FIRST QUARTER 2025 RESULTS April 16, 2025 LONG-TERM FINANCIAL STRATEGY Meaningful and sustainable competitive advantages Generation of top-tier earnings and capital substantially in excess of growth needs Balanced approach to rightsizing capital and growing book value per share over time CREATE SHAREHOLDER VALUE Objective: Mid–Teens Core ROE Over Time 2 FIRST QUARTER 2025 OVERVIEW Travelers Reports First Quarter Net Income of $395 Million and Core Income of $443 Million First Quarter 2025 Net Income per Dil ...

Financial Performance - Net income for Q1 2025 was $395 million, a decrease of 65% from $1.12 billion in Q1 2024, resulting in diluted earnings per share of $1.70 compared to $4.80 in the prior year[105] - The combined ratio for Q1 2025 was 102.5%, up from 93.9% in Q1 2024, indicating a deterioration in underwriting performance[104] - Claims and claim adjustment expenses increased by $1.35 billion, or 20%, to $8.01 billion in Q1 2025, primarily due to higher catastrophe losses[120] - General and administrative expenses in Q1 2025 were $1.46 billion, a 4% increase from Q1 2024[126] - Income tax expense in Q1 2025 was $73 million, a 70% decrease from $247 million in Q1 2024[130] - Segment income for Business Insurance in Q1 2025 was $683 million, an 11% decrease from $764 million in Q1 2024[138] - The combined ratio for Business Insurance in Q1 2025 was 96.2%, up 2.9 points from 93.3% in Q1 2024[149] - Segment income in Q1 2025 was $220 million, a 13% increase from $195 million in Q1 2024[161] - The combined ratio for Personal Insurance in Q1 2025 was 115.2%, an increase of 18.3 points from 96.9% in Q1 2024[188] Premiums and Underwriting - Net earned premiums increased by $584 million, or 6%, to $10.71 billion in Q1 2025 compared to Q1 2024, with growth across all segments[109] - Gross written premiums in Q1 2025 were $11.89 billion, a 5% increase from $11.31 billion in Q1 2024[135] - Net written premiums in Q1 2025 were $10.52 billion, a 3% increase from $10.18 billion in Q1 2024[135] - Earned premiums in Q1 2025 were $5.47 billion, a 6% increase from $5.16 billion in Q1 2024[139] - Personal Insurance segment earned premiums in Q1 2025 were $4.25 billion, a 6% increase from $4.01 billion in Q1 2024[179] - Homeowners and Other net written premiums reached $1.81 billion in Q1 2025, an 11% increase compared to Q1 2024[194] - Gross and net written premiums in Personal Insurance increased by 4% and 5%, respectively, in Q1 2025 compared to Q1 2024[192] Catastrophe Losses - Catastrophe losses in Q1 2025 were $2.27 billion, significantly higher than $712 million in Q1 2024, impacting overall profitability[105] - Catastrophe losses in Q1 2025 were $1.74 billion, compared to $498 million in Q1 2024[178] Investment Income - Net investment income rose by $84 million, or 10%, to $930 million in Q1 2025, driven by higher long-term average yields[113] - Net investment income in Q1 2025 was $656 million, an 8% increase from $609 million in Q1 2024[140] - Net investment income in Q1 2025 was $102 million, a 13% increase from $90 million in Q1 2024[163] - The company expects after-tax net investment income to be approximately $725 million in Q2 2025, $755 million in Q3 2025, and $790 million in Q4 2025[241] - The company reported net pre-tax realized investment losses of $61 million in the first three months of 2025[242] - The net unrealized investment loss in the fixed maturity investment portfolio was $4.17 billion as of March 31, 2025, down from $4.61 billion as of December 31, 2024[244] Capital Management - Total capital returned to shareholders was $599 million, consisting of $358 million in share repurchases and $241 million in dividends[102] - The Company believes it has a strong capital position and expects to return capital not needed for business operations to shareholders, with dividends and share repurchases likely not exceeding net income over time[247] - The Company anticipates that growth in premium volumes will increase the capital needed to support its financial strength ratings, resulting in a lower amount of capital returned to shareholders relative to earnings[247] - Future share repurchases will depend on various factors, including the Company's financial position, earnings, share price, catastrophe losses, and market conditions[247] Investment Portfolio - The company's total investments amounted to $95.70 billion, with fixed maturities and short-term securities making up 94% of the total[102] - The carrying value of the fixed maturity portfolio was $85.42 billion as of March 31, 2025, with a weighted average credit quality of "Aa2"[214] - The municipal bond portfolio included $27.29 billion in securities as of March 31, 2025, with a weighted average credit rating of "Aaa/Aa1"[217][218] - The carrying value of the company's other investments was $4.23 billion as of March 31, 2025, compared to $4.20 billion as of December 31, 2024[221] - Gross reinsurance recoverables increased to $8.233 billion as of March 31, 2025, from $8.119 billion as of December 31, 2024[225] Market Conditions and Outlook - Property and casualty insurance market conditions are expected to remain competitive for new business throughout 2025[229] - The Company anticipates strong retention levels for expiring premiums during the remainder of 2025[228] - Many statements in the "Outlook" section are forward-looking and subject to risks and uncertainties that could lead to actual results differing materially from those expressed[249]

Financial Performance - Net income for Q1 2025 was $395 million, a decrease of 64% compared to $1,123 million in Q1 2024[3] - Core income for Q1 2025 was $443 million, down from $1,096 million in Q1 2024, reflecting a 60% decline[3] - Total revenues for Q1 2025 were $11,810 million, compared to $11,228 million in Q1 2024, representing a 5.2% increase[8] - Net income for 1Q2024 was $1,123 million, with a significant increase to $2,082 million in 4Q2024, but a decrease to $395 million in 1Q2025[10] - Total revenues for 4Q2024 were $12,063 million, up from $11,849 million in 3Q2024, but decreased to $11,871 million in 1Q2025[12] - Cash flows from operating activities for Q1 2025 were $1,360 million, down from $2,064 million in Q4 2024[91] Underwriting Performance - The combined ratio for Q1 2025 was 103.5%, indicating a deterioration from the previous year's performance[3] - The combined ratio improved from 100.2% in 2Q2024 to 83.2% in 4Q2024, but is projected to rise to 102.5% in 1Q2025[10] - Business Insurance segment income for 1Q2025 is $683 million, down from $1,188 million in 4Q2024[24] - The combined ratio for Business Insurance in 1Q2025 is 96.2%, compared to 85.2% in 4Q2024[24] - The combined ratio for Personal Insurance improved to 96.9% in 1Q2024, with a target of 80.7% by 4Q2024[47] - The combined ratio for Personal Insurance - Homeowners and Other was 145.5% in 1Q2025, indicating a significant increase from 99.1% in 1Q2024[59] Investment Income - Net investment income for Q1 2025 was $930 million, down from $846 million in Q1 2024[8] - The effective tax rate on net investment income remained stable at 17.9% for Q1 2025[8] - Net investment income after tax for Q1 2025 was $763 million, a decrease from $785 million in Q4 2024, reflecting a decline of 2.8%[71] - The effective tax rate on net investment income remained stable around 17.9% in 4Q2024 and 1Q2025[12] Premiums and Reserves - Premiums written in Q1 2025 were $10,710 million, slightly lower than $10,868 million in Q4 2024[8] - Gross written premiums increased from $11,310 million in 1Q2024 to $12,149 million in 3Q2024, before declining to $11,890 million in 1Q2025[15] - Total statutory reserves for losses and loss adjustment expenses increased from $56,326 million in Q4 2024 to $58,091 million in Q1 2025, reflecting a growth of 3.13%[79] - The company incurred $7,947 million in total losses and loss adjustment expenses in Q1 2025, up from $5,966 million in Q4 2024, indicating a 33.2% increase[79] Shareholder Returns - The company declared common stock dividends of $241 million in Q1 2025, a slight decrease from $242 million in Q4 2024[3] - The company paid $229 million in dividends to shareholders in Q1 2024, indicating a commitment to returning value to investors[92] Debt and Capital Structure - The total debt to capital ratio remained stable at 20.3% as of March 31, 2025, consistent with the previous quarter[85] - The company reported a total long-term debt of $8,004 million as of March 31, 2025, unchanged from December 31, 2024[85] - The total capital, excluding net unrealized investment gains, was reported at $39,523 million as of March 31, 2025, slightly down from $39,537 million at the end of 2024[85] Miscellaneous - The company reported a favorable prior year reserve development of $378 million after tax in 1Q2025, compared to $262 million in 4Q2024[12] - The average yield on invested assets remained stable at 3.7% pre-tax for Q1 2025, consistent with the previous quarter[71] - The number of automobile policies in force was 3,212 thousand in 1Q2024, with a slight decrease to 3,118 thousand expected by 1Q2025[50]

The Travelers' Companies, Inc. (TRV) has an Earnings ESP of +0.30% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $3.26, indicating a year-over-year decrease of 39.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.CB’s earnings beat estimates in each of the last four reported quarters. Cincinnati Financial Corporation (CINF) has an Earnings ESP of +2.00% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quar ...

Wall Street analysts expect Travelers (TRV) to post quarterly earnings of $0.60 per share in its upcoming report, which indicates a year-over-year decline of 87.2%. Revenues are expected to be $12.15 billion, up 8.5% from the year-ago quarter.Over the last 30 days, there has been an upward revision of 0.4% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe.B ...

Travelers (TRV) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on April 16, 2025, might help the stock move higher if these key numbers are better than expecta ...

Core Insights - Travelers (TRV) is positioned to continue its earnings-beat streak, having a strong history of surpassing earnings estimates, particularly in the last two quarters with an average surprise of 38.76% [1][4] Earnings Performance - In the last reported quarter, Travelers achieved earnings of $9.15 per share, exceeding the Zacks Consensus Estimate of $6.57 per share, resulting in a surprise of 39.27% [2] - For the previous quarter, the company was expected to report earnings of $3.79 per share but delivered $5.24 per share, yielding a surprise of 38.26% [2] Earnings Estimates and Predictions - Estimates for Travelers have been trending higher, supported by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +45.57%, indicating bullish sentiment among analysts [4][7] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with expectations for the next earnings report on April 16, 2025 [7] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [5] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]

Core Viewpoint - Shares of The Travelers Companies, Inc. (TRV) have shown strong performance, closing at $265.13, near its 52-week high, with a year-to-date gain of 10% [1]. Company Overview - TRV is a leading provider of auto and homeowners' insurance, as well as commercial U.S. property-casualty insurance, with a market capitalization of $60 billion [2]. - The average trading volume over the last three months was 1.3 million shares [2]. Stock Performance - TRV shares are trading significantly above the 50-day simple moving average (SMA), indicating a bullish trend [4]. - The price-to-book value of TRV is 2.16X, which is higher than the industry average of 1.61X, suggesting that TRV shares are trading at a premium [5]. Financial Metrics - The return on equity (ROE) for TRV over the trailing 12 months was 19.1%, significantly higher than the industry's 8.3% [8]. - The return on invested capital (ROIC) was 10.9%, compared to the industry average of 6.4%, indicating efficient fund utilization [10]. Earnings Projections - The Zacks Consensus Estimate for 2025 earnings is $16.91, reflecting a decrease of 21.6%, despite a revenue increase of 7.4% to $49.9 billion [12]. - For 2026, the earnings estimate is $22.68, suggesting a 34.1% increase on revenues of $52.9 billion, which is a 6.1% rise [12]. Growth Factors - Factors favoring TRV's growth include solid retention rates, better pricing, increased new business, and positive renewal premium changes [13]. - The company has a conservative balance sheet, maintaining a debt-to-capital ratio between 15% and 25% and increasing its book value over the past decade [15]. Investment Income - Higher returns from the non-fixed income portfolio have driven investment income, with an estimated fixed-income net investment income (NII) of $3 billion in 2025 [14]. Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings has decreased by 6.4% in the past 30 days, while the estimate for 2026 has decreased by 1.8% [11]. Dividend Information - Travelers has increased dividends for the last 20 years, with a dividend yield of 1.8%, which is attractive compared to the industry average of 0.3% [18]. Target Price - The average price target for TRV, based on short-term estimates from 22 analysts, is $271.09 per share, indicating a potential upside of 3.9% from the last closing price [16]. Conclusion - Travelers' strong market presence in auto, homeowners' insurance, and commercial property-casualty insurance positions it well for future growth, supported by a solid capital position and effective execution of growth strategies [17].

Core Insights - Travelers reported a strong Q4 2024 performance with core income of $9.15 per share, exceeding estimates by 39.3% and improving 30.5% year over year [2][9] - Total revenues increased by 10.4% year over year to $11.9 billion, driven by higher premiums and net investment income [3][9] - The company experienced a record net written premium of $10.7 billion, reflecting a 7% year-over-year increase [3][9] Financial Performance - Net investment income rose 26% year over year to $955 million, surpassing estimates [4] - Catastrophe losses increased to $175 million, compared to $125 million in the previous year [5] - The underwriting gain was $1.4 billion, up 30.5% year over year, with a consolidated underlying combined ratio of 84, improving by 190 basis points [5] Segment Analysis - Business Insurance segment saw net written premiums increase by 9% to approximately $5.4 billion, with segment income rising 24.1% to $1.2 billion [6] - Bond & Specialty Insurance segment reported a 7% increase in net written premiums to $1 billion, but segment income decreased by 5% to $228 million [7] - Personal Insurance segment's net written premiums increased by 7% to $4.3 billion, with segment income up 53% to $798 million [8] Full-Year Highlights - For 2024, core income reached $21.58 per share, a 64.3% increase from 2023, and net written premiums hit a record $43.3 billion [9] - The combined ratio improved to 92.5, a 450 basis point enhancement year over year [9] - Adjusted book value per share increased by 13% to $139.04 [9] Capital Management - Travelers returned over $2.1 billion to shareholders through dividends and share repurchases in 2024, including a quarterly dividend of $1.05 per share [10] - The company has $5.04 billion remaining under its share repurchase authorization [10] Market Outlook - Estimates for Travelers have trended downward recently, with a significant shift of -90.35% in consensus estimates [11] - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [13]

Core Viewpoint - Keefe, Bruyette & Woods analyst upgraded Travelers Companies Inc (TRV) from Market Perform to Outperform and raised the price target from $275 to $286, indicating a positive outlook based on reserve analysis [1] Group 1: Reserve Analysis - The GAAP reserve analysis for year-end 2024 indicates that TRV's GAAP loss and ALAE reserves were overestimated by approximately $1.388 billion, compared to $324 million at year-end 2023 [1] - Excess reserves were identified in workers' compensation, personal lines, and fidelity and surety, which outweighed deficiencies in general liability, particularly in the Bond & Specialty sector [2] - Reserve development for 2024 was driven by significant releases in workers' compensation and personal lines, along with strong releases in fidelity and surety for all accident years except 2023 [2] Group 2: Concerns and Optimism - The analyst expressed concerns regarding the potential slowdown of substantial workers' compensation reserve releases, although there is optimism about the current reserve "cushion" [3] - Differences in general liability portfolios between Business Insurance and Bond & Specialty segments were noted, with the latter having more claims-made policies that converge more quickly to ultimate incurred amounts [3] - Concerns were raised about TRV's release of 2023 commercial auto reserves aligning with the strengthening of accident years 2021-2022, but confidence remains due to low ratios of paid to incurred losses and high IBNR-to-total-reserve ratios [4] Group 3: Earnings Projections - The analyst raised reserve release estimates for 2025E and 2026E to $392 million and $292 million, respectively, from $315 million and $199 million, which increased EPS estimates for those years to $19.30 and $24.90 from $19.05 and $24.60 [5] - Despite the positive long-term outlook due to TRV's scale and analytical advantages, increasing earnings volatility and declining reserve releases are expected to limit near-term upside [5] - TRV shares were trading higher by 1.56% at $242.12 at the last check [5]