The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2018 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Oct 18, 2018
Slide 1: Third Quarter 2018 Results
Third Quarter 2018 Results Thursday, October 18, 2018
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: Third Quarter 2018 Overview
Third Quarter 2018 Overview Travelers Reports Third Quarter Net Income per Diluted Share of $2.62 and Core Income per Diluted Share of $2.54, Both Up Substantially from Prior Year Quarter Third Quarter Return on Equity of 12.6% and Core Return on Equity of 12.0% • Third quarter net income of $709 mi
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) THIRD QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Core income $ 687 $ 253 172 % $ 1,859 $ 1,410 32 % per diluted share $ 2.54 $ 0.91 179 % $ 6.81 $ 5.01 36 % Included the following items: Ne
Slide 5: High Quality Financial Position
High Quality Financial Position ($ and shares in millions, except per share amounts) Capital September 30, December 31, • At or above target levels for all rating agencies. 2018 2017 • Repurchased 3.1 million shares during third quarter 2018 at Debt $ 6,564 $ 6,571 a total cost of $400 million. Comm
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Third Quarter 2018 Commentary $547 • Net investment income from the long-term fixed income portfolio $468 $467 $513 $507 $462 $480 $468 $457 benefited from the lower federal income tax rate, an increase in average investments and highe
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 12.8% 15.5% 15.5% 15.2% 13.3% 9.0% 8.3% 10.9% 9.4% 0.8% 8.5% 8.4% 0.3% 8.0% 1.2% 7.8% 1.5% 7.4% 7.1% 7.2% 7.2% 7.2% 7.0% 1.5% 0.9% 0.9% 8.3% 1.3% 1.3% 0.1% 6.1% 0.3% 0.2% 0.2% 3.4% 7.3% 6.9% 6.5% 6.2% 6.2% 2.9% 5.7% 5.7% 1.8% 1.1% 2005 through 2012 2013 2014 2015
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income $ 410 $ 105 290 % $ 1,247 $ 976 28 % Loss and loss adjustment ratio 69.6 % 78.1 % 67.4 % 69.1 % Underwriting expense ratio 31.0 31.7 31.6 31.9 1 Combined ratio 100.6 % 109.8 % 9
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% 2.2% 1.7% 1.8% 2% 1.4% 0.5% 0.7% 0.3% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q’18 3Q18 ($ in millions) Retention 85% 85% 85%
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% 0.7% 1.0% 0.8% 0.8% 0.8% 0.3% 0.2% - (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q’18 3Q'18 ($ in millions) Retention 84% 83% 83% 82% 83
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% 1.9% 1.4% 1.6% 1.6% - 0.7% 0.7% 0.2% (2%) 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q’18 3Q'18 ($ in millions) Retention 88% 88% 87% 87% 88%
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income $ 196 $ 136 44 % $ 573 $ 444 29 % Loss and loss adjustment ratio 33.1 % 39.5 % 32.8 % 36.6 % Underwriting expense ratio 37.1 38.2 37.6 38.7 1 Combined ratio 70.2 % 77.7
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Management Liability Retention 88% 88% 89% 87% 89% 90% 89% 2 Renewal premium change 4.3% 2.9% 3.5% 3.0% 3.5% 3.4% 3.0% New business $45 $49 $50 $49 $50 $54 $56 1 Domestic only, exclu
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Segment income $ 153 $ 77 99 % $ 265 $ 178 49 % Loss and loss adjustment ratio 71.2 % 73.1 % 73.2 % 74.2 % Underwriting expense ratio 26.0 26.6 26.7 26.9 Combined ratio 1 97.2 % 99.7 % 2.5 pts
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance THIRD QUARTER YEAR-TO-DATE 2018 2017 Change 2018 2017 Change Agency Automobile 1 Loss and loss adjustment ratio 68.5 % 83.0 % 70.3 % 80.9 % Underwriting expense ratio 22.8 23.0 23.5 23.7 2 Combined ratio 91.3 % 106.0 % 14.7 pts 93.8 % 104.6 % 10.8 pts Net favo
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Agency Automobile Retention 2 86% 86% 84% 83% 83% 83% 84% 3 Renewal premium change 7.3% 8.8% 10.4% 11.6% 10.8% 9.2% 7.6% Policies in force (in thousands) 2,482 2,514 2,528 2,529 2,519 2,517
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 84% 84% 82% 82% 84% 83% 82% Renewal premium change 2 4.6% 1.6% 2.3% 2.5% -% 2.0% 1.7% New business $96 $90 $92 $101 $94 $120 $88 1 Excludes the surety line of busin
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
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