Core Insights - Travelers reported revenue of $11.85 billion for the quarter ended September 2024, reflecting a year-over-year increase of 10.7% [1] - The company's EPS was $5.24, significantly higher than $1.95 in the same quarter last year, indicating a strong performance [1] - Revenue exceeded the Zacks Consensus Estimate of $11.68 billion by 1.42%, while EPS surpassed the consensus estimate of $3.79 by 38.26% [1] Financial Metrics - Combined Ratio - Consolidated: 93.2% compared to the estimated 97.4% [3] - Loss and Loss Adjustment Expense Ratio - Consolidated: 64.8% versus the estimated 68.3% [3] - Underwriting Expense Ratio - Consolidated: 28.4% against the estimated 28.5% [3] - Total Revenues - Net Investment Income: $904 million, exceeding the estimate of $882.60 million, with a year-over-year increase of 17.6% [3] - Total Revenues - Fee Income: $121 million, above the estimated $113.60 million, representing an 8% year-over-year change [3] - Total Revenues - Premiums: $10.70 billion, surpassing the estimate of $10.58 billion, with a year-over-year increase of 10.2% [3] - Total Revenues - Other Revenues: $120 million, exceeding the estimate of $99.60 million, with an 18.8% year-over-year increase [3] - Revenues - Premiums - Business Insurance: $5.47 billion, above the estimated $5.42 billion, reflecting a 10.5% year-over-year increase [3] - Revenues - Premiums - Personal Insurance: $4.42 billion, exceeding the estimate of $4.22 billion, with a 15.4% year-over-year increase [3] - Revenues - Premiums - Bond & Specialty Insurance: $1.01 billion, slightly above the estimated $998.03 million, indicating a 7.9% year-over-year increase [3] - Revenues - Other Revenues - Personal Insurance: $24 million, slightly above the estimate of $23.78 million, with no year-over-year change [3] Stock Performance - Shares of Travelers have returned +1.3% over the past month, compared to the S&P 500 composite's +3.8% change [2] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [2]

TRAVELERS J THIRD QUARTER 2024 RESULTS October 17, 2024 LONG-TERM FINANCIAL STRATEGY CREATE SHAREHOLDER VALUE Objective: Mid–Teens Core ROE Over Time 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 2 THIRD QUARTER 2024 OVERVIEW Travelers Reports Excellent Third Quarter and Year-to-Date Results Third Quarter 2024 Net Income per Diluted Share ...

Company Performance - Travelers reported quarterly earnings of $5.24 per share, exceeding the Zacks Consensus Estimate of $3.79 per share, and up from $1.95 per share a year ago, representing an earnings surprise of 38.26% [1] - The company posted revenues of $11.85 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.42%, and an increase from $10.7 billion year-over-year [1] - Over the last four quarters, Travelers has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [1] Stock Performance - Travelers shares have increased approximately 27.5% since the beginning of the year, outperforming the S&P 500's gain of 22.5% [2] - The current Zacks Rank for Travelers is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $6.15 on revenues of $11.89 billion, and for the current fiscal year, it is $17.09 on revenues of $46.11 billion [4] - The trend of estimate revisions for Travelers is mixed, and changes in estimates for the coming quarters and current fiscal year are anticipated following the recent earnings report [4] Industry Context - The Insurance - Property and Casualty industry is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [5] - Another company in the same industry, Selective Insurance, is expected to report quarterly earnings of $1.69 per share, reflecting a year-over-year change of +11.9%, with revenues projected at $1.24 billion, up 14.3% from the previous year [5][6]

Financial Performance - Net income for Q3 2024 was $1.26 billion, a 212% increase from $404 million in Q3 2023, resulting in diluted earnings per share of $5.42, up 211% from $1.74 [162]. - Net earned premiums reached $10.70 billion in Q3 2024, a 10% increase from $9.72 billion in Q3 2023, and $31.07 billion for the first nine months, a 12% increase from $27.79 billion [166]. - Net investment income for Q3 2024 was $904 million, an 18% increase from $769 million in Q3 2023, and $2.64 billion for the first nine months, a 23% increase from $2.14 billion [169]. - Total capital returned to shareholders was $496 million, including $253 million in share repurchases and $243 million in dividends [158]. - Segment income for the first nine months of 2024 was $2.12 billion, a 30% increase from $1.63 billion in the same period of 2023 [199]. Claims and Expenses - Claims and claim adjustment expenses in Q3 2024 were $7.00 billion, a decrease of $153 million or 2% compared to Q3 2023 [173]. - Claims and claim adjustment expenses for the first nine months of 2024 totaled $21.03 billion, an increase of $690 million or 3% compared to the same period in 2023 [175]. - General and administrative expenses in Q3 2024 were $1.46 billion, an increase of $148 million or 11% compared to Q3 2023 [183]. - The combined ratio improved to 93.2% in Q3 2024 from 101.0% in Q3 2023, reflecting better underwriting performance [161]. - The combined ratio for the first nine months of 2024 was 95.1%, down 2.6 points from 97.7% in the same period of 2023 [210]. Investment and Capital Management - The company reported a total debt of $8.03 billion, resulting in a debt-to-total capital ratio of 22.5% [158]. - The company's invested assets totaled $95.45 billion as of September 30, 2024, with 94% allocated to fixed maturity and short-term investments [286]. - The carrying value of the fixed maturity portfolio was $83.99 billion, maintaining a weighted average credit quality of "Aa2" [287]. - The company held $12.00 billion in residential mortgage-backed securities as of September 30, 2024, up from $7.82 billion in December 2023 [289]. - The company plans to continue returning capital to shareholders, with dividends and share repurchases likely not exceeding net income over time [315]. Premiums and Underwriting - Gross written premiums for Business Insurance increased to $18.73 billion in the first nine months of 2024, up 9% from $17.18 billion in 2023 [192]. - Total gross written premiums for the first nine months of 2024 were $35.32 billion, a 9% increase compared to $32.52 billion in the same period of 2023 [193]. - Domestic automobile net written premiums were $2.14 billion in Q3 2024, a 6% increase from Q3 2023, and $6.00 billion in the first nine months of 2024, a 9% increase from the same period in 2023 [262]. - The underwriting expense ratio for the first nine months of 2024 was 39.7%, an increase of 2.7 points from 37.0% in the same period of 2023 [232]. - The combined ratio for Q3 2024 was 92.5%, a decrease of 17.5 points from 110.0% in Q3 2023 [255]. Catastrophe and Environmental Claims - Catastrophe losses in Q3 2024 were $939 million, compared to $850 million in Q3 2023, while total catastrophe losses for the first nine months were $3.16 billion, up from $2.87 billion [162]. - The company holds gross claims and claim adjustment expense reserves totaling $2.22 billion for asbestos and environmental claims as of September 30, 2024 [337]. - The company increased its net environmental reserves by $21 million in Q3 2024 and $58 million in the first nine months of 2024, compared to $26 million and $74 million in the same periods of 2023 [280]. - Net asbestos paid loss and loss expenses were $201 million in the first nine months of 2024, up from $156 million in the same period of 2023 [274]. - The preliminary estimate for Hurricane Milton's incurred losses is between $75 million and $175 million for Q4 2024, after reinsurance and before taxes [302]. Market and Competitive Environment - The property and casualty insurance market is expected to remain competitive for new business through 2025, affecting underwriting profitability [299]. - The Company anticipates strong retention levels for expiring premiums during the remainder of 2024 and into 2025 [298]. - The company is focused on strategic initiatives to improve growth, profitability, and competitiveness, including advancements in artificial intelligence [343]. - The company is exposed to risks from high levels of catastrophe losses and changing climate conditions, which could adversely affect its financial position [344]. - The company is subject to regulatory risks that could affect profitability and growth, including changes in tax regulations [348].

Financial Performance - Net income for Q3 2024 was $1,260 million, compared to $404 million in Q3 2023, representing a significant increase of 212% year-over-year[4] - Core income for Q3 2024 reached $1,218 million, up from $454 million in Q3 2023, indicating a growth of 168%[4] - The diluted earnings per share for Q3 2024 was $5.42, compared to $1.74 in Q3 2023, reflecting a year-over-year increase of 212%[4] - Net income for Q3 2023 was $404 million, a decrease from $975 million in Q1 2023, while YTD net income for 3Q2023 reached $1,365 million[10] - Core income for Q3 2023 was $454 million, with a core income per share of $1.97, while YTD core income reached $1,439 million[10] - The company reported a diluted earnings per share of $1.74 for Q3 2023, compared to $4.13 in Q2 2023, with YTD diluted earnings per share of $5.83[10] - Net income for 3Q2024 is $1,365 million, up from $1,260 million in 3Q2023, reflecting an increase of approximately 8.3%[100] Assets and Equity - Total assets at the end of Q3 2024 were $134,588 million, an increase from $121,384 million at the end of Q3 2023, marking a growth of 10.8%[4] - The total equity at the end of Q3 2024 was $27,696 million, up from $19,978 million at the end of Q3 2023, representing a growth of 38.5%[4] - Book value per share at the end of Q3 2024 was $122.00, compared to $87.47 in Q3 2023, indicating a year-over-year increase of 39.4%[4] - The company's total shareholders' equity increased to $27,696 million, up from $24,921 million, reflecting a growth of 11.1%[71] - Common equity increased to $29,807 million from $28,050 million, reflecting a growth of approximately 6.3%[95] Revenue and Premiums - Total revenues for Q3 2024 are projected to be $11,849 million, compared to $10,700 million in Q3 2023, indicating a 10.7% growth[16] - Premiums for Q3 2024 are projected at $10,704 million, compared to $9,718 million in Q3 2023, marking a 10.2% rise[16] - Total revenues for Q3 2023 were $10,635 million, up from $10,098 million in Q2 2023, with YTD revenues of $30,437 million compared to $34,415 million in YTD 3Q2024[10] - Gross written premiums for Q3 2023 were $11,263 million, an increase of 8.8% compared to Q3 2022[19] - Net written premiums for YTD Q3 2024 reached $32,616 million, up 7.9% from $30,207 million in YTD Q3 2023[19] Investment Performance - The company reported net unrealized investment gains of $(9.30) million in Q3 2024, compared to $(28.31) million in Q3 2023, showing an improvement in investment performance[4] - Net investment income for Q3 2024 is expected to reach $742 million, up from $640 million in Q3 2023, a 15.9% increase[16] - Net investment income increased to $458 million in 3Q2023, up from $426 million in 2Q2023, contributing to a year-to-date total of $1,551 million[28] - The average yield pre-tax on investments improved to 3.7% for YTD 3Q2024, compared to 3.2% for the same period in 2023[79] - The company experienced a net realized investment loss of $25 million for YTD 3Q2024, contrasting with a net gain of $94 million in the same period last year[100] Underwriting Performance - The combined ratio improved to 93.2% in Q3 2024 from 101.0% in Q3 2023, reflecting better underwriting performance[13] - The loss and loss adjustment expense ratio decreased to 64.8% in Q3 2024 from 73.0% in Q3 2023, indicating improved claims management[13] - The combined ratio improved to 99.1% in 3Q2023, down from 100.1% in 2Q2023, indicating better underwriting performance[28] - The underwriting gain for 3Q2023 was $190 million, a decrease from $265 million in 3Q2022, with YTD 3Q2023 underwriting gain at $493 million compared to $341 million for YTD 3Q2024[39] - The combined ratio for 1Q2024 improved to 94.6%, down from 104.7% in 1Q2023, showing enhanced underwriting performance[60] Claims and Expenses - Claims and claim adjustment expenses for Q3 2023 were $7,149 million, a decrease from $7,227 million in Q2 2023, with YTD claims totaling $20,335 million[10] - The claims and claim adjustment expenses for Personal Insurance decreased from $9,516 million in YTD 3Q2023 to $9,183 million in YTD 3Q2024, a reduction of 3.5%[47] - The total incurred losses and loss expenses for Q3 2023 amounted to $7,091 million, with a year-to-date total of $20,176 million[90] - Business insurance incurred losses for Q3 2023 were $3,467 million, with a year-to-date total of $9,576 million[90] - The ending reserves for asbestos in Q3 2023 were $1,848 million, reflecting a gross increase from $1,620 million at the beginning of the period[92] Tax and Dividends - The effective tax rate on net investment income for Q3 2024 is projected at 17.9%, compared to 16.8% in Q3 2023[16] - The company declared dividends of $243 million in Q3 2024, slightly down from $232 million in Q3 2023[4] - The effective tax rate on net investment income for Q3 2023 was 16.8%, up from 16.5% in Q2 2023[10] - The company paid dividends totaling $238 million in Q3 2023, which is consistent with the previous quarter's payment of $232 million[102] Strategic Outlook - The company anticipates continued growth in premiums and revenues, projecting Q4 2023 revenues to exceed $11 billion[10] - The company expects continued market expansion and product development, aiming for improved underwriting performance in the upcoming quarters[36] - The company plans to expand its market presence through strategic acquisitions and new product developments in the upcoming quarters[104] - The company has a 20% quota-share reinsurance agreement with subsidiaries of Fidelis Insurance Holdings Limited, enhancing its international operations[108]

Core Insights - Travelers (TRV) is expected to report quarterly earnings of $3.76 per share, reflecting a year-over-year increase of 92.8% and revenues of $11.68 billion, which is a 9.1% increase compared to the previous year [1] - Analysts have revised the consensus EPS estimate upward by 0.2% over the last 30 days, indicating a collective reassessment of forecasts [1] - The relationship between earnings estimate revisions and short-term stock price performance is highlighted as a significant factor for investor behavior [1] Revenue Estimates - The consensus estimate for 'Total Revenues- Net investment income' is $882.72 million, representing a 14.8% increase from the prior-year quarter [2] - 'Total Revenues- Fee income' is projected to reach $113.55 million, indicating a 1.4% increase year-over-year [2] - 'Total Revenues- Premiums' is expected to be $10.58 billion, suggesting an 8.9% year-over-year change [2] Other Revenue Metrics - Analysts estimate 'Total Revenues- Other Revenues' at $99.60 million, which is a decrease of 1.4% from the previous year [3] - The 'Combined Ratio - Consolidated' is projected to be 97.6%, down from 101% in the same quarter last year [3] - The 'Loss and loss adjustment expense ratio - Consolidated' is expected to be 68.3%, compared to 73% a year ago [3] - The 'Underwriting Expense Ratio - Consolidated' is forecasted at 28.5%, slightly up from 28% in the previous year [3] Business Insurance Metrics - The 'Combined Ratio - Business Insurance' is expected to be 96.7%, down from 99.1% in the same quarter last year [4] - 'Combined Ratio - Bond & Specialty Insurance' is projected at 82.4%, an increase from 73.6% a year ago [4] - The 'Underwriting Expense Ratio - Personal Insurance' is estimated at 25.0%, compared to 24.3% in the previous year [4] - 'Underwriting Expense Ratio - Business Insurance' is forecasted to remain at 29.1%, unchanged from the year-ago value [4] Stock Performance - Shares of Travelers have decreased by 0.5% over the past month, contrasting with a 4.9% increase in the Zacks S&P 500 composite [4] - Travelers holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [5]

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores rate stocks based on value, growth, and momentum, providing a comprehensive approach to stock selection [2][3][4] - The Zacks Rank model, which focuses on earnings estimate revisions, has shown strong historical performance, with 1 (Strong Buy) stocks yielding an average annual return of +25.41% since 1988 [5] Group 2 - Travelers Companies Inc. (TRV) is a holding company engaged in property and casualty insurance, with a current Zacks Rank of 3 (Hold) and a VGM Score of B [8] - TRV has a Value Style Score of A, supported by a forward P/E ratio of 13.39, indicating attractive valuation metrics [8] - The Zacks Consensus Estimate for TRV's fiscal 2024 earnings has increased to $17.20 per share, with an average earnings surprise of 7.5% [8][9]

Core Insights - The Travelers Companies, Inc. (TRV) has seen a stock price increase of 38.5% over the past year, outperforming the industry growth of 35% and the S&P 500 composite return of 32.4% [1][2] - The company has a market capitalization of $51.5 billion and an average trading volume of 1.2 million shares over the last three months [1] Financial Performance - The expected long-term earnings growth rate for TRV is 11.1%, with the bottom line surpassing estimates in two of the last four quarters, averaging a surprise of 7.47% [2] - The Zacks Consensus Estimate for TRV's 2024 earnings per share indicates a year-over-year increase of 30.6%, with revenues expected to reach $46.12 billion, reflecting an 11.2% improvement [4] - For 2025, earnings per share and revenues are projected to increase by 17.5% and 7.9%, respectively, compared to 2024 estimates [4] Analyst Sentiment - Mixed analyst sentiment is observed, with two out of 14 analysts raising estimates for 2024 and three for 2025 in the past 60 days, while the consensus estimate for 2024 has decreased by 0.1% and for 2025 has increased by 0.3% [5] Return on Capital - TRV's return on equity (ROE) for the trailing 12 months is 15.9%, significantly higher than the industry average of 7.9%, indicating effective use of shareholders' funds [6] - The return on invested capital (ROIC) has improved to 8.4%, also above the industry average of 6% [7] Business Performance - The company is experiencing high retention rates, improved pricing, and increased new business, particularly in its profitable agency auto and homeowners segments [8] - Travelers expects after-tax net investment income from its non-fixed income portfolio to be $675 million in Q3 and $695 million in Q4 [8] Balance Sheet Strength - TRV maintains a conservative balance sheet with a focus on keeping the debt-to-capital ratio between 15% and 25%, and has increased its book value over the past decade [9] - The company had $5.54 billion remaining under repurchase authorization at the end of Q2 2024 [9] Dividend History - Travelers has consistently increased dividends for the last 20 years, with a current dividend yield of 1.8%, which is attractive compared to the industry average of 0.2% [10]

Group 1 - Zacks Premium offers various tools for investors, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens to enhance investment confidence [1] - The Zacks Style Scores rate stocks based on value, growth, and momentum, providing a comprehensive approach to selecting securities with high potential for market outperformance [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperforming the market, thus guiding investors in their stock selection process [2] Group 2 - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales, appealing to value investors [2] - The Growth Score assesses a company's financial health and future growth potential, targeting growth investors [3] - The Momentum Score helps traders capitalize on price trends, using metrics like weekly price changes to identify high-momentum stocks [3] Group 3 - The VGM Score combines the three Style Scores to identify stocks with attractive value, strong growth forecasts, and promising momentum, serving as a useful indicator alongside the Zacks Rank [4] - The Zacks Rank, based on earnings estimate revisions, has shown that 1 (Strong Buy) stocks have delivered an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [5] - To optimize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering the direction of earnings estimate revisions [6] Group 4 - Travelers Companies Inc. (TRV) is a holding company providing property and casualty insurance, currently holding a 3 (Hold) Zacks Rank with a VGM Score of B [8] - TRV has a Momentum Style Score of B, with shares increasing by 9.8% over the past four weeks, indicating positive momentum [8] - Recent analyst revisions have increased TRV's earnings estimate for fiscal 2024 by $0.16 to $17.19 per share, with an average earnings surprise of 7.5%, making it a stock of interest for investors [8][9]

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1] Zacks Style Scores - Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities likely to outperform the market in the next 30 days [2] - Each stock is rated from A to F, with A indicating the highest potential for outperformance [2] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [2] Growth Score - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow to identify those with sustainable growth potential [3] Momentum Score - The Momentum Score assesses stocks based on price trends and earnings estimate changes, helping investors capitalize on upward or downward price movements [3] VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive indicator for stock selection [4] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to rate stocks, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [5] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [6] Company Spotlight: Travelers (TRV) - Travelers Companies Inc. is a holding company providing property and casualty insurance and surety products, established in 1853 and based in New York [8] - TRV holds a Zacks Rank of 3 (Hold) with a VGM Score of B and a Value Style Score of A, supported by a forward P/E ratio of 13.45 [8] - Recent analyst revisions have increased TRV's earnings estimate for fiscal 2024 by $0.06 to $17.19 per share, with an average earnings surprise of 7.5% [8][9]