The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q4 2024 Earnings Presentation
27 slides from The Travelers Companies's earnings presentation, Jan 22, 2025
Slide 1: Fourth Quarter 2024 Results
FOURTH QUARTER 2024 RESULTS January 22, 2025
Slide 2: Long-Term Financial Strategy
LONG-TERM FINANCIAL STRATEGY Generation of Balanced Meaningful top-tier earnings approach to and sustainable and capital rightsizing capital competitive substantially and growing book advantages in excess of value per share growth needs over time CREATE SHAREHOLDER VALUE Objective: Mid–Teens Core RO
Slide 3: Fourth Quarter 2024 Overview
FOURTH QUARTER 2024 OVERVIEW Travelers Reports Exceptional Fourth Quarter and Full Year Results Fourth Quarter 2024 Net Income per Diluted Share of $8.96, up 28%, and Return on Equity of 30.0% Fourth Quarter 2024 Core Income per Diluted Share of $9.15, up 31%, and Core Return on Equity of 27.7% Full
Slide 4: Consolidated Performance
CONSOLIDATED PERFORMANCE ($ in millions, except per share amounts, after-tax, except for premiums) FOURTH QUARTER FULL YEAR 2024 2023 Change 2024 2023 Change Core income $ 2,126 $ 1,633 30 % $ 5,025 $ 3,072 64 % per diluted share $ 9.15 $ 7.01 31 % $ 21.58 $ 13.13 64 % Included the following items:
Slide 5: Very Strong Financial Position
VERY STRONG FINANCIAL POSITION ($ and shares in millions, except per share amounts) December 31, December 31, 2024 2023 Capital Debt $ 8,033 $ 8,031 Common equity 1 31,504 28,050 • Continued strong capitalization to support the Company’s business operations. Total capital 1 $ 39,537 $ 36,081 • Stron
Slide 6: Net Investment Income
NET INVESTMENT INCOME ($ in millions, after-tax) TOTAL $785 Fourth Quarter 2024 vs. Prior Year Quarter Commentary $738 $742 $698 $727 $609 $640 $645 $557 $594 • Net investment income (NII) from the fixed income portfolio increased due to a higher average yield and growth in average invested assets •
Slide 7: Leading Core Return on Equity at Industry-Low Volatility
LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY1 12.8% 11.3% 13.7% 11.3% 11.5% 17.2% 8.8% 9.0% 8.6% 8.0% 1.1% 8.2% 1.0% 0.2% 7.1% 0.7% 0.7% 6.9% 3.3% 0.7% 0.7% 1.2% 0.1% 0.2% 4.9% 4.2% 4.4% 4.2% 7.4% 3.5% 7.2% 6.6% 6.1% 5.5% 5.7% 2005 through 2019 2020 2021 2022 2023 2024 Full Year Long-ter
Slide 8: Business Insurance Performance
BUSINESS INSURANCE PERFORMANCE ($ in millions) FOURTH QUARTER FULL YEAR 2024 2023 Change 2024 2023 Change Segment income $ 1,188 $ 957 24 % $ 3,306 $ 2,583 28 % Loss and loss adjustment expense ratio 56.4 % 57.7 % 63.1 % 65.3 % Underwriting expense ratio 28.8 28.8 29.4 29.4 Combined ratio1 85.2 % 86
Slide 9: Domestic Business Insurance (ex. National Accounts)
DOMESTIC BUSINESS INSURANCE (EX. NATIONAL ACCOUNTS) IL L U STRATIV E BU SINESS STATISTICS Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 7.9% 8% 7.2% 7.2% 7.2% 6.9% 6.9% 6.4% 6% 4% 4.7% 2% —% ($ in millions) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Retention 87% 87%
Slide 10: Domestic Business Insurance: Select Accounts
DOMESTIC BUSINESS INSURANCE: SELECT ACCOUNTS IL L U STRATIV E BU SINESS STATISTICS Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6% 4.0% 3.8% 5.3% 5.5% 5.6% 4% 3.0% 2.9% 1.9% 2% —% ($ in millions) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Retention 85% 85% 85% 85
Slide 11: Domestic Business Insurance: Middle Market
DOMESTIC BUSINESS INSURANCE: MIDDLE MARKET IL L U STRATIV E BU SINESS STATISTICS Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 7.9% 7.8% 8% 7.0% 6.9% 6.9% 6.9% 6.0% 6% 4.4% 4% 2% —% ($ in millions) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Retention 89% 89% 89% 89%
Slide 12: Bond & Specialty Insurance Performance
BOND & SPECIALTY INSURANCE PERFORMANCE ($ in millions) FOURTH QUARTER FULL YEAR 2024 2023 Change 2024 2023 Change Segment income $ 228 $ 240 (5) % $ 815 $ 942 (13) % Loss and loss adjustment expense ratio 42.1 % 41.1 % 44.4 % 40.1 % Underwriting expense ratio 40.6 36.2 39.9 36.8 Combined ratio1 82.7
Slide 13: Domestic Bond & Specialty Insurance
DOMESTIC BOND & SPECIALTY INSURANCE ($ in millions) IL L U STRATIV E BU SINESS STATISTICS 2023 2024 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Management Liability 1 Retention 89% 91% 91% 90% 90% 90% 90% 88% Renewal premium change 2 5.7% 4.5% 4.2% 2.8% 3.0% 2.4% 1.1% 2.3% New business $68 $70 $62 $86 $91 $111 $109 $84
Slide 14: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE ($ in millions) FOURTH QUARTER FULL YEAR 2024 2023 Change 2024 2023 Change Segment income (loss) $ 798 $ 520 53 % $ 1,249 $ (128) NM Loss and loss adjustment expense ratio 56.2 % 63.4 % 69.7 % 80.4 % Underwriting expense ratio 24.5 23.4 24.7 24.4 Combined ratio1 80.7 %
Slide 15: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE FOURTH QUARTER YEAR-TO-DATE 2024 2023 Change 2024 2023 Change Automobile Loss and loss adjustment expense ratio 71.9 % 82.4 % 72.6 % 82.8 % Underwriting expense ratio 22.3 21.2 22.4 22.2 1 Combined ratio 94.2 % 103.6 % 9.4 pts 95.0 % 105.0 % 10.0 pts Net favorable (unf
Slide 16: Domestic Personal Insurance
DOMESTIC PERSONAL INSURANCE ($ in millions) IL L U STRATIV E BU SINESS STATISTICS 2023 2024 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Automobile Retention 1 82% 82% 82% 82% 82% 82% 82% 83% Renewal premium change 2 15.4% 17.5% 19.5% 18.2% 17.7% 16.4% 12.8% 10.2% Policies in force (in thousands) 3,021 2,999 2,996 2,996
Slide 17: Total International Insurance
TOTAL INTERNATIONAL INSURANCE ($ in millions) IL L U STRATIV E BU SINESS STATISTICS 2023 2024 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q International 1 Retention 84% 84% 84% 83% 84% 81% 80% 80% Renewal premium change 2 8.1% 8.6% 7.6% 4.1% 3.8% 4.3% 5.8% 5.2% New business $92 $104 $100 $91 $187 $97 $84 $109 1 Excludes
Slide 18: Appendix
APPENDIX 18
Slide 19: Deliberate and Disciplined Execution
DELIBERATE AND DISCIPLINED EXECUTION Accelerating NWP Growth Consistently Strong Underlying Profitability3 Improved Expense Ratio $43.4B R 2 93.0% AVG = 91.0% AVG = 31.7% C AG 86.2% 1% Imp 7. rov ed $22.4B 3.2 28.5% 1 pts AGR 2.7% C 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20
Slide 20: Balanced Approach to Capital Management
BALANCED APPROACH TO CAPITAL MANAGEMENT Adjusted Book Value 1 Per Share Dividends Per Share $4.15 % CAGR 8.2 $139.04 $1.01 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 7 .8% C AGR Cumulative Share Buybacks ( $ i n b i l l i o n s )
Slide 21: Technology Investments
TECHNOLOGY INVESTMENTS $ • Meaningfully increased our overall technology spend over the last seven years • Significantly reduced our expense ratio at the same time through our strategic focus on optimizing productivity and efficiency • Improved the mix of our technology spend ◦ Increased our spendin
Slide 22: 2025 Catastrophe Reinsurance Effective 1/1/25
2025 CATASTROPHE REINSURANCE EFFECTIVE 1/1/25 Corporate Catastrophe Excess-of-Loss Reinsurance Treaty (Renewal) Covers the accumulation of certain property losses arising from one or In addition to the Corporate Catastrophe Excess-of-Loss multiple occurrences. This treaty provides for recovery up to
Slide 23: TRV Catastrophe Losses - Quarterly History & 2025 Plan
1 TRV CATASTROPHE LOSSES - QUARTERLY HISTORY & 2025 PLAN 38.5% Percentage of calendar year CAT activity 24.1% 24.1% 2025 plan does not attributed to each quarter contemplate January 13.3% (10-year average) 2025 California wildfires 1Q 2Q 3Q 4Q Over the past 10 years, the second quarter is on average
Slide 24: Well-Defined and Consistent Investment Philosophy
Well-Defined and Consistent Investment Philosophy ($ in millions, as of December 31, 2024, unless otherwise noted) Investment Income reliable contributor to results Total Investments Fixed Income Portfolio Rating % % Fixed Maturities by Rating2 Fixed Non-Fixed Corporates1 A2 $ 37,397 40 % Aaa 48.3 %
Slide 25: 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 26: 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 27: investor.travelers.com
investor.travelers.com 27
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