# Other Net Realized Investment Gains

Other net realized investment gains in 2017 included \$236 million of net realized investment gains related to equity securities, \$10 million of net realized investment gains from real estate sales,\$4 million of net realized gains related to fixed maturity investments and \$20 million of net realized investment losses related to other investments.

Other net realized investment gains in 2016 included \$59 million of net realized gains related to fixed maturity investments, \$14 million of net realized investment gains related to equity securities,\$7 million of net realized investment gains from real estate sales and \$17 million of net realized investment gains related to other investments.

Other net realized investment gains in 2015 included \$81 million of net realized gains related to fixed maturity investments, \$6 million of net realized investment gains related to equity securities,\$2 million of net realized investment gains from real estate sales and \$34 million of net realized investment losses related to other investments. The net realized investment losses related to other investments included \$26 million of realized foreign exchange translation losses incurred in connection with the Company’s increased ownership of Travelers Participac¸o˜es em Seguros Brasil S.A.

# Other Revenues

Other revenues in all years presented included installment premium charges. Other revenues in 2017 also included revenues from Simply Business, which was acquired in August 2017. Other revenues in 2017 and 2016 also included gains related to the settlement of reinsurance disputes (discussed in more detail in note 16 of notes to the consolidated financial statements). Other revenues in 2016 also included proceeds from the favorable settlement of a claims-related legal matter.

# Claims and Expenses

# Claims and Claim Adjustment Expenses

Claims and claim adjustment expenses in 2017 were \$17.47 billion, \$2.40 billion or 16% higher than in 2016, primarily reflecting the impacts of (i) significantly higher catastrophe losses, (ii) higher volumes of insured exposures, (iii) loss cost trends, (iv) lower net favorable prior year reserve development, (v) higher non-catastrophe fire-related losses in Business Insurance and (vi) higher non-catastrophe weather-related losses in Personal Insurance. Catastrophe losses in 2017 primarily resulted from wildfires in California, Hurricanes Harvey, Irma and Maria, and several winter, wind and hail storms throughout the United States.

Claims and claim adjustment expenses in 2016 were \$15.07 billion, \$1.35 billion or 10% higher than in 2015, primarily reflecting the impacts of (i) higher volumes of insured exposures, (ii) loss cost trends, (iii) higher catastrophe losses, (iv) lower net favorable prior year reserve development and (v) higher loss estimates in the personal automobile product line for bodily injury liability coverages, partially offset by (vi) lower non-catastrophe fire-related losses and other loss activity in Business Insurance. Catastrophe losses in 2016 primarily resulted from Hurricane Matthew, wind and hail storms in several regions of the United States, flooding in the Southeast region of the United States, wildfires in Canada and Tennessee, and winter storms in the eastern United States. Catastrophe losses in 2015 primarily resulted from wildfires in California, and several winter, wind and hail storms throughout the United States.

Factors contributing to net favorable prior year reserve development during the years ended December 31, 2017, 2016 and 2015 are discussed in more detail in note 7 of notes to the consolidated financial statements.

# Significant Catastrophe Losses

The Company defines a ‘‘catastrophe’’ as an event that:

• is 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; and

• the Company’s estimates of its ultimate losses before reinsurance and taxes exceed a pre-established dollar threshold.

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 2017 ranged from approximately \$17 million to \$30 million of losses before reinsurance and taxes.

The following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in 2017, 2016 and 2015, the amount of net unfavorable (favorable) prior year reserve development recognized in 2017 and 2016 for catastrophes that occurred in 2016 and 2015, and the estimate of ultimate losses for those catastrophes at December 31, 2017, 2016 and 2015. For purposes of the table, a significant catastrophe is an event for which the Company estimates its ultimate losses will be \$100 million or more after reinsurance and before taxes.

<table><tr><td rowspan="2">(in millions, pre-tax and net of reinsurance)</td><td colspan="3">Losses Incurred /
Unfavorable (Favorable)
Prior Year Reserve
Development for the Year
Ended December 31,</td><td colspan="3"> Estimated Ultimate
 Losses at December 31,</td></tr><tr><td>2017</td><td>2016</td><td>2015</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>PCS Serial Number:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>68—Winter storm . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td> $   3</td><td> $(11)</td><td>$140</td><td> $132</td><td> $129</td><td> $140</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>PCS Serial Number:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>21—Severe wind and hail storms . . . . . . . . . . . . . . .</td><td>(2)</td><td>150</td><td> n/a</td><td>148</td><td>150</td><td> n/a</td></tr><tr><td>25—Severe wind and hail storms . . . . . . . . . . . . . . .</td><td>10</td><td>168</td><td> n/a</td><td>178</td><td>168</td><td> n/a</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>PCS Serial Number:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>22—Severe wind and hail storms . . . . . . . . . . . . . . .</td><td>111</td><td> n/a</td><td> n/a</td><td>111</td><td> n/a</td><td> n/a</td></tr><tr><td>32—Severe wind and hail storms . . . . . . . . . . . . . . .</td><td>210</td><td> n/a</td><td> n/a</td><td>210</td><td> n/a</td><td> n/a</td></tr><tr><td>43—Hurricane Harvey . . . . . . . . . . . . . . . . . . . . . . .</td><td>254</td><td> n/a</td><td> n/a</td><td>254</td><td> n/a</td><td> n/a</td></tr><tr><td>44—Hurricane Irma . . . . . . . . . . . . . . . . . . . . . . . .</td><td>187</td><td> n/a</td><td> n/a</td><td>187</td><td> n/a</td><td> n/a</td></tr><tr><td>48—California wildfire—Tubbs fire . . . . . . . . . . . . . .</td><td>507</td><td> n/a</td><td> n/a</td><td>507</td><td> n/a</td><td> n/a</td></tr></table>

n/a: not applicable.

# Amortization of Deferred Acquisition Costs

Amortization of deferred acquisition costs in 2017 was \$4.17 billion, \$181 million or 5% higher than in 2016. Amortization of deferred acquisition costs in 2016 was \$3.99 billion, \$100 million or 3% higher than in 2015. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.