The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2022 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Oct 19, 2022
Slide 1: Third Quarter 2022 Results
THIRD QUARTER 2022 RESULTS October 19, 2022
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 2022 Overview
THIRD QUARTER 2022 OVERVIEW Travelers Reports Third Quarter 2022 Net Income of $454 million and Core Income of $526 million, Strong Results in Light of Hurricane Ian Strong Year-to-Date 2022 Return on Equity of 11.1% and Core Return on Equity of 10.9% Third Quarter 2022 Net Income per Diluted Share
Slide 4: Consolidated Performance
C O N S O L I D AT E D P E R F O R M A N C E ($ in millions, except per share amounts, after-tax, except for premiums) THIRD QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Core income $ 526 $ 655 (20) % $ 2,188 $ 2,233 (2) % per diluted share $ 2.20 $ 2.60 (15) % $ 9.02 $ 8.78 3 % Included t
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, Capital 2022 2021 • Continued strong capitalization to support the Company’s business operations. Debt $ 7,291 $ 7,290 Common equity 1 26,223 26,472 • Repurchased 3.1
Slide 6: Net Investment Income
NET INVESTMENT INCOME ($ in millions, after-tax) TOTAL Third Quarter 2022 vs. Prior Year Quarter Commentary $682 $645 $635 $624 • Net investment income (NII) from the fixed income $590 $595 $539 $505 $477 portfolio increased due to the growth in average invested assets and a higher average yield • N
Slide 7: Leading Core Return on Equity at Industry-Low Volatility
LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY 13.5% 9.0% 10.7% 10.9% 11.3% 13.7% 11.6% 10.9% 8.9% 8.8% 8.9% 0.9% 8.0% 7.8% 0.2% 7.2% 1.5% 1.1% 7.1% 6.9% 3.3% 3.4% 1.3% 0.3% 0.3% 0.7% 1.5% 0.1% 0.2% 0.1% 4.9% 4.6% 4.4% 3.8% 7.8% 3.1% 6.2% 2.7% 6.4% 6.1% 2.7% 5.7% 5.5% 5.5% 5.5% 1.8% 2005 t
Slide 8: Business Insurance Performance
BUSINESS INSURANCE PERFORMANCE ($ in millions) THIRD QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Segment income $ 471 $ 558 (16) % $ 1,806 $ 1,518 19 % Loss and loss adjustment expense ratio 66.9 % 67.0 % 63.6 % 67.8 % Underwriting expense ratio 29.4 30.5 29.9 30.9 Combined ratio 1 96.3 %
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 Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 7.8% 8% 6.8% 6.1% 6% 5.1% 4% 4.9% 5.0% 4.5% 2% - ($ in millions) 1Q’21 2Q’21 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% 4.1% 4.1% 4% 3.5% 2.9% 3.1% 3.1% 2% - ($ in millions) 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 2Q’22 3Q’22 Retention 79% 80%
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% 8.4% 8% 7.1% 6.0% 6% 4.9% 4.5% 4% 4.8% 4.6% 2% - ($ in millions) 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 2Q’22 3Q’22 Retention 86% 87% 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 2022 2021 Change 2022 2021 Change Segment income $ 242 $ 174 39 % $ 687 $ 498 38 % Loss and loss adjustment expense ratio 37.3 % 46.3 % 39.5 % 46.2 % Underwriting expense ratio 35.2 34.8 35.
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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q Management Liability 1 Retention 87% 86% 86% 86% 85% 88% 89% Renewal premium change 2 11.4% 13.1% 13.5% 10.6% 11.8% 8.8% 9.0% New busin
Slide 14: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE ($ in millions) THIRD QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Segment income (loss) $ (111) $ (2) NM $ (79) $ 433 NM Loss and loss adjustment expense ratio 82.6 % 78.2 % 79.3 % 71.8 % Underwriting expense ratio 24.6 26.4 25.4 26.5 Combined ratio 1 107.2
Slide 15: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE THIRD QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Automobile Loss and loss adjustment ratio 90.0 % 75.9 % 82.4 % 66.9 % Underwriting expense ratio 22.2 24.1 23.0 24.4 Combined ratio 1 112.2 % 100.0 % (12.2) pts 105.4 % 91.3 % (14.1) pts Net favorable (unfavo
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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q Automobile Retention 1 85% 86% 86% 86% 85% 84% 83% 2 Renewal premium change 0.5% 0.4% 0.5% 2.1% 4.2% 6.5% 8.1% Policies in force (in thousands) 2,807 2,852 2,898 2,937
Slide 17: 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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 81% 80% 81% 84% 82% 85% 81% Renewal premium change 2 6.5% 8.4% 5.9% 9.7% 8.3% 7.1% 7.4% New business $71 $99 $73 $87 $8
Slide 18: Appendix
APPENDIX 18
Slide 19: 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 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 21
The Travelers Companies — Q3 2022 Earnings Presentation on 6ix