Travelers Significantly Misses Q2 Core EPS, Reports $1.5B Catastrophe Losses

The Travelers Companies Inc TRV reported second-quarter (Q2) 2023 revenues of $10.1 billion, up 11% Y/Y, slightly beating the consensus of $10.02 billion.

Net written premium rose 14% Y/Y to $10.32 billion on growth across Business Insurance (+14% Y/Y) and Personal Insurance (+13% Y/Y) segments. In the Bond & Specialty Insurance segment, net written premiums were almost in-line Y/Y.

The New York-based company reported a net loss of $14 million compared to net income of $551 million. 

Core income declined to $15 million from $625 million a year ago due to higher catastrophe losses ($1.481 billion pre-tax). 

Core EPS of $0.06 missed the consensus of $2.08.

Combined ratio for the quarter was 100.1%, up from 93.2% in Q2 2022, while underlying combined was 89.4%, compared to 92.4% a year ago.

Buyback: The company repurchased 2.2 million shares for $400 million. As of June 30, Travelers had shares worth $6.205 billion remaining under its share repurchase authorizations. 

Dividend: Travelers Companies declared a dividend of $1.00 per share, payable on Sept. 29, 2023, to shareholders of record on Sept. 8, 2023. 

Travelers CEO Alan Schnitzer praised the company's "commercial businesses," the "underlying results" in its personal insurance business and the "steadily rising investment returns" in its fixed income portfolio.

"Across the organization, we are leveraging our scale, expertise and proven track record of execution to invest in exciting new capabilities to advance our ambitious innovation agenda," Schnitzer said.

Price Action: TRV shares are trading higher by 1.43% at $173.00 premarket on the last check Thursday.

Image: Travelers Companies