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Travelers Surpasses Expectations with Strong Earnings Performance

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Robust underwriting gains and decreased catastrophic losses contributed to strong profitability.

According to TD Cowen’s analysis, Travellers Companies’ quarterly results were better than expected.

Reasons for Travellers’ impressive performance include lower catastrophic losses, more net investment income, and strong underwriting gains.

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The $7.01 in core profits per share (EPS) reported by Travellers surpassed both the $5.05 predicted by TD Cowen and the $5.10 predicted by the consensus. Pre-tax catastrophic losses were recorded at $125 million, much below TD Cowen’s estimate of $268 million.

A consolidated combined ratio of 85.8% was achieved, which was higher than both last year’s 94.5% and TD Cowen’s prediction of 92.7%, thanks in large part to the lower-than-expected cat losses.

Net written premiums (NWP) for Travellers were $9.994 billion, up 13% from the prior year. This amount was higher than the $9.74 billion predicted by TD Cowen. From 28% in the prior quarter and 27.9% year over year, Travellers’ underwriting expense ratio improved to 27.4%. A total of $66 million worth of shares were repurchased by the company during the reporting period.

Commercial policy

After taxes, Travellers’ business insurance division brought in $857 million, which was higher than TD Cowen’s $870 million forecast and a considerable increase from $725 million recorded in the corresponding period last year. The segment’s underlying combined ratio was 86.8%, and NWP was $5.018 billion, an increase of 14%, due to rising levels of new business, excellent renewal premium change, and retention.

Specialty and bond insurance

The bond and specialty insurance segment’s after-tax income was $240 million, which was higher than last year’s $221 million and exceeded TD Cowen’s estimate of $201 million. Eighty-0.6 percent was the segment’s underlying combined ratio.

Auto insurance

The personal insurance division made a significant comeback from last year’s $61 million loss, posting after-tax income of $520 million, which was higher than the $184 million projection by TD Cowen. Section 85.9% was the underlying combined ratio. The segment’s NWP was $3.987 billion, up 13% from the previous year.

Vehicle coverage

An underwriting loss of $82 million was announced by Travellers’ auto insurance unit. This marked a substantial improvement from the $202 million loss that had been reported the year before. Although it was higher than TD Cowen’s prediction of 101%, the underlying combined ratio for the car insurance segment was 102.7%, which is lower than last year’s 110.5% combined ratio for the same period. A 13% rise from the previous year, the segment’s NWP was $1.831 billion.

Insurance for a house

Compared to $5 million in the same period previous year, Travellers’ homeowners insurance division generated underwriting income of $585 million, a tremendous rise. Compared to last year’s combined ratio of 82.2% and TD Cowen’s prediction of 86.4%, the underlying ratio of 69.7% was a considerable improvement. Homeowners insurance NWP increased 14% year-over-year to $1.995 billion.

Travellers was recognised as one of the most valuable brands in the insurance business earlier this month by Global 500. The cyber insurance managing general underwriter Corvus Insurance was also just purchased by the insurance behemoth.

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