The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q2 2021 Earnings Presentation
23 slides from The Travelers Companies's earnings presentation, Jul 20, 2021
Slide 1: Second Quarter 2021 Results
Second Quarter 2021 Results July 20, 2021
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of approach to Meaningful and top tier earnings rightsizing sustainable and capital capital and competitive substantially in growing book advantages excess of growth value per share needs over time CREATE SHAREHOLDER VALUE Objective: Mid-Teens Core RO
Slide 3: Second Quarter 2021 Overview
Second Quarter 2021 Overview Travelers Reports Strong Underwriting and Investment Results Second Quarter 2021 Net Income per Diluted Share of $3.66 and Return on Equity of 13.0% Second Quarter 2021 Core Income per Diluted Share of $3.45 and Core Return on Equity of 13.7% • Strong second quarter net
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax, except for premiums) SECOND QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Core income (loss) $ 879 $ (50) NM $ 1,578 $ 626 152 % per diluted share $ 3.45 $ (0.20) NM $ 6.18 $ 2.44 153 % Included the following item
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital June 30, December 31, 2021 2020 • At or above target levels for all rating agencies. $ 7,290 $ 6,550 • Repurchased 2.6 million shares during second quarter 2021 for a total of $401 million. Debt 1 Common equi
Slide 6: Combined Net Investment Income - After-tax
Combined Net Investment Income - After-tax ($ in millions) TOTAL Second Quarter 2021 vs 2020 Commentary $682 • Net investment income (NII) from the long-term fixed income $572 $590 portfolio decreased due to lower interest rates, partially $566 $524 $519 offset by an increase in average investments
Slide 7: Components of Core Return on Equity
Components of Core Return on Equity 13.3% 15.2% 13.3% 9.0% 10.7% 10.9% 11.3% 5.3% 12.4% 9.2% 9.0% 0.9% 0.3% 7.8% 8.0% 7.8% 7.4% 7.2% 7.2% 3.4% 1.5% 1.1% 6.9% 0.9% 0.9% 5.4% 6.1% 1.3% 0.3% 0.7% 0.1% 0.3% 0.2% 0.1% 0.2% 4.4% 4.1% 8.0% 3.4% 6.5% 6.4% 3.1% 6.2% 6.2% 2.7% 6.1% 6.2% 5.7% 5.6% 1.8% 0.0% 0.
Slide 8: Business Insurance Performance
Business Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income (loss) $ 643 $ (58) NM $ 960 $ 231 316 % Loss and loss adjustment ratio 64.3 % 75.8 % 68.2 % 73.3 % Underwriting expense ratio 31.0 31.3 31.1 31.3 Combined ratio 1 95.3 % 107.1
Slide 9: Domestic Business Insurance (Ex. National Accounts)
Domestic Business Insurance (Ex. National Accounts) ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % 8.1% 8.3% 8.3% Exposure/Other % 8% 7.1% 7.1% 6% 5.9% 4% 2% - (2%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 Retention 84% 83% 83% 83% 83% 84% Renewal
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % Renewal Rate Change2 % Exposure/Other % 8% 6% 4.2% 4.3% 4% 4.3% 2.8% 2.1% 2% 1.8% - ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 Retention 82% 84% 81% 79% 79% 80% Renewal 2.0% 3.1% 5.
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market ILLUSTRATIVE BUSINESS STATISTICS 10% Renewal Premium Change1 % 8.9% Renewal Rate Change2 % 8.2% 9.1% Exposure/Other % 8% 7.5% 7.4% 6.2% 6% 4% 2% - (2%) (4%) ($ in millions) 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 Retention 86% 85% 85% 85% 86% 87% Renewal 4.4%
Slide 12: Business Insurance: Middle Market + National Property
Business Insurance: Middle Market1 + National Property Commercial Accounts: % ofACCOUNTS % OF RENEWED Renewal BYAccounts RATE BAND by Rate Band 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0% or Negative >0% to 10% >10% 4Q'20 1Q'21 2Q'21 84% of accounts received positive rate increases in 2Q 2021, up f
Slide 13: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income $ 187 $ 72 160 % $ 324 $ 194 67 % Loss and loss adjustment ratio 42.6 % 57.8 % 46.2 % 53.4 % Underwriting expense ratio 35.5 36.0 35.4 36.5 Combined ratio 1 78.1 % 93.8
Slide 14: Domestic Bond & Specialty Insurance
Domestic Bond & Specialty Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q Management Liability 1 Retention 89% 89% 91% 89% 87% 86% Renewal premium change 2 8.5% 9.2% 8.4% 10.9% 10.6% 12.7% New business $58 $51 $54 $49 $49 $54 14 1 Domestic only, excludes surety
Slide 15: Personal Insurance Performance
Personal Insurance Performance ($ in millions) SECOND QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Segment income $ 121 $ 10 NM $ 435 $ 346 26 % Loss and loss adjustment ratio 73.3 % 72.2 % 68.6 % 66.9 % Underwriting expense ratio 26.4 29.1 26.5 27.6 Combined ratio 1 99.7 % 101.3 % 1.6 pts
Slide 16: Personal Insurance Performance
Personal Insurance Performance SECOND QUARTER YEAR-TO-DATE 2021 2020 Change 2021 2020 Change Automobile Loss and loss adjustment ratio 67.2 % 58.9 % 62.3 % 63.3 % Underwriting expense ratio 24.4 28.9 24.5 26.4 1 Combined ratio 91.6 % 87.8 % (3.8) pts 86.8 % 89.7 % 2.9 pts Net favorable prior year re
Slide 17: Domestic Personal Insurance
Domestic Personal Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q Automobile Retention 1 84% 84% 84% 84% 84% 85% Renewal premium change 2 2.3% 1.6% 1.6% 0.9% 0.5% 0.2% Policies in force (in thousands) 2,700 2,732 2,761 2,779 2,807 2,852 • Sequential quarter gro
Slide 18: Total International Insurance
Total International Insurance ($ in millions) ILLUSTRATIVE BUSINESS STATISTICS 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 1 International Retention 71% 79% 79% 81% 81% 80% Renewal premium change 2 8.0% 8.1% 7.5% 10.2% 7.6% 6.9% New business $74 $84 $76 $84 $67 $86 18 1 Excludes surety and other products that are g
Slide 19: Appendix
Appendix 19
Slide 20: 2021 Catastrophe Reinsurance
2021 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 2021 − 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 23
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