The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2023 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Oct 18, 2023
Slide 1: Third Quarter 2023 Results
THIRD QUARTER 2023 RESULTS October 18, 2023
Slide 2: Long-Term Financial Strategy
L O N G - T E R M F I N A N C I A L S T R AT E G Y Generation of Balanced Meaningful top–tier earnings approach to and sustainable and capital rightsizing capital competitive substantially and growing book advantages in excess of value per share growth needs over time C R E AT E S H A R E H O L D E
Slide 3: Third Quarter 2023 Overview
THIRD QUARTER 2023 OVERVIEW Travelers Reports Third Quarter 2023 Net Income of $404 million and Core Income of $454 million Third Quarter 2023 Net Income per Diluted Share of $1.74 and Return on Equity of 7.7% Third Quarter 2023 Core Income per Diluted Share of $1.95 and Core Return on Equity of 6.9
Slide 4: Consolidated Performance
C O N S O L I D AT E D P E R F O R M A N C E ($ in millions, except per share amounts, after-tax, except for premiums) THIRD QUARTER YEAR-TO-DATE 2023 2022 Change 2023 2022 Change Core income $ 454 $ 526 (14) % $ 1,439 $ 2,188 (34) % per diluted share $ 1.95 $ 2.20 (11) % $ 6.15 $ 9.02 (32) % Includ
Slide 5: Very Strong Financial Position
V E RY S T R O N G F I N A N C I A L P O S I T I O N ($ and shares in millions, except per share amounts) September 30, December 31, 2023 2022 Capital Debt $ 8,031 $ 7,292 Common equity 1 26,444 26,458 • Continued strong capitalization to support the Company’s business operations. Total capital 1 $
Slide 6: Net Investment Income
NET INVESTMENT INCOME ($ in millions, after-tax) TOTAL Third Quarter 2023 vs. Prior Year Quarter Commentary $635 $640 $595 $557 $594 • Net investment income (NII) from the long-term and $542 $539 $505 $531 short-term fixed income portfolios increased due to a higher average yield and growth in avera
Slide 7: Leading Core Return on Equity at Industry-Low Volatility
LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY 13.1% 10.7% 10.9% 11.3% 13.7% 11.3% 10.9% 7.2% 8.8% 8.8% 1.0% 8.0% 7.8% 7.9% 0.2% 7.1% 7.1% 0.8% 1.5% 1.1% 6.9% 3.3% 0.7% 0.7% 0.3% 0.3% 1.2% 1.5% 0.1% 0.2% 0.1% 4.9% 4.3% 4.4% 4.2% 3.8% 7.6% 3.1% 6.2% 2.7% 6.4% 6.1% 6.4% 5.5% 5.7% 5.5% -0.7%
Slide 8: Business Insurance Performance
BUSINESS INSURANCE PERFORMANCE ($ in millions) THIRD QUARTER YEAR-TO-DATE 2023 2022 Change 2023 2022 Change Segment income $ 468 $ 471 (1) % $ 1,626 $ 1,806 (10) % Loss and loss adjustment expense ratio 70.0 % 66.9 % 68.0 % 63.6 % Underwriting expense ratio 29.1 29.4 29.7 29.9 Combined ratio 1 99.1
Slide 9: Domestic Business Insurance (ex. National Accounts)
D O M E S T I C B U S I N E S S I N S U R A N C E ( E X . N AT I O N A L A C C O U N T S ) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 12% Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 10% 7.9% 8% 7.2% 6% 4% 4.7% 5.0% 4.7% 4.4% 4.4% 2% - ($ in millions) 1Q’22 2Q’22 3
Slide 10: Domestic Business Insurance: Select Accounts
DOMESTIC BUSINESS INSURANCE: SELECT ACCOUNTS I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6% 4% 2.9% 3.1% 3.2% 3.0% 3.1% 3.3% 1.9% 2% - ($ in millions) 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Retention 83% 83%
Slide 11: Domestic Business Insurance: Middle Market
DOMESTIC BUSINESS INSURANCE: MIDDLE MARKET I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6.7% 5.9% 6% 4.4% 4% 4.6% 4.4% 4.5% 3.8% 2% - ($ in millions) 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 2Q’23 3Q’23 Retention 89% 88% 8
Slide 12: Bond & Specialty Insurance Performance
B O N D & S P E C I A LT Y I N S U R A N C E P E R F O R M A N C E ($ in millions) THIRD QUARTER YEAR-TO-DATE 2023 2022 Change 2023 2022 Change Segment income $ 265 $ 242 10 % $ 702 $ 687 2 % Loss and loss adjustment expense ratio 36.9 % 37.3 % 39.8 % 39.5 % Underwriting expense ratio 36.7 35.2 37.0
Slide 13: Domestic Bond & Specialty Insurance
D O M E S T I C B O N D & S P E C I A LT Y I N S U R A N C E ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q Management Liability 1 Retention 85% 88% 89% 90% 89% 91% 91% Renewal premium change 2 12.4% 9.7% 9.5% 6.1% 5.2% 3.6% 3.8% New business
Slide 14: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE ($ in millions) THIRD QUARTER YEAR-TO-DATE 2023 2022 Change 2023 2022 Change Segment loss $ (193) $ (111) NM $ (648) $ (79) NM Loss and loss adjustment expense ratio 85.7 % 82.6 % 86.6 % 79.3 % Underwriting expense ratio 24.3 24.6 24.7 25.4 Combined ratio 1 110.0 % 107
Slide 15: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE THIRD QUARTER YEAR-TO-DATE 2023 2022 Change 2023 2022 Change Automobile Loss and loss adjustment ratio 81.4 % 90.0 % 83.0 % 82.4 % Underwriting expense ratio 22.1 22.2 22.5 23.0 Combined ratio 1 103.5 % 112.2 % 8.7 pts 105.5 % 105.4 % (0.1) pts Net unfavorable prior ye
Slide 16: Domestic Personal Insurance
DOMESTIC PERSONAL INSURANCE ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q Automobile Retention 1 85% 84% 84% 83% 81% 81% 81% 2 Renewal premium change 4.1% 7.3% 9.5% 13.0% 15.5% 16.2% 18.2% Policies in force (in thousands) 2,972 3,008 3,053 3,
Slide 17: Domestic Personal Insurance: Renewal Premium Change
DOMESTIC PERSONAL INSURANCE R E N E WA L P R E M I U M C H A N G E 1 22% Automobile 22% Homeowners and Other 20% 20% 18% 18% 16% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% - - 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 17 1 Represents the estimated c
Slide 18: Total International Insurance
TO TA L I N T E R N AT I O N A L I N S U R A N C E ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 81% 85% 80% 84% 84% 84% 84% Renewal premium change 2 10.2% 10.0% 9.7% 7.7% 7.8% 8.9% 6.2% New business $82 $81 $72 $85
Slide 19: Appendix
APPENDIX 19
Slide 20: Explanatory Note
E X P L A N ATO RY N O T E 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
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 22
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