The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2021 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Apr 20, 2021
Slide 1: First Quarter 2021 Results
First Quarter 2021 Results April 20, 2021
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of approach to Meaningful and top tier earnings rightsizing sustainable and capital capital and competitive substantially in growing book advantages excess of growth value per share needs over time CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 3: First Quarter 2021 Overview
First Quarter 2021 Overview Travelers Reports Strong First Quarter 2021 Net Income per Diluted Share of $2.87, up 23%, and Return on Equity of 10.2% First Quarter 2021 Core Income per Diluted Share of $2.73, up 4%, and Core Return on Equity of 11.1% Board of Directors Declares 4% Increase in the Com
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) FIRST QUARTER 2021 2020 Change Core income $ 699 $ 676 3 % per diluted share $ 2.73 $ 2.62 4 % Included the following items: Net favorable prior year reserve development $ 249 $ 21 Catastrophes, net of
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital March 31, December 31, 2021 2020 • At or above target levels for all rating agencies. Debt $ 6,550 $ 6,550 • Repurchased 2.7 million shares during first quarter 2021 for a total of $397 million. Common equity
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL First Quarter 2021 vs 2020 Commentary $566 $572 $590 • Net investment income (NII) from the long-term fixed income $524 $519 portfolio decreased due to lower interest rates, partially $477 offset by an increase in average investments •
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.3% 15.2% 13.3% 9.0% 10.7% 10.9% 11.3% 11.5% 11.1% 9.2% 0.9% 8.3% 0.3% 8.0% 7.8% 7.8% 7.7% 7.4% 7.2% 7.2% 1.5% 1.1% 6.9% 1.1% 0.9% 2.7% 0.9% 1.3% 0.3% 0.7% 0.3% 0.1% 6.1% 0.3% 0.1% 0.2% 4.4% 4.1% 8.0% 3.8% 6.5% 6.4% 3.1% 6.3% 6.2% 6.2% 6.1% 2.8% 5.7% 2.7% 5.6% 1
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) FIRST QUARTER 2021 2020 Change Segment income $ 317 $ 289 10 % Loss and loss adjustment ratio 72.2 % 70.9 % Underwriting expense ratio 31.3 31.3 Combined ratio 1 103.5 % 102.2 % (1.3) pts Net favorable prior year reserve development 3.5 0.1 Catastrophes
Slide 9: Domestic Business Insurance (Ex. National Accounts)
Domestic Business Insurance (Ex. National Accounts) ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % 8.2% 8.5% 8.4% Exposure/Other % 8% 7.3% 6% 5.9% 4% 2% - (2%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 Retention 84% 83% 83% 83% 83% Renewal premium 5.1% 6.
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 8% 6% 4.5% 4.2% 4% 2.9% 2.2% 2% 1.7% - (2%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 Retention 82% 83% 80% 78% 78% Renewal 1.2% 1.7% 3.9% 6.3% 6.
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % 9.2% Renewal Rate Change2 % 8.3% 9.1% 8% Exposure/Other % 7.8% 6.3% 6% 4% 2% - (2%) (4%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 Retention 86% 85% 85% 85% 86% Renewal 5.1% 5.3% 6.8% 8.0%
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) FIRST QUARTER 2021 2020 Change Segment income $ 137 $ 122 12 % Loss and loss adjustment ratio 49.9 % 48.8 % Underwriting expense ratio 35.3 37.1 Combined ratio 1 85.2 % 85.9 % 0.7 pts Net favorable prior year reserve development 2.1 - Catastroph
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 1 Management Liability Retention 89% 89% 91% 89% 87% Renewal premium change 2 8.4% 8.1% 8.1% 10.9% 10.8% New business $58 $51 $53 $49 $50 13 1 Domestic only, excludes surety and other produc
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) FIRST QUARTER 2021 2020 Change Segment income $ 314 $ 336 (7) % Loss and loss adjustment ratio 63.6 % 61.9 % Underwriting expense ratio 26.7 26.3 Combined ratio 1 90.3 % 88.2 % (2.1) pts Net favorable prior year reserve development 5.9 0.8 Catastrophes,
Slide 15: Personal Insurance Performance
Personal Insurance Performance FIRST QUARTER 2021 2020 Change Automobile 1 Loss and loss adjustment ratio 57.2 % 66.9 % Underwriting expense ratio 24.6 24.3 2 Combined ratio 81.8 % 91.2 % 9.4 pts Net favorable prior year reserve development 5.2 0.2 Catastrophes, net of reinsurance (0.4) (0.5) Underl
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 1 Automobile Retention 2 84% 84% 84% 84% 84% 3 Renewal premium change 2.3% 1.6% 1.5% 0.7% 0.2% Policies in force (in thousands) 2,700 2,732 2,761 2,779 2,807 • Sequential quarter growth -% 1% 1% 1%
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 1 International Retention 71% 80% 79% 80% 80% Renewal premium change 2 7.8% 7.1% 7.1% 9.8% 6.9% New business $73 $82 $74 $76 $63 17 1 Excludes surety and other products that are generally sold on
Slide 18: Appendix
Appendix 18
Slide 19: Explanatory Note
Explanatory Note This presentation 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,” “w
Slide 20: Disclosure
Disclosure In this presentation, we may refer to some non-GAAP financial measures. For a reconciliation of these measures to the most comparable GAAP measures and a glossary of financial measures, we refer you to the press release and financial supplement that we have made available in connection wi
Slide 21: investor.travelers.com
investor.travelers.com 21
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