We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Travelers' (TRV) Q3 Earnings and Revenues Beat Estimates
Read MoreHide Full Article
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2022 core income of $2.20 per share, which beat the Zacks Consensus Estimate by 24.3%. The bottom line however decreased 15.4% year over year.
The quarter witnessed higher net written premiums, improved combined ratio and higher underwriting gain.
The Travelers Companies, Inc. Price, Consensus and EPS Surprise
Travelers’ total revenues increased 6.8% from the year-ago quarter to $9.4 billion, primarily due to higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion, driven by increased new business, strong retention rates and positive renewal premium changes across all the segments.
Net investment income decreased 23% year over year to $593 million pre-tax, primarily due to a decrease in income from the non-fixed income investment portfolio.
Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 basis points (bps) year over year to 98.2 due to net favorable prior-year reserve development and lesser impact from catastrophe losses. It was partially offset by a higher underlying combined ratio.
Total claims and expenses increased 9.4% year over year to $8.8 billion, primarily due to higher claims and claim adjustment expenses, amortization of deferred acquisition costs, general and administrative expenses and interest expense.
At the end of the third quarter, statutory capital and surplus were $23.4 billion. The debt-to-capital ratio (excluding after-tax net unrealized investment gains included in shareholders’ equity) was 21.8% and within the insurer’s target range of 15% to 25%.
Adjusted book value per share (excluding net unrealized investment gains/losses) was $111.90, up 7% year over year.
Core return on equity was 7.9%, down 220 bps year over year.
Segment Update
Business Insurance: Net written premiums increased 9% year over year to about $4.4 billion. The upside was due to strong renewal premium change, strong retention and higher levels of new business.
The combined ratio improved 120 bps year over year to 96.3 due to lower net unfavorable prior year reserve development and a lower underlying combined ratio. It was partially offset by higher catastrophe losses.
Segment income decreased 15.6% year over year to $471 million. The downside was due to lower net investment income and higher catastrophe losses. It was partially offset by lower net unfavorable prior year reserve development and a higher underlying underwriting gain.
Bond & Specialty Insurance: Net written premiums rose 8% year over year to $964 million, primarily driven by strong production in surety and strong renewal premium change, retention and new business in management liability.
The combined ratio improved 860 bps year over year to 72.5 due to a lower underlying combined ratio and higher net favorable prior-year reserve development. It was partially offset by higher catastrophe losses.
Segment income improved 39.1% year over year to $242 million, primarily due to higher underlying underwriting gain and higher net favorable prior-year reserve development.
Personal Insurance: Net written premiums of $3.9 billion increased 13% year over year due to higher pricing in both Domestic Automobile and Domestic Homeowners and Other.
The combined ratio deteriorated 260 bps year over year to 107.2 due to a higher underlying combined ratio and lower net favorable prior-year reserve development. It was partially offset by lower catastrophe losses.
Segment loss was $111 million after-tax wider than the segment loss of $2 million after-tax in the prior-year quarter. The loss increased primarily due to lower underlying underwriting results and lower net investment income. It was partially offset by lower catastrophe losses.
Dividend and Share Repurchase Update
This property & casualty insurer returned $722 million in the reported quarter. It bought back shares worth $501 million. It had about $2.5 billion of capacity remaining under its share repurchase authorization as of Sep 30, 2022.
Travelers’ board also declared a regular quarterly dividend of 93 cents per share. The dividend will be paid out on Dec 30 to shareholders of record at the close of business as of Dec 9, 2022.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2022 earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line however improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. Net premiums earned grew 9% to $12.4 billion but missed our estimate of $13 billion.
Upcoming Releases
RLI Corporation (RLI - Free Report) will report third-quarter 2022 earnings on Oct 19. The Zacks Consensus Estimate for the third quarter is pegged at 90 cents, suggesting an increase of 38.5% from the year-ago quarter’s reported figure.
RLI’s bottom line beat estimates in the last four quarters.
Chubb Limited (CB - Free Report) is set to report third-quarter 2022 earnings on Oct 25. The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.40, indicating an increase of 28.8% from the year-ago quarter’s reported figure.
Chubb delivered an earnings surprise in each of the last four reported quarters.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Travelers' (TRV) Q3 Earnings and Revenues Beat Estimates
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2022 core income of $2.20 per share, which beat the Zacks Consensus Estimate by 24.3%. The bottom line however decreased 15.4% year over year.
The quarter witnessed higher net written premiums, improved combined ratio and higher underwriting gain.
The Travelers Companies, Inc. Price, Consensus and EPS Surprise
The Travelers Companies, Inc. price-consensus-eps-surprise-chart | The Travelers Companies, Inc. Quote
Behind Q3 Headlines
Travelers’ total revenues increased 6.8% from the year-ago quarter to $9.4 billion, primarily due to higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 2.5%.
Net written premiums increased 110% year over year to $9.2 billion, driven by increased new business, strong retention rates and positive renewal premium changes across all the segments.
Net investment income decreased 23% year over year to $593 million pre-tax, primarily due to a decrease in income from the non-fixed income investment portfolio.
Underwriting gain of $115 million increased 53.3% year over year in the reported quarter. The combined ratio improved 40 basis points (bps) year over year to 98.2 due to net favorable prior-year reserve development and lesser impact from catastrophe losses. It was partially offset by a higher underlying combined ratio.
Total claims and expenses increased 9.4% year over year to $8.8 billion, primarily due to higher claims and claim adjustment expenses, amortization of deferred acquisition costs, general and administrative expenses and interest expense.
At the end of the third quarter, statutory capital and surplus were $23.4 billion. The debt-to-capital ratio (excluding after-tax net unrealized investment gains included in shareholders’ equity) was 21.8% and within the insurer’s target range of 15% to 25%.
Adjusted book value per share (excluding net unrealized investment gains/losses) was $111.90, up 7% year over year.
Core return on equity was 7.9%, down 220 bps year over year.
Segment Update
Business Insurance: Net written premiums increased 9% year over year to about $4.4 billion. The upside was due to strong renewal premium change, strong retention and higher levels of new business.
The combined ratio improved 120 bps year over year to 96.3 due to lower net unfavorable prior year reserve development and a lower underlying combined ratio. It was partially offset by higher catastrophe losses.
Segment income decreased 15.6% year over year to $471 million. The downside was due to lower net investment income and higher catastrophe losses. It was partially offset by lower net unfavorable prior year reserve development and a higher underlying underwriting gain.
Bond & Specialty Insurance: Net written premiums rose 8% year over year to $964 million, primarily driven by strong production in surety and strong renewal premium change, retention and new business in management liability.
The combined ratio improved 860 bps year over year to 72.5 due to a lower underlying combined ratio and higher net favorable prior-year reserve development. It was partially offset by higher catastrophe losses.
Segment income improved 39.1% year over year to $242 million, primarily due to higher underlying underwriting gain and higher net favorable prior-year reserve development.
Personal Insurance: Net written premiums of $3.9 billion increased 13% year over year due to higher pricing in both Domestic Automobile and Domestic Homeowners and Other.
The combined ratio deteriorated 260 bps year over year to 107.2 due to a higher underlying combined ratio and lower net favorable prior-year reserve development. It was partially offset by lower catastrophe losses.
Segment loss was $111 million after-tax wider than the segment loss of $2 million after-tax in the prior-year quarter. The loss increased primarily due to lower underlying underwriting results and lower net investment income. It was partially offset by lower catastrophe losses.
Dividend and Share Repurchase Update
This property & casualty insurer returned $722 million in the reported quarter. It bought back shares worth $501 million. It had about $2.5 billion of capacity remaining under its share repurchase authorization as of Sep 30, 2022.
Travelers’ board also declared a regular quarterly dividend of 93 cents per share. The dividend will be paid out on Dec 30 to shareholders of record at the close of business as of Dec 9, 2022.
Zacks Rank
Travelers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Another Insurer
The Progressive Corporation’s (PGR - Free Report) third-quarter 2022 earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line however improved more than threefold from 14 cents earned in the year-ago quarter.
Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. Net premiums earned grew 9% to $12.4 billion but missed our estimate of $13 billion.
Upcoming Releases
RLI Corporation (RLI - Free Report) will report third-quarter 2022 earnings on Oct 19. The Zacks Consensus Estimate for the third quarter is pegged at 90 cents, suggesting an increase of 38.5% from the year-ago quarter’s reported figure.
RLI’s bottom line beat estimates in the last four quarters.
Chubb Limited (CB - Free Report) is set to report third-quarter 2022 earnings on Oct 25. The Zacks Consensus Estimate for third-quarter earnings is pegged at $3.40, indicating an increase of 28.8% from the year-ago quarter’s reported figure.
Chubb delivered an earnings surprise in each of the last four reported quarters.