The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2023 Earnings Presentation
24 slides from The Travelers Companies's earnings presentation, Apr 19, 2023
Slide 1: First Quarter 2023 Results
FIRST QUARTER 2023 RESULTS April 19, 2023
Slide 2: Long-Term Financial Strategy
L O N G - T E R M F I N A N C I A L S T R AT E G Y 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 C R E AT E S H A R E H O L D E
Slide 3: First Quarter 2023 Overview
FIRST QUARTER 2023 OVERVIEW Travelers Reports Strong First Quarter Results First Quarter 2023 Net Income per Diluted Share of $4.13 and Return on Equity of 17.5% First Quarter 2023 Core Income per Diluted Share of $4.11 and Core Return on Equity of 14.5% Board of Directors Declares 8% Increase in Re
Slide 4: Consolidated Performance
C O N S O L I D AT E D P E R F O R M A N C E ($ in millions, except per share amounts, after-tax, except for premiums) FIRST QUARTER 2023 2022 Change Core income $ 970 $ 1,037 (6) % per diluted share $ 4.11 $ 4.22 (3) % Included the following items: Net favorable prior year reserve development $ 83
Slide 5: Very Strong Financial Position
V E RY S T R O N G F I N A N C I A L P O S I T I O N ($ and shares in millions, except per share amounts) March 31, December 31, 2023 2022 Capital Debt $ 7,292 $ 7,292 • Continued strong capitalization to support the Company’s business operations. Common equity 1 26,920 26,458 Total capital 1 $ 34,2
Slide 6: Net Investment Income
NET INVESTMENT INCOME ($ in millions, after-tax) TOTAL First Quarter 2023 vs. Prior Year Quarter Commentary $635 $595 $557 • Net investment income (NII) from the fixed income $542 $539 $505 $531 portfolio increased due to a higher average yield and growth in average invested assets • NII from the no
Slide 7: Leading Core Return on Equity at Industry-Low Volatility
LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY 13.1% 10.7% 10.9% 11.3% 13.7% 11.3% 15.5% 14.5% 8.8% 8.8% 8.5% 1.0% 8.0% 7.8% 0.2% 7.1% 7.3% 7.2% 1.5% 1.1% 6.9% 3.3% 7.0% 0.6% 0.3% 0.3% 0.7% 1.2% 0.5% 0.1% 1.6% 0.2% 4.9% 4.3% 4.4% 4.2% 7.6% 3.1% 6.2% 2.7% 6.4% 6.1% 6.2% 5.5% 5.7% 5.4% 2005
Slide 8: Business Insurance Performance
BUSINESS INSURANCE PERFORMANCE ($ in millions) FIRST QUARTER 2023 2022 Change Segment income $ 756 $ 669 13 % Loss and loss adjustment expense ratio 63.8 % 60.7 % Underwriting expense ratio 29.8 30.2 Combined ratio 1 93.6 % 90.9 % (2.7) pts Net favorable prior year reserve development 0.4 2.8 Catast
Slide 9: Domestic Business Insurance (ex. National Accounts)
D O M E S T I C B U S I N E S S I N S U R A N C E ( E X . N AT I O N A L A C C O U N T S ) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6% 4% 4.9% 5.0% 4.7% 4.4% 4.5% 2% - ($ in millions) 1Q’22 2Q’22 3Q’22 4Q’22
Slide 10: Domestic Business Insurance: Select Accounts
DOMESTIC BUSINESS INSURANCE: SELECT ACCOUNTS I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6% 4% 2.9% 3.1% 3.2% 3.0% 1.8% 2% - ($ in millions) 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 Retention 83% 83% 83% 83% 84% Renewal p
Slide 11: Domestic Business Insurance: Middle Market
DOMESTIC BUSINESS INSURANCE: MIDDLE MARKET I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 12% 10% 8% 6% 4.4% 4.4% 4% 4.7% 4.6% 4.0% 2% - ($ in millions) 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 Retention 89% 88% 89% 90% 89% Renewal pre
Slide 12: Bond & Specialty Insurance Performance
B O N D & S P E C I A LT Y I N S U R A N C E P E R F O R M A N C E ($ in millions) FIRST QUARTER 2023 2022 Change Segment income $ 207 $ 217 (5) % Loss and loss adjustment expense ratio 43.0 % 42.8 % Underwriting expense ratio 37.0 35.2 Combined ratio 1 80.0 % 78.0 % (2.0) pts Net favorable prior ye
Slide 13: Domestic Bond & Specialty Insurance
D O M E S T I C B O N D & S P E C I A LT Y I N S U R A N C E ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q Management Liability 1 Retention 85% 88% 89% 90% 90% Renewal premium change 2 12.4% 8.9% 8.8% 6.1% 5.0% New business $55 $63 $60 $57 $69 1 Do
Slide 14: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE ($ in millions) FIRST QUARTER 2023 2022 Change Segment income $ 83 $ 225 (63) % Loss and loss adjustment expense ratio 76.3 % 69.5 % Underwriting expense ratio 25.2 25.8 Combined ratio 1 101.5 % 95.3 % (6.2) pts Net favorable prior year reserve development 0.8 0.1 Cata
Slide 15: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE FIRST QUARTER 2023 2022 Change Automobile Loss and loss adjustment ratio 81.7 % 75.8 % Underwriting expense ratio 23.0 23.5 1 Combined ratio 104.7 % 99.3 % (5.4) pts Net unfavorable prior year reserve development (0.4) (0.3) Catastrophes, net of reinsurance (0.9) (0.2)
Slide 16: Domestic Personal Insurance
DOMESTIC PERSONAL INSURANCE ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q Automobile Retention 1 85% 84% 84% 83% 80% 2 Renewal premium change 4.1% 7.4% 9.5% 11.4% 13.9% Policies in force (in thousands) 2,972 3,008 3,053 3,051 3,021 • Sequential qua
Slide 17: Domestic Personal Insurance: Renewal Premium Change
DOMESTIC PERSONAL INSURANCE R E N E WA L P R E M I U M C H A N G E 1 22% Automobile 22% Homeowners and Other 20% 20% 18% 18% 16% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% - - 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 17 1 Represents the estimated change in average premium
Slide 18: Total International Insurance
TO TA L I N T E R N AT I O N A L I N S U R A N C E ($ in millions) I L L U S T R AT I V E B U S I N E S S S TAT I S T I C S 2022 2023 1Q 2Q 3Q 4Q 1Q International 1 Retention 81% 85% 80% 83% 84% Renewal premium change 2 10.1% 8.8% 9.0% 7.2% 7.5% New business $82 $79 $69 $84 $88 1 Excludes 2023 quota
Slide 19: Appendix
APPENDIX 19
Slide 20: Well-Defined and Consistent Investment Philosophy
WELL-DEFINED AND CONSISTENT INVESTMENT PHILOSOPHY ($ in millions, as of March 31, 2023, unless otherwise noted) Investment Income reliable contributor to results Total Investments Fixed Income Portfolio Rating % % Fixed Maturities by Rating2 Fixed Non-Fixed Corporates1 A2 $ 32,655 40% Aaa 45% Income
Slide 21: Investment Portfolio — Commercial Real Estate
I N V E S T M E N T P O RT F O L I O — C O M M E R C I A L R E A L E S TAT E ($ in millions, as of March 31, 2023, unless otherwise noted) H i g h q u a l i t y, w e l l - d i v e r s i f i e d h o l d i n g s Total Investments % of Total Fixed Income Non-Fixed Income Fixed Income Rating1 Investment
Slide 22: Explanatory Note
E X P L A N ATO RY N O T E 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
Slide 23: 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 24: investor.travelers.com
investor.travelers.com 24
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