Excellent Underlying Results, Net Favorable
Prior Year Reserve Development and Higher Net Investment Income
More Than Offset Significant Catastrophe Losses from Severe
Convective Storms
Second Quarter 2024 Net Income per Diluted
Share of $2.29 and Return on Equity of 8.6%
Second Quarter 2024 Core Income per Diluted
Share of $2.51 and Core Return on Equity of 8.1%
- Second quarter net income of $534 million and core income of
$585 million.
- Consolidated combined ratio improved 6.3 points from the prior
year quarter to 100.2%.
- Catastrophe losses of $1.509 billion pre-tax, compared to
$1.481 billion pre-tax in the prior year quarter.
- Underlying combined ratio improved 3.4 points from the prior
year quarter to an excellent 87.7%.
- Net favorable prior year reserve development of $230 million
pre-tax, with favorable development in all three segments.
- Record net written premiums of $11.115 billion, up 8%, with
growth in all three segments.
- Net investment income increased 24% pre-tax over the prior year
quarter, primarily due to strong fixed income returns and growth in
fixed maturity investments.
- Total capital of $498 million returned to shareholders,
including $253 million of share repurchases.
- Book value per share of $109.08, up 14% over June 30, 2023;
adjusted book value per share of $126.52, up 10% over June 30,
2023.
- Board of Directors declares regular cash dividend of $1.05 per
share.
The Travelers Companies, Inc. today reported net income of $534
million, or $2.29 per diluted share, for the quarter ended June 30,
2024, compared to a net loss of $14 million, or $0.07 per diluted
share, in the prior year quarter. Core income in the current
quarter was $585 million, or $2.51 per diluted share, compared to
$15 million, or $0.06 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 and higher net investment income,
partially offset by higher catastrophe losses. Net realized
investment losses in the current quarter were $65 million pre-tax
($51 million after-tax), compared to net realized investment losses
of $35 million pre-tax ($29 million after-tax) in the prior year
quarter. Per diluted share amounts benefited from the impact of
share repurchases.
Consolidated Highlights
($ in millions, except for per share
amounts, and after-tax, except for premiums and revenues)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
Net written premiums
$
11,115
$
10,318
8
%
$
21,297
$
19,714
8
%
Total revenues
$
11,283
$
10,098
12
$
22,511
$
19,802
14
Net income (loss)
$
534
$
(14
)
NM
$
1,657
$
961
72
per diluted share
$
2.29
$
(0.07
)
NM
$
7.09
$
4.09
73
Core income
$
585
$
15
NM
$
1,681
$
985
71
per diluted share
$
2.51
$
0.06
NM
$
7.20
$
4.19
72
Diluted weighted average shares
outstanding
231.5
229.7
1
231.8
233.3
(1
)
Combined ratio
100.2
%
106.5
%
(6.3
)
pts
97.1
%
101.1
%
(4.0
)
pts
Underlying combined ratio
87.7
%
91.1
%
(3.4
)
pts
87.7
%
90.8
%
(3.1
)
pts
Return on equity
8.6
%
(0.2
)%
8.8
pts
13.3
%
8.6
%
4.7
pts
Core return on equity
8.1
%
0.2
%
7.9
pts
11.8
%
7.4
%
4.4
pts
As of
Change From
June 30, 2024
December 31,
2023
June 30, 2023
December 31,
2023
June 30, 2023
Book value per share
$
109.08
$
109.19
$
95.46
—
%
14
%
Adjusted book value per share
126.52
122.90
115.45
3
%
10
%
NM = Not meaningful.
See Glossary of Financial Measures for
definitions and the statistical supplement for additional financial
data.
“We are pleased to have generated a strong bottom line result in
a quarter that included a record level of severe convective storms
across the United States,” said Alan Schnitzer, Chairman and Chief
Executive Officer. “Core income of $585 million, or $2.51 per
diluted share, benefited from excellent underlying results,
favorable net prior year reserve development and higher investment
income.
“Underlying underwriting income of $1.2 billion pre-tax was up
55% over the prior year quarter, driven by record net earned
premiums of $10.2 billion and a consolidated underlying combined
ratio that improved 3.4 points to an excellent 87.7%. Net earned
premiums were higher in all three of our business segments. The
underlying combined ratio in our Business Insurance segment was an
excellent 89.2%; the underlying combined ratio in our Bond &
Specialty Insurance business improved 1.7 points to a very strong
86.1%; and the underlying combined ratio in Personal Insurance
improved by nearly eight points to a terrific 86.3%. Our
high-quality investment portfolio continued to perform well,
generating after-tax net investment income of $727 million, driven
by strong and reliable returns from our growing fixed income
portfolio and higher returns from our non-fixed income portfolio.
We returned $498 million of excess capital to our shareholders this
quarter, including $253 million of share repurchases.
“Through terrific marketplace execution across all three
segments, we grew net written premiums in the quarter by 8% to
$11.1 billion. In Business Insurance, we grew net written premiums
by 7% to $5.5 billion. Renewal premium change in the segment
remained very strong at 10.1%, while retention remained high at 85%
and new business increased 9% to a record $732 million. In Bond
& Specialty Insurance, we grew net written premiums by 8% to
more than $1 billion, with excellent retention of 90% in our
high-quality management liability business. In our industry-leading
surety business, we grew net written premiums by 11%. Given the
attractive returns, we are very pleased with the strong production
results in both of our commercial business segments. In Personal
Insurance, continued strong pricing drove 9% growth in net written
premiums, with growth of 10% in Auto and 8% in Home.
“We continue to be very confident in the outlook for our
business. Our results for the first half of the year include strong
premium growth, excellent underlying underwriting profitability,
record operating cash flow and steadily rising investment returns
in our growing fixed income portfolio. With a strong and
diversified business and balance sheet, we delivered 13.6% core
return on equity over the last twelve months, despite elevated
industrywide catastrophe losses. We also continue to grow adjusted
book value per share, while making important investments in our
business and returning substantial excess capital to shareholders.
With this momentum and plenty of opportunity ahead of us, we remain
well positioned for success this year and beyond.”
Consolidated Results
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain (loss):
$
(65
)
$
(640
)
$
575
$
512
$
(273
)
$
785
Underwriting gain
(loss) includes:
Net favorable prior year reserve
development
230
60
170
321
165
156
Catastrophes, net of reinsurance
(1,509
)
(1,481
)
(28
)
(2,221
)
(2,016
)
(205
)
Net investment income
885
712
173
1,731
1,375
356
Other income (expense), including
interest expense
(99
)
(85
)
(14
)
(187
)
(193
)
6
Core income (loss) before income
taxes
721
(13
)
734
2,056
909
1,147
Income tax expense (benefit)
136
(28
)
164
375
(76
)
451
Core income
585
15
570
1,681
985
696
Net realized investment losses after
income taxes
(51
)
(29
)
(22
)
(24
)
(24
)
—
Net income (loss)
$
534
$
(14
)
$
548
$
1,657
$
961
$
696
Combined ratio
100.2
%
106.5
%
(6.3
)
pts
97.1
%
101.1
%
(4.0
)
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(2.2
)
pts
(0.7
)
pts
(1.5
)
pts
(1.5
)
pts
(0.9
)
pts
(0.6
)
pts
Catastrophes, net of reinsurance
14.7
pts
16.1
pts
(1.4
)
pts
10.9
pts
11.2
pts
(0.3
)
pts
Underlying combined ratio
87.7
%
91.1
%
(3.4
)
pts
87.7
%
90.8
%
(3.1
)
pts
Net written premiums
Business Insurance
$
5,539
$
5,175
7
%
$
11,135
$
10,332
8
%
Bond & Specialty Insurance
1,040
964
8
1,983
1,850
7
Personal Insurance
4,536
4,179
9
8,179
7,532
9
Total
$
11,115
$
10,318
8
%
$
21,297
$
19,714
8
%
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted
otherwise)
Net income of $534 million increased $548 million, due to higher
core income, partially offset by higher net realized investment
losses. Core income of $585 million increased $570 million,
primarily due to a higher underlying underwriting gain, higher net
favorable prior year reserve development and higher net investment
income, partially offset by higher catastrophe losses. The
underlying underwriting gain benefited from higher business
volumes. Net realized investment losses were $65 million pre-tax
($51 million after-tax), compared to net realized investment losses
of $35 million pre-tax ($29 million after-tax) in the prior year
quarter.
Combined ratio:
- The combined ratio of 100.2% improved 6.3 points due to an
improvement in the underlying combined ratio (3.4 points), higher
net favorable prior year reserve development (1.5 points) and lower
catastrophe losses as a percentage of net earned premiums (1.4
points).
- The underlying combined ratio improved 3.4 points to 87.7%. 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 numerous severe wind
and hail storms in multiple states.
Net investment income of $885 million pre-tax ($727 million
after-tax) increased 24%. Income from the fixed income investment
portfolio increased over the prior year quarter due to a higher
average yield and growth in 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. Non-fixed income returns are generally reported on a
one-quarter lagged basis and directionally follow the broader
equity markets.
Net written premiums of $11.115 billion increased 8%. See below
for further details by segment.
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Net income of $1.657 billion increased $696 million, due to
higher core income. Core income of $1.681 billion increased $696
million, primarily due to a higher underlying underwriting gain,
higher net investment income and higher net favorable prior year
reserve development, partially offset by higher catastrophe losses.
The underlying underwriting gain benefited from higher business
volumes. The underlying underwriting gain in the prior year
included a one-time tax benefit of $211 million due to the
expiration of the statute of limitations with respect to a tax
item. Net realized investment losses were $30 million pre-tax ($24
million after-tax), compared to net realized investment losses of
$29 million pre-tax ($24 million after-tax) in the prior year.
Combined ratio:
- The combined ratio of 97.1% improved 4.0 points due to an
improvement in the underlying combined ratio (3.1 points), higher
net favorable prior year reserve development (0.6 points) and lower
catastrophe losses as a percentage of net earned premiums (0.3
points).
- The underlying combined ratio of 87.7% improved 3.1 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 included the second quarter events described
above, as well as severe wind and hail storms in the central and
eastern regions of the United States in the first three months of
2024.
Net investment income of $1.731 billion pre-tax ($1.425 billion
after-tax) increased 26% driven by the same factors described above
for the second quarter of 2024.
Net written premiums of $21.297 billion increased 8%. See below
for further details by segment.
Shareholders’ Equity
Shareholders’ equity of $24.862 billion decreased slightly from
year-end 2023, primarily due to higher net unrealized investment
losses, common share repurchases and dividends to shareholders,
largely offset by net income of $1.657 billion. Net unrealized
investment losses included in shareholders’ equity were $5.043
billion pre-tax ($3.976 billion after-tax), compared to $3.970
billion pre-tax ($3.129 billion after-tax) at year-end 2023. The
increase in net unrealized investment losses was driven primarily
by higher interest rates. Book value per share of $109.08 was
comparable with year-end 2023. Adjusted book value per share of
$126.52, which excludes net unrealized investment gains (losses),
increased 3% from year-end 2023.
The Company repurchased 1.2 million shares during the second
quarter at an average price of $211.24 per share for a total cost
of $253 million. At June 30, 2024, the Company had $5.540 billion
of capacity remaining under its share repurchase authorizations
approved by the Board of Directors. At the end of the quarter,
statutory capital and surplus was $25.210 billion, and the ratio of
debt-to-capital was 24.4%. The ratio of debt-to-capital excluding
after-tax net unrealized investment gains (losses) included in
shareholders’ equity was 21.8%, within the Company’s target range
of 15% to 25%.
The Board of Directors declared a regular quarterly dividend of
$1.05 per share. The dividend is payable September 30, 2024, to
shareholders of record at the close of business on September 10,
2024.
Business
Insurance Segment Financial Results
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain (loss):
$
193
$
(14
)
$
207
$
527
$
259
$
268
Underwriting gain
(loss) includes:
Net favorable (unfavorable) prior year
reserve development
34
(101
)
135
34
(82
)
116
Catastrophes, net of reinsurance
(389
)
(396
)
7
(598
)
(595
)
(3
)
Net investment income
632
509
123
1,241
982
259
Other income (expense)
(10
)
(10
)
—
(19
)
(43
)
24
Segment income before income
taxes
815
485
330
1,749
1,198
551
Income tax expense
159
83
76
329
40
289
Segment income
$
656
$
402
$
254
$
1,420
$
1,158
$
262
Combined ratio
96.1
%
100.1
%
(4.0
)
pts
94.7
%
96.9
%
(2.2
)
pts
Impact on combined
ratio
Net (favorable) unfavorable prior year
reserve development
(0.6
)
pts
2.2
pts
(2.8
)
pts
(0.3
)
pts
0.9
pts
(1.2
)
pts
Catastrophes, net of reinsurance
7.5
pts
8.5
pts
(1.0
)
pts
5.8
pts
6.5
pts
(0.7
)
pts
Underlying combined ratio
89.2
%
89.4
%
(0.2
)
pts
89.2
%
89.5
%
(0.3
)
pts
Net written premiums by market
Domestic
Select Accounts
$
975
$
883
10
%
$
1,949
$
1,791
9
%
Middle Market
2,769
2,618
6
5,982
5,544
8
National Accounts
312
277
13
639
571
12
National Property and Other
912
862
6
1,554
1,452
7
Total Domestic
4,968
4,640
7
10,124
9,358
8
International
571
535
7
1,011
974
4
Total
$
5,539
$
5,175
7
%
$
11,135
$
10,332
8
%
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted
otherwise)
Segment income for Business Insurance was $656 million
after-tax, an increase of $254 million. Segment income increased
primarily due to net favorable prior year reserve development
compared to net unfavorable prior year reserve development in the
prior year quarter, higher net investment income and a higher
underlying underwriting gain. The underlying underwriting gain
benefited from higher business volumes.
Combined ratio:
- The combined ratio of 96.1% improved 4.0 points due to net
favorable prior year reserve development compared to net
unfavorable prior year reserve development in the prior year
quarter (2.8 points), lower catastrophe losses (1.0 points) and an
improvement in the underlying combined ratio (0.2 points).
- The underlying combined ratio remained excellent at 89.2%.
- Net favorable prior year reserve development was primarily
driven by better than expected loss experience in the domestic
operations’ workers’ compensation product line for multiple
accident years, partially offset by higher than expected loss
experience in the general liability product line for recent
accident years, driven by excess coverages, as well as an addition
to reserves related to run-off.
Net written premiums of $5.539 billion increased 7%, reflecting
strong renewal premium change and retention, as well as higher
levels of new business.
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for Business Insurance was $1.420 billion
after-tax, an increase of $262 million. Segment income increased
primarily due to higher net investment income and net favorable
prior year reserve development compared to net unfavorable prior
year reserve development in the prior year period, partially offset
by a lower underlying underwriting gain. The underlying
underwriting gain benefited from higher business volumes. The
underlying underwriting gain in the prior year period included a
one-time tax benefit of $171 million due to the expiration of the
statute of limitations with respect to a tax item.
Combined ratio:
- The combined ratio of 94.7% improved 2.2 points due to net
favorable prior year reserve development compared to net
unfavorable prior year reserve development in the prior year period
(1.2 points), lower catastrophe losses as a percentage of net
earned premiums (0.7 points) and an improvement in the underlying
combined ratio (0.3 points).
- The underlying combined ratio remained excellent at 89.2%.
- Net favorable prior year reserve development was primarily
driven by the same factors described above for the second quarter
of 2024.
Net written premiums of $11.135 billion increased 8%, reflecting
the same factors described above for the second quarter of
2024.
Bond
& Specialty Insurance Segment Financial Results
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain:
$
115
$
205
$
(90
)
$
259
$
376
$
(117
)
Underwriting gain
includes:
Net favorable prior year reserve
development
24
119
(95
)
48
177
(129
)
Catastrophes, net of reinsurance
(40
)
(21
)
(19
)
(45
)
(26
)
(19
)
Net investment income
94
78
16
184
151
33
Other income
5
6
(1
)
11
10
1
Segment income before income
taxes
214
289
(75
)
454
537
(83
)
Income tax expense
44
59
(15
)
89
100
(11
)
Segment income
$
170
$
230
$
(60
)
$
365
$
437
$
(72
)
Combined ratio
87.7
%
77.1
%
10.6
pts
86.1
%
78.5
%
7.6
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(2.5
)
pts
(13.0
)
pts
10.5
pts
(2.5
)
pts
(9.9
)
pts
7.4
pts
Catastrophes, net of reinsurance
4.1
pts
2.3
pts
1.8
pts
2.3
pts
1.5
pts
0.8
pts
Underlying combined ratio
86.1
%
87.8
%
(1.7
)
pts
86.3
%
86.9
%
(0.6
)
pts
Net written premiums
Domestic
Management Liability
$
586
$
541
8
%
$
1,129
$
1,052
7
%
Surety
325
293
11
621
550
13
Total Domestic
911
834
9
1,750
1,602
9
International
129
130
(1
)
233
248
(6
)
Total
$
1,040
$
964
8
%
$
1,983
$
1,850
7
%
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted
otherwise)
Segment income for Bond & Specialty Insurance was $170
million after-tax, a decrease of $60 million. Segment income
decreased primarily due to lower net favorable prior year reserve
development and higher catastrophe losses, partially offset by a
higher underlying underwriting gain and higher net investment
income. The underlying underwriting gain benefited from higher
business volumes.
Combined ratio:
- The combined ratio of 87.7% increased 10.6 points due to lower
net favorable prior year reserve development (10.5 points) and
higher catastrophe losses (1.8 points), partially offset by an
improvement in the underlying combined ratio (1.7 points).
- The underlying combined ratio improved 1.7 points to a very
strong 86.1%.
- Net favorable prior year reserve development was primarily
driven by better than expected loss experience in the domestic
operations’ fidelity and surety product lines for recent accident
years.
Net written premiums of $1.040 billion increased 8%, reflecting
strong production in both surety and management liability.
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for Bond & Specialty Insurance was $365
million after-tax, a decrease of $72 million. Segment income
decreased primarily due to lower net favorable prior year reserve
development and higher catastrophe losses, partially offset by
higher net investment income and a higher underlying underwriting
gain. The underlying underwriting gain benefited from higher
business volumes. The underlying underwriting gain in the prior
year period included a one-time tax benefit of $9 million due to
the expiration of the statute of limitations with respect to a tax
item.
Combined ratio:
- The combined ratio of 86.1% increased 7.6 points due to lower
net favorable prior year reserve development (7.4 points) and
higher catastrophe losses (0.8 points), partially offset by an
improvement in the underlying combined ratio (0.6 points).
- The underlying combined ratio improved 0.6 points to a very
strong 86.3%.
- Net favorable prior year reserve development was primarily
driven by the same factors described above for the second quarter
of 2024.
Net written premiums of $1.983 billion increased 7%, reflecting
the same factors described above for the second quarter of
2024.
Personal
Insurance Segment Financial Results
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting loss:
$
(373
)
$
(831
)
$
458
$
(274
)
$
(908
)
$
634
Underwriting loss
includes:
Net favorable prior year reserve
development
172
42
130
239
70
169
Catastrophes, net of reinsurance
(1,080
)
(1,064
)
(16
)
(1,578
)
(1,395
)
(183
)
Net investment income
159
125
34
306
242
64
Other income
16
21
(5
)
37
39
(2
)
Segment income (loss) before income
taxes
(198
)
(685
)
487
69
(627
)
696
Income tax expense (benefit)
(45
)
(147
)
102
2
(172
)
174
Segment income (loss)
$
(153
)
$
(538
)
$
385
$
67
$
(455
)
$
522
Combined ratio
108.5
%
122.0
%
(13.5
)
pts
102.8
%
112.0
%
(9.2
)
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(4.2
)
pts
(1.2
)
pts
(3.0
)
pts
(2.9
)
pts
(1.0
)
pts
(1.9
)
pts
Catastrophes, net of reinsurance
26.4
pts
29.1
pts
(2.7
)
pts
19.5
pts
19.5
pts
—
pts
Underlying combined ratio
86.3
%
94.1
%
(7.8
)
pts
86.2
%
93.5
%
(7.3
)
pts
Net written premiums
Domestic
Automobile
$
2,001
$
1,823
10
%
$
3,860
$
3,477
11
%
Homeowners and Other
2,347
2,173
8
3,982
3,738
7
Total Domestic
4,348
3,996
9
7,842
7,215
9
International
188
183
3
337
317
6
Total
$
4,536
$
4,179
9
%
$
8,179
$
7,532
9
%
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted
otherwise)
Segment loss for Personal Insurance was $153 million after-tax,
compared with a segment loss of $538 million in the prior year
quarter. The improvement in segment loss was primarily due to a
higher underlying underwriting gain, higher net favorable prior
year reserve development and higher net investment income,
partially offset by higher catastrophe losses. The underlying
underwriting gain benefited from higher business volumes.
Combined ratio:
- The combined ratio of 108.5% improved 13.5 points due to an
improvement in the underlying combined ratio (7.8 points), higher
net favorable prior year reserve development (3.0 points) and lower
catastrophe losses as a percentage of net earned premiums (2.7
points).
- The underlying combined ratio of 86.3% improved 7.8 points,
reflecting improvement in both Automobile and Homeowners and
Other.
- Net favorable prior year reserve development was primarily
driven by better than expected loss experience in the domestic
operations in both the homeowners and other and automobile product
lines for recent accident years.
Net written premiums of $4.536 billion increased 9%, reflecting
strong renewal premium change in both Domestic Automobile and
Homeowners and Other.
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for Personal Insurance was $67 million after-tax,
compared with a segment loss of $455 million in 2023. Segment
income increased primarily due to a higher underlying underwriting
gain, higher net favorable prior year reserve development and
higher net investment income, partially offset by higher
catastrophe losses. The underlying underwriting gain benefited from
higher business volumes. The underlying underwriting gain in the
prior year period included a one-time tax benefit of $31 million
due to the expiration of the statute of limitations with respect to
a tax item.
Combined ratio:
- The combined ratio of 102.8% improved 9.2 points due to an
improvement in the underlying combined ratio (7.3 points) and
higher net favorable prior year reserve development (1.9
points).
- The underlying combined ratio of 86.2% improved 7.3 points,
reflecting improvement in both Automobile and Homeowners and
Other.
- Net favorable prior year reserve development was primarily
driven by the same factors described above for the second quarter
of 2024.
Net written premiums of $8.179 billion increased 9%, reflecting
the same factor described above for the second quarter of 2024.
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 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 Friday, July 19, 2024. Investors
can access the call via webcast at investor.travelers.com or by
dialing 1.888.440.6281 within the United States or 1.646.960.0218
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 investor.travelers.com and by telephone for 30 days
by dialing 1.800.770.2030 within the United States or
1.647.362.9199 outside the United States. All callers should use
conference ID 5449478.
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 more
than 30,000 employees and generated revenues of more than $41
billion in 2023. For more information, visit Travelers.com.
Travelers may use its website and/or social media outlets, such
as Facebook and X, 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 investor.travelers.com, our Facebook page at
facebook.com/travelers and our X account (@Travelers) at
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
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 products and 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, including as a corporate member of
Lloyd’s.
Bond & Specialty Insurance - Bond & Specialty
Insurance offers surety, fidelity, management liability,
professional liability, and other property and casualty coverages
and related risk management services to its customers, primarily in
the United States, and certain surety and specialty insurance
products in Canada, the United Kingdom and the Republic of Ireland,
as well as Brazil through a joint venture, in each case utilizing
various degrees of financially-based underwriting approaches.
Personal Insurance - Personal Insurance offers a broad
range of property and casualty insurance products and services
covering individuals’ personal risks, primarily in the United
States, as well as in Canada. Personal Insurance’s primary products
of automobile and homeowners insurance are complemented by a broad
suite of related coverages.
* * * * *
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,”
“probably,” “anticipates,” “expects,” “intends,” “plans,”
“projects,” “believes,” “views,” “ensures,” “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, the impact of trends on its business and
its future results of operations and financial condition;
- the impact of legislative or regulatory actions or court
decisions;
- share repurchase plans;
- future pension plan contributions;
- the sufficiency of the Company’s reserves, including
asbestos;
- the impact of emerging claims issues as well as other insurance
and non-insurance litigation;
- the cost and availability of reinsurance coverage;
- catastrophe losses and modeling;
- the impact of investment, economic and underwriting market
conditions, including interest rates and inflation;
- the Company’s approach to managing its investment
portfolio;
- the impact of changing climate conditions;
- strategic and operational initiatives to improve profitability
and competitiveness;
- the Company’s competitive advantages and innovation agenda,
including executing on that agenda with respect to artificial
intelligence;
- the Company’s cybersecurity policies and practices;
- new product offerings;
- the impact of developments in the tort environment;
- the impact of developments in the geopolitical environment;
and
- the impact of the Company’s acquisition of Corvus Insurance
Holdings, Inc.
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:
Insurance-Related Risks
- high levels of catastrophe losses;
- actual claims may exceed the Company’s claims and claim
adjustment expense reserves, or the estimated level of claims and
claim adjustment expense reserves may increase, including as a
result of, among other things, changes in the legal/tort,
regulatory and economic environments, including increased
inflation;
- the Company’s potential exposure to asbestos and environmental
claims and related litigation;
- the Company is exposed to, and may face adverse developments
involving, mass tort claims; and
- the effects of emerging claim and coverage issues on the
Company’s business are uncertain, and court decisions or
legislative changes that take place after the Company issues its
policies can result in an unexpected increase in the number of
claims.
Financial, Economic and Credit
Risks
- a period of financial market disruption or an economic
downturn;
- 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;
- the Company is exposed to credit risk related to reinsurance
and structured settlements, and reinsurance coverage may not be
available to the Company;
- 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;
- a downgrade in the Company’s claims-paying and financial
strength ratings; and
- the Company’s insurance subsidiaries may be unable to pay
dividends to the Company’s holding company in sufficient
amounts.
Business and Operational
Risks
- the intense competition that the Company faces, including with
respect to attracting and retaining employees, and the impact of
innovation, technological change and changing customer preferences
on the insurance industry and the markets in which it
operates;
- disruptions to the Company’s relationships with its independent
agents and brokers or the Company’s inability to manage effectively
a changing distribution landscape;
- the Company’s efforts to develop new products or services,
expand in targeted markets, improve business processes and
workflows or make acquisitions may not be successful and may create
enhanced risks;
- the Company’s pricing and capital models may provide materially
different indications than actual results;
- 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;
- the Company is subject to additional risks associated with its
business outside the United States; and
- future pandemics (including new variants of COVID-19).
Technology and Intellectual Property
Risks
- as a result of cyber attacks (the risk of which could be
exacerbated by geopolitical tensions) or otherwise, the Company may
experience difficulties with technology, data and network security
or outsourcing relationships;
- the Company’s dependence on effective information technology
systems and on continuing to develop and implement improvements in
technology, including with respect to artificial intelligence;
and
- the Company may be unable to protect and enforce its own
intellectual property or may be subject to claims for infringing
the intellectual property of others.
Regulatory and Compliance
Risks
- changes in regulation, including higher tax rates; and
- the Company’s compliance controls may not be effective.
In addition, 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 appropriate for the Company’s business operations, 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, changes in tax laws
(including the Inflation Reduction Act of 2022) and other
factors.
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,” “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and “Forward Looking
Statements” in our most recent annual report on Form 10-K filed
with the Securities and Exchange Commission (SEC) on February 15,
2024, as updated by our periodic filings with the SEC.
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.
Reconciliation of Net Income (Loss) to
Core Income (Loss) less Preferred Dividends
Three Months Ended June
30,
Six Months Ended June
30,
Twelve Months Ended June
30,
($ in millions, after-tax)
2024
2023
2024
2023
2024
Net income (loss)
$
534
$
(14
)
$
1,657
$
961
$
3,687
Adjustments:
Net realized investment losses
51
29
24
24
81
Core income
$
585
$
15
$
1,681
$
985
$
3,768
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions, pre-tax)
2024
2023
2024
2023
Net income (loss)
$
656
$
(48
)
$
2,026
$
880
Adjustments:
Net realized investment losses
65
35
30
29
Core income (loss)
$
721
$
(13
)
$
2,056
$
909
Twelve Months Ended December
31,
Average Annual
($ in millions, after-tax)
2023
2022
2021
2020
2019
2005 - 2018
Net income
$
2,991
$
2,842
$
3,662
$
2,697
$
2,622
$
3,035
Less: Loss from discontinued
operations
—
—
—
—
—
(31
)
Income from continuing
operations
2,991
2,842
3,662
2,697
2,622
3,066
Adjustments:
Net realized investment (gains) losses
81
156
(132
)
(11
)
(85
)
(41
)
Impact of changes in tax laws and/or tax
rates (1) (2)
—
—
(8
)
—
—
9
Core income
3,072
2,998
3,522
2,686
2,537
3,034
Less: Preferred dividends
—
—
—
—
—
2
Core income, less preferred
dividends
$
3,072
$
2,998
$
3,522
$
2,686
$
2,537
$
3,032
(1) Impact is recognized in the accounting
period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and
Jobs Act of 2017 (TCJA)
Reconciliation of Net Income (Loss) per
Share to Core Income per Share on a Diluted Basis
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Diluted income
(loss) per share
Net income (loss)
$
2.29
$
(0.07
)
$
7.09
$
4.09
Adjustments:
Net realized investment losses,
after-tax
0.22
0.13
0.11
0.10
Core income
$
2.51
$
0.06
$
7.20
$
4.19
Reconciliation of Segment Income (Loss)
to Total Core Income
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions, after-tax)
2024
2023
2024
2023
Business Insurance
$
656
$
402
$
1,420
$
1,158
Bond & Specialty Insurance
170
230
365
437
Personal Insurance
(153
)
(538
)
67
(455
)
Total segment income
673
94
1,852
1,140
Interest Expense and Other
(88
)
(79
)
(171
)
(155
)
Total core income
$
585
$
15
$
1,681
$
985
RECONCILIATION OF SHAREHOLDERS’ EQUITY TO ADJUSTED
SHAREHOLDERS’ EQUITY AND CALCULATION OF RETURN ON EQUITY AND CORE
RETURN ON EQUITY
Adjusted shareholders’ equity is shareholders’ equity
excluding net unrealized investment gains (losses), net of tax,
included in shareholders’ equity, net realized investment gains
(losses), net of tax, for the period presented, the effect of a
change in tax laws and tax rates at enactment (excluding the
portion related to net unrealized investment gains (losses)),
preferred stock and discontinued operations.
Reconciliation of Shareholders’ Equity
to Adjusted Shareholders’ Equity
As of June 30,
($ in millions)
2024
2023
Shareholders’ equity
$
24,862
$
21,855
Adjustments:
Net unrealized investment losses, net of
tax, included in shareholders’ equity
3,976
4,576
Net realized investment losses, net of
tax
24
24
Adjusted shareholders’ equity
$
28,862
$
26,455
As of December 31,
Average Annual
($ in millions)
2023
2022
2021
2020
2019
2005 - 2018
Shareholders’ equity
$
24,921
$
21,560
$
28,887
$
29,201
$
25,943
$
24,659
Adjustments:
Net unrealized investment (gains) losses,
net of tax, included in shareholders’ equity
3,129
4,898
(2,415
)
(4,074
)
(2,246
)
(1,232
)
Net realized investment (gains) losses,
net of tax
81
156
(132
)
(11
)
(85
)
(41
)
Impact of changes in tax laws and/or tax
rates (1) (2)
—
—
(8
)
—
—
20
Preferred stock
—
—
—
—
—
(45
)
Loss from discontinued operations
—
—
—
—
—
31
Adjusted shareholders’ equity
$
28,131
$
26,614
$
26,332
$
25,116
$
23,612
$
23,392
(1) Impact is recognized in the accounting
period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and
Jobs Act of 2017 (TCJA)
Return on equity is the ratio of annualized net income
(loss) less preferred dividends to average shareholders’ equity for
the periods presented. Core return on equity is the ratio of
annualized core income (loss) less preferred dividends to adjusted
average shareholders’ equity for the periods presented. In the
opinion of the Company’s management, these are important indicators
of how well management creates value for its shareholders through
its operating activities and its capital management.
Average shareholders’ equity is (a) the sum of total
shareholders’ equity excluding preferred stock at the beginning and
end of each of the quarters for the period presented divided by (b)
the number of quarters in the period presented times two.
Adjusted average shareholders’ equity is (a) the sum of
total adjusted shareholders’ equity at the beginning and end of
each of the quarters for the period presented divided by (b) the
number of quarters in the period presented times two.
Calculation of Return on Equity and
Core Return on Equity
Three Months Ended June
30,
Six Months Ended June
30,
Twelve Months Ended June
30,
($ in millions, after-tax)
2024
2023
2024
2023
2024
Annualized net income (loss)
$
2,134
$
(56
)
$
3,313
$
1,922
$
3,687
Average shareholders’ equity
24,942
22,453
24,957
22,380
23,320
Return on equity
8.6
%
(0.2
)%
13.3
%
8.6
%
15.8
%
Annualized core income
$
2,341
$
57
$
3,362
$
1,969
$
3,768
Adjusted average shareholders’ equity
28,817
26,690
28,600
26,688
27,728
Core return on equity
8.1
%
0.2
%
11.8
%
7.4
%
13.6
%
Twelve Months Ended
December 31,
Average Annual
($ in millions, after-tax)
2023
2022
2021
2020
2019
2005 - 2018
Net income, less preferred dividends
$
2,991
$
2,842
$
3,662
$
2,697
$
2,622
$
3,033
Average shareholders’ equity
22,031
23,384
28,735
26,892
24,922
24,677
Return on equity
13.6
%
12.2
%
12.7
%
10.0
%
10.5
%
12.3
%
Core income, less preferred dividends
$
3,072
$
2,998
$
3,522
$
2,686
$
2,537
$
3,032
Adjusted average shareholders’ equity
26,772
26,588
25,718
23,790
23,335
23,401
Core return on equity
11.5
%
11.3
%
13.7
%
11.3
%
10.9
%
13.0
%
RECONCILIATION OF NET INCOME (LOSS) TO UNDERWRITING GAIN
EXCLUDING CERTAIN ITEMS
Underwriting gain (loss) is net earned premiums and fee
income less claims and claim adjustment expenses and
insurance-related expenses. In the opinion of the Company’s
management, it is important to measure the profitability of each
segment excluding the results of investing activities, which are
managed separately from the insurance business. This measure is
used to assess each segment’s business performance and as a tool in
making business decisions. Underwriting gain, excluding the
impact of catastrophes and net favorable (unfavorable) prior year
loss reserve development, is the underwriting gain adjusted to
exclude claims and claim adjustment expenses, reinstatement
premiums and assessments related to catastrophes and loss reserve
development related to time periods prior to the current year. In
the opinion of the Company’s management, this measure is meaningful
to users of the financial statements to understand the Company’s
periodic earnings and the variability of earnings caused by the
unpredictable nature (i.e., the timing and amount) of catastrophes
and loss reserve development. This measure is also referred to as
underlying underwriting gain, underlying underwriting
margin, underlying underwriting income or underlying
underwriting result.
A catastrophe is a severe loss designated, or reasonably
expected by the Company to be designated, a catastrophe by one or
more industry 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 can be caused by various natural events, including,
among others, hurricanes, tornadoes and other windstorms,
earthquakes, hail, wildfires, severe winter weather, floods,
tsunamis, volcanic eruptions and other naturally-occurring events,
such as solar flares. 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, 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 (loss) 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 reached 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 2024 ranges from $20 million
to $30 million of losses before reinsurance and taxes.
Net favorable (unfavorable) prior year loss reserve
development is the increase or decrease in incurred claims and
claim adjustment expenses as a result of the re-estimation of
claims and claim adjustment expense reserves at successive
valuation dates for a given group of claims, which may be related
to one or more prior years. In the opinion of the Company’s
management, a discussion of loss reserve development is meaningful
to users of the financial statements as it allows them to assess
the impact between prior and current year development on incurred
claims and claim adjustment expenses, net and core income (loss),
and changes in claims and claim adjustment expense reserve levels
from period to period.
Reconciliation of Net Income (Loss) to
Pre-Tax Underlying Underwriting Income (also known as Underlying
Underwriting Gain)
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions, after-tax, except as
noted)
2024
2023
2024
2023
Net income (loss)
$
534
$
(14
)
$
1,657
$
961
Net realized investment losses
51
29
24
24
Core income
585
15
1,681
985
Net investment income
(727
)
(594
)
(1,425
)
(1,151
)
Other (income) expense, including interest
expense
84
70
158
158
Underwriting income (loss)
(58
)
(509
)
414
(8
)
Income tax expense (benefit) on
underwriting results
(7
)
(131
)
98
(265
)
Pre-tax underwriting income
(loss)
(65
)
(640
)
512
(273
)
Pre-tax impact of net favorable prior year
reserve development
(230
)
(60
)
(321
)
(165
)
Pre-tax impact of catastrophes
1,509
1,481
2,221
2,016
Pre-tax underlying underwriting
income
$
1,214
$
781
$
2,412
$
1,578
Reconciliation of Net Income (Loss) to
After-Tax Underlying Underwriting Income (also known as Underlying
Underwriting Gain)
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions, after-tax)
2024
2023
2024
2023
Net income (loss)
$
534
$
(14
)
$
1,657
$
961
Net realized investment losses
51
29
24
24
Core income
585
15
1,681
985
Net investment income
(727
)
(594
)
(1,425
)
(1,151
)
Other (income) expense, including interest
expense
84
70
158
158
Underwriting income (loss)
(58
)
(509
)
414
(8
)
Impact of net favorable prior year reserve
development
(182
)
(47
)
(253
)
(130
)
Impact of catastrophes
1,192
1,171
1,755
1,593
Underlying underwriting income
$
952
$
615
$
1,916
$
1,455
Twelve Months Ended December
31,
($ in millions, after-tax)
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Net income
$
2,991
$
2,842
$
3,662
$
2,697
$
2,622
$
2,523
$
2,056
$
3,014
$
3,439
$
3,692
$
3,673
$
2,473
Net realized investment (gains) losses
81
156
(132
)
(11
)
(85
)
(93
)
(142
)
(47
)
(2
)
(51
)
(106
)
(32
)
Impact of changes in tax laws and/or tax
rates (1) (2)
—
—
(8
)
—
—
—
129
—
—
—
—
—
Core income
3,072
2,998
3,522
2,686
2,537
2,430
2,043
2,967
3,437
3,641
3,567
2,441
Net investment income
(2,436
)
(2,170
)
(2,541
)
(1,908
)
(2,097
)
(2,102
)
(1,872
)
(1,846
)
(1,905
)
(2,216
)
(2,186
)
(2,316
)
Other (income) expense, including interest
expense
337
277
235
232
214
248
179
78
193
159
61
171
Underwriting income
973
1,105
1,216
1,010
654
576
350
1,199
1,725
1,584
1,442
296
Impact of net (favorable) unfavorable
prior year reserve development
(113
)
(512
)
(424
)
(276
)
47
(409
)
(378
)
(510
)
(617
)
(616
)
(552
)
(622
)
Impact of catastrophes
2,361
1,480
1,459
1,274
699
1,355
1,267
576
338
462
387
1,214
Underlying underwriting income
$
3,221
$
2,073
$
2,251
$
2,008
$
1,400
$
1,522
$
1,239
$
1,265
$
1,446
$
1,430
$
1,277
$
888
(1) Impact is recognized in the accounting
period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and
Jobs Act of 2017 (TCJA)
COMBINED RATIO AND ADJUSTMENTS FOR UNDERLYING COMBINED
RATIO
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 earnings release, 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
premiums and the underwriting expense ratio as used in this
earnings release is based on net earned premiums.
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 earnings release is calculated in the
same manner as the SAP 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 and other, to net written premiums as defined in the statutory
financial statements required by insurance regulators. The
underwriting expense ratio as used in this earnings release, 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 combined ratio, loss and LAE ratio, and underwriting expense
ratio are used as indicators 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.
Underlying combined ratio represents the combined ratio
excluding the impact of net prior year reserve development and
catastrophes. The underlying combined ratio is an indicator of the
Company’s underwriting discipline and underwriting profitability
for the current accident year.
Other companies’ method of computing similarly titled measures
may not be comparable to the Company’s method of computing these
ratios.
Calculation of the Combined
Ratio
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions, pre-tax)
2024
2023
2024
2023
Loss and loss
adjustment expense ratio
Claims and claim adjustment expenses
$
7,373
$
7,227
$
14,029
$
13,186
Less:
Policyholder dividends
12
10
24
22
Allocated fee income
42
40
81
82
Loss ratio numerator
$
7,319
$
7,177
$
13,924
$
13,082
Underwriting
expense ratio
Amortization of deferred acquisition
costs
$
1,678
$
1,519
$
3,376
$
2,981
General and administrative expenses
(G&A)
1,478
1,308
2,884
2,575
Less:
Non-insurance G&A
106
92
208
187
Allocated fee income
73
66
143
130
Billing and policy fees and other
30
28
60
56
Expense ratio numerator
$
2,947
$
2,641
$
5,849
$
5,183
Earned premium
$
10,243
$
9,216
$
20,369
$
18,070
Combined ratio (1)
Loss and loss adjustment expense ratio
71.4
%
77.9
%
68.4
%
72.4
%
Underwriting expense ratio
28.8
%
28.6
%
28.7
%
28.7
%
Combined ratio
100.2
%
106.5
%
97.1
%
101.1
%
Impact on combined ratio:
Net favorable prior year reserve
development
(2.2
)%
(0.7
)%
(1.5
)%
(0.9
)%
Catastrophes, net of reinsurance
14.7
%
16.1
%
10.9
%
11.2
%
Underlying combined ratio
87.7
%
91.1
%
87.7
%
90.8
%
(1) For purposes of computing ratios,
billing and policy fees and other (which are a component of other
revenues) are allocated as a reduction of underwriting expenses. In
addition, fee income is allocated as a reduction of losses and loss
adjustment expenses and underwriting expenses. These allocations
are to conform the calculation of the combined ratio with statutory
accounting. Additionally, general and administrative expenses
include non-insurance expenses that are excluded from underwriting
expenses, and accordingly are excluded in calculating the combined
ratio.
RECONCILIATION OF BOOK VALUE PER SHARE AND SHAREHOLDERS’
EQUITY TO CERTAIN NON-GAAP MEASURES
Book value per share is total common shareholders’ equity
divided by the number of common shares outstanding. Adjusted
book value per share is total common shareholders’ equity
excluding net unrealized investment gains and losses, net of tax,
included in shareholders’ equity, divided by the number of common
shares outstanding. In the opinion of the Company’s management,
adjusted book value per share is useful in an analysis of a
property casualty company’s book value per share as it removes the
effect of changing prices on invested assets (i.e., net unrealized
investment gains (losses), net of tax), which do not have an
equivalent impact on unpaid claims and claim adjustment expense
reserves. Tangible book value per share is adjusted book
value per share excluding the after-tax value of goodwill and other
intangible assets divided by the number of common shares
outstanding. In the opinion of the Company’s management, tangible
book value per share is useful in an analysis of a property
casualty company’s book value on a nominal basis as it removes
certain effects of purchase accounting (i.e., goodwill and other
intangible assets), in addition to the effect of changing prices on
invested assets.
Reconciliation of Shareholders’ Equity
to Tangible Shareholders’ Equity, Excluding Net Unrealized
Investment Losses, Net of Tax and Calculation of Book Value Per
Share, Adjusted Book Value Per Share and Tangible Book Value Per
Share
As of
($ in millions, except per share
amounts)
June 30, 2024
December 31,
2023
June 30, 2023
Shareholders’ equity
$
24,862
$
24,921
$
21,855
Less: Net unrealized investment losses,
net of tax, included in shareholders’ equity
(3,976
)
(3,129
)
(4,576
)
Shareholders’ equity, excluding net
unrealized investment losses, net of tax, included in shareholders’
equity
28,838
28,050
26,431
Less:
Goodwill
4,250
3,976
3,975
Other intangible assets
371
277
283
Impact of deferred tax on other intangible
assets
(86
)
(69
)
(67
)
Tangible shareholders’ equity,
excluding net unrealized investment losses, net of tax, included in
shareholders’ equity
$
24,303
$
23,866
$
22,240
Common shares outstanding
227.9
228.2
228.9
Book value per share
$
109.08
$
109.19
$
95.46
Adjusted book value per share
126.52
122.90
115.45
Tangible book value per share, excluding
net unrealized investment losses, net of tax, included in
shareholders’ equity
106.62
104.57
97.14
RECONCILIATION OF TOTAL CAPITALIZATION TO TOTAL
CAPITALIZATION EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES),
NET OF TAX
Total capitalization is the sum of total shareholders’
equity and debt. Debt-to-capital ratio excluding net unrealized
gains (losses) on investments, net of tax, included in
shareholders’ equity, is the ratio of debt to total
capitalization excluding the after-tax impact of net unrealized
investment gains and losses included in shareholders’ equity. In
the opinion of the Company’s management, the debt-to-capital ratio
is useful in an analysis of the Company’s financial leverage.
As of
($ in millions)
June 30, 2024
December 31,
2023
Debt
$
8,032
$
8,031
Shareholders’ equity
24,862
24,921
Total capitalization
32,894
32,952
Less: Net unrealized investment losses,
net of tax, included in shareholders’ equity
(3,976
)
(3,129
)
Total capitalization excluding net
unrealized losses on investments, net of tax, included in
shareholders’ equity
$
36,870
$
36,081
Debt-to-capital ratio
24.4
%
24.4
%
Debt-to-capital ratio excluding net
unrealized investment losses, net of tax, included in shareholders’
equity
21.8
%
22.3
%
RECONCILIATION OF INVESTED ASSETS TO
INVESTED ASSETS EXCLUDING NET UNREALIZED INVESTMENT GAINS
(LOSSES)
As of June 30,
($ in millions)
2024
2023
Invested assets
$
89,511
$
82,973
Less: Net unrealized investment losses,
pre-tax
(5,043
)
(5,815
)
Invested assets excluding net
unrealized investment losses
$
94,554
$
88,788
As of December 31,
($ in millions)
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Invested assets
$
88,810
$
80,454
$
87,375
$
84,423
$
77,884
$
72,278
$
72,502
$
70,488
$
70,470
$
73,261
$
73,160
$
73,838
Less: Net unrealized investment gains
(losses), pre-tax
(3,970
)
(6,220
)
3,060
5,175
2,853
(137
)
1,414
1,112
1,974
3,008
2,030
4,761
Invested assets excluding net
unrealized investment gains (losses)
$
92,780
$
86,674
$
84,315
$
79,248
$
75,031
$
72,415
$
71,088
$
69,376
$
68,496
$
70,253
$
71,130
$
69,077
OTHER DEFINITIONS
Gross written premiums reflect the direct and assumed
contractually determined amounts charged to policyholders for the
effective period of the contract based on the terms and conditions
of the insurance contract. Net written premiums reflect
gross written premiums less premiums ceded to reinsurers.
For Business Insurance and Bond & Specialty Insurance,
retention is the amount of premium available for renewal
that was retained, excluding rate and exposure changes. For
Personal Insurance, retention is the ratio of the expected
number of renewal policies that will be retained throughout the
annual policy period to the number of available renewal base
policies. For all of the segments, renewal rate change
represents the estimated change in average premium on policies that
renew, excluding exposure changes. Exposure is 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. Renewal premium
change represents the estimated change in average premium on
policies that renew, including rate and exposure changes. New
business is the amount of written premium related to new
policyholders and additional products sold to existing
policyholders. These are operating statistics, which are in part
dependent on the use of estimates and are therefore subject to
change. For Business Insurance, retention, renewal premium change
and new business exclude National Accounts. For Bond &
Specialty Insurance, retention, renewal premium change and new
business exclude surety and other products that are generally sold
on a non-recurring, project specific basis. For each of the
segments, production statistics referred to herein are domestic
only unless otherwise indicated.
Statutory capital and surplus represents the excess of an
insurance company’s admitted assets over its liabilities, including
loss reserves, as determined in accordance with statutory
accounting practices.
Holding company liquidity is the total funds available at
the holding company level to fund general corporate purposes,
primarily the payment of shareholder dividends and debt service.
These funds consist of total cash, short-term invested assets and
other readily marketable securities held by the holding
company.
For a glossary of other financial terms used in this press
release, we refer you to the Company’s most recent annual report on
Form 10-K filed with the SEC on February 15, 2024, and subsequent
periodic filings with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240717089689/en/
Media: Patrick Linehan
917.778.6267
Institutional Investors: Abbe
Goldstein 917.778.6825
The Travelers Companies (NYSE:TRV)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
The Travelers Companies (NYSE:TRV)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
