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Travelers Q3 Earnings Surpass Estimates on Solid Underwriting
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Key Takeaways
Core income of $8.14 per share beat estimates by 35.4%, surging 55% YoY.
Net written premiums grew 1% YoY, led by strength in Business Insurance and Bond & Specialty Insurance.
Net investment income grew 14% YoY, benefiting from higher yields and larger invested assets.
The Travelers Companies (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year.
The bottom line increased year over year primarily due to lower catastrophe losses, a higher underlying underwriting gain, and higher net investment income, partially offset by lower net favorable prior year reserve development.
The Travelers Companies, Inc. Price, Consensus and EPS Surprise
Travelers’ total revenues increased 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income, and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion, driven by strong growth across Bond & Specialty Insurance and Business Insurance segments. The figure was higher than our estimate of $11 billion.
Pre-tax net investment income increased 14% year over year to $1.03 billion, primarily due to growth in average invested assets and a higher average yield in the long-term fixed income investment portfolio. The figure matched our estimate. The Zacks Consensus Estimate was pegged at $981 million.
Catastrophe loss was $402 million, pre-tax, narrower than a loss of $939 million, pre-tax, incurred in the year-ago quarter.
The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 basis points (bps) year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
Core return on equity expanded 600 basis points to 22.6%. Adjusted book value per share (excludes net unrealized investment gains/losses) of $150.55 increased 15% year over year. At quarter-end, statutory capital and surplus were $29.965 billion and the debt-to-capital ratio was 22.7%.
Segment Update
Business Insurance: Net written premiums increased 3% year over year to about $5.67 billion, reflecting strong growth of 7% in core Middle Market business. This was partially offset by a 6% decline in net written premiums in National Property and Other, reflecting disciplined underwriting. Business Insurance net written premiums were higher than our estimate $5.48 billion.
The combined ratio improved 290 bps year over year to 92.9 on lower catastrophe losses, partially offset by higher net unfavorable prior year reserve development and a higher underlying combined ratio. Our estimate was 97.5. The Zacks Consensus Estimate was pegged at 97.
Segment income of $907 million increased 30% year over year on lower catastrophe losses and higher net investment income, partially offset by higher net unfavorable prior year reserve development. The figure was higher than our estimate of $610.2 million.
Bond & Specialty Insurance: Net written premiums increased 1% year over year to $1 billion. The metric matched our estimate.
The combined ratio improved 90 bps year over year to 81.6 due to higher net favorable prior year reserve development and lower catastrophe losses, partially offset by a higher underlying combined ratio. Our estimate was 80.2. The Zacks Consensus Estimate was pegged at 84.
Segment income of $250 million increased 12.6% year over year due to higher net investment income, a higher underlying underwriting gain, higher net favorable prior year reserve development and lower catastrophe losses. The underlying underwriting gain benefited from higher business volumes. The figure was lower than our estimate of $281.4 million.
Personal Insurance: Net written premiums of $4.71 billion were comparable year over year, reflecting a strong renewal premium change in Domestic Homeowners and Other. Our estimate was $4.5 billion.
The combined ratio improved 1,120 bps year over year to 81.3, driven by lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development. Our estimate was 103.7. The Zacks Consensus Estimate was pegged at 94.
Segment income doubled year over year to $807 million after-tax, attributable to lower catastrophe losses, a higher underlying underwriting gain and higher net investment income. It was partially offset by lower net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes. Our estimate was $283.5 million.
Dividend and Share Repurchase Update
This property and casualty insurer returned $878 million to shareholders in the third quarter of 2025. It bought back 2.3 million shares for $628 million in the third quarter. At the end of Sept. 30, 2025, TRV had $3.66 billion remaining under its authorization.
The board also announced a quarterly dividend of $1.10 per share. The dividend will be paid out on Dec. 31, 2025, to shareholders of record at the close of business on Dec. 10, 2025.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2025 earnings per share of $4.05 missed the Zacks Consensus Estimate by 20.3%. Operating revenues of $22.2 billion missed the Zacks Consensus Estimate by 0.6%. However, the bottom line increased 13.1% year over year while the top line increased 12.7%.
Net premiums written were $21.3 billion in the quarter, up 10% from $19.5 billion a year ago. Net premiums earned grew 14% to $20.8 billion. The reported figure missed the Zacks Consensus Estimate of $21.1 billion.
Upcoming Releases
RLI Corporation (RLI - Free Report) is set to report third-quarter 2025 results on Oct. 20, after market close. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at 62 cents, suggesting a decrease of 4.6% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in three of the last four quarters, while missing in one.
Chubb Limited (CB - Free Report) is slated to report third-quarter 2025 results on Oct. 21, after market close. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $5.94 per share, indicating an increase of 3.9% from the year-ago quarter’s reported figure.
CB’s earnings beat estimates in each of the last four quarters.
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Travelers Q3 Earnings Surpass Estimates on Solid Underwriting
Key Takeaways
The Travelers Companies (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year.
The bottom line increased year over year primarily due to lower catastrophe losses, a higher underlying underwriting gain, and higher net investment income, partially offset by lower net favorable prior year reserve development.
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 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income, and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion, driven by strong growth across Bond & Specialty Insurance and Business Insurance segments. The figure was higher than our estimate of $11 billion.
Pre-tax net investment income increased 14% year over year to $1.03 billion, primarily due to growth in average invested assets and a higher average yield in the long-term fixed income investment portfolio. The figure matched our estimate. The Zacks Consensus Estimate was pegged at $981 million.
Catastrophe loss was $402 million, pre-tax, narrower than a loss of $939 million, pre-tax, incurred in the year-ago quarter.
The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 basis points (bps) year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
Core return on equity expanded 600 basis points to 22.6%. Adjusted book value per share (excludes net unrealized investment gains/losses) of $150.55 increased 15% year over year. At quarter-end, statutory capital and surplus were $29.965 billion and the debt-to-capital ratio was 22.7%.
Segment Update
Business Insurance: Net written premiums increased 3% year over year to about $5.67 billion, reflecting strong growth of 7% in core Middle Market business. This was partially offset by a 6% decline in net written premiums in National Property and Other, reflecting disciplined underwriting. Business Insurance net written premiums were higher than our estimate $5.48 billion.
The combined ratio improved 290 bps year over year to 92.9 on lower catastrophe losses, partially offset by higher net unfavorable prior year reserve development and a higher underlying combined ratio. Our estimate was 97.5. The Zacks Consensus Estimate was pegged at 97.
Segment income of $907 million increased 30% year over year on lower catastrophe losses and higher net investment income, partially offset by higher net unfavorable prior year reserve development. The figure was higher than our estimate of $610.2 million.
Bond & Specialty Insurance: Net written premiums increased 1% year over year to $1 billion. The metric matched our estimate.
The combined ratio improved 90 bps year over year to 81.6 due to higher net favorable prior year reserve development and lower catastrophe losses, partially offset by a higher underlying combined ratio. Our estimate was 80.2. The Zacks Consensus Estimate was pegged at 84.
Segment income of $250 million increased 12.6% year over year due to higher net investment income, a higher underlying underwriting gain, higher net favorable prior year reserve development and lower catastrophe losses. The underlying underwriting gain benefited from higher business volumes. The figure was lower than our estimate of $281.4 million.
Personal Insurance: Net written premiums of $4.71 billion were comparable year over year, reflecting a strong renewal premium change in Domestic Homeowners and Other. Our estimate was $4.5 billion.
The combined ratio improved 1,120 bps year over year to 81.3, driven by lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development. Our estimate was 103.7. The Zacks Consensus Estimate was pegged at 94.
Segment income doubled year over year to $807 million after-tax, attributable to lower catastrophe losses, a higher underlying underwriting gain and higher net investment income. It was partially offset by lower net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes. Our estimate was $283.5 million.
Dividend and Share Repurchase Update
This property and casualty insurer returned $878 million to shareholders in the third quarter of 2025. It bought back 2.3 million shares for $628 million in the third quarter. At the end of Sept. 30, 2025, TRV had $3.66 billion remaining under its authorization.
The board also announced a quarterly dividend of $1.10 per share. The dividend will be paid out on Dec. 31, 2025, to shareholders of record at the close of business on Dec. 10, 2025.
Zacks Rank
Travelers currently carries a Zacks Rank #2 (Buy). 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 2025 earnings per share of $4.05 missed the Zacks Consensus Estimate by 20.3%. Operating revenues of $22.2 billion missed the Zacks Consensus Estimate by 0.6%. However, the bottom line increased 13.1% year over year while the top line increased 12.7%.
Net premiums written were $21.3 billion in the quarter, up 10% from $19.5 billion a year ago. Net premiums earned grew 14% to $20.8 billion. The reported figure missed the Zacks Consensus Estimate of $21.1 billion.
Upcoming Releases
RLI Corporation (RLI - Free Report) is set to report third-quarter 2025 results on Oct. 20, after market close. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at 62 cents, suggesting a decrease of 4.6% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in three of the last four quarters, while missing in one.
Chubb Limited (CB - Free Report) is slated to report third-quarter 2025 results on Oct. 21, after market close. The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $5.94 per share, indicating an increase of 3.9% from the year-ago quarter’s reported figure.
CB’s earnings beat estimates in each of the last four quarters.