The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q2 2022 Earnings Presentation
23 slides from The Travelers Companies's earnings presentation, Jul 21, 2022
Slide 1: Second Quarter 2022 Results
SECOND QUARTER 2022 RESULTS J U LY 2 1 , 2 0 2 2
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: Second Quarter 2022 Overview
SECOND QUARTER 2022 OVERVIEW Travelers Reports Very Strong Second Quarter and Year-to-Date Results Second Quarter 2022 Net Income per Diluted Share of $2.27 and Return on Equity of 9.1% Second Quarter 2022 Core Income per Diluted Share of $2.57 and Core Return on Equity of 9.3% • Second quarter net
Slide 4: Consolidated Performance
C O N S O L I D AT E D P E R F O R M A N C E ($ in millions, except per share amounts, after-tax, except for premiums) SECOND QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Core income $ 625 $ 879 (29) % $ 1,662 $ 1,578 5 % per diluted share $ 2.57 $ 3.45 (26) % $ 6.81 $ 6.18 10 % Included t
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) June 30, December 31, Capital 2022 2021 • At or above target levels for all rating agencies. Debt $ 7,291 $ 7,290 Common equity 1 26,666 26,472 • Repurchased 2.9 million shares during second qua
Slide 6: Net Investment Income
NET INVESTMENT INCOME ($ in millions, after-tax) TOTAL Second Quarter 2022 vs. Prior Year Quarter Commentary $682 $645 $635 $624 • Net investment income (NII) from the fixed income $590 $595 $539 $477 portfolio increased due to the growth in average investments, partially offset by a lower average y
Slide 7: Leading Core Return on Equity at Industry-Low Volatility
LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY 13.5% 9.0% 10.7% 10.9% 11.3% 13.7% 12.4% 12.4% 8.9% 8.8% 9.0% 0.9% 8.0% 7.8% 0.2% 7.4% 7.2% 1.5% 1.1% 3.4% 6.9% 3.3% 1.3% 0.3% 0.3% 0.7% 1.9% 0.1% 0.2% 0.1% 5.0% 4.9% 4.6% 4.4% 7.8% 3.4% 3.1% 6.2% 2.7% 6.4% 6.1% 5.7% 5.5% 5.6% 5.4% 1.8% 2005 t
Slide 8: Business Insurance Performance
BUSINESS INSURANCE PERFORMANCE ($ in millions) SECOND QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Segment income $ 666 $ 643 4 % $ 1,335 $ 960 39 % Loss and loss adjustment expense ratio 63.0 % 64.3 % 61.9 % 68.2 % Underwriting expense ratio 30.2 31.0 30.2 31.1 Combined ratio 1 93.2 % 95.
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% 7.9% 8% 6.8% 6.1% 6% 5.1% 4% 4.9% 4.4% 2% - ($ in millions) 1Q’21 2Q’21 3Q’21
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% 4.1% 4.0% 4% 3.4% 2.9% 3.0% 2% - ($ in millions) 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 2Q’22 Retention 79% 80% 82% 82% 83
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% 7.1% 8.5% 6.1% 6% 5.0% 4% 4.8% 4.3% 2% - ($ in millions) 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 2Q’22 Retention 86% 87% 87% 87% 89%
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) SECOND QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Segment income $ 228 $ 187 22 % $ 445 $ 324 37 % Loss and loss adjustment expense ratio 38.5 % 42.6 % 40.7 % 46.2 % Underwriting expense ratio 35.5 35.5 35
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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q Management Liability 1 Retention 87% 86% 86% 86% 86% 88% Renewal premium change 2 11.3% 13.1% 13.2% 10.5% 12.0% 8.8% New business $50 $55
Slide 14: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE ($ in millions) SECOND QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Segment income (loss) $ (193) $ 121 NM $ 32 $ 435 (93) % Loss and loss adjustment expense ratio 85.4 % 73.3 % 77.6 % 68.6 % Underwriting expense ratio 25.8 26.4 25.8 26.5 Combined ratio 1 111
Slide 15: Personal Insurance Performance
PERSONAL INSURANCE PERFORMANCE SECOND QUARTER YEAR-TO-DATE 2022 2021 Change 2022 2021 Change Automobile Loss and loss adjustment ratio 80.9 % 67.2 % 78.4 % 62.3 % Underwriting expense ratio 23.4 24.4 23.5 24.5 Combined ratio 1 104.3 % 91.6 % (12.7) pts 101.9 % 86.8 % (15.1) pts Net favorable (unfavo
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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q Automobile Retention 1 85% 86% 86% 86% 85% 83% 2 Renewal premium change 0.5% 0.4% 0.5% 2.1% 3.3% 6.3% Policies in force (in thousands) 2,807 2,852 2,898 2,937 2,972 3,008
Slide 17: 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 2021 2022 1Q 2Q 3Q 4Q 1Q 2Q 1 International Retention 80% 80% 81% 84% 82% 85% Renewal premium change 2 6.7% 8.3% 5.5% 9.0% 8.0% 7.3% New business $70 $98 $73 $86 $82 $75 1 Excl
Slide 18: Appendix
APPENDIX 18
Slide 19: Well-Defined and Consistent Investment Philosophy
WELL-DEFINED AND CONSISTENT INVESTMENT PHILOSOPHY Investment Income reliable contributor to results; $1.1 billion after -tax, YTD 2022 ($ in millions as of June 30, 2022, unless otherwise noted) Total Investments Fixed Income Portfolio Rating % % Fixed Maturities by Rating2 Fixed Non-Fixed Municipal
Slide 20: 2022 Catastrophe Reinsurance
2 0 2 2 C ATA S T R O P H E R E I N S U R A N C E Catastrophe Bonds – Long Point Re IV Ltd. • $500 million aggregate principal expired as scheduled May 2022 • $575 million aggregate principal was placed in May 2022 − The reinsurance agreement provides coverage to the Company through May 24, 2026 for
Slide 21: 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 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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