The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2018 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Apr 24, 2018
Slide 1: First Quarter 2018 Results
First Quarter 2018 Results April 24, 2018 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 2018 Overview
First Quarter 2018 Overview Travelers Reports First Quarter Net Income and Core Income per Diluted Share of $2.42 and $2.46, Respectively, Up 12% and 14%, Which Includes Catastrophe Losses of $1.01 per Diluted Share First Quarter Return on Equity and Core Return on Equity of 11.5% and 11.9%, Respect
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) FIRST QUARTER 2018 2017 Change Core income $ 678 $ 614 10 % per diluted share $ 2.46 $ 2.16 14 % Included the following items: Net favorable prior year reserve development $ 119 $ 44 Catastrophes, net
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital March 31, December 31, • At or above target levels for all rating agencies. 2018 2017 • Repurchased 2.8 million shares during first quarter 2018 at Debt $ 6,963 $ 6,571 a total cost of $401 million. Common eq
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL First Quarter 2018 Commentary $513 • Net investment income from the long-term fixed income portfolio $462 $468 $480 $468 $467 $457 benefited from the lower federal income tax rate and an increase in average investments • The short-term
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 12.8% 15.5% 15.5% 15.2% 13.3% 9.0% 10.8% 11.9% 9.4% 0.8% 8.5% 8.4% 0.3% 1.2% 7.8% 7.8% 1.5% 7.4% 7.4% 7.1% 7.2% 7.2% 7.0% 1.5% 0.9% 0.9% 1.5% 8.3% 1.3% 0.1% 6.1% 0.3% 0.2% 0.1% 4.1% 3.4% 7.3% 3.4% 6.9% 6.5% 6.2% 5.7% 5.8% 6.0% 1.8% 2005 through 2012 2013 2014 2015
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) FIRST QUARTER 2018 2017 Change Segment income $ 452 $ 442 2 % Loss and loss adjustment ratio 65.7 % 64.5 % Underwriting expense ratio 31.8 31.9 Combined ratio 1 97.5 % 96.4 % (1.1) pts Net favorable prior year reserve development 1.9 1.8 Catastrophes, n
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% 1.6% 1.3% 0.4% 0.6% 0.6% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q’18 ($ in millions) Retention 85% 85% 85% 85% 86% Renewal premium 2.6
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% 0.6% 0.9% 0.7% 0.3% 0.2% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q’18 ($ in millions) Retention 84% 83% 83% 82% 83% Renewal premium 5.4% 5.2%
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% 1.3% 1.5% - 0.5% 0.8% 0.7% (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q’18 ($ in millions) Retention 88% 88% 87% 87% 88% Renewal premium 1.9% 3.4% 3.
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) FIRST QUARTER 2018 2017 Change Segment income $ 173 $ 145 19 % Loss and loss adjustment ratio 36.6 % 40.6 % Underwriting expense ratio 38.1 38.8 1 Combined ratio 74.7 % 79.4 % 4.7 pts Net favorable prior year reserve development 6.0 2.6 Catastro
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q Management Liability 1 Retention 88% 88% 89% 87% 89% Renewal premium change 2 4.2% 2.4% 2.7% 2.9% 3.6% New business $45 $49 $50 $49 $50 1 Domestic only, excludes the surety line of business
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) FIRST QUARTER 2018 2017 Change Segment income $ 129 $ 89 45 % Loss and loss adjustment ratio 70.7 % 72.9 % Underwriting expense ratio 26.8 26.7 1 Combined ratio 97.5 99.6 % 2.1 pts Net favorable prior year reserve development 2.0 0.3 Catastrophes, net o
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance FIRST QUARTER 2018 2017 Change Agency Automobile 1 Loss and loss adjustment ratio 71.1 % 77.3 % Underwriting expense ratio 23.7 23.8 2 Combined ratio 94.8 % 101.1 % 6.3 pts Net favorable prior year reserve development 2.3 - Catastrophes, net of reinsurance (0.
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 1 Agency Automobile Retention 2 86% 86% 84% 84% 83% 3 Renewal premium change 7.3% 8.9% 10.4% 10.6% 9.9% Policies in force (in thousands) 2,482 2,514 2,528 2,529 2,519 • Sequential quarter growth 2%
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 1 International Retention 85% 84% 81% 82% 83% Renewal premium change 2 1.4% 0.9% 1.5% 2.0% 0.9% New business $95 $88 $90 $95 $86 1 Excludes the surety line of business as surety products are gener
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
The Travelers Companies — Q1 2018 Earnings Presentation on 6ix