Fourth Quarter 2024 Net Income per Diluted
Share of $8.96, up 28%, and Return on Equity of 30.0%
Fourth Quarter 2024 Core Income per Diluted
Share of $9.15, up 31%, and Core Return on Equity of 27.7%
Full Year Net Income and Core Income of $5
Billion
Full Year Return on Equity of 19.2% and Core
Return on Equity of 17.2%
- Excellent fourth quarter net income of $2.082 billion and core
income of $2.126 billion.
- Consolidated combined ratio improved 2.6 points from the prior
year quarter to an excellent 83.2%.
- Underlying underwriting income of $1.700 billion pre-tax,
reflecting an underlying combined ratio that improved 1.9 points to
an excellent 84.0%; very strong underlying results in all three
segments.
- Net written premiums of $10.742 billion, up 7%, with growth in
all three segments; record full year net written premiums of
$43.356 billion, up 8%, with growth in all three segments.
- Net investment income increased 23% pre-tax over the prior year
quarter.
- Book value per share of $122.97, up 13% over year-end 2023;
adjusted book value per share of $139.04, up 13% over year-end
2023.
- Record full year operating cash flows of $9.074 billion.
The Travelers Companies, Inc. today reported net income of
$2.082 billion, or $8.96 per diluted share, for the quarter ended
December 31, 2024, compared to $1.626 billion, or $6.99 per diluted
share, in the prior year quarter. Core income in the current
quarter was $2.126 billion, or $9.15 per diluted share, compared to
$1.633 billion, or $7.01 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 investment income
and higher net favorable prior year reserve development, partially
offset by higher catastrophe losses. Net realized investment losses
in the current quarter were $55 million pre-tax ($44 million
after-tax), compared to $11 million pre-tax ($7 million after-tax)
in the prior year quarter. Per diluted share amounts benefited from
the impact of share repurchases.
Consolidated Highlights
($ in millions, except for per share
amounts, and after-tax, except for premiums and revenues)
Three Months Ended December
31,
Twelve Months Ended December
31,
2024
2023
Change
2024
2023
Change
Net written premiums
$
10,742
$
9,994
7
%
$
43,356
$
40,201
8
%
Total revenues
$
12,008
$
10,927
10
$
46,423
$
41,364
12
Net income
$
2,082
$
1,626
28
$
4,999
$
2,991
67
per diluted share
$
8.96
$
6.99
28
$
21.47
$
12.79
68
Core income
$
2,126
$
1,633
30
$
5,025
$
3,072
64
per diluted share
$
9.15
$
7.01
31
$
21.58
$
13.13
64
Diluted weighted average shares
outstanding
230.7
231.1
—
231.1
232.2
—
Combined ratio
83.2
%
85.8
%
(2.6
)
pts
92.5
%
97.0
%
(4.5
)
pts
Underlying combined ratio
84.0
%
85.9
%
(1.9
)
pts
86.2
%
89.5
%
(3.3
)
pts
Return on equity
30.0
%
29.0
%
1.0
pts
19.2
%
13.6
%
5.6
pts
Core return on equity
27.7
%
24.0
%
3.7
pts
17.2
%
11.5
%
5.7
pts
As of
December 31, 2024
December 31, 2023
Change
Book value per share
$
122.97
$
109.19
13
%
Adjusted book value per share
139.04
122.90
13
%
See Glossary of Financial Measures for
definitions and the statistical supplement for additional financial
data.
“On behalf of all of us at Travelers, I want to acknowledge the
tragic wildfires that have devastated communities across Los
Angeles,” said Alan Schnitzer, Chairman and Chief Executive
Officer. “Our hearts go out to everyone affected – those who have
lost their homes, their businesses, and, most tragically, their
loved ones. At times like these, words alone of course are not
enough. As a company rooted in the communities we serve, we will be
there for our customers and neighbors to support them as they
recover and rebuild. We also extend our deep gratitude to all of
the first responders who have been working tirelessly and to our
claim professionals who demonstrate day in and day out to our
customers and agents the value of the Travelers promise.
“The strong results and financial position that we are reporting
today enable us to be there when our customers need us most,
including in the event of devastating tragedy, as our friends and
neighbors in Los Angeles are experiencing right now. In that
regard, we are very pleased to report record core income for the
quarter of $2.1 billion driven by strong growth in earned premiums
and excellent profitability. Net earned premiums increased 9% to
$10.9 billion, and the combined ratio improved 2.6 points to 83.2%.
The improvement in the combined ratio was driven by very strong
underlying profitability and higher net favorable prior year
reserve development. Earned premiums and underwriting margins were
strong in all three segments. Our high-quality investment portfolio
performed well, generating after-tax net investment income of $785
million.
“For the full year, core income was up 64% to more than $5
billion, or $21.58 per diluted share, generating core return on
equity of 17.2%. Full year results were driven by strong earned
premiums, excellent underwriting margins and a higher level of net
investment income.
“These results, together with our strong balance sheet, enabled
us to grow adjusted book value per share by 13% during the year to
$139.04, after making important investments in our business and
returning more than $2.1 billion of excess capital to shareholders
through dividends and share repurchases.
“Through continued terrific marketplace execution across all
three segments, we grew net written premiums during the year by 8%
to $43.4 billion and in the quarter by 7% to $10.7 billion. In
Business Insurance, we grew net written premiums in the quarter by
8% to $5.4 billion. Renewal premium change in the segment remained
strong at 9.6%, including renewal rate change of 6.9%, while
retention also remained strong at 85%. In Bond & Specialty
Insurance, we grew net written premiums by 7% to $1.1 billion, with
excellent retention of 88% in our high-quality management liability
business. In our industry-leading surety business, we grew net
written premiums by 19%. In Personal Insurance, net written
premiums grew 7% to $4.3 billion, driven by continued strong
renewal premium change, particularly in our Homeowners
business.
“The depth and breadth of our franchise value was on full
display in 2024. The compelling value proposition that we offer to
our customers and distribution partners drives our top line.
Underwriting excellence delivers strong profitability and cash
flow. Investing expertise along with a growing portfolio and higher
reinvestment rates contributes to meaningful growth in net
investment income. All of that contributes to strong returns and
meaningful growth in book value per share. With this momentum, we
are very confident in the outlook for Travelers in 2025 and
beyond.”
Consolidated Results
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain:
$
1,787
$
1,375
$
412
$
2,984
$
966
$
2,018
Underwriting gain
includes:
Net favorable prior year reserve
development
262
132
130
709
143
566
Catastrophes, net of reinsurance
(175
)
(125
)
(50
)
(3,335
)
(2,991
)
(344
)
Net investment income
955
778
177
3,590
2,922
668
Other income (expense), including
interest expense
(93
)
(123
)
30
(364
)
(412
)
48
Core income before income taxes
2,649
2,030
619
6,210
3,476
2,734
Income tax expense
523
397
126
1,185
404
781
Core income
2,126
1,633
493
5,025
3,072
1,953
Net realized investment losses after
income taxes
(44
)
(7
)
(37
)
(26
)
(81
)
55
Net income
$
2,082
$
1,626
$
456
$
4,999
$
2,991
$
2,008
Combined ratio
83.2
%
85.8
%
(2.6
)
pts
92.5
%
97.0
%
(4.5
)
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(2.4
)
pts
(1.3
)
pts
(1.1
)
pts
(1.7
)
pts
(0.4
)
pts
(1.3
)
pts
Catastrophes, net of reinsurance
1.6
pts
1.2
pts
0.4
pts
8.0
pts
7.9
pts
0.1
pts
Underlying combined ratio
84.0
%
85.9
%
(1.9
)
pts
86.2
%
89.5
%
(3.3
)
pts
Net written premiums
Business Insurance
$
5,426
$
5,018
8
%
$
22,078
$
20,430
8
%
Bond & Specialty Insurance
1,054
989
7
4,109
3,842
7
Personal Insurance
4,262
3,987
7
17,169
15,929
8
Total
$
10,742
$
9,994
7
%
$
43,356
$
40,201
8
%
Fourth Quarter 2024 Results
(All comparisons vs. fourth quarter 2023, unless noted
otherwise)
Net income of $2.082 billion increased $456 million, driven by
higher core income, partially offset by higher net realized
investment losses. Core income of $2.126 billion increased $493
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. Net realized investment losses were $55 million pre-tax
($44 million after-tax), compared to $11 million pre-tax ($7
million after-tax) in the prior year quarter.
Combined ratio:
- The combined ratio of 83.2% improved 2.6 points due to an
improvement in the underlying combined ratio (1.9 points) and
higher net favorable prior year reserve development (1.1 points),
partially offset by higher catastrophe losses (0.4 points).
- The underlying combined ratio improved 1.9 points to an
excellent 84.0%. 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 Hurricane Milton, as
well as an increase in estimated losses related to Hurricane
Helene, a third quarter event.
Net investment income of $955 million pre-tax ($785 million
after-tax) increased 23%. 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.
Net written premiums of $10.742 billion increased 7%. See below
for further details by segment.
Full Year 2024 Results (All
comparisons vs. full year 2023, unless noted otherwise)
Net income of $4.999 billion increased $2.008 billion, driven by
higher core income and lower net realized investment losses. Core
income of $5.025 billion increased $1.953 billion, 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 ($26 million after-tax), compared to $105 million
pre-tax ($81 million after-tax) in the prior year.
Combined ratio:
- The combined ratio of 92.5% improved 4.5 points due to an
improvement in the underlying combined ratio (3.3 points) and
higher net favorable prior year reserve development (1.3 points),
partially offset by higher catastrophe losses (0.1 points).
- The underlying combined ratio of 86.2% improved 3.3 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 primarily resulted from Hurricane Helene and
numerous severe wind and hail storms in multiple states.
Net investment income of $3.590 billion pre-tax ($2.952 billion
after-tax) increased 23% driven by the same factors described above
for the fourth quarter of 2024.
Net written premiums of $43.356 billion increased 8%. See below
for further details by segment.
Shareholders’ Equity
Shareholders’ equity of $27.864 billion increased 12% over
year-end 2023, primarily due to net income of $4.999 billion,
partially offset by common share repurchases, dividends to
shareholders and higher net unrealized investment losses. Net
unrealized investment losses included in shareholders’ equity were
$4.609 billion pre-tax ($3.640 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 $122.97
increased 13% over year-end 2023. Adjusted book value per share of
$139.04, which excludes net unrealized investment gains (losses),
increased 13% over year-end 2023.
The Company repurchased 1.0 million shares during the fourth
quarter at an average price of $255.41 per share for a total cost
of $252 million. At December 31, 2024, the Company had $5.040
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 $27.715 billion, and
the ratio of debt-to-capital was 22.4%. The ratio of
debt-to-capital excluding after-tax net unrealized investment gains
(losses) included in shareholders’ equity was 20.3%, within the
Company’s target range of 15% to 25%.
The Board of Directors declared a regular quarterly dividend of
$1.05 per share. The dividend is payable March 31, 2025, to
shareholders of record at the close of business on March 10,
2025.
Business
Insurance Segment Financial Results
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain:
$
808
$
669
$
139
$
1,554
$
959
$
595
Underwriting gain
includes:
Net favorable (unfavorable) prior year
reserve development
147
56
91
90
(289
)
379
Catastrophes, net of reinsurance
(94
)
(40
)
(54
)
(1,032
)
(838
)
(194
)
Net investment income
677
552
125
2,560
2,085
475
Other income (expense)
(7
)
(37
)
30
(27
)
(93
)
66
Segment income before income
taxes
1,478
1,184
294
4,087
2,951
1,136
Income tax expense
290
227
63
781
368
413
Segment income
$
1,188
$
957
$
231
$
3,306
$
2,583
$
723
Combined ratio
85.2
%
86.5
%
(1.3
)
pts
92.5
%
94.7
%
(2.2
)
pts
Impact on combined
ratio
Net (favorable) unfavorable prior year
reserve development
(2.7
)
pts
(1.1
)
pts
(1.6
)
pts
(0.4
)
pts
1.5
pts
(1.9
)
pts
Catastrophes, net of reinsurance
1.7
pts
0.8
pts
0.9
pts
4.8
pts
4.3
pts
0.5
pts
Underlying combined ratio
86.2
%
86.8
%
(0.6
)
pts
88.1
%
88.9
%
(0.8
)
pts
Net written premiums by market
Domestic
Select Accounts
$
893
$
862
4
%
$
3,727
$
3,477
7
%
Middle Market
3,011
2,751
9
12,023
11,045
9
National Accounts
356
317
12
1,259
1,135
11
National Property and Other
684
682
—
3,134
3,008
4
Total Domestic
4,944
4,612
7
20,143
18,665
8
International
482
406
19
1,935
1,765
10
Total
$
5,426
$
5,018
8
%
$
22,078
$
20,430
8
%
Fourth Quarter 2024 Results
(All comparisons vs. fourth quarter 2023, unless noted
otherwise)
Segment income for Business Insurance was $1.188 billion
after-tax, an increase of $231 million. Segment income increased
primarily due to higher net investment income, a higher underlying
underwriting gain and higher net favorable prior year reserve
development, partially offset by higher catastrophe losses. The
underlying underwriting gain benefited from higher business
volumes.
Combined ratio:
- The combined ratio of 85.2% improved 1.3 points due to higher
net favorable prior year reserve development (1.6 points) and an
improvement in the underlying combined ratio (0.6 points),
partially offset by higher catastrophe losses (0.9 points).
- The underlying combined ratio improved 0.6 points to an
excellent 86.2%.
- Net favorable prior year reserve development was primarily
driven by better than expected loss experience in the workers’
compensation product line for multiple accident years, partially
offset by additions to reserves attributable to childhood sexual
molestation in the Company’s run-off operations.
Net written premiums of $5.426 billion increased 8%, reflecting
strong renewal premium change and retention.
Full Year 2024 Results (All
comparisons vs. full year 2023, unless noted otherwise)
Segment income for Business Insurance was $3.306 billion
after-tax, an increase of $723 million. Segment income increased
primarily due to higher net investment income, net favorable prior
year reserve development compared to net unfavorable prior year
reserve development in the prior year and a higher underlying
underwriting gain, 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 $171 million due to the
expiration of the statute of limitations with respect to a tax
item.
Combined ratio:
- The combined ratio of 92.5% improved 2.2 points due to net
favorable prior year reserve development compared to net
unfavorable prior year reserve development in the prior year (1.9
points) and an improvement in the underlying combined ratio (0.8
points), partially offset by higher catastrophe losses (0.5
points).
- The underlying combined ratio improved 0.8 points to an
excellent 88.1%.
- Net favorable prior year reserve development was primarily
driven by (i) better than expected loss experience in the workers’
compensation product line for multiple accident years, partially
offset by (ii) higher than expected loss experience in the general
liability product line (excluding asbestos) for recent accident
years, (iii) an addition to asbestos reserves of $242 million and
(iv) additions to other reserves related to run-off
operations.
Net written premiums of $22.078 billion increased 8%, reflecting
the same factors described above for the fourth quarter of
2024.
Bond
& Specialty Insurance Segment Financial Results
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain:
$
172
$
207
$
(35
)
$
603
$
824
$
(221
)
Underwriting gain
includes:
Net favorable prior year reserve
development
45
36
9
129
285
(156
)
Catastrophes, net of reinsurance
(2
)
(6
)
4
(51
)
(37
)
(14
)
Net investment income
105
91
14
390
328
62
Other income
6
3
3
23
17
6
Segment income before income
taxes
283
301
(18
)
1,016
1,169
(153
)
Income tax expense
55
61
(6
)
201
227
(26
)
Segment income
$
228
$
240
$
(12
)
$
815
$
942
$
(127
)
Combined ratio
82.7
%
77.3
%
5.4
pts
84.3
%
76.9
%
7.4
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(4.3
)
pts
(3.9
)
pts
(0.4
)
pts
(3.3
)
pts
(7.8
)
pts
4.5
pts
Catastrophes, net of reinsurance
0.2
pts
0.6
pts
(0.4
)
pts
1.3
pts
1.0
pts
0.3
pts
Underlying combined ratio
86.8
%
80.6
%
6.2
pts
86.3
%
83.7
%
2.6
pts
Net written premiums
Domestic
Management Liability
$
563
$
553
2
%
$
2,309
$
2,156
7
%
Surety
329
276
19
1,294
1,147
13
Total Domestic
892
829
8
3,603
3,303
9
International
162
160
1
506
539
(6
)
Total
$
1,054
$
989
7
%
$
4,109
$
3,842
7
%
Fourth Quarter 2024 Results
(All comparisons vs. fourth quarter 2023, unless noted
otherwise)
Segment income for Bond & Specialty Insurance was $228
million after-tax, a decrease of $12 million. Segment income
decreased primarily due to a lower underlying underwriting gain,
partially offset by higher net investment income and higher net
favorable prior year reserve development. The underlying
underwriting gain benefited from higher business volumes.
Combined ratio:
- The combined ratio of 82.7% increased 5.4 points due to a
higher underlying combined ratio (6.2 points), partially offset by
higher net favorable prior year reserve development (0.4 points)
and lower catastrophe losses (0.4 points).
- The underlying combined ratio increased 6.2 points to a very
strong 86.8%.
- Net favorable prior year reserve development was primarily
driven by better than expected loss experience in the fidelity and
surety product lines for multiple accident years.
Net written premiums of $1.054 billion increased 7%, reflecting
production growth in both surety and management liability.
Full Year 2024 Results (All
comparisons vs. full year 2023, unless noted otherwise)
Segment income for Bond & Specialty Insurance was $815
million after-tax, a decrease of $127 million. Segment income
decreased primarily due to lower net favorable prior year reserve
development and a lower underlying underwriting gain, partially
offset by higher net investment income. The underlying underwriting
gain benefited from higher business volumes. The underlying
underwriting gain in the prior year 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 84.3% increased 7.4 points due to lower
net favorable prior year reserve development (4.5 points), a higher
underlying combined ratio (2.6 points) and higher catastrophe
losses (0.3 points).
- The underlying combined ratio increased 2.6 points to a very
strong 86.3%.
- Net favorable prior year reserve development was primarily
driven by the same factors described above for the fourth quarter
of 2024.
Net written premiums of $4.109 billion increased 7%, reflecting
the same factors described above for the fourth quarter of
2024.
Personal
Insurance Segment Financial Results
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions and pre-tax, unless
noted otherwise)
2024
2023
Change
2024
2023
Change
Underwriting gain (loss):
$
807
$
499
$
308
$
827
$
(817
)
$
1,644
Underwriting gain
(loss) includes:
Net favorable prior year reserve
development
70
40
30
490
147
343
Catastrophes, net of reinsurance
(79
)
(79
)
—
(2,252
)
(2,116
)
(136
)
Net investment income
173
135
38
640
509
131
Other income
19
18
1
76
77
(1
)
Segment income (loss) before income
taxes
999
652
347
1,543
(231
)
1,774
Income tax expense (benefit)
201
132
69
294
(103
)
397
Segment income (loss)
$
798
$
520
$
278
$
1,249
$
(128
)
$
1,377
Combined ratio
80.7
%
86.8
%
(6.1
)
pts
94.4
%
104.8
%
(10.4
)
pts
Impact on combined
ratio
Net favorable prior year reserve
development
(1.6
)
pts
(1.1
)
pts
(0.5
)
pts
(3.0
)
pts
(1.0
)
pts
(2.0
)
pts
Catastrophes, net of reinsurance
1.8
pts
2.0
pts
(0.2
)
pts
13.5
pts
14.1
pts
(0.6
)
pts
Underlying combined ratio
80.5
%
85.9
%
(5.4
)
pts
83.9
%
91.7
%
(7.8
)
pts
Net written premiums
Domestic
Automobile
$
1,927
$
1,831
5
%
$
7,925
$
7,330
8
%
Homeowners and Other
2,158
1,995
8
8,550
7,949
8
Total Domestic
4,085
3,826
7
16,475
15,279
8
International
177
161
10
694
650
7
Total
$
4,262
$
3,987
7
%
$
17,169
$
15,929
8
%
Fourth Quarter 2024 Results
(All comparisons vs. fourth quarter 2023, unless noted
otherwise)
Segment income for Personal Insurance was $798 million
after-tax, an increase of $278 million. Segment income increased
primarily due to a higher underlying underwriting gain, higher net
investment income and higher net favorable prior year reserve
development. The underlying underwriting gain benefited from higher
business volumes.
Combined ratio:
- The combined ratio of 80.7% improved 6.1 points due to an
improvement in the underlying combined ratio (5.4 points), higher
net favorable prior year reserve development (0.5 points) and lower
catastrophe losses as a percentage of net earned premiums (0.2
points).
- The underlying combined ratio of 80.5% improved 5.4 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 both the
Homeowners and Other and Automobile product lines for recent
accident years.
Net written premiums of $4.262 billion increased 7%, reflecting
strong renewal premium change.
Full Year 2024 Results (All
comparisons vs. full year 2023, unless noted otherwise)
Segment income for Personal Insurance was $1.249 billion
after-tax, compared with a segment loss of $128 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 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 94.4% improved 10.4 points due to an
improvement in the underlying combined ratio (7.8 points), higher
net favorable prior year reserve development (2.0 points) and lower
catastrophe losses as a percentage of net earned premiums (0.6
points).
- The underlying combined ratio of 83.9% improved 7.8 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 fourth quarter
of 2024.
Net written premiums of $17.169 billion increased 8%, reflecting
the same factors described above for the fourth 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 Wednesday, January 22, 2025.
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 $46
billion in 2024. 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
x.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 (including the recent California wildfires
and the 2025 Plan) 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 growth,
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, including the recent
California wildfires;
- 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 changes in tax laws; 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 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 to Core
Income less Preferred Dividends
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions, after-tax)
2024
2023
2024
2023
Net income
$
2,082
$
1,626
$
4,999
$
2,991
Adjustments:
Net realized investment losses
44
7
26
81
Core income
$
2,126
$
1,633
$
5,025
$
3,072
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions, pre-tax)
2024
2023
2024
2023
Net income
$
2,594
$
2,019
$
6,180
$
3,371
Adjustments:
Net realized investment losses
55
11
30
105
Core income
$
2,649
$
2,030
$
6,210
$
3,476
Twelve Months Ended December
31,
Average Annual
($ in millions, after-tax)
2022
2021
2020
2019
2005 - 2019
Net income
$
2,842
$
3,662
$
2,697
$
2,622
$
3,007
Less: Loss from discontinued
operations
—
—
—
—
(29
)
Income from continuing
operations
2,842
3,662
2,697
2,622
3,036
Adjustments:
Net realized investment (gains) losses
156
(132
)
(11
)
(85
)
(44
)
Impact of changes in tax laws and/or tax
rates (1) (2)
—
(8
)
—
—
9
Core income
2,998
3,522
2,686
2,537
3,001
Less: Preferred dividends
—
—
—
—
2
Core income, less preferred
dividends
$
2,998
$
3,522
$
2,686
$
2,537
$
2,999
(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 per Share
to Core Income per Share on a Diluted Basis
Three Months Ended December
31,
Twelve Months Ended December
31,
2024
2023
2024
2023
Diluted income
per share
Net income
$
8.96
$
6.99
$
21.47
$
12.79
Adjustments:
Net realized investment losses,
after-tax
0.19
0.02
0.11
0.34
Core income
$
9.15
$
7.01
$
21.58
$
13.13
Reconciliation of Segment Income (Loss)
to Total Core Income
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions, after-tax)
2024
2023
2024
2023
Business Insurance
$
1,188
$
957
$
3,306
$
2,583
Bond & Specialty Insurance
228
240
815
942
Personal Insurance
798
520
1,249
(128
)
Total segment income
2,214
1,717
5,370
3,397
Interest Expense and Other
(88
)
(84
)
(345
)
(325
)
Total core income
$
2,126
$
1,633
$
5,025
$
3,072
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 December 31,
Average Annual
($ in millions)
2024
2023
2022
2021
2020
2019
2005 - 2019
Shareholders’ equity
$
27,864
$
24,921
$
21,560
$
28,887
$
29,201
$
25,943
$
24,744
Adjustments:
Net unrealized investment (gains) losses,
net of tax, included in shareholders’ equity
3,640
3,129
4,898
(2,415
)
(4,074
)
(2,246
)
(1,300
)
Net realized investment (gains) losses,
net of tax
26
81
156
(132
)
(11
)
(85
)
(44
)
Impact of changes in tax laws and/or tax
rates (1) (2)
—
—
—
(8
)
—
—
19
Preferred stock
—
—
—
—
—
—
(42
)
Loss from discontinued operations
—
—
—
—
—
—
29
Adjusted shareholders’ equity
$
31,530
$
28,131
$
26,614
$
26,332
$
25,116
$
23,612
$
23,406
(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 December
31,
Twelve Months Ended December
31,
($ in millions, after-tax)
2024
2023
2024
2023
Annualized net income
$
8,330
$
6,506
$
4,999
$
2,991
Average shareholders’ equity
27,780
22,449
25,993
22,031
Return on equity
30.0
%
29.0
%
19.2
%
13.6
%
Annualized core income
$
8,505
$
6,530
$
5,025
$
3,072
Adjusted average shareholders’ equity
30,677
27,250
29,295
26,772
Core return on equity
27.7
%
24.0
%
17.2
%
11.5
%
Twelve Months Ended
December 31,
Average Annual
($ in millions, after-tax)
2022
2021
2020
2019
2005 - 2019
Net income, less preferred dividends
$
2,842
$
3,662
$
2,697
$
2,622
$
3,005
Average shareholders’ equity
23,384
28,735
26,892
24,922
24,693
Return on equity
12.2
%
12.7
%
10.0
%
10.5
%
12.2
%
Core income, less preferred dividends
$
2,998
$
3,522
$
2,686
$
2,537
$
2,999
Adjusted average shareholders’ equity
26,588
25,718
23,790
23,335
23,397
Core return on equity
11.3
%
13.7
%
11.3
%
10.9
%
12.8
%
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 or unintentionally
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 $30 million of losses before reinsurance and taxes.
Net favorable (unfavorable) prior year loss reserve
development is the increase or decrease in incurred claims and
claim adjustment expenses as a result of the re-estimation of
claims and claim adjustment expense reserves at successive
valuation dates for a given group of claims, which may be related
to one or more prior years. In the opinion of the Company’s
management, a discussion of loss reserve development is meaningful
to users of the financial statements as it allows them to assess
the impact between prior and current year development on incurred
claims and claim adjustment expenses, net and core income (loss),
and changes in claims and claim adjustment expense reserve levels
from period to period.
Reconciliation of Net Income to Pre-Tax
Underlying Underwriting Income (also known as Underlying
Underwriting Gain)
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions, after-tax, except as
noted)
2024
2023
2024
2023
Net income
$
2,082
$
1,626
$
4,999
$
2,991
Net realized investment losses
44
7
26
81
Core income
2,126
1,633
5,025
3,072
Net investment income
(785
)
(645
)
(2,952
)
(2,436
)
Other (income) expense, including interest
expense
79
100
308
337
Underwriting income
1,420
1,088
2,381
973
Income tax expense (benefit) on
underwriting results
367
287
603
(7
)
Pre-tax underwriting income
1,787
1,375
2,984
966
Pre-tax impact of net favorable prior year
reserve development
(262
)
(132
)
(709
)
(143
)
Pre-tax impact of catastrophes
175
125
3,335
2,991
Pre-tax underlying underwriting
income
$
1,700
$
1,368
$
5,610
$
3,814
Reconciliation of Net Income to
After-Tax Underlying Underwriting Income (also known as Underlying
Underwriting Gain)
Three Months Ended December
31,
Twelve Months Ended December
31,
($ in millions, after-tax)
2024
2023
2024
2023
Net income
$
2,082
$
1,626
$
4,999
$
2,991
Net realized investment losses
44
7
26
81
Core income
2,126
1,633
5,025
3,072
Net investment income
(785
)
(645
)
(2,952
)
(2,436
)
Other (income) expense, including interest
expense
79
100
308
337
Underwriting income
1,420
1,088
2,381
973
Impact of net favorable prior year reserve
development
(207
)
(105
)
(559
)
(113
)
Impact of catastrophes
138
99
2,632
2,361
Underlying underwriting income
$
1,351
$
1,082
$
4,454
$
3,221
Twelve Months Ended December
31,
($ in millions, after-tax)
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Net income
$
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
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
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
(2,170
)
(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
277
235
232
214
248
179
78
193
159
61
171
Underwriting income
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
(512
)
(424
)
(276
)
47
(409
)
(378
)
(510
)
(617
)
(616
)
(552
)
(622
)
Impact of catastrophes
1,480
1,459
1,274
699
1,355
1,267
576
338
462
387
1,214
Underlying underwriting income
$
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 December
31,
Twelve Months Ended December
31,
($ in millions, pre-tax)
2024
2023
2024
2023
Loss and loss
adjustment expense ratio
Claims and claim adjustment expenses
$
6,034
$
5,880
$
27,059
$
26,215
Less:
Policyholder dividends
11
13
47
49
Allocated fee income
47
40
172
164
Loss ratio numerator
$
5,976
$
5,827
$
26,840
$
26,002
Underwriting
expense ratio
Amortization of deferred acquisition
costs
$
1,807
$
1,641
$
6,973
$
6,226
General and administrative expenses
(G&A)
1,475
1,289
5,819
5,176
Less:
Non-insurance G&A
107
103
421
389
Allocated fee income
81
69
301
269
Billing and policy fees and other
28
29
116
113
Expense ratio numerator
$
3,066
$
2,729
$
11,954
$
10,631
Earned premium
$
10,868
$
9,973
$
41,941
$
37,761
Combined ratio (1)
Loss and loss adjustment expense ratio
55.0
%
58.4
%
64.0
%
68.9
%
Underwriting expense ratio
28.2
%
27.4
%
28.5
%
28.1
%
Combined ratio
83.2
%
85.8
%
92.5
%
97.0
%
Impact on combined ratio:
Net favorable prior year reserve
development
(2.4
)%
(1.3
)%
(1.7
)%
(0.4
)%
Catastrophes, net of reinsurance
1.6
%
1.2
%
8.0
%
7.9
%
Underlying combined ratio
84.0
%
85.9
%
86.2
%
89.5
%
(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 Gains (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)
December 31,
2024
December 31,
2023
December 31,
2006
Shareholders’ equity
$
27,864
$
24,921
$
25,135
Less: Net unrealized investment gains
(losses), net of tax, included in shareholders’ equity
(3,640
)
(3,129
)
445
Preferred stock
—
—
129
Common shareholders’ equity, excluding
net unrealized investment gains (losses), net of tax, included in
shareholders’ equity
31,504
28,050
24,561
Less:
Goodwill
4,233
3,976
n/a
Other intangible assets
360
277
n/a
Impact of deferred tax on other intangible
assets
(85
)
(69
)
n/a
Tangible shareholders’ equity,
excluding net unrealized investment losses, net of tax, included in
shareholders’ equity
$
26,996
$
23,866
n/a
Common shares outstanding
226.6
228.2
678.3
Book value per share
$
122.97
$
109.19
$
36.86
Adjusted book value per share
139.04
122.90
36.21
Tangible book value per share, excluding
net unrealized investment losses, net of tax, included in
shareholders’ equity
119.14
104.57
n/a
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)
December 31,
2024
December 31,
2023
Debt
$
8,033
$
8,031
Shareholders’ equity
27,864
24,921
Total capitalization
35,897
32,952
Less: Net unrealized investment losses,
net of tax, included in shareholders’ equity
(3,640
)
(3,129
)
Total capitalization excluding net
unrealized losses on investments, net of tax, included in
shareholders’ equity
$
39,537
$
36,081
Debt-to-capital ratio
22.4
%
24.4
%
Debt-to-capital ratio excluding net
unrealized investment losses, net of tax, included in shareholders’
equity
20.3
%
22.3
%
RECONCILIATION OF INVESTED ASSETS TO
INVESTED ASSETS EXCLUDING NET UNREALIZED INVESTMENT GAINS
(LOSSES)
As of December 31,
($ in millions)
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Invested assets
$
94,223
$
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
(4,609
)
(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)
$
98,832
$
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/20250120457726/en/
Media: Patrick Linehan
917.778.6267
Institutional Investors: Abbe
Goldstein 917.778.6825
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