Financials
Insurance - Property & Casualty
$53.58B
33.3K
The Travelers Companies, Inc. is a holding company that provides a wide range of commercial and personal property and casualty insurance products and services. The company operates in the United States, Canada, the United Kingdom, the Republic of Ireland and other parts of the world. Travelers competes on the basis of price, service, product offerings, and agent and broker relationships.
Key insights and themes extracted from this filing
The company's net income increased by 67% to $5.00 billion in 2024, compared to $2.99 billion in 2023. This increase was primarily driven by higher underwriting margins, net investment income, and favorable prior year reserve development.
Catastrophe losses amounted to $3.34 billion in 2024, compared to $2.99 billion in 2023. While the company seeks to manage this exposure, these losses continue to materially affect financial results.
The combined ratio improved to 92.5% in 2024, compared to 97.0% in 2023. This improvement reflects better underwriting discipline and efficiency in acquiring and servicing business.
Earned premiums increased by 11% to $41.94 billion in 2024, compared to $37.76 billion in 2023. This growth suggests successful efforts to expand the company's insurance business.
The company completed the acquisition of Corvus Insurance Holdings, Inc. in January 2024 for approximately $427 million. This acquisition provides the company with opportunities to renew Corvus's book of business and leverage its capabilities to enhance Travelers' existing cyber portfolio.
The company returned $2.11 billion to shareholders in 2024, including $1.15 billion in share repurchases and $962 million in dividends. This indicates a commitment to shareholder value and efficient capital allocation.
The company's enterprise risk management (ERM) activities involve identification, assessment, and coordinated strategies to manage risks, requiring an entity-wide view and understanding of potential impacts on operations. ERM is an integral part of business operations, with engagement from all risk owners, corporate leaders, and the Board of Directors.
The company has a Chief Diversity & Inclusion Officer, a Diversity Council, and 10 Diversity Networks. The company has established deliberate recruiting, retention and development practices that are tailored to deepen talent pools and broaden advancement opportunities for all employees.
The Company's culture of honesty, integrity and accountability is critical to its long-term success. The Company promotes ethics and compliance awareness across its operations. On an annual basis, all employees of the Company's wholly owned subsidiaries are required to complete the Company's ethics training and certify that they have reviewed, understand and agree to comply with the Company's Code of Business Conduct and Ethics and other applicable Company policies.
High levels of catastrophe losses, including as a result of factors such as increased concentrations of insured exposures in catastrophe-prone areas and changing climate conditions, could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance.
The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.
Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth.
The property and casualty insurance industry is highly competitive, and we believe that it will remain highly competitive for the foreseeable future. We compete with both domestic and foreign insurers, including start-ups, which may offer products at prices and on terms that are not consistent with our economic standards in an effort to maintain or increase their business.
A downgrade in one or more of the Company's claims-paying ratings could negatively impact the Company's business volumes and competitive position because demand for certain of its products may be reduced, particularly because some customers require that the Company maintain minimum ratings to enter into, maintain or renew business with it.
Bond & Specialty Insurance underwrites and markets its products to all sizes of businesses and other organizations, as well as individuals. The Company believes that its reputation for timely and consistent decision making and financial stability, a nationwide network of local underwriting, claims and industry experts and strong producer and customer relationships, as well as its ability to offer its customers a full range of products and services, provides Bond & Specialty Insurance an advantage over many of its competitors and enables it to compete effectively in a complex, dynamic marketplace.
Claims Services uses technology, management information and data analysis to assist the Company in reviewing its claim practices and results in order to evaluate and improve its claims management performance. The Company's claims-management strategy is focused on segmentation of claims and appropriate technical specialization to drive effective claim resolution.
Claims Services' catastrophe response strategy is to respond to a significant catastrophic event using its own personnel, enabling it to minimize reliance on independent adjusters and appraisers. The Company has developed a large, dedicated Catastrophe Response Team and has also trained a large Enterprise Response Team of existing employees.
The Company regularly monitors its investment in claim resources to maintain an effective focus on claim outcomes and a disciplined approach to continual improvement. The Company operates a state-of-the-art claims-training facility which offers hands-on experiential learning to help ensure that its claim professionals are properly trained.
In recent years, the Company has invested significant additional resources in many of its claims handling operations, including digital, analytics, artificial intelligence and automation capabilities. The Company regularly monitors the effect of these investments to ensure a consistent optimization among outcomes, cost and service.
Business Insurance continues to make significant investments to enable real-time interface capabilities with its independent agencies and brokers.
Personal Insurance has developed a product management methodology that integrates the disciplines of underwriting, claims, actuarial and product development. This approach is designed to maintain high-quality underwriting discipline and pricing segmentation. Proprietary and third-party data accumulated over many years is analyzed, and Personal Insurance uses a variety of risk differentiation models to facilitate its pricing segmentation and underwriting.
Total capital returned to shareholders of $2.11 billion, comprising $1.15 billion of share repurchases and $962 million of dividends.
At December 31, 2024, the Company had $5.04 billion of capacity remaining under its share repurchase authorizations.
Total debt of $8.03 billion, resulting in a debt-to-total capital ratio of 22.4% (20.3% excluding net unrealized investment losses, net of tax, included in shareholders' equity).
The Company's culture of honesty, integrity and accountability is critical to its long-term success. To support this culture, the Company promotes ethics and compliance awareness across its operations. On an annual basis, all employees of the Company's wholly owned subsidiaries are required to complete the Company's ethics training and certify that they have reviewed, understand and agree to comply with the Company's Code of Business Conduct and Ethics and other applicable Company policies.
The Company provides employees with multiple channels to raise concerns, including the Human Resources, Employee Relations and Compliance functions, as well as the Travelers Ethics Helpline. The Company's independently administered Ethics Helpline is available to employees and others 24 hours a day, seven days a week to report issues or seek guidance confidentially and anonymously.
In addition to the day-to-day ERM activities within the Company's operations, key internal risk management functions include, among others, the Management and Operating Committees (comprised of the Company's Chief Executive Officer and the other most senior members of management); the Enterprise, Segment and Function (including Catastrophe, Cyber, etc.) Risk Committees of management; the Executive Crisis Management Team; the Sustainability Committee; and the Credit Committee.
The Company closely monitors the financial condition of reinsurers on a regular basis and reviews its reinsurance arrangements periodically. Reinsurers are selected based on their financial condition, business practices, the price of their product offerings and the value of collateral provided.
Similar to other industries, the insurance industry is undergoing rapid and significant technological and other change. Traditional insurance industry participants, technology companies, “InsurTech” companies, some of which are supported by traditional insurance industry participants, and others are focused on using technology and innovation to simplify and improve the customer experience, increase efficiencies, redesign products, alter business or distribution models and effect other potentially disruptive changes in the insurance industry.
The Company's ability or willingness to change prices, modify underwriting terms or shift exposure to, or from, certain geographies may be limited due to a number of factors, including public policy, the competitive environment, the evolving political and legislative environment and/or changes in the general economic climate.