The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2017 Earnings Presentation
23 slides from The Travelers Companies's earnings presentation, Apr 20, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results April 20, 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: First Quarter 2017 Overview
First Quarter 2017 Overview Travelers Reports First Quarter Net Income and Core Income1 per Diluted Share of $2.17 and $2.16, Respectively, Including Catastrophe Losses of $0.79 per Diluted Share First Quarter Return on Equity and Core Return on Equity of 10.5% and 10.8%, Respectively Board of Direc
Slide 4: Analysis of 1Q 2017 Operating Results
Analysis of 1Q 2017 Operating Results Versus Consensus Estimate 1Q 2017 TRV Core income per diluted share - as reported $ 2.16 Consensus estimate1 $ 2.35 Remove: consensus estimate of catastrophe losses per share2 $0.48 Add: TRV actual catastrophe losses per share (0.79) $(0.31) Consensus estimate –
Slide 5: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) FIRST QUARTER 2017 2016 Change Core income $ 614 $ 698 (12) % per diluted share $ 2.16 $ 2.33 (7) % Included the following items: Net favorable prior year reserve development $ 44 $ 119 Catastrophes, net of reinsurance (22
Slide 6: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital March 31, December 31, • At or above target levels for all rating agencies. 2017 2016 • Repurchased 2.4 million shares during the first quarter Debt $ 6,438 $ 6,437 2017 at a total cost of $286 million. 1 22,
Slide 7: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL First Quarter 2017 Commentary • Net investment income from the long-term fixed income $476 $472 portfolio declined modestly from the prior year quarter due to $462 $439 $442 $493 $480 lower reinvestment rates as expected • Short-term p
Slide 8: Components of Core Return on Equity
Components of Core Return on Equity 13.0% 11.0% 15.5% 15.5% 15.2 % 13.3% 12.5% 10.8% 9.4% 9.4% 0.8% 8.5% 8.4% 1.3% 0.3% 1.3% 7.8% 1.2% 1.5% 7.4% 7.4% 7.1% 7.2% 1.5% 7.0% 6.8% 8.3% 0.9% 8.1% 0.9% 1.5% 6.1% 0.5% 7.3% 0.1% 5.7% 6.9% 0.1% 6.5% 6.2% 6.3% 5.8% 3.6% 3.4% 1.6% 2005 through 2011 2012 2013 20
Slide 9: Business and International Insurance Performance
Business and International Insurance Performance ($ in millions) FIRST QUARTER 2017 2016 Change Segment income1 $ 468 $ 476 (2) % Loss and loss adjustment ratio 63.9 % 62.4 % Underwriting expense ratio 32.4 32.4 2 Combined ratio 96.3 % 94.8 % (1.5) pts Net favorable prior year reserve development 1.
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% 2% 0.5% 0.6% (0.1%) 0.1% 0.2% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q’17 1Q'17 ($ in millions) Retention 85% 85% 85% 84% 85% Renewal pre
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% 1.3% 1.0% 0.4% 0.6% 0.4% - (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q’17 1Q'17 ($ in millions) Retention 82% 82% 83% 83% 83% Renewal premium 6.2%
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% 2% 1.0% 0.9% - 0.4% 0.4% (0.4%) (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q’17 1Q'17 ($ in millions) Retention 88% 87% 87% 87% 88% Renewal premium 0.7%
Slide 13: Domestic Business Insurance: Other Business Insurance
Domestic Business Insurance: Other Business Insurance1 ILLUSTRATIVE BUSINESS STATISTICS 10% ▲ Renewal Premium Change2 % Renewal Rate Change3 % Renewal Rate Change3 ex National Property % 8% • Exposure/Other % 6% 4% 2% - (0.1%) (0.7%) (0.5%) (0.8%) (1.1%) (2%) 1Q'16 2Q'16 3Q'16 4Q'16 1Q’17 1Q'17 ($
Slide 14: International Insurance
International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 1 International Retention 83% 80% 82% 83% 84% Renewal premium change 2 (1.6%) (1.1%) (0.8%) 1.7% 0.3% New business $77 $108 $87 $90 $86 1 Excludes the surety line of business as surety products are gene
Slide 15: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) FIRST QUARTER 2017 2016 Change Segment income $ 129 $ 144 (10) % Loss and loss adjustment ratio 41.1 % 31.9 % Underwriting expense ratio 38.2 37.4 1 Combined ratio 79.3 % 69.3 % (10.0) pts Net favorable prior year reserve development 1.9 11.9 Ca
Slide 16: Bond & Specialty Insurance
Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 1 Management Liability Retention 86% 87% 87% 88% 88% Renewal premium change 2 3.2% 3.6% 3.3% 1.5% 4.4% New business $47 $48 $49 $41 $45 1 Excludes the surety line of business as surety products are g
Slide 17: Personal Insurance Performance
Personal Insurance Performance ($ in millions) FIRST QUARTER 2017 2016 Change Segment income $ 79 $ 139 (43) % Loss and loss adjustment ratio 74.1 % 66.7 % Underwriting expense ratio 25.8 27.0 1 Combined ratio 99.9 % 93.7 % (6.2) pts Net favorable prior year reserve development - 1.4 Catastrophes, n
Slide 18: Personal Insurance Performance
Personal Insurance Performance FIRST QUARTER 2017 2016 Change Agency Automobile 1 Loss and loss adjustment ratio 77.3 % 70.3 % Underwriting expense ratio 23.8 24.9 2 Combined ratio 101.1 % 95.2 % (5.9) pts Net favorable prior year reserve development - 0.8 Catastrophes, net of reinsurance (2.5) (2.0
Slide 19: Personal Insurance
Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2016 2017 1Q 2Q 3Q 4Q 1Q 1 Agency Automobile Retention 2 86% 86% 86% 86% 84% 3 Renewal premium change 4.6% 5.1% 5.5% 4.9% 5.9% Policies in force (in thousands) 2,212 2,275 2,350 2,428 2,482 • Sequential quarter growth 3% 3% 3% 3% 2%
Slide 20: Appendix
Appendix Additional Information Additional Information 20
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
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