The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2014 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Apr 22, 2014
Slide 1: First Quarter 2014 Results
The Travelers Companies, Inc. First Quarter 2014 Results April 22, 2014 1
Slide 2: 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 3: First Quarter 2014 Overview
First Quarter 2014 Overview Record quarterly net and operating income per diluted share of $2.95, up 27% and 28%, respectively, from prior year quarter Return on equity and operating return on equity of 16.8% and 17.8%, respectively • Net and operating income of $1.052 billion, up 17% and 19%, respe
Slide 4: Business Insurance: Middle Market
Business Insurance: Middle Market1 Renewal Rate Change Least Profitable Segmentation Band 21% 20% ` 1Q'13 1Q'14 Retained Accounts 289 216 1 Represents Travelers Middle Market businesses, excluding lines the company does not segment for the first quarter of each respective year. 4 Note: Statistics ar
Slide 5: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) First Quarter Fourth Quarter 2014 2013 Change Operating income $ 1,052 $ 887 19 % per diluted share $ 2.95 $ 2.31 28 % Included the following items: Net favorable prior year reserve development $ 190 $ 154 Catastrophes, ne
Slide 6: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital • At or above target levels for all rating agencies. March 31, December 31, 2014 2013 • Repurchased 8.5 million shares at a total cost of $705 million Debt $ 6,347 $ 6,346 in the first quarter, including 7.8
Slide 7: Net Investment Income
Net Investment Income ($ in millions, after-tax) Total First Quarter 2014 Commentary • Net investment income from the long-term fixed income $579 $582 portfolio declined modestly from the prior year quarter due to $546 $542 $551 $531 $562 lower reinvestment rates, as expected. ` • Short-term portion
Slide 8: Components of Operating Return on Equity
Components of Operating Return on Equity 9.6% 17.9% 17.7% 12.4% 14.0% 12.5% 6.1% 11.0% 15.5% 15.8% 17.8% 11.1% 11.0% 10.6% 1.4% 1.6% 1.4% 9.4% 9.3% 9.0% 8.8%9.0% 0.8% 0.5% 0.7% 8.1% 8.6% 0.9% 1.3% 8.5% 0.4% 8.2% 0.1% 0.9% 0.1% 1.2% 1.0% 1.7% 7.0% 7.2% 6.8% 6.7% 5.8% 8.7% 8.9% 8.7% 8.3% 8.3% 8.3% 8.0
Slide 9: Business Insurance
Business Insurance Performance ($ in millions) First Quarter Third Quarter 2014 2013 Change Operating income $ 653 $ 590 11 % Loss and loss adjustment ratio 59.8 % 57.7 % Underw riting expense ratio 27.9 31.7 1 GAAP combined ratio 87.7 % 89.4 % 1.7 pts Net favorable prior year reserve development 3.
Slide 10: Business Insurance (Ex. National Accounts)
Business Insurance (Ex. National Accounts) Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 12% • Exposure/Other % 10% 8% 7.6% 6.8% 6.8% 6% 5.7% 5.0% 4% 2% - (2%) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 ($ in millions) Retention 80% 79% 79% 80%
Slide 11: Business Insurance: Select Accounts
Business Insurance: Select Accounts Illustrative Business Statistics Renewal Pricing Results 16% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 14% • Exposure/Other % 12% 10% 8% 6.8% 6.6% 6.6% 6% 5.9% 4.6% 4% 2% - (2%) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 ($ in millions) Retention 77% 76% 75% 75% 79%
Slide 12: Business Insurance: Commercial Accounts
Business Insurance: Commercial Accounts Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 12% • Exposure/Other % 10% 9.4% 7.8% 8% 7.1% 6% 5.6% 5.6% 4% 2% - (2%) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 ($ in millions) Retention 82% 81% 82% 83% 83%
Slide 13: Business Insurance: Other Business Insurance
Business Insurance: Other Business Insurance1 Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change2 % Renewal Rate Change3 % 12% • Exposure/Other % 10% 8% 6% 6.8% 6.7% 6.3% 5.7% 4% 4.8% 2% - (2%) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 ($ in millions) Retention 81% 80% 80% 8
Slide 14: Financial, Professional & International Insurance
Financial, Professional & International Insurance Performance ($ in millions) First Quarter Third Quarter Year-to-Date 2014 2013 Change Operating income $ 195 $ 163 20 % Loss and loss adjustment ratio 45.9 % 40.8 % Underw riting expense ratio 37.9 41.5 GAAP combined ratio 1 83.8 % 82.3 % (1.5) pts N
Slide 15: Financial, Professional & International Insurance
Financial, Professional & International Insurance ($ in millions) Illustrative Business Statistics 2013 2014 1Q 2Q 3Q 4Q 1Q Surety Gross written premium $195 $235 $225 $197 $216 Management Liability 1 Retention 85% 83% 85% 84% 85% Renewal premium change 2 7.8% 6.1% 6.3% 4.7% 7.8% New business $38 $3
Slide 16: Personal Insurance
Personal Insurance Performance ($ in millions) First Quarter Third Quarter 2014 2013 Change Operating income $ 268 $ 197 36 % Loss and loss adjustment ratio 55.6 % 59.9 % Underw riting expense ratio 28.0 29.5 GAAP combined ratio 1 83.6 % 89.4 % 5.8 pts Net favorable prior year reserve development 7.
Slide 17: Personal Insurance
Personal Insurance Performance First Quarter 2014 2013 Change Agency Automobile 1 Loss and loss adjustment ratio 67.7 % 70.4 % Underw riting expense ratio 25.6 25.6 GAAP combined ratio2 93.3 % 96.0 % 2.7 pts Net unfavorable prior year reserve development - (0.6) Catastrophes, net of reinsurance - (1
Slide 18: Personal Insurance
Personal Insurance ($ in millions) Illustrative Business Statistics 2013 2014 1Q 2Q 3Q 4Q 1Q 1 Agency Automobile Retention 2,3 79% 80% 80% 81% 81% Renewal premium change 3,4 9.8% 9.3% 7.8% 6.8% 6.1% PIF growth over prior year quarter (11%) (12%) (12%) (11%) (9%) New business $86 $90 $87 $92 $109 Age
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: Additional Information
The Travelers Companies, Inc. Additional Information Additional Information 21
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