The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Barclays Global Financial Services Conference 2014
25 slides from The Travelers Companies's conference presentation, Sep 8, 2014
Slide 1: Jay S. Benet, Vice Chairman & Chief Financial Officer
Jay S. Benet Vice Chairman & Chief Financial Officer Barclays Global Financial Services Conference September 8, 2014 1
Slide 2: 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 3: Travelers Profile, Data & Analytics, Performance
• Travelers Profile • Data & Analytics • Performance 3
Slide 4: Travelers Profile
Travelers Profile • Property & casualty insurer – writer of primary business, mostly U.S. domestic with growing international presence • Distribution primarily through independent agents and brokers • Full year 2013 net written premiums: $22.8 billion − 6th largest property & casualty insurer − #2 i
Slide 5: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of approach to Meaningful and top tier earnings rightsizing capital sustainable and capital and competitive substantially in growing book advantages excess of growth value per share needs over time CREATE SHAREHOLDER VALUE Objective: Mid-Teens Operati
Slide 6: Return Focused Company
Return Focused Company Operating Return on Equity vs. Estimated Cost of Capital1 17.9% 17.7% 15.5% 14.6% 14.0% 12.4% 12.5% 11.9% 11.0% 10.8% 9.6% 9.8% 8.3% 8.4% 8.1% 7.9% ` 7.4% 6.6% 6.1% 6.4% 2005 2006 2007 2008 2009 2010 2011 2012 2013 1H 2014 TRV operating return on equity TRV estimated cost of c
Slide 7: Consistently Growing Book Value Per Share
Consistently Growing Book Value Per Share Book Value Per Share $75.32 $70.15 $67.31 $62.32 $58.47 $52.54 $42.22 $43.12 $36.86 ` $31.94 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jun. 30, 2014 Adjusted Book Value Per Share1 $66.41 $69.38 $55.01 $59.09 $54.19 $48.98 $41.25 $43.37 $36.21 ` $31.47 200
Slide 8: Travelers Profile, Data & Analytics, Performance
• Travelers Profile • Data & Analytics • Performance 8
Slide 9: Data & Analytics - Role of Finance Organization at Travelers
Data & Analytics - Role of Finance Organization at Travelers • Major part of the company’s culture -- finance fully embedded in our business units • Knowledge, insight and judgment is the name of the game • Modern, comprehensive financial systems streamline financial reporting processes and allow fo
Slide 10: Data & Analytics - Knowledge, Insight and Judgment
Data & Analytics - Knowledge, Insight and Judgment • Worldwide general ledger1 Countrywide – CAG Field Controllable Income Statement Jane Smith (XXX) XXX-XXXX • Consolidated results available on Southwest Region – CAG Field - Controllable Income Statement fifth work day of each month John Smith (XXX
Slide 11: Data & Analytics – “Ever Better” Financial Insight
Data & Analytics – “Ever Better” Financial Insight Production information: renewal rate change, exposure change, etc. Account executive dashboards Expected economic product returns Renewal rate change distribution Renewal rate change & retention by loss ratio band Continually expanding business anal
Slide 12: Highly Detailed Reserve Setting Process
Highly Detailed Reserve Setting Process • Actuarial fully embedded in our business units • Highly detailed analyses performed quarterly at the business unit level to test carried reserves • Involves a high degree of judgment informed by historical data, detailed knowledge of the business, econometri
Slide 13: Reserve Analyses Subject to Extensive Review and Oversight
Reserve Analyses Subject to Extensive Review and Oversight Corporate Actuarial • Facilitates cross business unit communication -- quarterly meetings of reserving actuaries, pricing actuaries, claim managers and product managers across business units for: − Workers’ Compensation − General Liability −
Slide 14: Travelers Profile, Data & Analytics, Performance
• Travelers Profile • Data & Analytics • Performance 14
Slide 15: Return Focused Company: Components of Operating Return on Equity
Return Focused Company Components of Operating Return on Equity 9.6% 17.9% 17.7% 12.4% 14.0% 12.5% 6.1% 11.0% 15.5% 14.6% 11.1% 11.0% 10.6% 1.4% 1.6% 1.4% 9.4% 9.3% 0.8% 0.7% 8.1% 9.0% 0.5% 0.9% 0.9% 8.5% 8.6% 0.4% 8.2% 0.9% 0.1% 0.9% 1.3% 1.3% 0.1% 1.2% 1.6% 7.0% 6.8% 6.7% 5.8% 6.0% 8.7% 8.9% 8.7%
Slide 16: Capital Management Strategy
Capital Management Strategy Operating company capital Holding company maintained at Holding company Excess capital in liquidity Unneeded levels needed to leverage operating maintained in capital support current maintained at level companies excess of amount returned business profile consistent with
Slide 17: Travelers Very Highly Rated
Travelers Very Highly Rated Financial Strength / Claims Paying Ratings A. M. Best S&P Moody's Fitch Berkshire Hathaway A++ AA+ Aa1 AA+ Travelers A++ AA Aa2 AA Chubb A++ AA Aa2 AA ACE A++ AA A1 AA Progressive A+ AA Aa2 AA Zurich - U.S. A+ AA- Aa3 AA- Allstate A+ AA- Aa3 A+ Cincinnati Financial A+ A A
Slide 18: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital June 30, December 31, • At or above target levels for all rating agencies 2014 2013 • Repurchased 9.5 million shares during the second quarter 2014 and Debt $ 6,347 $ 6,346 18.0 million shares year-to-date at
Slide 19: Excess Capital Returned to Shareholders
Excess Capital Returned to Shareholders ($ in millions) Net Income Share Repurchases1 & Dividends $5,670 $4,601 $4,208 $3,990 $3,685 $3,622 $3,569 $3,673 $3,216 $3,134 $2,924 $2,834 ` $2,473 $2,150 $1,892 $1,817 $1,735 $1,622 $1,426 $622 2005 2006 2007 2008 2009 2010 2011 2012 2013 1H 2014 Share Rep
Slide 20: Consistently Increased Dividends Per Share
Consistently Increased Dividends Per Share Dividends Per Share $1.96 $1.79 $1.59 $1.41 $1.23 $1.13 $1.19 $1.01 $1.05 $0.91 ` 2005 2006 2007 2008 2009 2010 2011 2012 2013 1H 2014 20
Slide 21: TRV Return on Equity vs. Other Financials 2005 - 1H 2014
TRV Return on Equity vs. Other Financials1 2005 - 1H 2014 Average Return on Equity: 2005 - 1H 2014 12.4% 9.9% 9.7% 7.9% 6.6% 6.7% ` (5.9%) S&P Property & S&P S&P Diversified S&P S&P S&P Multi-line Casualty Life & Health Financials Banks Financials Insurance Return on capital focus has resulted in to
Slide 22: TRV Significantly Outperformed Comparison Group Over Time
TRV Significantly Outperformed Comparison Group Over Time Stock Price Performance $100 Travelers • Comparison Group Average 1 $80 $60 $40 $20 $0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 Sep. 5, 2014 22 1 Comparison group: ACE, Aetna, Allstate, American Express, Chubb, CIGNA, Hartfor
Slide 23: Questions?
Questions? Additional Information Additional Information 23
Slide 24: Disclosure
Disclosure In this presentation or in the discussion that follows, 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 our press releases and financial supplements that we
Slide 25: The Travelers Companies, Inc.
The Travelers Companies, Inc. Additional Information Additional Information 25
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