The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2019 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Apr 18, 2019
Slide 1: First Quarter 2019 Results
First Quarter 2019 Results April 18, 2019 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: First Quarter 2019 Overview
First Quarter 2019 Overview Travelers Reports Strong First Quarter 2019 Net Income per Diluted Share of $2.99, up 24%, and Return on Equity of 13.5% First Quarter 2019 Core Income per Diluted Share of $2.83, up 15%, and Core Return on Equity of 13.0% Board of Directors Declares 6.5% Increase in Regu
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) FIRST QUARTER 2019 2018 Change Core income $ 755 $ 678 11 % per diluted share $ 2.83 $ 2.46 15 % Included the following items: Net favorable prior year reserve development $ 41 $ 119 Catastrophes, net
Slide 5: High Quality Financial Position
High Quality Financial Position ($ and shares in millions, except per share amounts) March 31, December 31, 2019 2018 Capital Debt $ 7,057 $ 6,564 • At or above target levels for all rating agencies. Common equity 1 23,333 23,007 Total capital 1 $ 30,390 $ 29,571 • Repurchased 3.3 million shares dur
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL First Quarter 2019 Commentary $547 $535 $525 $513 $507 $496 • Net investment income from the long-term fixed income portfolio $468 benefited from higher reinvestment rates and an increase in average investments • The short-term portion
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.1% 15.5% 15.2% 13.3% 9.0% 10.7% 11.9% 13.0% 9.3% 0.9% 8.4% 0.3% 7.8% 8.0% 7.8% 1.5% 7.4% 7.4% 7.1% 7.2% 7.2% 1.5% 1.5% 0.7% 0.9% 0.9% 8.1% 1.3% 0.4% 0.1% 6.1% 0.3% 0.3% 0.2% 5.6% 4.1% 3.8% 6.9% 6.5% 6.2% 6.2% 6.3% 5.7% 2.7% 6.0% 1.8% 2005 through 2013 2014 2015
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) FIRST QUARTER 2019 2018 Change Segment income $ 414 $ 452 (8) % Loss and loss adjustment ratio 67.6 % 65.7 % Underwriting expense ratio 30.5 31.8 1 Combined ratio 98.1 % 97.5 % (0.6) pts Net favorable (unfavorable) prior year reserve development (0.6) 1
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% 2.1% 2.2% 2% 1.6% 1.7% 1.6% - (2%) 1Q'18 2Q'18 3Q'18 4Q'18 1Q’19 ($ in millions) Retention 86% 85% 86% 85% 86% Renewal premium 4.6
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% 0.8% 0.8% 0.8% 0.7% 0.2% - (2%) 1Q'18 2Q'18 3Q'18 4Q'18 1Q’19 ($ in millions) Retention 83% 82% 82% 81% 83% Renewal premium 5.1% 5.8%
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% 2.2% 1.9% 1.5% 1.5% 1.6% - (2%) 1Q'18 2Q'18 3Q'18 4Q'18 1Q’19 ($ in millions) Retention 88% 88% 87% 87% 87% Renewal premium 4.0% 5.2% 4.
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) FIRST QUARTER 2019 2018 Change Segment income $ 138 $ 173 (20) % Loss and loss adjustment ratio 43.5 % 36.6 % Underw riting expense ratio 37.6 38.1 Combined ratio 1 81.1 % 74.7 % (6.4) pts Net favorable prior year reserve development 0.5 6.0 Cat
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q 1 Management Liability Retention 89% 90% 90% 89% 89% 2 Renewal premium change 3.7% 3.3% 3.0% 3.9% 3.6% New business $51 $54 $55 $53 $54 1 Domestic only, excludes the surety line of business
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) FIRST QUARTER 2019 2018 Change Segment income $ 278 $ 129 116 % Loss and loss adjustment ratio 63.7 % 70.7 % Underw riting expense ratio 26.4 26.8 Combined ratio 1 90.1 97.5 % 7.4 pts Net favorable prior year reserve development 2.8 2.0 Catastrophes, ne
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance FIRST QUARTER 2019 2018 Change Agency Automobile 1 Loss and loss adjustment ratio 66.0 % 71.1 % Underw riting expense ratio 23.4 23.7 2 Combined ratio 89.4 % 94.8 % 5.4 pts Net favorable prior year reserve development 3.4 2.3 Catastrophes, net of reinsurance (
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q Agency Automobile 1 Retention 2 83% 83% 84% 84% 84% Renewal premium change 3 10.7% 9.6% 8.0% 6.3% 5.1% Policies in force (in thousands) 2,519 2,517 2,518 2,518 2,516 • Sequential quarter growth -% -
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q 1 International Retention 84% 83% 83% 81% 77% Renewal premium change 2 2.8% 1.1% 2.8% 4.7% 5.0% New business $95 $121 $94 $101 $85 1 Excludes the surety line of business and other products that ar
Slide 18: Appendix
Appendix Additional Information Additional Information 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
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