The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q2 2017 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Jul 20, 2017
Slide 1: Second Quarter 2017 Results
Second Quarter 2017 Results July 20, 2017 1
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Generation of Balanced approach Meaningful and top tier earnings to rightsizing sustainable and capital capital and competitive substantially in growing book value advantages excess of growth per share over time needs CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 3: Second Quarter 2017 Overview
Second Quarter 2017 Overview Travelers Reports Second Quarter Net Income and Core Income per Diluted Share of $2.11 and $1.92, Respectively, Including Catastrophe Losses of $0.93 per Diluted Share Return on Equity and Core Return on Equity of 10.0% and 9.5%, Respectively • Net income of $595 million
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) SECOND QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Core income $ 543 $ 649 (16) % $ 1,157 $ 1,347 (14) % per diluted share $ 1.92 2.20 (13) % $ 4.08 $ 4.52 (10) % Included the following items: Net favorable prio
Slide 5: 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. 2017 2016 • Repurchased 3.8 million shares during the second quarter Debt $ 6,920 $ 6,437 22,823 2017 at a total cost of $475 million
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Second Quarter 2017 Commentary $476 $493 • Net investment income from the long-term fixed income $462 $472 $480 $468 $439 $442 portfolio declined modestly from the prior year quarter due to lower reinvestment rates as expected • Short-
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.0% 11.0% 15.5% 15.5% 15.2 % 13.3% 12.0% 10.2% 9.4% 9.4% 0.8% 1.3% 8.5% 8.4% 1.3% 0.3% 1.5% 7.8% 8.3% 1.2% 7.4% 8.1% 7.0% 7.1% 7.2% 1.5% 7.3% 0.9% 6.8% 7.3% 0.9% 0.5% 1.4% 6.9% 0.1% 6.1% 0.1% 6.5% 6.2% 6.2% 0.1% 5.2% 5.8% 3.6% 2.9% 1.6% 2005 through 2011 2012 20
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 429 $ 401 7 % $ 871 $ 848 3 % Loss and loss adjustment ratio 64.3 % 63.7 % 64.4 % 63.5 % Underwriting expense ratio 32.2 32.8 32.1 32.3 1 Combined ratio 96.5 % 96.5 % - pts 9
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% • Exposure/Other % 6% 4% 2% 0.6% 0.6% 0.6% (0.1%) 0.0% 0.2% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 2Q’17 ($ in millions) Retention 86% 85% 85% 85% 85%
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts ILLUSTRATIVE BUSINESS STATISTICS 10% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 8% • Exposure/Other % 6% 4% 2% 1.3% 1.0% 0.6% 0.4% 0.6% 0.3% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 2Q’17 ($ in millions) Retention 82% 82% 83% 83% 84% 83% Renew
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market ILLUSTRATIVE BUSINESS STATISTICS 10% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 8% • Exposure/Other % 6% 4% 2% 0.9% 0.7% 0.9% - 0.2% 0.3% (0.5%) (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 2Q’17 ($ in millions) Retention 88% 87% 87% 87% 88% 88% Renew
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 163 $ 215 (24) % $ 308 $ 375 (18) % Loss and loss adjustment ratio 29.7 % 16.2 % 35.1 % 24.1 % Underwriting expense ratio 39.0 38.3 38.9 38.0 1 Combined ratio 68.7 %
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 1 Management Liability Retention 86% 87% 87% 88% 88% 88% Renewal premium change 2 3.3% 3.6% 3.3% 1.3% 4.0% 3.8% New business $47 $48 $49 $41 $45 $49 1 Domestic only, excludes the surety l
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 12 $ 95 (87) % $ 101 $ 247 (59) % Loss and loss adjustment ratio 76.8 % 68.9 % 74.9 % 67.2 % Underwriting expense ratio 27.3 28.9 27.0 28.6 Combined ratio 1 104.1 % 97.8 % (6
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance SECOND QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Agency Automobile 1 Loss and loss adjustment ratio 82.2 % 75.9 % 79.8 % 73.2 % Underwriting expense ratio 24.2 25.4 24.0 25.1 2 Combined ratio 106.4 % 101.3 % (5.1) pts 103.8 % 98.3 % (5.5) pts Net
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 1 Agency Automobile Retention 2 86% 87% 87% 87% 86% 85% 3 Renewal premium change 4.6% 5.1% 5.7% 5.9% 6.2% 7.7% Policies in force (in thousands) 2,212 2,275 2,350 2,428 2,482 2,514 • Sequential qu
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 1 International Retention 83% 80% 82% 83% 85% 83% Renewal premium change 2 (1.4%) (0.9%) (0.6%) 2.0% (0.1%) 2.3% New business $77 $109 $87 $90 $86 $86 1 Excludes the surety line of business as
Slide 18: Appendix
Appendix Additional Information Additional Information 18
Slide 19: 2017 Catastrophe Reinsurance
2017 Catastrophe Reinsurance Catastrophe Bonds - Long Point Re III Ltd. • $300 million aggregate principal remains in effect – will expire May 2018 ̵ The attachment point and maximum limit were reset as required annually to adjust the expected loss of the layer within a predetermined range. For the
Slide 20: 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 21: 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 22: investor.travelers.com
investor.travelers.com
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