Travelers : Q4 2024 Quarterly Results Conference Call Presentation

Published: 2025-01-22 10:19:05 ET TRV

FOURTH QUARTER 2024 RESULTS

January 22, 2025

LONG-TERM FINANCIAL STRATEGY

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

CREATE SHAREHOLDER VALUE

Objective: Mid-Teens Core ROE Over Time

2

FOURTH QUARTER 2024 OVERVIEW

Travelers Reports Exceptional Fourth Quarter and Full Year Results

Fourth Quarter 2024 Net Income per Diluted Share of $8.96, up 28%, and Return on Equity of 30.0%

Fourth Quarter 2024 Core Income per Diluted Share of $9.15, up 31%, and Core Return on Equity of 27.7%

Full Year Net Income and Core Income of $5 Billion

Full Year Return on Equity of 19.2% and Core Return on Equity of 17.2%

3

CONSOLIDATED PERFORMANCE

($ in millions, except per share amounts, after-tax, except for premiums)

FOURTH QUARTER

2024

2023

Change

Core income

$

2,126

$

1,633

30

%

per diluted share

$

9.15

$

7.01

31

%

Included the following items:

Net favorable prior year reserve development

$

207

$

105

Catastrophes, net of reinsurance

(138)

(99)

Total items

$

69

$

6

Loss and loss adjustment expense ratio

55.0

%

58.4

%

Underwriting expense ratio

28.2

27.4

Combined ratio1

83.2 %

85.8 %

2.6

pts

Net favorable prior year reserve development

2.4

1.3

Catastrophes, net of reinsurance

(1.6)

(1.2)

Underlying combined ratio

84.0 %

85.9 %

1.9

pts

FULL YEAR

2024

2023

Change

$

5,025

$

3,072

64

%

$

21.58

$

13.13

64

%

$

559

$

113

(2,632)

(2,361)

$

(2,073)

$

(2,248)

64.0

%

68.9

%

28.5

28.1

92.5 %

97.0 %

4.5

pts

1.7

0.4

(8.0)

(7.9)

86.2 %

89.5 %

3.3

pts

Net written premiums

$ 10,742

$ 9,994

7 %

$ 43,356

$ 40,201

8 %

VERY STRONG FINANCIAL POSITION

($ and shares in millions, except per share amounts)

Debt

Common equity 1 Total capital 1

Debt-to-capital 1

Common shares outstanding

December 31,

2024

226.6

December 31,

2023

228.2

Capital

Book value per common share

Adjusted book value per common share 1

Tangible book value per common share 1,2

Statutory capital and surplus

Holding company liquidity

$

122.97

$

109.19

$

139.04

$

122.90

$

119.14

$

104.57

$

27,715

$

25,114

$

1,802

$

1,544

Leverage

Very high-quality investment portfolio

5

1

Excludes net unrealized investment gains (losses), net of tax, included in shareholders' equity.

2

Excludes the after-tax value of goodwill and other intangible assets.

NET INVESTMENT INCOME

($ in millions, after-tax)

TOTAL

$609 $738 $557 $594 $640 $645 $698 $727 $742 $785

20231 20241 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24

After-tax yield

2.7% 3.0% 2.5% 2.7% 2.8% 2.8% 2.9% 3.0% 3.0% 3.1%

Fourth Quarter 2024 vs. Prior Year Quarter Commentary

FIXED INCOME2

$566 $665 $524 $541 $582 $619 $630 $643 $680 $708

Long-term

Short-term

20231

20241 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24

After-tax yield

Total

2.7%

2.9%

2.5%

2.6%

2.7%

2.8%

2.8%

2.9%

3.0%

3.0%

Short-term

4.6%

4.8%

4.3%

4.7%

5.0%

4.8%

4.8%

5.0%

5.1%

4.3%

Long-term

2.6%

2.8%

2.5%

2.5%

2.6%

2.7%

2.7%

2.8%

2.9%

2.9%

NON-FIXED INCOME2

$82

$63

$67

$79

$94

$72

$83

$52

$43

$34

20231

20241

1Q'23

2Q'23

3Q'23

4Q'23

1Q'24

2Q'24

3Q'24

4Q'24

After-tax yield

3.3% 5.3% 2.8% 4.0% 4.3% 2.2% 5.1% 6.0% 4.6% 5.4%

6

1

2023 and 2024 data represent quarterly average.

2

Excludes investment expenses.

LEADING CORE RETURN ON EQUITY AT INDUSTRY-LOW VOLATILITY1

12.8%

11.3%

13.7%

11.3%

11.5%

17.2%

8.6%

8.8%

9.0%

8.2%

8.0%

1.1%

1.0%

0.7%

0.2%

6.9%

3.3%

7.1%

0.7%

0.7%

0.7%

1.2%

0.1%

4.9%

0.2%

4.2%

4.4%

4.2%

7.4%

3.5%

7.2%

6.6%

6.1%

5.7%

5.5%

2005 through 2019

2020

2021

2022

2023

2024

Full Year

Long-term fixed net investment portfolio investment income less holding company interest expense

Short-term fixed net investment portfolio investment income

Non-fixed net investment portfolio investment income

7

Underwriting gain and other

BUSINESS INSURANCE PERFORMANCE

($ in millions)

FOURTH QUARTER

2024

2023

Change

Segment income

$

1,188

$

957

24

%

Loss and loss adjustment expense ratio

56.4 %

57.7 %

Underwriting expense ratio

28.8

28.8

Combined ratio1

85.2 %

86.5 %

1.3

pts

Net favorable (unfavorable) prior year reserve development

2.7

1.1

Catastrophes, net of reinsurance

(1.7)

(0.8)

Underlying combined ratio

86.2 %

86.8 %

0.6

pts

Net written premiums

Domestic

Select Accounts

$

893

$

862

4

%

Middle Market

3,011

2,751

9

National Accounts

356

317

12

National Property and Other

684

682

-

Total Domestic

4,944

4,612

7

International

482

406

19

Total Business Insurance

$

5,426

$

5,018

8

%

FULL YEAR

2024

2023

Change

$ 3,306

$ 2,583

28

%

63.1

%

65.3 %

29.4

29.4

92.5 %

94.7 %

2.2

pts

0.4

(1.5)

(4.8)

(4.3)

88.1 %

88.9 %

0.8

pts

$

3,727

$

3,477

7

%

12,023

11,045

9

1,259

1,135

11

3,134

3,008

4

20,143

18,665

8

1,935

1,765

10

$

22,078

$

20,430

8

%

8

DOMESTIC BUSINESS INSURANCE (EX. NATIONAL ACCOUNTS)

ILLUSTRATIVE BUSINESS STATISTICS

Renewal Premium Change1 %

Renewal Rate Change2 %

Exposure/Other %

12%

10%

8%

7.2%

7.9%

7.2%

7.2%

6.9%

6.4%

6%

4%

4.7%

2%

-

($ in millions)

1Q'23

2Q'23

3Q'23

4Q'23

1Q'24

2Q'24

3Q'24

Retention

87%

87%

87%

87%

86%

85%

86%

Renewal premium change1

9.6%

12.4%

12.8%

11.2%

10.4%

10.0%

10.5%

New business

$649

$685

$693

$681

$695

$735

$682

6.9%

4Q'24

85%

9.6%

$641

DOMESTIC BUSINESS INSURANCE: SELECT ACCOUNTS

ILLUSTRATIVE BUSINESS STATISTICS

12%

10%

8%

6%

4%

4.0%

3.8%

5.3%

3.0%

2.9%

2%

1.9%

-

($ in millions)

1Q'23

2Q'23

3Q'23

4Q'23

1Q'24

2Q'24

Retention

85%

85%

85%

85%

84%

83%

Renewal premium change1

9.7%

10.0%

9.5%

11.1%

10.2%

12.0%

New business

$128

$136

$139

$148

$158

$147

Renewal Premium Change1 %

Renewal Rate Change2 %

Exposure/Other %

5.5% 5.6%

3Q'24

4Q'24

82%

80%

12.3%

12.0%

$131

$133

10

1

Represents the estimated change in average premium on policies that renew, including rate and exposure changes.

2

Represents the estimated change in average premium on policies that renew, excluding exposure changes.

Note: Statistics are in part dependent on the use of estimates and are therefore subject to change.

Disclaimer

The Travelers Companies Inc. published this content on January 22, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 22, 2025 at 15:18:10.626.