Strong performance attributed to robust underwriting gains, reduced catastrophe losses
By Ryan Smith
Jan 21, 2024 Share
Travelers Companies reported quarterly earnings that surpassed expectations, according to an analysis by TD Cowen.
Travelers’ strong performance was attributed to robust underwriting gains, higher net investment income, and reduced catastrophe losses.
Travelers posted core earnings per share (EPS) of $7.01, exceeding TD Cowen’s estimate of $5.05 and the consensus estimate of $5.10. Pre-tax catastrophe losses were reported at $125 million, significantly below TD Cowen’s estimate of $268 million.
The lower-than-expected cat losses contributed to a consolidated combined ratio of 85.8%, surpassing TD Cowen’s projection of 92.7% and the 94.5% combined ratio recorded in the same period last year.
Travelers reported net written premiums (NWP) of $9.994 billion, a 13% increase over the previous year. This figure also exceeded TD Cowen’s estimate of $9.74 billion. Travelers’ underwriting expense ratio improved to 27.4% from 27.9% year over year and 28% in the previous quarter. The company also executed share buybacks worth $66 million during the reporting period.
Business insurance
Travelers’ business insurance segment reported after-tax income of $857 million, beating TD Cowen’s estimate of $870 million and growing significantly from the $725 million posted in the same period last year. The underlying combined ratio for the segment was 86.8%, while NWP was $5.018 billion – a 14% increase, driven by strong renewal premium change, retention, and increased levels of new business.
Bond and specialty insurance
After-tax income for the bond and specialty insurance segment was $240 million, exceeding TD Cowen’s estimate of $201 million and up from $221 million during the same period last year. The underlying combined ratio for the segment was 80.6%.
Read next: Travelers VP appointed chairman of INI board
Personal insurance
The personal insurance segment posted after-tax income of $520 million, surpassing the TD Cowen estimate of $184 million and marking a substantial recovery from the $61 million loss in the previous year. The underlying combined ratio for the segment was 85.9%. NWP for the segment was $3.987 billion, a 13% year-over-year increase.
Auto insurance
Travelers’ auto insurance segment reported an underwriting loss of $82 million. This was a significant improvement from the $202 million loss reported in the previous year. The underlying combined ratio for the auto insurance segment was 102.7%, slightly higher than TD Cowen’s projection of 101%, but still lower than the 110.5% combined ratio recorded in the same period last year. NWP for the segment was $1.831 billion, a 13% year-over-year increase.
Homeowners insurance
Travelers’ homeowners insurance segment posted underwriting income of $585 million, a massive increase from the $5 million reported in the same period last year. The underlying combined ratio was 69.7%, significantly improving on TD Cowen’s projection of 86.4% and the 82.2% combined ratio reported in the previous year. NWP for homeowners insurance was $1.995 billion, up 14% year over year.
Earlier this month, Global 500 named Travelers one of the insurance sector’s most valuable brands. The insurance giant also recently acquired Corvus Insurance, a managing general underwriter for cyber insurance.
Have something to say about this story? Let us know in the comments below.
Related Stories
- Most valuable brands named – which insurance companies made the cut?
- Done deal: Corvus now part of Travelers
Fetching comments… Please enable JavaScript to view the comments powered by Disqus.
LATEST NEWS
INSURANCE NEWS
Travelers’ earnings beat expectations
MARINE
West P&I Club rolls out new piracy protection product
INSURANCE NEWS
Insurers fear Credit Suisse and SVB regulation impact
TECHNOLOGY
Embedded insurance poised for significant growth in 2024
