The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q2 2018 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Jul 19, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results July 19, 2018
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 2018 Overview
Second Quarter 2018 Overview Travelers Reports Second Quarter Net Income and Core Income per Diluted Share of $1.92 and $1.81, Respectively, Which Includes Catastrophe Losses of $1.40 per Diluted Share Second Quarter Return on Equity of 9.2% and Core Return on Equity of 8.7% • Second quarter net inc
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) SECOND QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Core income $ 494 $ 543 (9) % $ 1,172 $ 1,157 1 % per diluted share $ 1.81 $ 1.92 (6) % $ 4.27 $ 4.08 5 % Included the following items: Net
Slide 5: High Quality Financial Position
High Quality Financial Position ($ and shares in millions, except per share amounts) Capital June 30, December 31, • At or above target levels for all rating agencies. 2018 2017 • Repurchased 2.7 million shares during second quarter Debt $ 6,464 $ 6,571 2018 at a total cost of $350 million. Common e
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Second Quarter 2018 Commentary $513 $507 • Net investment income from the long-term fixed income portfolio $462 $468 $480 $468 $457 $467 benefited from the lower federal income tax rate and an increase in average investments • The shor
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 12.8% 15.5% 15.5% 15.2% 13.3% 9.0% 10.2% 10.3% 9.4% 0.8% 8.5% 8.4% 0.3% 1.2% 7.8% 7.7% 1.5% 7.4% 7.3% 7.1% 7.2% 7.2% 7.0% 0.9% 1.4% 0.9% 1.4% 8.3% 1.3% 0.1% 6.1% 0.3% 0.2% 0.1% 3.4% 7.3% 6.9% 6.5% 6.2% 2.9% 5.7% 5.8% 6.0% 2.6% 1.8% 2005 through 2012 2013 2014 2015
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income $ 385 $ 429 (10) % $ 837 $ 871 (4) % Loss and loss adjustment ratio 66.9 % 64.3 % 66.3 % 64.4 % Underwriting expense ratio 31.9 32.2 31.9 32.1 Combined ratio 1 98.8 % 96.5 % (2
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% 1.7% 1.4% 0.4% 0.5% 0.7% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q’18 ($ in millions) Retention 85% 85% 85% 85% 86% 85% Rene
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% 0.7% 0.9% 0.7% 0.3% 0.7% 0.2% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q’18 2Q'18 ($ in millions) Retention 84% 83% 83% 82% 83% 82% 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% 0.8% 0.7% 1.9% 0.3% 1.4% 1.6% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 2Q’18 ($ in millions) Retention 88% 88% 87% 87% 88% 88% Renewal
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income $ 204 $ 163 25 % $ 377 $ 308 22 % Loss and loss adjustment ratio 28.8 % 29.7 % 32.6 % 35.1 % Underwriting expense ratio 37.7 39.0 37.9 38.9 1 Combined ratio 66.5 % 68.7
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q Management Liability 1 Retention 88% 88% 89% 87% 89% 89% Renewal premium change 2 4.3% 2.7% 3.2% 2.9% 3.4% 3.4% New business $46 $49 $50 $49 $50 $54 1 Domestic only, excludes the surety l
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income/(loss) $ (17) $ 12 (242) % $ 112 $ 101 11 % Loss and loss adjustment ratio 77.6 % 76.8 % 74.2 % 74.9 % Underwriting expense ratio 27.3 27.3 27.1 27.0 Combined ratio 1 104.9 % 1
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance SECOND QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Agency Automobile 1 Loss and loss adjustment ratio 71.4 % 82.2 % 71.2 % 79.8 % Underwriting expense ratio 24.0 24.2 23.9 24.0 2 Combined ratio 95.4 % 106.4 % 11.0 pts 95.1 % 103.8 % 8.7 pts Net favo
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 1 Agency Automobile Retention 2 86% 86% 84% 83% 83% 83% 3 Renewal premium change 7.3% 8.8% 10.5% 11.5% 10.2% 9.1% Policies in force (in thousands) 2,482 2,514 2,528 2,529 2,519 2,517 • Sequential
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q International 1 Retention 84% 84% 82% 82% 84% 82% Renewal premium change 2 3.4% 1.1% 1.8% 2.3% -% 2.0% New business $95 $90 $91 $101 $90 $110 1 Excludes the surety line of business as surety pr
Slide 18: Appendix
Appendix Additional Information Additional Information 18
Slide 19: 2018 Catastrophe Reinsurance
2018 Catastrophe Reinsurance Catastrophe Bonds - Long Point Re III Ltd. • $300 million aggregate principal expired as scheduled May 2018 • $500 million aggregate principal was placed in May 2018 ̵ The reinsurance agreement provides coverage to the Company through May 24, 2022 for certain property lo
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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