Second Quarter 2024 Earnings Release
NYSE: TRV
Travelers Reports Strong Second Quarter and Year-to-Date Results
Excellent Underlying Results, Net Favorable Prior
Income More Than Offset Significant Catastrophe Losses from Severe Convective Storms
Second Quarter 2024 Net Income per Diluted Share of
Second Quarter 2024 Core Income per Diluted Share of
- 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% overJune 30, 2023 ; adjusted book value per share of$126.52 , up 10% overJune 30, 2023 . - Board of Directors declares regular cash dividend of
$1.05 per share.
Consolidated Highlights
($ in millions, except for per share amounts, and after-tax, except for premiums and revenues)
Net written premiums ..............................................................
Total revenues...........................................................................
Net income (loss)......................................................................
per diluted share......................................................................
Core income...............................................................................
per diluted share......................................................................
Diluted weighted average shares outstanding.................
Combined ratio..........................................................................
Underlying combined ratio ....................................................
Retuon equity .......................................................................
Core retuon equity ..............................................................
Three Months Ended |
Six Months Ended |
||||||||||||||||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||||||||||||||
|
|
8 % |
|
|
8 % |
||||||||||||||
|
|
12 |
|
|
14 |
||||||||||||||
$ |
534 |
$ |
(14) |
NM |
$ |
1,657 |
$ |
961 |
72 |
||||||||||
$ |
2.29 |
$ |
(0.07) |
NM |
$ |
7.09 |
$ |
4.09 |
73 |
||||||||||
$ |
585 |
$ |
15 |
NM |
$ |
1,681 |
$ |
985 |
71 |
||||||||||
$ |
2.51 |
$ |
0.06 |
NM |
$ |
7.20 |
$ |
4.19 |
72 |
||||||||||
231.5 |
229.7 |
1 |
231.8 |
233.3 |
(1) |
||||||||||||||
100.2 % |
106.5 % |
(6.3) |
pts |
97.1 % |
101.1 % |
(4.0) |
pts |
||||||||||||
87.7 % |
91.1 % |
(3.4) |
pts |
87.7 % |
90.8 % |
(3.1) |
pts |
||||||||||||
8.6 % |
(0.2)% |
8.8 |
pts |
13.3 % |
8.6 % |
4.7 |
pts |
||||||||||||
8.1 % |
0.2 % |
7.9 |
pts |
11.8 % |
7.4 % |
4.4 |
pts |
||||||||||||
As of |
Change From |
||||||||||||||||||
|
|
|
|
|
|||||||||||||||
2024 |
2023 |
2023 |
2023 |
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.
1
"We are pleased to have generated a strong bottom line result in a quarter that included a record level of severe convective storms across
"Underlying underwriting income of
"Through terrific marketplace execution across all three segments, we grew net written premiums in the quarter by 8% to
"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 retuon 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."
2
Consolidated Results
($ in millions and pre-tax, unless noted otherwise)
Three Months Ended |
Six Months Ended |
|||||||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
Underwriting gain (loss): |
$ |
(65) |
$ |
(640) |
$ |
575 |
$ |
512 |
$ |
(273) |
$ |
785 |
||||||
Underwriting gain (loss) includes: |
||||||||||||||||||
Net favorable prior year reserve |
230 |
60 |
170 |
321 |
165 |
156 |
||||||||||||
development |
||||||||||||||||||
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 |
(99) |
(85) |
(14) |
(187) |
(193) |
6 |
||||||||||||
interest expense |
||||||||||||||||||
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 |
(51) |
(29) |
(22) |
(24) |
(24) |
- |
||||||||||||
income taxes |
||||||||||||||||||
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 |
(2.2) |
pts |
(0.7) |
pts |
(1.5) |
pts |
(1.5) |
pts |
(0.9) |
pts |
(0.6) |
pts |
||||||
development |
||||||||||||||||||
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 |
||||||||||||||||||
|
$ |
5,539 |
$ |
5,175 |
7 % |
$ |
11,135 |
$ |
10,332 |
8 % |
||||||||
|
1,040 |
964 |
8 |
1,983 |
1,850 |
7 |
||||||||||||
|
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
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
3
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
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Net income of
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 easteregions of
the United States in the first three months of 2024.
Net investment income of
Net written premiums of
Shareholders' Equity
Shareholders' equity of
The Company repurchased 1.2 million shares during the second quarter at an average price of
The Board of Directors declared a regular quarterly dividend of
4
Business Insurance Segment Financial Results
Three Months Ended |
Six Months Ended |
||||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||||||
Underwriting gain (loss): |
$ |
193 |
|
$ |
207 |
|
$ |
259 |
$ |
268 |
|||||||
Underwriting gain (loss) includes: |
|||||||||||||||||
Net favorable (unfavorable) prior year |
34 |
(101) |
135 |
34 |
(82) |
116 |
|||||||||||
reserve development |
|||||||||||||||||
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 |
|
$ |
254 |
|
$ |
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 |
(0.6) |
pts |
2.2 |
pts |
(2.8) |
pts |
(0.3) |
pts |
0.9 |
pts |
(1.2) |
pts |
|||||
reserve development |
|||||||||||||||||
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 |
|
10 % |
|
$ |
1,791 |
9 % |
|||||||||
Middle Market |
2,769 |
2,618 |
6 |
5,982 |
5,544 |
8 |
|||||||||||
National Accounts |
312 |
277 |
13 |
639 |
571 |
12 |
|||||||||||
|
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 |
|
|
7 % |
|
|
8 % |
|||||||||||
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)
Segment income for
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
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for
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
6
Bond & Specialty Insurance Segment Financial Results
($ in millions and pre-tax, unless noted otherwise)
Three Months Ended |
Six Months Ended |
||||||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
Underwriting gain: |
$ |
115 |
$ |
205 |
$ |
(90) |
$ |
259 |
$ |
376 |
$ |
(117) |
||||||
Underwriting gain includes: |
||||||||||||||||||
Net favorable prior year reserve |
24 |
119 |
(95) |
48 |
177 |
(129) |
||||||||||||
development |
||||||||||||||||||
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 |
(2.5) |
pts |
(13.0) |
pts |
10.5 |
pts |
(2.5) |
pts |
(9.9) |
pts |
7.4 |
pts |
||||||
development |
||||||||||||||||||
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
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
7
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for
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
Personal Insurance Segment Financial Results
Three Months Ended |
Six Months Ended |
|||||||||||||||||
($ 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 |
172 |
42 |
130 |
239 |
70 |
169 |
||||||||||||
development |
||||||||||||||||||
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 |
(198) |
(685) |
487 |
69 |
(627) |
696 |
||||||||||||
taxes |
||||||||||||||||||
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 |
(4.2) |
pts |
(1.2) |
pts |
(3.0) |
pts |
(2.9) |
pts |
(1.0) |
pts |
(1.9) |
pts |
||||||
development |
||||||||||||||||||
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 % |
||||||||
8
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)
Segment loss for
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
Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
Segment income for
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
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
Following the live event, replays will be available via webcast for one year at investor.travelers.comand by telephone for 30 days by dialing 1.800.770.2030 within
About Travelers
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/ travelersand 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:
* * * * *
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;
10
Attachments
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Travelers Reports Strong Second Quarter and Year-to-Date Results
Costly, hard-to-find insurance keeping THC beverages off some Minnesota menus
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