The Travelers Companies, Inc. has reported a net income of $534 million for Q2 of 2024 despite an underwriting loss of $65 million driven by substantial cat losses of $1.5 billion, which were offset by net favourable prior year reserve development of $230 million and an investment income increase of 24%.
Travelers’ net income of $534 million for Q2 2024 compares to a net loss of $14 million in the prior year’s quarter, while the firm’s core income of $585 million in Q2 2024 compares to $15 million in Q2 2023.
The firm observed that core income increased primarily due to a higher underlying underwriting gain (excluding net prior year reserve development and catastrophe losses), higher net favourable prior year reserve development, and higher net investment income.
At the same time, Travelers’ consolidated combined ratio improved 6.3 points from Q2 2023 to 100.2%, while its underlying combined ratio improved 3.4 points to 87.7%.
“The underlying combined ratio in our Business Insurance segment was an excellent 89.2%; the underlying combined ratio in our Bond & Specialty Insurance business improved 1.7 points to a very strong 86.1%; and the underlying combined ratio in Personal Insurance improved by nearly eight points to a terrific 86.3%,” explained Alan Schnitzer, the firm’s Chairman and Chief Executive Officer.
Travelers’ investment portfolio also continued to perform well in Q2 2024, generating after-tax net investment income of $727 million, reportedly driven by strong and reliable returns from its growing fixed income portfolio and higher returns from its non-fixed income portfolio.
Meanwhile, the firm additionally grew its net written premiums in Q2 by 8% to $11.1 billion, citing “terrific marketplace execution” across all three of its business segments as the cause.
Schnitzer concluded, “We continue to be very confident in the outlook for our business. 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.
“With a strong and diversified business and balance sheet, we delivered 13.6% core return on equity over the last twelve months, despite elevated industrywide catastrophe losses. We also continue to grow adjusted book value per share, while making important investments in our business and returning substantial excess capital to shareholders.
“With this momentum and plenty of opportunity ahead of us, we remain well-positioned for success this year and beyond.”
