Earnings Results: • Core income of $1.1 billion or $4.69 per diluted share, up 13% from prior year quarter • Combined ratio improved 1.5 points to 93.9% despite elevated catastrophe activity • Underlying combined ratio improved 2.9 points to 87.7%, driven by strong results in all three segments • Record net earned premiums of $10.1 billion, up 14% year-over-year • Net written premiums grew 8% to $10.2 billion
Future Guidance: • Updated outlook for fixed income NII: $640 million after tax in Q2, growing to $665 million in Q3 and $690 million in Q4 • Expect full year expense ratio of 28% to 28.5% • Auto renewal premium change expected to moderate throughout 2024 as written rate adequacy is achieved in most states • Homeowners renewal premium change expected to remain at current levels (~13.4%) throughout 2024 as the company continues to address elevated loss costs
Themes, Trends, Market Conditions, and Sentiment: Travelers reported strong first quarter results driven by excellent underwriting performance across all three business segments and higher net investment income. The company grew net written premiums by 8% while maintaining attractive margins, reflecting a disciplined marketplace in the face of persistent headwinds such as social inflation, economic inflation, weather volatility, and geopolitical uncertainty.
Business Insurance and Bond & Specialty Insurance continued to deliver exceptional results with strong renewal premium change and high retention. Personal Insurance showed significant improvement, particularly in auto profitability, as earned pricing increases took effect. The company remains focused on profitably growing its auto business while managing growth and improving profitability in homeowners.
Travelers continues to invest in strategic initiatives to enhance its competitive advantages, including optimizing its value proposition for agents and brokers through product modernization and digitization of the value chain. The company’s strong relationships with distribution partners and its deep specialization across a wide range of products position it well for long-term success.
Overall, management expressed confidence in the company’s ability to continue delivering strong results and creating shareholder value, supported by its underwriting expertise, innovative capabilities, and strong balance sheet.
Notable Quotes: • Alan Schnitzer: “We’re firing on all cylinders. We also continue to invest in important strategic initiatives. We have demonstrated success in executing our innovation strategy, which has contributed to superior returns with industry low volatility, growth in our premium base and higher adjusted book value per share.”
• Michael Klein: “Personal Insurance team has made notable progress on improving the underlying fundamentals of our business, while sustaining investments in key capabilities for the future. We’re moving closer to our goal of delivering target returns.”