The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2021 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Oct 19, 2021
Slide 1: Third Quarter 2021 Results
Third Quarter 2021 Results October 19, 2021
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of approach to Meaningful and top tier earnings rightsizing sustainable and capital capital and competitive substantially in growing book advantages excess of growth value per share needs over time CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 3: Third Quarter 2021 Overview
Third Quarter 2021 Overview Travelers Reports Third Quarter 2021 Net Income per Diluted Share of $2.62 and Return on Equity of 9.2% Third Quarter 2021 Core Income per Diluted Share of $2.60 and Core Return on Equity of 10.1% • Third quarter net income of $662 million and core income of $655 million.
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) THIRD QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Core income $ 655 $ 798 (18) % $ 2,233 $ 1,424 57 % per diluted share $ 2.60 $ 3.12 (17) % $ 8.78 $ 5.56 58 % Included the following items:
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital September 30, December 31, 2021 2020 • At or above target levels for all rating agencies. Debt $ 7,290 $ 6,550 • Repurchased 3.8 million shares during third quarter 2021 for a total of $601 million. Common eq
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Third Quarter 2021 vs 2020 Commentary $682 • Net investment income (NII) from the long-term fixed income $645 $572 $590 portfolio decreased slightly due to lower interest rates, $566 $524 $519 partially offset by an increase in average
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.3% 15.2% 13.3% 9.0% 10.7% 10.9% 11.3% 8.1% 11.6% 9.2% 8.9% 0.9% 0.3% 7.8% 8.0% 7.8% 7.4% 7.2% 7.2% 1.5% 1.1% 3.4% 0.9% 6.9% 0.9% 6.4% 6.1% 1.3% 0.3% 0.7% 0.1% 0.3% 0.1% 0.1% 0.2% 0.2% 4.4% 4.1% 8.0% 6.5% 6.2% 6.2% 6.4% 3.1% 6.1% 6.1% 2.7% 5.7% 2.7% 5.5% 1.8% 1.
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income $ 558 $ 365 53 % $ 1,518 $ 596 155 % Loss and loss adjustment ratio 67.0 % 71.8 % 67.8 % 72.8 % Underwriting expense ratio 30.5 30.5 30.9 31.0 Combined ratio 1 97.5 % 102.3 % 4.
Slide 9: Domestic Business Insurance (Ex. National Accounts)
Domestic Business Insurance (Ex. National Accounts) ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 8.0% 8.2% 8.1% 8% 7.1% 7.1% 6.3% 6.0% 6% 4% 2% - (2%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Retention 84% 83% 83% 83% 83% 8
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 8% 6% 4.1% 4.2% 4.2% 4.1% 4% 2.8% 2.2% 2% 1.7% - ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Retention 82% 84% 81% 79% 80% 80% 82% Renew
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % 8.8% Renewal Rate Change2 % 8.7% Exposure/Other % 8.1% 8% 7.4% 7.5% 6.4% 6.2% 6% 4% 2% - (2%) (4%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 Retention 86% 86% 85% 85% 86% 87% 8
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income $ 174 $ 115 51 % $ 498 $ 309 61 % Loss and loss adjustment ratio 46.3 % 54.0 % 46.2 % 53.6 % Underwriting expense ratio 34.8 35.3 35.2 36.1 Combined ratio 1 81.1 % 89.3
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Management Liability Retention 89% 89% 91% 89% 87% 86% 86% Renewal premium change 2 8.7% 9.4% 9.1% 11.2% 10.6% 12.6% 13.6% New business $58 $51 $54 $50 $49 $54 $50 13 1 Domestic only
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income (loss) $ (2) $ 392 NM $ 433 $ 738 (41) % Loss and loss adjustment ratio 78.2 % 60.0 % 71.8 % 64.5 % Underwriting expense ratio 26.4 26.4 26.5 27.2 Combined ratio 1 104.6 % 86.4
Slide 15: Personal Insurance Performance
Personal Insurance Performance THIRD QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Automobile Loss and loss adjustment ratio 75.9 % 56.0 % 66.9 % 60.7 % Underwriting expense ratio 24.1 24.3 24.4 25.6 1 Combined ratio 100.0 % 80.3 % (19.7) pts 91.3 % 86.3 % (5.0) pts Net favorable prior year
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q Automobile Retention 1 84% 84% 84% 84% 85% 85% 85% Renewal premium change 2 2.3% 1.6% 1.5% 0.9% 0.6% 0.4% (0.1%) Policies in force (in thousands) 2,700 2,732 2,761 2,779 2,807 2,852 2,898 • Se
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 71% 79% 79% 81% 81% 80% 80% Renewal premium change 2 9.2% 8.4% 7.7% 10.9% 7.2% 7.3% 5.0% New business $75 $84 $76 $83 $68 $96 $68 17 1 Excludes surety and other pro
Slide 18: Appendix
Appendix 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 21
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