceeding 11%, a terrific result in a challenging economic and operating environment. Full year core income includes record underlying underwriting profit of $2 billion. Our high-quality investment portfolio also performed well, generating net investment income of $572 million after-tax. Our operating results, together with our strong balance sheet, enabled us to grow adjusted book value per share by 7% during the year, after returning $1.5 billion of excess capital to shareholders, including $672 million of share repurchases, which we resumed in the fourth quarter.

“Our top line remained remarkably resilient this quarter and throughout the year. For the quarter, net written premiums grew 3%, driven by continued strong renewal rate change and retention in each of our three segments. In Business Insurance, we achieved record renewal rate change of 8.4%, nearly 4 points higher than the prior year quarter, while retention remained strong. In Bond & Specialty Insurance, net written premiums increased by 12%, driven by record renewal premium change of 10.9% in our domestic management liability business, including record renewal rate change. In Personal Insurance, net written premiums increased by 7%, driven by strong renewal premium change of 8.2% in our Agency Homeowners business and strong retention and new business in both Agency Auto and Agency Homeowners.

“Our ability to deliver strong results over this past year in the face of an historic pandemic, a record number of PCS catastrophe events and historically low interest rates reflects the value of underwriting excellence, our leading data and analytics, the dedication of our highly engaged and talented workforce and the significant value we bring to our customers and distribution partners. Looking forward, we believe we are well positioned to capitalize on the opportunities ahead as the economy reopens and to continue to deliver meaningful shareholder value over time.”

Fourth Quarter 2020 Results
(All comparisons vs. fourth quarter 2019, unless noted otherwise)

Net income of $1.310 billion increased $437 million due to higher core income and higher net realized investment gains. Core income of $1.262 billion increased $395 million, primarily due to a higher underlying underwriting gain, higher net favorable prior year reserve development, higher net investment income and lower catastrophe losses. The underlying underwriting gain benefited from higher business volumes and a lower underlying combined ratio. Net realized investment gains were $50 million pre-tax ($48 million after-tax), compared to $12 million pre-tax ($6 million after-tax) in the prior year quarter.

Combined ratio:

• The combined ratio of 86.7% improved 5.7 points due to a lower underlying combined ratio (3.4 points), higher net favorable prior year reserve development (1.6 points) and lower catastrophe losses (0.7 points).
• The underlying combined ratio of 88.7% improved 3.4 points. See below for further details by segment.
• Net favorable prior year reserve development occurred in all segments. See below for further details by segment. Catastrophe losses primarily resulted from Hurricane Zeta.

Net investment income of $677 million pre-tax ($572 million after-tax) increased 10%. Income from the fixed income investment portfolio decreased from the prior year quarter, primarily due to lower interest rates, partially offset by a higher average level of fixed maturity investments. Income from the non-fixed income investment portfolio increased over the prior year quarter, primarily due to higher private equity partnership returns.

Net written premiums of $7.269 billion increased 3%. See below for further details by segment.

Full Year 2020 Results
(All comparisons vs. full year 2019, unless noted otherwise)

Net income of $2.697 billion increased $75 million due to higher core income, partially offset by lower net realized investment gains. Core income of $2.686 billion increased by $149 million, primarily due to a higher underlying underwriting gain and net favorable prior year reserve development in the current year compared to net unfavorable prior year reserve development in the prior year, partially offset by higher catastrophe losses and lower net investment income. The underlying underwriting gain benefited from higher business volumes and a lower underlying combined ratio. Catastrophe and non-catastrophe weather-related losses in 2020 were reduced by the full $280 million of recoveries available under the Company’s 2020 Underlying Property Aggregate Catastrophe Excess-of-Loss Reinsurance Treaty in the third quarter of 2020. Catastrophe and non-catastrophe weather-related losses in 2019 were reduced by $135 million of recoveries available under the Company’s 2019 Underlying Property Aggregate Catastrophe Excess-of-Loss Reinsurance Treaty in the fourth quarter of 2019. Net realized investment gains were $2 million pre-tax ($11 million after-tax), compared to $113 million pre-tax ($85 million after-tax) in the prior year.

Combined ratio:

• The combined ratio of 95.0% improved 1.5 points due to a lower underlying combined ratio (2.5 points) and net favorable prior year reserve development in the current year compared to net unfavorable prior year reserve development in the prior year (1.4 points), partially offset by higher catastrophe losses (2.4 points).
• The underlying combined ratio of 90.7% improved 2.5 points. See below for further details by segment.
• Net favorable prior year reserve development in Personal Insurance was partially offset by net unfavorable prior year reserve development in Business Insurance. Prior year reserve development in Personal Insurance and Business Insurance included an aggregate $403 million subrogation benefit in the third quarter of 2020 from Pacific Gas and Electric Company (PG&E) related to the 2017 and 2018 California wildfires. Net prior year reserve development in Bond & Specialty Insurance was not significant.
• Catastrophe losses included the fourth quarter event described above, as well as tornado activity in Tennessee and other wind storms and winter storms in several regions of the United States in the first quarter of 2020, severe storms in several regions of the United States and civil unrest in the second quarter of 2020 and the derecho windstorm in the midwestern region of the United States, the Glass wildfire in California, Tropical Storm Isaias, Hurricane Laura and additional wildfires in the United States in the third quarter of 2020.

Net investment income of $2.227 billion pre-tax ($1.908 billion after-tax) decreased 10%. Income from the fixed income investment portfolio decreased from the prior year, primarily due to lower interest rates, partially offset by a higher average level of fixed maturity investments. Income from the non-fixed income investment portfolio decreased from the prior year, primarily due to lower private equity partnership returns which reflected the impact of the disruption in global financial markets in the first quarter of 2020 associated with COVID-19.

Net written premiums of $29.732 billion increased 2%. See below for further details by segment.

Shareholders’ Equity

Shareholders’ equity of $29.201 billion increased 13% over year-end 2019, driven by net income of $2.697 billion and higher net unrealized investment gains resulting from lower interest rates, partially offset by dividends to shareholders and common share repurchases. Net unrealized investment gains included in shareholders’ equity were $5.175 billion pre-tax ($4.074 billion after-tax), compared to net unrealized investment gains of $2.853 billion pre-tax ($2.246 billion after-tax) at year-end 2019. Book value per share of $115.68 increased 14% from year-end 2019, driven by the increase in shareholders’ equity and lower common shares outstanding as a result of share repurchases. Adjusted book value per share of $99.54, which excludes net unrealized investment gains, increased 7% from year-end 2019.

The Company repurchased 1.4 million shares during the fourth quarter at an average price of $136.78 per share for a total of $201 million. Capacity remaining under the existing share repurchase authorization was $1.161 billion at the end of the quarter. Also at the end of the quarter, statutory capital and surplus was $22.180 billion, and the ratio of debt-to-capital was 18.3%. The ratio of debt-to-capital excluding after-tax net unrealized investment gains included in shareholders’ equity was 20.7%, within the Company’s target range of 15% to 25%.

The Board of Directors declared a regular quarterly dividend of $0.85 per share. The dividend is payable on March 31, 2021, to shareholders of record at the close of business on March 10, 2021.

Fourth Quarter 2020 Results
(All comparisons vs. fourth quarter 2019, unless noted otherwise)

Segment income for Business Insurance was $713 million after-tax, an increase of $265 million. Segment income increased primarily due to higher net favorable prior year reserve development, a higher underlying underwriting gain, lower catastrophe losses and higher net investment income.

Combined ratio:

• The combined ratio of 89.8% improved 7.7 points due to higher net favorable prior year reserve development (3.0 points), a lower underlying combined ratio (2.8 points) and lower catastrophe losses (1.9 points).
• The underlying combined ratio of 93.6% improved by 2.8 points, impacted by earned pricing that exceeded loss cost trends and the favorable comparison as a result of the re-estimation of losses in the prior year quarter related to the first three quarters of 2019. COVID-19 and related economic conditions had a modest net favorable impact on the underlying combined ratio.
• Net favorable prior year reserve development was primarily driven by better than expected loss experience in the workers’ compensation product line for multiple accident years, partially offset by an increase to general liability reserves in our run-off book related to policies issued more than 20 years ago.

Net written premiums of $3.631 billion decreased 2%. The benefits of continued strong retention and higher renewal rate changes were more than offset by a modest reduction in exposures and a decrease in new business volume, both impacted by COVID-19 and related economic conditions.

Full Year 2020 Results
(All comparisons vs. full year 2019, unless noted otherwise)

Segment income for Business Insurance was $1.309 billion after-tax, a decrease of $83 million. Segment income decreased primarily due to lower net investment income and higher catastrophe losses, partially offset by lower net unfavorable prior year reserve development and a higher underlying underwriting gain.

Combined ratio:

• The combined ratio of 100.3% improved 0.6 points due to lower net unfavorable prior year reserve development (1.1 points) and a lower underlying combined ratio (0.7 points), partially offset by higher catastrophe losses (1.2 points).
• The underlying combined ratio of 95.5% improved 0.7 points, impacted by earned pricing that exceeded loss cost trends. COVID-19 and related economic conditions had a modest net unfavorable impact on the underlying combined ratio.
• Net unfavorable prior year reserve development was primarily driven by the following:

Asbestos reserves - an increase of $295 million;

General liability (excluding asbestos and environmental) - higher than expected loss experience in the segment’s domestic operations for primary and excess coverages for recent accident years, as well as an increase to general liability reserves in our run-off book related to policies issued more than 20 years ago;

Commercial automobile - higher than expected loss experience in the segment’s domestic operations for recent accident years; and

Commercial multi-peril (excluding PG&E subrogation recoveries and asbestos and environmental) - higher than expected loss experience in the segment’s domestic operations for recent accident years.

Partially offset by:

Workers’ compensation - better than expected loss experience in the segment’s domestic operations for multiple accident years;

Commercial property (excluding PG&E subrogation recoveries) - better than expected loss experience in the segment’s domestic operations for multiple accident years; and

PG&E subrogation recoveries - $81 million of recoveries as described above.

Net written premiums of $15.431 billion decreased 1%, driven by the same factors described above for the fourth quarter of 2020.

Fourth Quarter 2020 Results
(All comparisons vs. fourth quarter 2019, unless noted otherwise)

Segment income for Bond & Specialty Insurance was $164 million after-tax, a decrease of $3 million. Segment income decreased primarily due to a lower underlying underwriting gain, largely offset by higher net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

• The combined ratio of 80.9% increased 2.3 points due to a higher underlying combined ratio (3.7 points), partially offset by higher net favorable prior year reserve development (1.3 points) and slightly lower catastrophe losses (0.1 points).
• The underlying combined ratio of 85.0% increased 3.7 points, driven by the impacts of higher loss estimates for management liability coverages, primarily due to the impact of COVID-19 and related economic conditions.
• Net favorable prior year reserve development was primarily driven by better than expected loss experience in the surety product line for multiple accident years.

Net written premiums of $800 million increased 12%, reflecting continued strong retention and increased levels of renewal premium change in management liability.

Full Year 2020 Results
(All comparisons vs. full year 2019, unless noted otherwise)

Segment income for Bond & Specialty Insurance was $473 million after-tax, a decrease of $145 million. Segment income decreased primarily due to a lower underlying underwriting gain, an insignificant amount of net unfavorable prior year reserve development in the current year compared to net favorable prior year reserve development in the prior year and lower net investment income. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

• The combined ratio of 87.4% increased 7.9 points due to a higher underlying combined ratio (5.2 points), the comparison to net favorable prior year reserve development in the prior year (2.5 points) and slightly higher catastrophe losses (0.2 points).
• The underlying combined ratio of 87.0% increased 5.2 points, driven by the impacts of higher loss estimates for management liability coverages, primarily due to the impact of COVID-19 and related economic conditions.
• Net prior year reserve development in the current year was not significant, as higher than expected loss experience in the domestic general liability product line for management liability coverages for recent accident years was offset by better than expected loss experience in the surety product line for multiple accident years.

Net written premiums of $2.951 billion increased 8%, driven by the same factors described above for the fourth quarter of 2020.

Fourth Quarter 2020 Results
(All comparisons vs. fourth quarter 2019, unless noted otherwise)

Segment income for Personal Insurance was $457 million after-tax, an increase of $130 million. Segment income increased primarily due to a higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses and lower net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

• The combined ratio of 84.1% improved 4.4 points due to a lower underlying combined ratio (5.3 points), partially offset by higher catastrophe losses (0.5 points) and lower net favorable prior year reserve development (0.4 points).
• The underlying combined ratio of 83.1% improved 5.3 points, primarily driven by lower losses in the automobile product line due to a decrease in miles driven attributable to COVID-19 and related economic conditions, partially offset by higher losses in the homeowners and other product line.
• Net favorable prior year reserve development was driven by better than expected loss experience in the segment’s domestic operations in the automobile product line for recent accident years.

Net written premiums of $2.838 billion increased 7%. Agency Automobile net written premiums increased 2%, driven by strong retention and higher levels of new business. Agency Homeowners and Other net written premiums increased 13%, driven by strong retention, renewal premium change of 8% and higher levels of new business.

Full Year 2020 Results
(All comparisons vs. full year 2019, unless noted otherwise)

Segment income for Personal Insurance was $1.195 billion after-tax, an increase of $371 million. Segment income increased primarily due to a higher underlying underwriting gain and higher net favorable prior year reserve development, partially offset by higher catastrophe losses and lower net investment income. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

• The combined ratio of 89.7% improved 4.5 points due to a lower underlying combined ratio (6.5 points) and higher net favorable prior year reserve development (2.8 points), partially offset by higher catastrophe losses (4.8 points).
• The underlying combined ratio of 85.0% improved 6.5 points, primarily driven by lower losses in the automobile product line due to a decrease in miles driven attributable to COVID-19 and related economic conditions (net of premium refunds) and lower non-catastrophe weather-related losses in the homeowners and other product line.
• Net favorable prior year reserve development was driven by $322 million of PG&E subrogation recoveries described above and better than expected loss experience in the segment’s domestic operations in the automobile product line for recent accident years.

Net written premiums of $11.350 billion increased 5%. Agency Automobile net written premiums decreased 1%, driven by premium refunds provided to personal automobile customers, partially offset by strong retention and higher levels of new business. Agency Homeowners and Other net written premiums increased 14%, driven by strong retention, renewal premium change of 8% and higher levels of new business.

Financial Supplement and Conference Call

The information in this press release should be read in conjunction with the financial supplement that is available on our website at www.travelers.com. Travelers management will discuss the contents of this release and other relevant topics via webcast at 9 a.m. Eastern (8 a.m. Central) on Thursday, January 21, 2021. Investors can access the call via webcast at http://investor.travelers.com or by dialing 1.844.895.1976 within the United States and 1.647.689.5389 outside the United States. Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the Company’s website.

Following the live event, replays will be available via webcast for one year at http://investor.travelers.com and by telephone for 30 days by dialing 800.585.8367 within the United States or 416.621.4642 outside the United States. All callers should use conference ID 9075479.

About Travelers

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $32 billion in 2020. For more information, visit www.travelers.com.

Travelers may use its website and/or social media outlets, such as Facebook and Twitter, as distribution channels of material Company information. Financial and other important information regarding the Company is routinely accessible through and posted on our website at http://investor.travelers.com, our Facebook page at https://www.facebook.com/travelers and our Twitter account (@Travelers) at https://twitter.com/travelers. In addition, you may automatically receive email alerts and other information about Travelers when you enroll your email address by visiting the Email Notifications section at http://investor.travelers.com.

Travelers is organized into the following reportable business segments:

Business Insurance - Business Insurance offers a broad array of property and casualty insurance and insurance-related services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyd’s.

Bond & Specialty Insurance - Bond & Specialty Insurance provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers in the United States and certain specialty insurance products in Canada, the United Kingdom and the Republic of Ireland, as well as Brazil through a joint venture, utilizing various degrees of financially-based underwriting approaches.

Personal Insurance - Personal Insurance writes a broad range of property and casualty insurance covering individuals’ personal risks, primarily in the United States, as well as in Canada. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.

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Forward-Looking Statements

This press release contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “views,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements include, among other things, the Company’s statements about:

• the Company’s outlook and its future results of operations and financial condition (including, among other things, anticipated premium volume, premium rates, renewal premium changes, underwriting margins and underlying underwriting margins, net and core income, investment income and performance, loss costs, return on equity, core return on equity and expected current returns, and combined ratios and underlying combined ratios);
• the impact of COVID-19 and related economic conditions, including the potential impact on the Company’s investments;
• the impact of legislative or regulatory actions or court decisions taken in response to COVID-19 or otherwise;
• share repurchase plans;
• future pension plan contributions;
• the sufficiency of the Company’s asbestos and other reserves;
• the impact of emerging claims issues as well as other insurance and non-insurance litigation;
• the cost and availability of reinsurance coverage;
• catastrophe losses;
• the impact of investment (including changes in interest rates), economic (including inflation, changes in tax law, changes in commodity prices and fluctuations in foreign currency exchange rates) and underwriting market conditions;
• strategic and operational initiatives to improve profitability and competitiveness;
• the Company’s competitive advantages;
• new product offerings;
• the impact of new or potential regulations imposed or to be imposed by the United States or other nations, including tariffs or other barriers to international trade; and
• the impact of developments in the tort environment, such as increased attorney involvement in insurance claims and legislation allowing victims of sexual abuse to file or proceed with claims that otherwise would have been time-barred.

The Company cautions investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the Company’s control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Some of the factors that could cause actual results to differ include, but are not limited to, the following:

• high levels of catastrophe losses, including as a result of factors such as increased concentrations of insured exposures in catastrophe-prone areas, could materially and adversely affect the Company’s results of operations, its financial position and/or liquidity, and could adversely impact the Company’s ratings, the Company’s ability to raise capital and the availability and cost of reinsurance;
• if actual claims exceed the Company’s claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, including as a result of, among other things, changes in the legal/tort, regulatory and economic environments in which the Company operates or the impacts of COVID-19, the Company’s financial results could be materially and adversely affected;
• the impact of COVID-19 and related risks, including on the Company’s distribution or other key partners, could materially affect the Company’s results of operations, financial position and/or liquidity;
• during or following a period of financial market disruption or an economic downturn, such as the current environment, the Company’s business could be materially and adversely affected;
• the Company’s investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses, particularly in the current environment;
• the intense competition that the Company faces, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which it operates, could harm its ability to maintain or increase its business volumes and its profitability;
• the Company’s business could be harmed because of its potential exposure to asbestos and environmental claims and related litigation;
• disruptions to the Company’s relationships with its independent agents and brokers or the Company’s inability to manage effectively a changing distribution landscape could adversely affect the Company;
• the Company is exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances;
• the effects of emerging claim and coverage issues on the Company’s business are uncertain, and court decisions or legislative or regulatory changes that take place after the Company issues its policies, including those taken in response to COVID-19 (such as effectively expanding workers’ compensation coverage by instituting presumptions of compensability of claims for certain types of workers or requiring insurers to cover business interruption claims irrespective of terms, exclusions or other conditions included in the policies that would otherwise preclude coverage), can result in an unexpected increase in the number of claims and have a material adverse impact on the Company’s results of operations;
• the Company may not be able to collect all amounts due to it from reinsurers, reinsurance coverage may not be available to the Company in the future at commercially reasonable rates or at all and the Company is exposed to credit risk related to its structured settlements;
• the Company is exposed to credit risk in certain of its insurance operations and with respect to certain guarantee or indemnification arrangements that it has with third parties, which risk is heightened in the current environment;
• within the United States, the Company’s businesses are heavily regulated by the states in which it conducts business, including licensing, market conduct and financial supervision, and changes in regulation or regulatory actions (including those taken in response to COVID-19) may reduce the Company’s profitability and limit its growth;
• a downgrade in the Company’s claims-paying and financial strength ratings could adversely impact the Company’s business volumes, adversely impact the Company’s ability to access the capital markets and increase the Company’s borrowing costs;
• the inability of the Company’s insurance subsidiaries to pay dividends to the Company’s holding company in sufficient amounts would harm the Company’s ability to meet its obligations, pay future shareholder dividends and/or make future share repurchases;
• the Company’s efforts to develop new products, expand in targeted markets or improve business processes and workflows may not be successful and may create enhanced risks;
• the Company may be adversely affected if its pricing and capital models provide materially different indications than actual results;
• the Company’s business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology, particularly as its business processes become more digital;
• if the Company experiences difficulties with technology, data and network security (including as a result of cyber attacks), outsourcing relationships or cloud-based technology, the Company’s ability to conduct its business could be negatively impacted. This risk is heightened in the current environment where a majority of the Company’s employees have shifted to a work from home arrangement;
• the Company is also subject to a number of additional risks associated with its business outside the United States, such as foreign currency exchange fluctuations (including with respect to the valuation of the Company’s foreign investments and interests in joint ventures) and restrictive regulations as well as the risks and uncertainties associated with the United Kingdom’s withdrawal from the European Union;
• regulatory changes outside of the United States, including in Canada, the United Kingdom, the Republic of Ireland and the European Union, could adversely impact the Company’s results of operations and limit its growth;
• loss of or significant restrictions on the use of particular types of underwriting criteria, such as credit scoring, or other data or methodologies, in the pricing and underwriting of the Company’s products could reduce the Company’s future profitability;
• acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences;
• the Company could be adversely affected if its controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective;
• the Company’s businesses may be adversely affected if it is unable to hire and retain qualified employees;
• intellectual property is important to the Company’s business, and the Company may be unable to protect and enforce its own intellectual property or the Company may be subject to claims for infringing the intellectual property of others;
• changes in federal regulation could impose significant burdens on the Company, and otherwise adversely impact the Company’s results;
• changes in U.S. tax laws or in the tax laws of other jurisdictions where the Company operates could adversely impact the Company; and
• the Company’s share repurchase plans depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels commensurate with the Company’s desired ratings from independent rating agencies, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions and other factors, including the ongoing level of uncertainty related to COVID-19.

Our forward-looking statements speak only as of the date of this press release or as of the date they are made, and we undertake no obligation to update forward-looking statements. For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the quarterly report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on October 20, 2020 and in our most recent annual report on Form 10-K filed with the SEC on February 13, 2020, in each case as updated by our periodic filings with the SEC.

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GLOSSARY OF FINANCIAL MEASURES AND RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

The following measures are used by the Company’s management to evaluate financial performance against historical results, to establish performance targets on a consolidated basis and for other reasons as discussed below. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated financial statements or are not required to be disclosed in the notes to financial statements or, in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure. Reconciliations of these measures to the most comparable GAAP measures also follow.

In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance.

Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, included in shareholders’ equity, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.

Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.

RECONCILIATION OF NET INCOME TO CORE INCOME AND CERTAIN OTHER NON-GAAP MEASURES

Core income (loss) is 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, and cumulative effect of changes in accounting principles when applicable. Segment income (loss) is 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 core income (loss) when analyzing the results and trends of insurance companies. Core income (loss) per share is core income (loss) on a per common share basis.