The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2015 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Oct 20, 2015
Slide 1: Third Quarter 2015 Results
Third Quarter 2015 Results October 20, 2015 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: Third Quarter 2015 Overview
Third Quarter 2015 Overview Travelers Reports Third Quarter Net Income per Diluted Share of $2.97, Up 10% from Prior Year Quarter Operating Income per Diluted Share of $2.93, Up 12% from Prior Year Quarter Third Quarter Return on Equity and Operating Return on Equity of 15.4% and 16.2%, Respectively
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) Third Quarter Year-to-Date 2015 2014 Change 2015 2014 Change Operating income $ 918 $ 893 3 % $ 2,551 $ 2,618 (3) % per diluted share $ 2.93 $ 2.61 12 % $ 7.97 $ 7.50 6 % Included the following items: Net favorable prior y
Slide 5: 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. September 30, December 31, 2015 2014 • Repurchased 7.3 million shares during the third quarter 2015 at a total cost of $750 million. Debt $ 6,743 $ 6,349 C
Slide 6: Net Investment Income
Net Investment Income ($ in millions, after-tax) Total Third Quarter 2015 Commentary • Net investment income from the long-term fixed income $582 portfolio declined modestly from the prior year quarter $546 $554 $553 $568 $513 $503 $484 due to lower reinvestment rates as expected as well as $478 the
Slide 7: Components of Operating Return on Equity
Components of Operating Return on Equity 14.4% 12.5% 6.1% 11.0% 15.5% 15.5% 14.8% 14.9% 9.5% 9.3% 9.4% 0.7% 9.0% 0.9% 8.5% 8.4% 8.6% 0.5% 0.9% 1.3% 0.1% 0.1% 1.2% 1.5% 1.7% 7.5% 7.4% 7.0% 7.1% 1.0% 6.2% 8.3% 8.3% 8.0% 8.1% 7.3% 6.9% 6.9% 6.5% 4.9% 3.2% 1.6% 2005 (2.9%) through 2009 2010 2011 2012 20
Slide 8: Business and International Insurance Performance
Business and International Insurance Performance ($ in millions) Third Quarter Year-to-Date 2015 2014 Change 2015 2014 Change Operating income $ 546 $ 552 (1) % $ 1,604 $ 1,717 (7) % Loss and loss adjustment ratio 59.6 % 63.1 % 60.5 % 63.0 % Underw riting expense ratio 32.6 32.1 32.4 31.2 Combined r
Slide 9: Domestic Business Insurance (Ex. National Accounts)
Domestic Business Insurance (Ex. National Accounts) Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % Renewal Rate Change2 % ex. National Property • 10% Exposure/Other % 8% 6% 4% 4.9% 3.7% 2% 2.8% 2.2% 1.3% 1.0% 0.9% - (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 10% • Exposure/Other % 8% 6% 4.9% 4.7% 4% 4.0% 3.6% 2% 2.8% 2.8% 2.4% - (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 ($ in millions) Retention 79% 80% 80% 80% 82%
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 10% • Exposure/Other % 8% 6% 5.4% 3.9% 4% 2% 3.0% 1.9% 0.9% 1.3% 1.1% - (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 ($ in millions) Retention 83% 83% 85% 84% 86% 86
Slide 12: Domestic Business Insurance: Other Business Insurance
Domestic Business Insurance: Other Business Insurance1 Illustrative Business Statistics 12% ▲ Renewal Premium Change2 % Renewal Rate Change3 % Renewal Rate Change3 % ex. National Property 10% • Exposure/Other % 8% 6% 4% 3.8% 2.5% 2% 1.3% 1.6% - 0.5% -0.9% -1.0% (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2
Slide 13: International Insurance
International Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 84% 81% 81% 82% 85% 83% 81% Renewal premium change 2 1.6% 1.9% (0.6%) 1.1% 1.0% 0.3% (0.2%) New business $84 $90 $72 $69 $57 $62 $58 1 Excludes the surety line of busines
Slide 14: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) Third Quarter Year-to-Date 2015 2014 Change 2015 2014 Change Operating income $ 196 $ 165 19 % $ 471 $ 511 (8) % Loss and loss adjustment ratio 20.6 % 28.7 % 31.3 % 26.7 % Underw riting expense ratio 36.5 38.2 37.5 37.9 1 Combined ratio 57.1 % 6
Slide 15: Bond & Specialty Insurance
Bond & Specialty Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Management Liability Retention 85% 84% 83% 83% 85% 86% 87% Renewal premium change 2 7.4% 4.3% 4.0% 4.7% 3.9% 3.2% 3.5% New business $37 $36 $34 $35 $38 $40 $45 1 Excludes the surety line of b
Slide 16: Personal Insurance Performance
Personal Insurance Performance ($ in millions) Third Quarter Year-to-Date 2015 2014 Change 2015 2014 Change Operating income $ 241 $ 239 1 % $ 667 $ 582 15 % Loss and loss adjustment ratio 56.5 % 56.0 % 58.0 % 60.9 % Underw riting expense ratio 28.6 30.1 28.6 28.9 Combined ratio 1 85.1 % 86.1 % 1.0
Slide 17: Personal Insurance Performance
Personal Insurance Performance Third Quarter Year-to-Date 2015 2014 Change 2015 2014 Change Agency Automobile 1 Loss and loss adjustment ratio 68.5 % 70.1 % 67.8 % 70.8 % Underw riting expense ratio 25.4 26.6 25.8 26.2 Combined ratio 2 93.9 % 96.7 % 2.8 pts 93.6 % 97.0 % 3.4 pts Net favorable prior
Slide 18: Personal Insurance
Personal Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Agency Automobile Retention 2 80% 81% 82% 82% 82% 83% 83% Renewal premium change 3 6.7% 6.8% 6.2% 5.7% 5.2% 4.4% 3.4% Policies in force (in thousands) 1,985 1,981 1,990 2,000 2,021 2,057 2,106 • Sequ
Slide 19: Appendix
Appendix Additional Information Additional Information 19
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: The Travelers Companies, Inc.
The Travelers Companies, Inc. Additional Information Additional Information 22
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