The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q3 2013 Earnings Presentation
21 slides from The Travelers Companies's earnings presentation, Oct 22, 2013
Slide 1: Third Quarter 2013 Results
The Travelers Companies, Inc. Third Quarter 2013 Results October 22, 2013 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 ROE Ove
Slide 3: Third Quarter 2013 Overview
Third Quarter 2013 Overview Net income per diluted share of $2.30, up 4% from prior year quarter Record quarterly operating income per diluted share of $2.35, up 6% from prior year quarter Return on equity and operating return on equity of 13.9% and 15.2%, respectively • Strong net and operating inc
Slide 4: Extreme Weather Events in the United States
Extreme Weather Events in the United States Average number of events over the past 5 years is nearly double the long-term average (1980-2013) 16 14 12 Number of Events 10 8 6 4 2 0 1 1982 1999 2008 1980 1981 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2001 20
Slide 5: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) Third Quarter Year-to-Date Fourth Quarter Full Year 2013 2012 Change 2013 2012 Change Operating income $ 883 $ 867 2 % $ 2,586 $ 2,163 20 % per diluted share $ 2.35 $ 2.22 6 % $ 6.79 $ 5.48 24 % Included the following item
Slide 6: 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, 2013 2012 • Repurchased $1.400 billion of shares, and dividends were $552 million in the first nine months of 2013. Debt $ 6,346
Slide 7: Net Investment Income
Net Investment Income ($ in millions, after-tax) Total Third Quarter 2013 Commentary • Net investment income from the long-term fixed income $593 $589 $578 $583 $579 $556 $542 $551 portfolio declined modestly from the prior year quarter due to $531 lower reinvestment rates, as expected. ` • Short-te
Slide 8: Components of Operating Return on Equity
Components of Operating Return on Equity 9.6% 17.9% 17.7% 12.4% 14.0% 12.5% 6.1% 11.0% 13.1% 15.1% 11.1% 11.0% 10.6% 1.4% 1.6% 1.4% 9.6% 9.3% 9.4% 0.8% 0.7% 8.1% 9.0% 0.5% 1.4% 0.4% 8.2% 0.9% 0.9% 0.9% 0.9% 1.3% 8.5% 0.1% 0.1% 1.1% 6.8% 6.7% 6.6% 5.8% 8.7% 8.9% 8.7% 8.3% 8.3% 8.3% 8.0% 8.1% 8.2% 7.4
Slide 9: Business Insurance
Business Insurance Performance ($ in millions) Third Quarter Year-to-Date Third Quarter Year-to-Date 2013 2012 Change 2013 2012 Change Operating income $ 526 $ 543 (3) % $ 1,695 $ 1,517 12 % Loss and loss adjustment ratio 63.0 % 62.3 % 62.0 % 63.7 % Underw riting expense ratio 30.0 31.0 30.9 31.6 GA
Slide 10: Business Insurance (Ex. National Accounts)
Business Insurance (Ex. National Accounts) Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change1 % Renewal Rate Change % 2 • Exposure/Other % 12% 10% 8% 7.8% 7.1% 6.9% 7.2% 7.4% 7.0% 7.1% 6% 4% 2% - (2%) 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 ($ in millions) Ret
Slide 11: Business Insurance: Select Accounts
Business Insurance: Select Accounts Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change1 % Renewal Rate Change % 2 • Exposure/Other % 12% 10% 8% 6.7% 6.6% 6.8% 6.7% 6.7% 5.7% 6.1% 6% 4% 2% - (2%) 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 ($ in millions) Retention
Slide 12: Business Insurance: Commercial Accounts
Business Insurance: Commercial Accounts Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change1 % Renewal Rate Change % 2 • Exposure/Other % 12% 9.6% 10% 8.8% 8.4% 8.1% 7.7% 8% 8.4% 8.2% 6% 4% 2% - (2%) 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 ($ in millions) Retent
Slide 13: Business Insurance: Other Business Insurance
Business Insurance: Other Business Insurance1 Illustrative Business Statistics Renewal Pricing Results 14% ▲ Renewal Premium Change2 % Renewal Rate Change % 3 • Exposure/Other % 12% 10% 8% 6.7% 6.9% 7.1% 7.0% 7.0% 6% 6.5% 6.6% 4% 2% - (2%) 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 ($ in millions)
Slide 14: Financial, Professional & International Insurance
Financial, Professional & International Insurance Performance ($ in millions) Third Quarter Year-to-Date Third Quarter Year-to-Date 2013 2012 Change 2013 2012 Change Operating income $ 160 $ 180 (11) % $ 477 $ 511 (7) % Loss and loss adjustment ratio 41.8 % 39.7 % 42.2 % 41.5 % Underw riting expense
Slide 15: Financial, Professional & International Insurance
Financial, Professional & International Insurance ($ in millions) Illustrative Business Statistics 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q Surety Gross written premium $202 $223 $219 $194 $195 $235 $225 Management Liability 1 Retention 87% 86% 85% 85% 85% 83% 85% Renewal premium change 2 5.3% 6.0% 6.4% 5.7%
Slide 16: Personal Insurance
Personal Insurance Performance ($ in millions) Third Quarter Year-to-Date Third Quarter Year-to-Date 2013 2012 Change 2013 2012 Change Operating income $ 262 $ 206 27 % $ 601 $ 331 82 % Loss and loss adjustment ratio 54.5 % 59.8 % 59.8 % 68.0 % Underw riting expense ratio 30.2 29.9 29.7 29.4 GAAP co
Slide 17: Personal Insurance
Personal Insurance Performance Third Quarter Year-to-Date 2013 2012 Change 2013 2012 Change Agency Automobile 1 Loss and loss adjustment ratio 71.5 % 74.1 % 71.1 % 73.6 % Underw riting expense ratio 26.4 25.3 26.1 25.5 2 GAAP combined ratio 97.9 % 99.4 % 1.5 pts 97.2 % 99.1 % 1.9 pts Net unfavorable
Slide 18: Personal Insurance
Personal Insurance ($ in millions) Illustrative Business Statistics 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q Agency Automobile 1 Retention 2,3 82% 81% 79% 79% 79% 80% 81% Renewal premium change 3,4 5.7% 6.7% 9.1% 9.8% 9.9% 8.4% 7.4% PIF growth over prior year quarter (1%) (3%) (6%) (9%) (11%) (12%) (12%) New
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: Additional Information
The Travelers Companies, Inc. Additional Information Additional Information 21
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