Travelers' Q3 Triumph: Strong Premium Growth And Underwriting Gains Propel Massive Earnings Beat

The Travelers Companies TRV shares are trading higher premarket on Thursday after the company reported third-quarter revenue growth of 12% year-over-year to $11.904 billion, beating the consensus of $11.491 billion.

Core income per share jumped 169% to $5.24, beating the $3.64 consensus estimate.

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 third quarter, net written premiums increased by 8% to $11.3 billion. In Business Insurance, net written premiums rose 9% to $5.5 billion, with a 10.5% increase in renewal premiums and 86% retention.

Bond & Specialty Insurance premiums grew 7% to over $1.1 billion, featuring 90% retention in management liability and a 7% increase in surety premiums. Personal Insurance saw a 7% boost in net written premiums, driven by 6% growth in Auto and 9% in Homeowners and Other.

Net realized investment gains stood at $55 million pre-tax ($42 million after-tax) vs. net realized investment losses of $65 million pre-tax ($50 million after-tax) in the same quarter last year.

Quarterly net investment income increased 18% to $904 million pre-tax ($742 million after-tax). Income from the fixed-income investment portfolio rose Y/Y, led by a higher average yield and growth in fixed-maturity investments.

Dividend: The Board declared a quarterly dividend per share of $1.05, payable on December 31, 2024, to shareholders of record as of December 10, 2024.

Alan Schnitzer, chairman and chief executive officer, said, “These results, along with our strong balance sheet, enabled us to return $496 million of excess capital to our shareholders this quarter, including $253 million of share repurchases.”

“Driven by our formidable earnings power across underwriting and investments, we delivered 15.9% core return on equity over the last twelve months…With this momentum, we are very confident in our outlook for our business into 2025 and beyond.”

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 up 4.96% at $255.00 premarket at the last check premarket on Thursday.

Read Next:

• Wall Street Poised To Open Higher As TSMC Earnings Expected To Kick Off Rally In Tech Stocks: Strategist Says AI Trade Will Have Legs Even In Case Of Recession In 2025