The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q2 2019 Earnings Presentation
23 slides from The Travelers Companies's earnings presentation, Jul 23, 2019
Slide 1: Second Quarter 2019 Results
Second Quarter 2019 Results July 23, 2019
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: Second Quarter 2019 Overview
Second Quarter 2019 Overview Travelers Reports Second Quarter 2019 Net Income per Diluted Share of $2.10, up 9%, and Return on Equity of 9.0% Second Quarter 2019 Core Income per Diluted Share of $2.02, up 12%, and Core Return on Equity of 9.2% • Second quarter net income of $557 million and core inc
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) SECOND QUARTER YEAR-TO-DATE 2019 2018 Change 2019 2018 Change Core income $ 537 $ 494 9 % $ 1,292 $ 1,172 10 % per diluted share $ 2.02 $ 1.81 12 % $ 4.85 $ 4.27 14 % Included the following items: Net
Slide 5: High Quality Financial Position
High Quality Financial Position ($ and shares in millions, except per share amounts) June 30, December 31, Capital 2019 2018 • At or above target levels for all rating agencies. Debt $ 6,558 $ 6,564 1 23,443 23,007 • Repurchased 2.6 million shares during second quarter Common equity Total capital 1
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Second Quarter 2019 Commentary $525 $547 $535 $548 • Net investment income from the long-term fixed income portfolio $513 $507 $496 $468 benefited from an increase in average investments and higher embedded yields in the portfolio • Th
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.1% 15.5% 15.2% 13.3% 9.0% 10.7% 10.3% 11.1% 9.3% 0.9% 8.4% 0.3% 7.8% 8.0% 7.8% 7.7% 1.5% 7.4% 7.1% 7.2% 7.2% 1.5% 1.1% 0.9% 1.4% 0.9% 8.1% 1.3% 0.4% 0.1% 6.1% 0.3% 0.3% 0.2% 3.8% 6.9% 3.3% 6.5% 6.2% 6.2% 6.3% 5.7% 2.7% 6.0% 2.6% 1.8% 2005 through 2013 2014 2015
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2019 2018 Change 2019 2018 Change Segment income $ 351 $ 385 (9) % $ 765 $ 837 (9) % Loss and loss adjustment ratio 69.6 % 66.9 % 68.6 % 66.3 % Underw riting expense ratio 31.5 31.9 31.0 31.9 1 Combined ratio 101.1 % 98.8 % (
Slide 9: Business Insurance Underlying Combined Ratio
Business Insurance Underlying Combined Ratio SECOND QUARTER 2019 2018 Change Underlying combined ratio 1 97.4 % 96.5 % (0.9) pts Change of (0.9) pts includes: Higher non-catastrophe weather-related losses ~(1) pt Impact of 2019 property aggregate catastrophe XOL reinsurance treaty ~(1/2) pt Run-rate
Slide 10: 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% 3.6% 2.3% 1.7% 2.0% 2% 1.7% 1.6% - (2%) 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q’19 2Q'19 ($ in millions) Retention 86% 85% 86% 85% 86% 85
Slide 11: 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% 1.0% 0.7% 0.7% 0.7% 0.7% 0.3% - (2%) 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q’19 2Q'19 ($ in millions) Retention 83% 82% 82% 81% 83% 82% Renew
Slide 12: 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% 3.4% 2.3% 2% 1.8% 1.6% 1.6% 1.5% - (2%) 1Q'18 1Q’18 2Q'18 2Q’18 3Q'18 3Q’18 4Q'18 4Q’18 1Q'19 1Q’19 2Q’19 2Q'19 ($ in millions) Retention 8
Slide 13: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2019 2018 Change 2019 2018 Change Segment income $ 174 $ 204 (15) % $ 312 $ 377 (17) % Loss and loss adjustment ratio 37.4 % 28.8 % 40.3 % 32.6 % Underwriting expense ratio 37.5 37.7 37.6 37.9 Combined ratio 1 74.9 %
Slide 14: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q Management Liability 1 Retention 89% 90% 90% 89% 89% 90% Renewal premium change 2 3.8% 4.1% 3.2% 3.7% 3.6% 4.2% New business $51 $54 $56 $53 $55 $65 1 Domestic only, excludes surety and o
Slide 15: Personal Insurance Performance
Personal Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2019 2018 Change 2019 2018 Change Segment income/(loss) $ 88 $ (17) 618 % $ 366 $ 112 227 % Loss and loss adjustment ratio 73.7 % 77.6 % 68.8 % 74.2 % Underwriting expense ratio 26.5 27.3 26.4 27.1 Combined ratio 1 100.2 % 10
Slide 16: Domestic Personal Insurance Performance
Domestic Personal Insurance Performance SECOND QUARTER YEAR-TO-DATE 2019 2018 Change 2019 2018 Change 1 Agency Automobile Loss and loss adjustment ratio 70.1 % 71.4 % 68.0 % 71.2 % Underwriting expense ratio 23.9 24.0 23.7 23.9 2 Combined ratio 94.0 % 95.4 % 1.4 pts 91.7 % 95.1 % 3.4 pts Net favorab
Slide 17: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 1 Agency Automobile Retention 2 83% 83% 84% 84% 84% 84% Renewal premium change 3 10.7% 9.6% 8.1% 6.8% 5.3% 4.6% Policies in force (in thousands) 2,519 2,517 2,518 2,518 2,516 2,517 • Sequential q
Slide 18: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 1 International Retention 85% 83% 83% 82% 78% 79% Renewal premium change 2 3.2% 1.9% 3.3% 5.4% 5.6% 6.6% New business $95 $122 $95 $101 $92 $80 1 Excludes surety and other products that are gen
Slide 19: Appendix
Appendix Additional Information Additional Information 19
Slide 20: 2019 Catastrophe Reinsurance
2019 Catastrophe Reinsurance Catastrophe Bonds - Long Point Re III Ltd. • $500 million aggregate principal was placed in May 2018 and the attachment point was reset in May 2019 ̵ The reinsurance agreement provides coverage to the Company through May 24, 2022 for certain property losses on specified
Slide 21: 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 22: 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 23: investor.travelers.com
investor.travelers.com
The Travelers Companies — Q2 2019 Earnings Presentation on 6ix