Travelers' Q2 Earnings Beat Expectations With Strong Core Income

The Travelers Companies TRV shares are trading higher on Friday after the company reported Q2 revenue growth of 12% Y/Y to $11.283 billion, missing the consensus of $11.341 billion.

Core income per share reached $2.51, up from 6 cents a year ago, beating the $1.98 consensus forecast.

Core income increased mainly due to improved underwriting gains, better reserve development, and higher net investment income, partially offset by higher catastrophe losses.

For the second quarter, net written premiums increased by 8% Y/Y to $11.12 billion.

In Business Insurance, net written premiums rose 7% to $5.5 billion, with a 10.1% increase in renewal premiums, 85% retention, and record new business of $732 million.

Bond & Specialty Insurance premiums grew 8% to over $1 billion, featuring 90% retention in management liability and an 11% increase in surety premiums.

Personal Insurance saw a 9% boost in net written premiums, driven by 10% growth in Auto and 8% in Home.

Net realized investment losses stood at $65 million pre-tax ($51 million after-tax), up from $35 million pre-tax ($29 million after-tax) in the same quarter last year.

Catastrophe losses were mainly due to severe wind and hail storms across several states.

Underlying combined ratio improved 3.4 points Y/Y to 87.7% in the quarter. The lower the ratio, the more profitable the insurance company, and vice versa.

The quarterly net investment income increased 24% Y/Y to $885 million pre-tax ($727 million after-tax). Income from the fixed-income portfolio rose from the previous year due to higher average yields and increased fixed-maturity investments.

Dividend: The Board declared a quarterly dividend per share of $1.05, payable on Sept. 30, 2024, to shareholders of record as of Sept. 10, 2024.

Alan Schnitzer, chairman and chief executive officer said, “Our results for the first half of the year include strong premium growth, excellent underlying underwriting profitability, record operating cash flow and steadily rising investment returns in our growing fixed income portfolio.”

Travelers Companies stock gained around 29% in the last 12 months. Investors can gain exposure to the stock via Invesco KBW Property & Casualty Insurance ETF KBWP and IShares U.S. Insurance ETF IAK.

Price Action: TRV shares are down 3.10% at $213.66 during early morning trading Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock