The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2017 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Oct 19, 2017
Slide 1: Third Quarter 2017 Results
Third Quarter 2017 Results October 19, 2017 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: Third Quarter 2017 Overview
Third Quarter 2017 Overview Travelers Reports Third Quarter Net Income and Core Income per Diluted Share of $1.05 and $0.91, Respectively, Including Catastrophe Losses of $1.63 per Diluted Share Return on Equity and Core Return on Equity of 4.9% and 4.5%, Respectively • Net income of $293 million an
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) THIRD QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Core income $ 253 $ 701 (64) % $ 1,410 $ 2,048 (31) % per diluted share $ 0.91 2.40 (62) % $ 5.01 $ 6.92 (28) % Included the following items: Net favorable prior
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital September 30, December 31, • At or above target levels for all rating agencies. 2017 2016 • Repurchased 2.6 million shares during the third quarter Debt $ 6,921 $ 6,437 2017 at a total cost of $328 million. C
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Third Quarter 2017 Commentary $476 $493 • Net investment income from the long-term fixed income $462 $472 $480 $468 $439 $442 $457 portfolio declined modestly from the prior year quarter due to lower reinvestment rates as expected • Sh
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.0% 11.0% 15.5% 15.5% 15.2 % 13.3% 12.2% 8.3% 9.4% 9.4% 0.8% 1.3% 8.5% 8.4% 1.3% 0.3% 1.5% 7.8% 8.3% 1.2% 7.4% 8.1% 7.0% 7.1% 7.2% 1.5% 7.2% 0.9% 7.0% 7.3% 0.9% 0.7% 1.3% 6.9% 0.1% 6.1% 0.1% 6.5% 6.2% 6.2% 0.2% 5.2% 5.7% 3.6% 1.6% 1.1% 2005 through 2011 2012 201
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 105 $ 433 (76) % $ 976 $ 1,281 (24) % Loss and loss adjustment ratio 78.1 % 63.5 % 69.1 % 63.5 % Underwriting expense ratio 31.7 32.6 31.9 32.4 Combined ratio 1 109.8 % 96.1 %
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% 0.6% 0.6% 0.7% 0.2% 0.5% (0.1%) 0.0% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q’17 3Q'17 ($ in millions) Retention 86% 85% 8
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% 1.3% 1.0% 0.9% 0.6% 0.5% 0.6% 0.3% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 3Q’17 ($ in millions) Retention 82% 82% 83% 83% 84
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% 0.7% 0.7% 0.9% 0.9% - 0.2% 0.2% (0.5%) (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q’17 ($ in millions) Retention 88% 87% 87% 87% 88% 88%
Slide 12: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 136 $ 165 (18) % $ 444 $ 540 (18) % Loss and loss adjustment ratio 39.5 % 32.0 % 36.6 % 26.8 % Underwriting expense ratio 38.2 38.6 38.7 38.2 1 Combined ratio 77.7 % 7
Slide 13: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Management Liability Retention 86% 87% 87% 88% 88% 88% 89% Renewal premium change 2 3.3% 3.7% 3.7% 1.2% 4.0% 3.1% 3.5% New business $47 $48 $49 $41 $45 $49 $50 1 Domestic only, exclu
Slide 14: Personal Insurance Performance
Personal Insurance Performance ($ in millions) THIRD QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Segment income $ 77 $ 163 (53) % $ 178 $ 410 (57) % Loss and loss adjustment ratio 73.1 % 65.2 % 74.2 % 66.5 % Underwriting expense ratio 26.6 28.3 26.9 28.5 Combined ratio 1 99.7 % 93.5 % (6.
Slide 15: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance THIRD QUARTER YEAR-TO-DATE 2017 2016 Change 2017 2016 Change Agency Automobile 1 Loss and loss adjustment ratio 83.0 % 77.1 % 80.9 % 74.6 % Underwriting expense ratio 23.0 24.3 23.7 24.8 2 Combined ratio 106.0 % 101.4 % (4.6) pts 104.6 % 99.4 % (5.2) pts Net f
Slide 16: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 Agency Automobile Retention 2 86% 87% 87% 87% 86% 85% 84% 3 Renewal premium change 4.6% 5.1% 5.6% 6.1% 7.3% 7.9% 9.5% Policies in force (in thousands) 2,212 2,275 2,350 2,428 2,482 2,514 2,5
Slide 17: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1 International Retention 83% 80% 82% 83% 85% 84% 81% Renewal premium change 2 (1.2%) (0.7%) (0.4%) 2.4% 0.2% 1.6% 2.1% New business $77 $109 $87 $88 $91 $89 $85 1 Excludes the surety line o
Slide 18: Appendix
Appendix Additional Information Additional Information 18
Slide 19: Asbestos Usage & Mesothelioma Mortality
Asbestos Usage & Mesothelioma Mortality Asbestos Usage in the United States Observations: • Asbestos usage peaked in mid-to-late ‘70’s. • Steep reduction thereafter, primarily due to heightened awareness of danger and changes in regulation. • Total mesothelioma deaths decreased 7.5% from 2014 to 201
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: investor.travelers.com
investor.travelers.com
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