sefa ozel Travelers stock: 2023 headwinds are over The Travelers Companies (NYSE:TRV) has a pretty difficult 2023. As seen, both Q2 and Q3 2023 results missed consensus estimates by a large margin. This is largely due to the fact that weather-related natural disasters were well above historical averages. This has resulted in higher combined ratios for TRV (and many other insurance companies in the sector too). However, given its immense size and scale (BTW, it is the only insurance stock in the Dow-30 index ...

Core Viewpoint - Travelers Companies, Inc. (TRV) demonstrates a strong portfolio, high retention rates, positive premium changes, solid returns from non-fixed income investments, and sufficient liquidity, making it a stock worth retaining in investment portfolios [1] Financial Projections - The Zacks Consensus Estimate for Travelers' 2024 earnings per share indicates a year-over-year increase of 35.6% from the 2023 estimate, with revenues projected at $46.33 billion, reflecting an 11.7% improvement [2] - For 2025, the earnings per share estimate suggests a 14.4% year-over-year increase, with revenues expected to reach $50 billion, indicating a 7.9% growth from 2024 [2] Estimate Revisions - The Zacks Consensus Estimate for 2024 and 2025 earnings has increased by 0.5% and 0.7%, respectively, over the past 30 days, which may boost investor confidence [3] Stock Performance - TRV currently holds a Zacks Rank 3 (Hold) and has gained 20% over the past year, compared to the industry growth of 25.3% [4] Style Score - Travelers has a VGM Score of A, indicating attractive value, strong growth, and promising momentum [6] Return on Capital - The return on equity for Travelers is 13.9%, significantly higher than the industry average of 7.3%, showcasing efficient use of shareholders' funds [7] - The return on invested capital stands at 7.6%, outperforming the industry average of 5.5%, reflecting effective fund utilization to generate income [7] Business Drivers - Premiums, a key revenue component, are expected to benefit from strong retention rates, positive renewal premium changes, and increased new business premiums in Domestic Automobile and Domestic Homeowners [8] - The company is optimistic about its personal lines business due to growth in agency auto and homeowners segments, higher invested assets, and improved results from its fixed-income portfolio [9] Financial Strategy - Travelers maintains a long-term financial strategy focused on generating capital beyond growth needs, balancing capital rightsizing, and increasing book value per share over time [9] - The company has consistently achieved free cash flow conversion above 100%, indicating solid earnings [10] Dividend and Share Repurchase - TRV announced a 5% increase in its quarterly cash dividend in Q1 2024, marking the 20th consecutive year of dividend increases with a compound annual growth rate of 8%, and its current dividend yield is 1.8%, surpassing the industry average of 0.3% [10] - The company has $5.79 billion remaining under its share repurchase authorizations [10] Comparable Stocks - Other well-ranked stocks in the property and casualty insurance sector include Arch Capital Group Ltd. (ACGL), Palomar Holdings, Inc. (PLMR), and NMI Holdings Inc (NMIH), with ACGL and PLMR holding a Zacks Rank 1 (Strong Buy) and NMIH at Zacks Rank 2 (Buy) [11]

Core Viewpoint - Travelers (TRV) has been experiencing a decline in stock performance, with a return of -3.1% over the past month, compared to the S&P 500's -0.2% and the Zacks Insurance - Property and Casualty industry's -2.6% [1] Earnings Estimates Revisions - The current quarter's earnings estimate for Travelers is $3.23 per share, reflecting a significant increase of +5,283.3% year-over-year, with a 30-day change of +5.6% [3] - The consensus earnings estimate for the current fiscal year is $17.81, indicating a year-over-year change of +35.6%, with a 30-day change of +0.7% [3] - For the next fiscal year, the consensus estimate is $20.37, showing a change of +14.4% from the previous year, with a 30-day change of +0.8% [3] Revenue Growth Potential - The consensus sales estimate for the current quarter is $11.45 billion, indicating a year-over-year growth of +13% [6] - The sales estimates for the current and next fiscal years are $46.33 billion and $50 billion, reflecting changes of +11.7% and +7.9%, respectively [6] Recent Performance and Surprise History - In the last reported quarter, Travelers generated revenues of $11.19 billion, a year-over-year increase of +15.4%, with an EPS of $4.69 compared to $4.11 a year ago [7] - The reported revenues matched the Zacks Consensus Estimate, resulting in a surprise of +0.05%, while the EPS surprise was -1.26% [7] - Over the last four quarters, Travelers surpassed EPS estimates only once but exceeded revenue estimates each time [7] Valuation Metrics - Travelers is graded A in the Zacks Value Style Score, indicating it is trading at a discount compared to its peers [10] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is fairly valued [8][9] Conclusion - The Zacks Rank 3 suggests that Travelers may perform in line with the broader market in the near term, despite the market buzz surrounding the stock [11]

The Travelers Companies (TRV) reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss.  Shares lost 2.9% in the pre-market trading session to reflect the underperformance.The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses.Behind Q1 HeadlinesTravelers’ total revenues increased 15.3% from the y ...

Financial Data and Key Metrics Changes - Core income for Q1 2024 was $1.1 billion or $4.69 per diluted share, with a core return on equity of 15.4%, reflecting a 13% increase year-over-year [19] - Net earned premiums reached a record $10.1 billion, up 14% compared to the prior year, with a combined ratio of 93.9%, improving by 1.5 points [6][19] - Adjusted book value per share increased by 2% from year-end to $125.53, and up 8% from a year ago [24] Business Line Data and Key Metrics Changes - Business Insurance segment income was $764 million, with net written premiums increasing by 9% to $5.6 billion, and a combined ratio of 89.2% [26] - Bond & Specialty Insurance segment income was $195 million, with net written premiums growing by 6% and a combined ratio of 84.5% [30] - Personal Insurance generated segment income of $220 million, with net written premiums growing by 9% and a combined ratio of 96.9% [33] Market Data and Key Metrics Changes - Renewal premium change in Business Insurance was historically high at 10.6%, with retention remaining strong at 86% [26] - In Bond & Specialty Insurance, retention was 90%, with new business growing by 34% [30] - Personal Insurance saw renewal premium change of 16.6% in auto and 13.4% in home, reflecting strong pricing [10][36] Company Strategy and Development Direction - The company continues to invest in strategic initiatives, focusing on innovation and enhancing relationships with distribution partners [12][17] - The emphasis is on digitizing the value chain to improve efficiency and customer experience [14][15] - The company aims to maintain its competitive advantage by offering a wide range of tailored products and services [13][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, citing strong profitability and production across all segments [18] - The competitive environment remains disciplined, with management noting external factors such as inflation and geopolitical risks impacting the market [47] - The company is well-positioned for continued success, supported by strong relationships with distribution partners [11][17] Other Important Information - The board declared a 5% increase in the quarterly cash dividend to $1.05 per share, marking 20 consecutive years of dividend increases [8] - The company returned $620 million of excess capital to shareholders through dividends and share repurchases [7][24] Q&A Session Summary Question: Details on recent accident year reserve increases in Business Insurance - Management clarified that the adjustments were small and related to recent accident years, reflecting ongoing trends rather than significant new developments [42][43] Question: Impact of mild winter on auto business sustainability - Management indicated that the mild winter contributed less than a point to the underlying combined ratio improvement [45] Question: Competitive environment in Business Insurance segment - Management noted that the competitive landscape remains stable, with pricing reflecting the overall risk and uncertainty in the market [47][60] Question: ROE targets for 2024 - Management did not disclose specific targets but emphasized considerations around interest rates and overall business outlook [48][49] Question: Trends in homeowners' insurance regarding higher loss costs - Management discussed various non-rate actions being implemented to manage exposure and improve profitability [81] Question: Florida homeowners market and recent reforms - Management acknowledged improvements in Florida but maintained concerns over the high catastrophe exposure in the region [85]

FIRST QUARTER 2 0 24 RESULTS April 17, 2024 LONG -TERM FINANCIAL STRATEGY Generation of Balanced Meaningful top–tier earnings approach to and sustainable and capital rightsizing capital competitive substantially and growing book advantages in excess of value per share ...

Core Insights - Travelers reported $11.19 billion in revenue for Q1 2024, a year-over-year increase of 15.4% [1] - EPS for the same period was $4.69, compared to $4.11 a year ago, reflecting a positive trend [1] - Revenue exceeded the Zacks Consensus Estimate by 0.05%, while EPS fell short by 1.26% [1] Financial Metrics - Combined Ratio - Consolidated: 93.9%, matching the nine-analyst average estimate [3] - Loss and Loss Adjustment Expense Ratio - Consolidated: 65.2%, slightly better than the average estimate of 65.3% [3] - Underwriting Expense Ratio - Consolidated: 28.7%, close to the estimated 28.6% [3] - Combined Ratio - Bond & Specialty Insurance: 84.5%, worse than the average estimate of 81.3% [3] - Total Revenues - Other Revenues: $112 million, exceeding the estimate of $84.87 million, a year-over-year increase of 49.3% [3] - Total Revenues - Net Investment Income: $846 million, surpassing the estimate of $807.55 million, a year-over-year increase of 27.6% [3] - Total Revenues - Premiums: $10.13 billion, slightly below the estimate of $10.18 billion, with a year-over-year increase of 14.4% [3] - Total Revenues - Fee Income: $109 million, slightly below the estimate of $110.87 million, a year-over-year increase of 2.8% [3] - Revenues - Premiums - Bond & Specialty Insurance: $956 million, below the estimate of $966.97 million, a year-over-year increase of 9.3% [3] - Revenues - Premiums - Personal Insurance: $4.01 billion, slightly below the estimate of $4.02 billion, a year-over-year increase of 14.5% [3] - Revenues - Premiums - Business Insurance: $5.16 billion, matching the estimate, with a year-over-year increase of 15.3% [3] - Revenues - Fee Income - Business Insurance: $101 million, below the estimate of $103.80 million, a year-over-year increase of 2% [3] Stock Performance - Shares of Travelers have returned -0.2% over the past month, compared to the Zacks S&P 500 composite's -1.1% change [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [2]

分组1 - Travelers reported quarterly earnings of $4.69 per share, missing the Zacks Consensus Estimate of $4.75 per share, but showing an increase from $4.11 per share a year ago, representing an earnings surprise of -1.26% [1] - The company posted revenues of $11.19 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.05%, and up from $9.7 billion year-over-year [1] - Over the last four quarters, Travelers has exceeded consensus revenue estimates four times, while surpassing EPS estimates only once [1] 分组2 - The stock has gained approximately 17.1% since the beginning of the year, outperforming the S&P 500's gain of 5.9% [2] - The current consensus EPS estimate for the upcoming quarter is $3.08 on revenues of $11.46 billion, and for the current fiscal year, it is $17.64 on revenues of $46.41 billion [4] - The Zacks Industry Rank for Insurance - Property and Casualty is in the top 20% of over 250 Zacks industries, indicating a favorable outlook for the sector [5] 分组3 - Root, Inc. is expected to report a quarterly loss of $2.51 per share, reflecting a year-over-year change of +12.9%, with revenues anticipated to be $185 million, up 163.9% from the previous year [5][6]

```markdown [PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%201%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) Presents unaudited consolidated financial statements for Q1 2024 and 2023, including income, balance sheet, equity, cash flows, and detailed notes [Consolidated Statement of Income (Unaudited)](index=3&type=section&id=Consolidated%20Statement%20of%20Income%20(Unaudited)) Consolidated Statement of Income (Unaudited) - Three Months Ended March 31, 2024 vs. 2023 | Metric (in millions, except per share) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:---------------------------------------|:-----------------------------|:-----------------------------| | **Revenues** | | | | Premiums | $10,126 | $8,854 | | Net investment income | $846 | $663 | | Fee income | $109 | $106 | | Net realized investment gains | $35 | $6 | | Other revenues | $112 | $75 | | **Total revenues** | **$11,228** | **$9,704** | | **Claims and expenses** | | | | Claims and claim adjustment expenses | $6,656 | $5,959 | | Amortization of deferred acquisition costs | $1,698 | $1,462 | | General and administrative expenses | $1,406 | $1,267 | | Interest expense | $98 | $88 | | **Total claims and expenses** | **$9,858** | **$8,776** | | Income before income taxes | $1,370 | $928 | | Income tax expense (benefit) | $247 | $(47) | | **Net income** | **$1,123** | **$975** | | **Net income per share** | | | | Basic | $4.87 | $4.18 | | Diluted | $4.80 | $4.13 | | Cash dividends declared per common share | $1.00 | $0.93 | [Consolidated Statement of Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Consolidated Statement of Comprehensive Income (Loss) (Unaudited) - Three Months Ended March 31, 2024 vs. 2023 | Metric (in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:----------------------------------------------------------------------------------|:-----------------------------|:-----------------------------| | Net income | $1,123 | $975 | | **Other comprehensive income (loss):** | | | | Changes in net unrealized gains (losses) on investment securities (no credit losses) | $(752) | $1,308 | | Changes in net unrealized gains (losses) on investment securities (credit losses) | $2 | $— | | Net changes in benefit plan assets and obligations | $(1) | $(3) | | Net changes in unrealized foreign currency translation | $(71) | $37 | | Other comprehensive income (loss) before income taxes | $(822) | $1,342 | | Income tax expense (benefit) | $(162) | $283 | | Other comprehensive income (loss), net of taxes | $(660) | $1,059 | | **Comprehensive income** | **$463** | **$2,034** | [Consolidated Balance Sheet (Unaudited)](index=5&type=section&id=Consolidated%20Balance%20Sheet%20(Unaudited)) Consolidated Balance Sheet (Unaudited) - March 31, 2024 vs. December 31, 2023 | Metric (in millions) | March 31, 2024 (Unaudited) | December 31, 2023 | |:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:---------------------------|:------------------| | **Assets** | | | | Fixed maturities, available for sale, at fair value | $77,991 | $77,807 | | Equity securities, at fair value | $689 | $608 | | Real estate investments | $958 | $959 | | Short-term securities | $4,682 | $5,137 | | Other investments | $4,337 | $4,299 | | **Total investments** | **$88,657** | **$88,810** | | Cash | $667 | $650 | | Premiums receivable (net) | $10,829 | $10,282 | | Reinsurance recoverables (net) | $8,100 | $8,143 | | Deferred acquisition costs | $3,380 | $3,306 | | Goodwill | $4,251 | $3,976 | | Other intangible assets | $376 | $277 | | **Total assets** | **$127,410** | **$125,978** | | **Liabilities** | | | | Claims and claim adjustment expense reserves | $62,487 | $61,627 | | Unearned premium reserves | $21,307 | $20,872 | | Debt | $8,032 | $8,031 | | **Total liabilities** | **$102,388** | **$101,057** | | **Shareholders' equity** | | | | Common stock | $25,163 | $24,906 | | Retained earnings | $46,483 | $45,591 | | Accumulated other comprehensive loss | $(5,131) | $(4,471) | | Treasury stock, at cost | $(41,493) | $(41,105) | | **Total shareholders' equity** | **$25,022** | **$24,921** | | **Total liabilities and shareholders' equity** | **$127,410** | **$125,978** | [Consolidated Statement of Changes in Shareholders' Equity (Unaudited)](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity%20(Unaudited)) Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Three Months Ended March 31, 2024 vs. 2023 | Metric (in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:-------------------------------------------------------------------------|:-----------------------------|:-----------------------------| | **Common stock** | | | | Balance, beginning of period | $24,906 | $24,565 | | Employee share-based compensation | $179 | $68 | | Compensation amortization under share-based plans and other changes | $78 | $70 | | **Balance, end of period** | **$25,163** | **$24,703** | | **Retained earnings** | | | | Balance, beginning of period | $45,591 | $43,516 | | Net income | $1,123 | $975 | | Dividends | $(232) | $(218) | | Other | $1 | $— | | **Balance, end of period** | **$46,483** | **$44,273** | | **Accumulated other comprehensive loss, net of tax** | | | | Balance, beginning of period | $(4,471) | $(6,445) |\n| Other comprehensive income (loss) | $(660) | $1,059 | | **Balance, end of period** | **$(5,131)** | **$(5,386)** | | **Treasury stock, at cost** | | | | Balance, beginning of period | $(41,105) | $(40,076) |\n| Treasury stock acquired — share repurchase authorizations | $(250) | $(400) | | Net shares acquired related to employee share-based compensation plans | $(138) | $(62) | | **Balance, end of period** | **$(41,493)** | **$(40,538)** | | **Total shareholders' equity** | **$25,022** | **$23,052** | | **Common shares outstanding** | | | | Balance, beginning of period | 228.2 | 232.1 | | Treasury stock acquired — share repurchase authorizations | $(1.2) | $(2.2) | | Net shares issued under employee share-based compensation plans | 2.0 | 1.1 | | **Balance, end of period** | **229.0** | **231.0** | [Consolidated Statement of Cash Flows (Unaudited)](index=7&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20(Unaudited)) Consolidated Statement of Cash Flows (Unaudited) - Three Months Ended March 31, 2024 vs. 2023 | Metric (in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:----------------------------------------------------------------------------------|:-----------------------------|:-----------------------------| | **Cash flows from operating activities** | | | | Net income | $1,123 | $975 | | Net cash provided by operating activities | $1,458 | $1,012 | | **Cash flows from investing activities** | | | | Proceeds from maturities of fixed maturities | $1,709 | $1,538 | | Proceeds from sales of investments: Fixed maturities | $942 | $2,364 | | Purchases of investments: Fixed maturities | $(3,738) | $(4,335) | | Acquisition, net of cash acquired | $(381) | $— | | Net cash used in investing activities | $(1,037) | $(455) | | **Cash flows from financing activities** | | | | Treasury stock acquired — share repurchase authorizations | $(250) | $(398) | | Dividends paid to shareholders | $(229) | $(215) | | Net cash used in financing activities | $(399) | $(593) | | Effect of exchange rate changes on cash | $(5) | $4 | | Net increase (decrease) in cash | $17 | $(32) | | Cash at beginning of year | $650 | $799 | | **Cash at end of period** | **$667** | **$767** | | **Supplemental disclosure of cash flow information** | | | | Income taxes paid (received) | $24 | $(16) | | Interest paid | $60 | $60 | [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed notes to unaudited consolidated financial statements, covering accounting policies, investments, reserves, and contingencies [Basis of Presentation and Accounting Policies](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20ACCOUNTING%20POLICIES) - The interim consolidated financial statements are unaudited and prepared in conformity with U.S. GAAP, including all necessary adjustments for fair presentation. Certain information typically included in annual statements is omitted for interim reporting[30](index=30&type=chunk) - On January 2, 2024, the Company acquired Corvus Insurance Holdings, Inc. for approximately **$427 million**, aiming to renew Corvus's business and enhance Travelers' cyber portfolio. The acquisition resulted in **$478 million** of assets acquired and **$51 million** of liabilities assumed, including **$390 million** in identifiable intangible assets and goodwill, allocated to the Bond & Specialty Insurance segment[32](index=32&type=chunk) - The Company recognized a one-time tax benefit of **$211 million** in Q1 2023 due to the expiration of the statute of limitations related to a tax item impacted by the repeal of Internal Revenue Code Section 847[33](index=33&type=chunk) [Segment Information](index=8&type=section&id=2.%20SEGMENT%20INFORMATION) - The Company operates in three reportable business segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance, reflecting how businesses are managed and aggregated by customer type, marketing, and underwriting[34](index=34&type=chunk) Segment Revenues and Income (Three Months Ended March 31, in millions) | Metric | Business Insurance (2024) | Bond & Specialty Insurance (2024) | Personal Insurance (2024) | Total Reportable Segments (2024) | |:------------------------|:--------------------------|:----------------------------------|:--------------------------|:---------------------------------| | Premiums | $5,160 | $956 | $4,010 | $10,126 | | Net investment income | $609 | $90 | $147 | $846 | | Fee income | $101 | $— | $8 | $109 | | Other revenues | $77 | $9 | $26 | $112 | | Total segment revenues | $5,947 | $1,055 | $4,191 | $11,193 | | Segment income | $764 | $195 | $220 | $1,179 | | | | | | | | Metric | Business Insurance (2023) | Bond & Specialty Insurance (2023) | Personal Insurance (2023) | Total Reportable Segments (2023) | |:------------------------|:--------------------------|:----------------------------------|:--------------------------|:---------------------------------| | Premiums | $4,477 | $875 | $3,502 | $8,854 | | Net investment income | $473 | $73 | $117 | $663 | | Fee income | $99 | $— | $7 | $106 | | Other revenues | $47 | $5 | $23 | $75 | | Total segment revenues | $5,096 | $953 | $3,649 | $9,698 | | Segment income | $756 | $207 | $83 | $1,046 | Total Assets by Reportable Segment (in millions) | Segment | March 31, 2024 | December 31, 2023 | |:-----------------------------|:---------------|:------------------| | Business Insurance | $94,393 | $93,565 | | Bond & Specialty Insurance | $12,136 | $11,478 | | Personal Insurance | $20,003 | $20,072 | | Total assets by reportable segment | $126,532 | $125,115 | | Other assets | $878 | $863 | | Total consolidated assets | $127,410 | $125,978 | [Investments](index=11&type=section&id=3.%20INVESTMENTS) Fixed Maturities, Available for Sale (at March 31, 2024, in millions) | Type of Security | Amortized Cost | Allowance for Expected Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |:-------------------------------------------------------------------------------------------------------------|:---------------|:-------------------------------------|:-----------------------|:------------------------|:-----------| | U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $6,489 | $— | $1 | $250 | $6,240 | | Obligations of U.S. states, municipalities and political subdivisions | $29,665 | $— | $73 | $2,226 | $27,512 | | Debt securities issued by foreign governments | $970 | $— | $1 | $32 | $939 | | Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $9,076 | $— | $68 | $224 | $8,920 | | Corporate and all other bonds | $36,512 | $3 | $103 | $2,232 | $34,380 | | **Total** | **$82,712** | **$3** | **$246** | **$4,964** | **$77,991**| Equity Securities (at March 31, 2024, in millions) | Type of Security | Cost | Gross Gains | Gross Losses | Fair Value | |:---------------------------|:-----|:------------|:-------------|:-----------| | Common stock | $512 | $142 | $13 | $641 | | Non-redeemable preferred stock | $45 | $3 | $— | $48 | | **Total** | **$557** | **$145** | **$13** | **$689** | - Proceeds from sales of fixed maturities were **$942 million** in Q1 2024, significantly lower than **$2.36 billion** in Q1 2023. Gross gains were **$2 million** and gross losses were **$39 million** in Q1 2024[50](index=50&type=chunk) - Net impairment charges, including credit impairments, totaled **$3 million** in Q1 2024, up from **$1 million** in Q1 2023. Credit losses on fixed maturities remained less than **1%** of the portfolio[64](index=64&type=chunk) [Fair Value Measurements](index=15&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) - The Company estimates fair values based on a hierarchy (Level 1, 2, 3) prioritizing observable inputs. Approximately **99%** of fixed maturities are valued using a pricing service (Level 2)[66](index=66&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - Corporate bonds not valued by the pricing service and certain non-public equity securities are included in Level 3 due to significant unobservable inputs[69](index=69&type=chunk)[70](index=70&type=chunk) Fair Value Hierarchy of Invested Assets (at March 31, 2024, in millions) | Invested Assets | Total Fair Value | Level 1 | Level 2 | Level 3 | |:------------------------------------------------------------------------------------------------------------|:-----------------|:--------|:--------|:--------| | Fixed maturities: U.S. Treasury securities and obligations of U.S. government and government agencies and authorities | $6,240 | $6,240 | $— | $— | | Fixed maturities: Obligations of U.S. states, municipalities and political subdivisions | $27,512 | $— | $27,512 | $— | | Fixed maturities: Debt securities issued by foreign governments | $939 | $— | $939 | $— | | Fixed maturities: Mortgage-backed securities, collateralized mortgage obligations and pass-through securities | $8,920 | $— | $8,899 | $21 | | Fixed maturities: Corporate and all other bonds | $34,380 | $— | $34,125 | $255 | | **Total fixed maturities** | **$77,991** | **$6,240**| **$71,475**| **$276** | | Equity securities: Common stock | $641 | $634 | $— | $7 | | Equity securities: Non-redeemable preferred stock | $48 | $15 | $3 | $30 | | **Total equity securities** | **$689** | **$649**| **$3** | **$37** | | Other investments | $18 | $18 | $— | $— | | **Total** | **$78,698** | **$6,907**| **$71,478**| **$313** | [Allowance for Expected Credit Losses](index=18&type=section&id=5.%20ALLOWANCE%20FOR%20EXPECTED%20CREDIT%20LOSSES) Premiums Receivable, Net of Allowance for Expected Credit Losses (in millions) | Metric | March 31, 2024 | December 31, 2023 | |:---------------------------------------------|:---------------|:------------------| | Premiums Receivable, Net | $10,829 | $10,282 | | Allowance for Expected Credit Losses (end of period) | $68 | $69 | | Current period change for expected credit losses | $12 | $10 | | Write-offs of uncollectible premiums receivable | $13 | $10 | Reinsurance Recoverables, Net of Allowance for Estimated Uncollectible Reinsurance (in millions) | Metric | March 31, 2024 | December 31, 2023 | |:---------------------------------------------|:---------------|:------------------| | Reinsurance Recoverables, Net | $8,100 | $8,143 | | Allowance for Estimated Uncollectible Reinsurance (end of period) | $117 | $118 | | Current period change for estimated uncollectible reinsurance | $(1) | $(1) | | Write-offs of uncollectible reinsurance recoverables | $— | $— | - Of total reinsurance recoverables, **87%** (**$5.70 billion**) were rated by A.M. Best Company at March 31, 2024, with **94%** of those rated A- or better[81](index=81&type=chunk) [Goodwill and Other Intangible Assets](index=19&type=section&id=6.%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) Goodwill by Segment (in millions) | Segment | March 31, 2024 | December 31, 2023 | |:-----------------------------|:---------------|:------------------| | Business Insurance | $2,579 | $2,585 | | Bond & Specialty Insurance | $835 | $550 | | Personal Insurance | $811 | $815 | | Other | $26 | $26 | | **Total** | **$4,251** | **$3,976** | - Goodwill for Bond & Specialty Insurance increased by **$285 million** due to the acquisition of Corvus in Q1 2024, primarily for its cyber underwriting capabilities and workforce[87](index=87&type=chunk) Other Intangible Assets (at March 31, 2024, in millions) | Asset Class | Carrying Amount | Accumulated Amortization | Net | |:------------------------|:----------------|:-------------------------|:----| | Subject to amortization: | | | | | Customer-related | $186 | $63 | $123| | Contract-based | $204 | $194 | $10 | | Marketing-related | $18 | $1 | $17 | | Total subject to amortization | $408 | $258 | $150| | Not subject to amortization | $226 | $— | $226| | **Total** | **$634** | **$258** | **$376**| - The Corvus acquisition added **$87 million** in customer-related intangibles (14-year weighted average amortization) and **$18 million** in marketing-related intangibles (7-year weighted average amortization)[93](index=93&type=chunk)[97](index=97&type=chunk) [Insurance Claim Reserves](index=21&type=section&id=7.%20INSURANCE%20CLAIM%20RESERVES) Claims and Claim Adjustment Expense Reserves (in millions) | Type | March 31, 2024 | December 31, 2023 | |:--------------------------|:---------------|:------------------| | Property-casualty | $62,482 | $61,621 | | Accident and health | $5 | $6 | | **Total** | **$62,487** | **$61,627** | - Gross claims and claim adjustment expense reserves increased by **$861 million** from December 31, 2023, driven by catastrophe losses, higher insured exposures, and loss cost trends, partially offset by claim payments and net favorable prior year reserve development[100](index=100&type=chunk) Net Prior Year Reserve Development (in millions, net of reinsurance) | Segment | Q1 2024 | Q1 2023 | |:--------------------------|:--------|:--------|\n| Total Company | $49 | $90 | | Business Insurance | $0 | $19 | | Bond & Specialty Insurance| $24 | $58 | | Personal Insurance | $67 | $28 | [Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)](index=22&type=section&id=8.%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)%20AND%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Changes in Accumulated Other Comprehensive Income (Loss) (AOCI) (in millions) | Metric | Balance, Dec 31, 2023 | OCI before reclassifications, net of tax | Amounts reclassified from AOCI, net of tax | Net OCI, current period | Balance, Mar 31, 2024 | |:---------------------------------------------------------------------------------------------------|:----------------------|:-------------------------------------------|:-------------------------------------------|:------------------------|:----------------------| | Changes in Net Unrealized Gains (Losses) on Investment Securities: Having No Credit Losses Recognized in the Consolidated Statement of Income | $(3,309) | $(626) | $32 | $(594) | $(3,903) | | Changes in Net Unrealized Gains (Losses) on Investment Securities: Having Credit Losses Recognized in the Consolidated Statement of Income | $180 | $2 | $— | $2 | $182 | | Net Changes in Benefit Plan Assets and Obligations Recognized in Shareholders' Equity | $(458) | $— | $(1) | $(1) | $(459) | | Net Unrealized Foreign Currency Translation | $(884) | $(67) | $— | $(67) | $(951) | | **Total Accumulated Other Comprehensive Income (Loss)** | **$(4,471)** | **$(691)** | **$31** | **$(660)** | **$(5,131)** | - Total other comprehensive loss, net of taxes, was **$(660) million** in Q1 2024, a significant decrease from a gain of **$1,059 million** in Q1 2023, primarily driven by changes in net unrealized losses on investment securities[111](index=111&type=chunk) [Common Share Repurchases](index=24&type=section&id=9.%20COMMON%20SHARE%20REPURCHASES) - The Company repurchased **1.2 million** common shares for **$250 million** in Q1 2024 under its share repurchase authorizations, at an average cost of **$217.31** per share[116](index=116&type=chunk) - An additional **0.6 million** common shares were acquired for **$138 million**, not part of public authorizations, mainly for employee share-based compensation plans (payroll withholding taxes and exercise prices)[116](index=116&type=chunk) - At March 31, 2024, the Company had **$5.79 billion** of remaining capacity under its share repurchase authorizations[116](index=116&type=chunk) [Earnings Per Share](index=25&type=section&id=10.%20EARNINGS%20PER%20SHARE) Earnings Per Share (in millions, except per share amounts) | Metric | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:---------------------------------------------------------------------|:-----------------------------|:-----------------------------| | Net income, as reported | $1,123 | $975 | | Participating share-based awards — allocated income | $(8) | $(7) | | **Net income available to common shareholders — basic and diluted** | **$1,115** | **$968** | | **Common Shares** | | | | Weighted average shares outstanding (Basic) | 229.0 | 231.7 | | Weighted average shares outstanding (Diluted) | 232.0 | 234.4 | | **Net Income per Common Share** | | | | Basic | $4.87 | $4.18 | | Diluted | $4.80 | $4.13 | [Share-Based Incentive Compensation](index=25&type=section&id=11.%20SHARE-BASED%20INCENTIVE%20COMPENSATION) - Total compensation cost for share-based incentive awards recognized in earnings was **$79 million** in Q1 2024, up from **$69 million** in Q1 2023[121](index=121&type=chunk) - The related tax benefits recognized were **$12 million** in Q1 2024, compared to **$11 million** in Q1 2023[121](index=121&type=chunk) - Unrecognized compensation cost for nonvested awards was **$380 million** at March 31, 2024, expected to be recognized over a weighted-average period of **2.2 years**[121](index=121&type=chunk) [Pension Plans, Retirement Benefits and Savings Plans](index=26&type=section&id=12.%20PENSION%20PLANS,%20RETIREMENT%20BENEFITS%20AND%20SAVINGS%20PLANS) Net Periodic Benefit Cost (Benefit) (in millions) | Metric | Pension Plans (2024) | Pension Plans (2023) | Postretirement Benefit Plans (2024) | Postretirement Benefit Plans (2023) | |:-------------------------------------|:---------------------|:---------------------|:------------------------------------|:------------------------------------| | Service cost | $29 | $27 | $— | $— | | Non-service cost (benefit) | $(30) | $(34) | $(2) | $(2) | | **Net periodic benefit cost (benefit)** | **$(1)** | **$(7)** | **$(2)** | **$(2)** | [Leases](index=26&type=section&id=13.%20LEASES) - The Company accounts for real estate leases as operating leases, recognizing lease expense on a straight-line basis and a right-of-use asset and lease liability on the balance sheet[126](index=126&type=chunk) Lease Information (in millions) | Metric | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:---------------------------------------------------------------------|:-----------------------------|:-----------------------------| | Lease cost: Operating leases | $19 | $19 | | Lease cost: Short-term leases | $1 | $1 | | **Net lease cost** | **$20** | **$20** | | Cash payments to settle a lease liability reported in cash flows | $22 | $21 | | Right-of-use assets obtained in exchange for new lease liabilities | $10 | $10 | | Weighted average discount rate | 2.91% | 2.44% | | Weighted average remaining lease term | 4.1 years | 4.4 years | [Contingencies, Commitments and Guarantees](index=27&type=section&id=14.%20CONTINGENCIES,%20COMMITMENTS%20AND%20GUARANTEES) - The Company is involved in asbestos- and environmental-related claims and litigation, with outcomes being uncertain and potentially leading to additional liabilities beyond current reserves[131](index=131&type=chunk) - Unfunded commitments to private equity, hedge fund, and real estate partnerships totaled **$1.59 billion** at March 31, 2024, down from **$2.05 billion** at December 31, 2023[135](index=135&type=chunk) - The maximum contingent obligation for indemnifications related to business sales was **$351 million**, and for guaranteed insurance policy obligations of a former subsidiary was **$480 million** (fully indemnified by a third party) at March 31, 2024[136](index=136&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Analyzes Q1 2024 financial condition and results, covering key metrics, segment performance, investments, liquidity, and outlook [Financial Highlights](index=29&type=section&id=FINANCIAL%20HIGHLIGHTS) - Net income: **$1.12 billion**, or **$4.87** basic EPS and **$4.80** diluted EPS - Net earned premiums: **$10.13 billion** - Catastrophe losses: **$712 million** (**$563 million** after-tax) - Net favorable prior year reserve development: **$91 million** (**$71 million** after-tax) - Combined ratio: **93.9%** - Net investment income: **$846 million** (**$698 million** after-tax) - Net realized investment gains: **$35 million** (**$27 million** after-tax) - Operating cash flows: **$1.46 billion**[140](index=140&type=chunk) - Total investments: **$88.66 billion** (**93%** in fixed maturities and short-term securities) - Total assets: **$127.41 billion** - Total debt: **$8.03 billion**, with a debt-to-total capital ratio of **24.3%** (**21.8%** excluding net unrealized investment losses) - Total capital returned to shareholders: **$620 million** (**$388 million** share repurchases, **$232 million** dividends) - Shareholders' equity: **$25.02 billion** - Net unrealized investment losses: **$4.72 billion** (**$3.72 billion** after-tax) - Book value per common share: **$109.28** - Holding company liquidity: **$1.62 billion**[141](index=141&type=chunk) [Consolidated Results of Operations Overview](index=30&type=section&id=Consolidated%20Results%20of%20Operations%20Overview) Net income increased by **15%** to **$1.12 billion** and diluted EPS by **16%** to **$4.80** in Q1 2024, driven by underwriting and investment income - Diluted net income per share increased by **16%** to **$4.80** in Q1 2024 from **$4.13** in Q1 2023, reflecting the impact of share repurchases[145](index=145&type=chunk) - Net income rose by **15%** to **$1.12 billion** in Q1 2024 from **$975 million** in Q1 2023[145](index=145&type=chunk) - The increase in income before income taxes was primarily due to higher underlying underwriting margins and net investment income, partially offset by higher catastrophe losses (**$712 million** in Q1 2024 vs. **$535 million** in Q1 2023)[145](index=145&type=chunk) - The Company recorded income tax expense in Q1 2024, compared to an income tax benefit in Q1 2023, largely due to a one-time **$211 million** tax benefit in Q1 2023[145](index=145&type=chunk) [Revenues](index=31&type=section&id=Revenues) Total revenues increased by **15.7%** to **$11.23 billion** in Q1 2024, driven by higher earned premiums and net investment income across segments [Earned Premiums](index=31&type=section&id=Earned%20Premiums) - Earned premiums in Q1 2024 were **$10.13 billion**, a **14%** increase (**$1.27 billion**) compared to Q1 2023[148](index=148&type=chunk) - Business Insurance: **+15%** - Bond & Specialty Insurance: **+9%** - Personal Insurance: **+15%**[148](index=148&type=chunk) [Net Investment Income](index=31&type=section&id=Net%20Investment%20Income) - Net investment income in Q1 2024 was **$846 million**, a **28%** increase (**$183 million**) over Q1 2023[150](index=150&type=chunk) - Fixed maturity investments: **$692 million** (**+ $117 million**), driven by higher long-term average yields and increased investment levels - Short-term securities: **$70 million** (**+ $23 million**), due to higher short-term average yields - Other investment portfolios: **$98 million** (**+ $45 million**), primarily from higher private equity partnership returns[150](index=150&type=chunk) [Fee Income](index=31&type=section&id=Fee%20Income) - Fee income in Q1 2024 was **$109 million**, a **$3 million** increase over Q1 2023, primarily from the National Accounts market in Business Insurance[151](index=151&type=chunk) [Net Realized Investment Gains](index=32&type=section&id=Net%20Realized%20Investment%20Gains) Net Realized Investment Gains (in millions) | Metric | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:----------------------------------------------|:-----------------------------|:-----------------------------| | Impairment losses: Fixed maturities | $(3) | $(1) | | Net realized investment gains on equity securities still held | $79 | $17 | | Other net realized investment gains (losses), including from sales | $(41) | $(10) | | **Total** | **$35** | **$6** | - Net realized investment gains on equity securities still held were **$79 million** in Q1 2024, significantly higher than **$17 million** in Q1 2023, both driven by favorable equity markets[154](index=154&type=chunk) [Other Revenues](index=32&type=section&id=Other%20Revenues) - Other revenues increased by **$37 million** to **$112 million** in Q1 2024, including revenues from Simply Business, installment premium charges, and other policyholder service charges[155](index=155&type=chunk) [Claims and Expenses](index=32&type=section&id=Claims%20and%20Expenses) Total claims and expenses increased by **12%** to **$9.86 billion** in Q1 2024, due to higher business volumes, catastrophe losses, and rising operating costs [Claims and Claim Adjustment Expenses](index=32&type=section&id=Claims%20and%20Claim%20Adjustment%20Expenses) - Claims and claim adjustment expenses were **$6.66 billion** in Q1 2024, a **12%** increase (**$697 million**) over Q1 2023[156](index=156&type=chunk) - The increase primarily reflects higher business volumes, increased catastrophe losses, and other loss activity in Business Insurance, partially offset by reduced loss activity related to the banking sector disruption in Q1 2023 for Bond & Specialty Insurance[156](index=156&type=chunk) - Catastrophe losses in Q1 2024 were mainly from severe wind and hail storms in the central and eastern U.S[156](index=156&type=chunk) [Significant Catastrophe Losses](index=32&type=section&id=Significant%20Catastrophe%20Losses) Significant Catastrophe Losses (in millions, pre-tax and net of reinsurance) | PCS Serial Number (Year) | Losses Incurred/Unfavorable (Favorable) Prior Year Reserve Development (Q1 2024) | Losses Incurred/Unfavorable (Favorable) Prior Year Reserve Development (Q1 2023) | Estimated Ultimate Losses (Mar 31, 2024) | Estimated Ultimate Losses (Dec 31, 2023) | |:-------------------------|:-----------------------------------------------------------------------------------|:-----------------------------------------------------------------------------------|:-----------------------------------------|:-----------------------------------------| | 33 (2022) | $1 | $(7) | $139 | $138 | | 35 (2022) | $2 | $(2) | $186 | $184 | | 43 (2022) | $1 | $(10) | $117 | $116 | | 61 (2022) | $(2) | $(53) | $149 | $151 | | 73 (2022) | $5 | $143 | $675 | $670 | | 25 (2023) | $(2) | $148 | $151 | $153 | | 32 (2023) | $1 | $119 | $141 | $140 | | 33 (2023) | $— | n/a | $199 | $199 | | 35 (2023) | $(2) | n/a | $138 | $140 | | 38 (2023) | $— | n/a | $110 | $110 | | 42 (2023) | $9 | n/a | $142 | $133 | | 48 (2023) | $— | n/a | $150 | $150 | | 49 (2023) | $(1) | n/a | $132 | $133 | | 51 (2023) | $— | n/a | $265 | $265 | | 63 (2023) | $— | n/a | $125 | $125 | | 75 (2023) | $1 | n/a | $191 | $190 | | 26 (2024) | $259 | n/a | $259 | n/a | [Amortization of Deferred Acquisition Costs](index=33&type=section&id=Amortization%20of%20Deferred%20Acquisition%20Costs) - Amortization of deferred acquisition costs increased by **16%** (**$236 million**) to **$1.70 billion** in Q1 2024, consistent with the rise in earned premiums[161](index=161&type=chunk) [General and Administrative Expenses](index=33&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative expenses increased by **11%** (**$139 million**) to **$1.41 billion** in Q1 2024, primarily due to costs associated with higher business volumes[162](index=162&type=chunk) [Interest Expense](index=33&type=section&id=Interest%20Expense) - Interest expense was **$98 million** in Q1 2024, up from **$88 million** in Q1 2023[163](index=163&type=chunk) [Income Tax Expense (Benefit)](index=34&type=section&id=Income%20Tax%20Expense%20(Benefit)) Income tax expense of **$247 million** in Q1 2024, a shift from a **$47 million** benefit in Q1 2023, due to a prior year one-time benefit and higher pre-tax income - Income tax expense was **$247 million** in Q1 2024, compared to an income tax benefit of **$47 million** in Q1 2023[165](index=165&type=chunk) - The change was primarily due to a one-time **$211 million** tax benefit in Q1 2023 and the **$442 million** increase in income before income taxes in Q1 2024[165](index=165&type=chunk) - The effective tax rate was **18%** in Q1 2024, compared to (**5%)** in Q1 2023, with the prior year's rate reduced by the one-time tax benefit[165](index=165&type=chunk) [Combined Ratio](index=34&type=section&id=Combined%20Ratio) Combined ratio improved by **1.5 points** to **93.9%** in Q1 2024, driven by a lower loss ratio and improved underlying combined ratio from earned pricing Combined Ratio Analysis | Metric | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:------------------------------------------|:-----------------------------|:-----------------------------| | Loss and loss adjustment expense ratio | 65.2% | 66.7% | | Underwriting expense ratio | 28.7% | 28.7% | | **Combined ratio** | **93.9%** | **95.4%** | | Catastrophe losses impact on combined ratio | 7.1 points | 6.0 points | | Net favorable prior year reserve development benefit | 0.9 points | 1.2 points | | Underlying combined ratio | 86.8% | 89.6% | - The underlying combined ratio improved by **2.9 points** in Q1 2024, primarily due to the benefit of earned pricing[167](index=167&type=chunk) - The combined ratio continues to be impacted by the tort environment, including increased attorney involvement in insurance claims[167](index=167&type=chunk) [Written Premiums](index=34&type=section&id=Written%20Premiums) Consolidated gross and net written premiums increased by **9%** and **8%** respectively in Q1 2024, reflecting growth across all segments Consolidated Gross and Net Written Premiums (in millions) | Segment | Gross Written Premiums (Q1 2024) | Gross Written Premiums (Q1 2023) | Net Written Premiums (Q1 2024) | Net Written Premiums (Q1 2023) | |:-------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Business Insurance | $6,383 | $5,828 | $5,596 | $5,157 | | Bond & Specialty Insurance | $1,076 | $1,010 | $943 | $886 | | Personal Insurance | $3,851 | $3,509 | $3,643 | $3,353 | | **Total** | **$11,310** | **$10,347** | **$10,182** | **$9,396** | [Results of Operations by Segment](index=35&type=section&id=Results%20of%20Operations%20by%20Segment) Details financial performance of Business, Bond & Specialty, and Personal Insurance segments, covering revenues, claims, income, and combined ratios [Business Insurance](index=35&type=section&id=Business%20Insurance) Business Insurance Segment Performance (in millions) | Metric (dollars in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:-----------------------------|:-----------------------------|:-----------------------------| | Earned premiums | $5,160 | $4,477 | | Net investment income | $609 | $473 | | Fee income | $101 | $99 | | Other revenues | $77 | $47 | | Total revenues | $5,947 | $5,096 | | Total claims and expenses | $5,013 | $4,383 | | Segment income | $764 | $756 | | Loss and loss adjustment expense ratio | 63.6% | 63.8% | | Underwriting expense ratio | 29.7% | 29.8% | | Combined ratio | 93.3% | 93.6% | - Segment income increased by **1%** to **$764 million** in Q1 2024, driven by higher net investment income and underlying underwriting margins, partially offset by no net prior year reserve development (compared to **$19 million** favorable in Q1 2023)[173](index=173&type=chunk) - Earned premiums increased by **15%** to **$5.16 billion**, and net written premiums increased by **9%** to **$5.596 billion**, reflecting strong retention rates and positive renewal premium changes across most domestic markets[174](index=174&type=chunk)[184](index=184&type=chunk) [Bond & Specialty Insurance](index=38&type=section&id=Bond%20%26%20Specialty%20Insurance) Bond & Specialty Insurance Segment Performance (in millions) | Metric (dollars in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:-----------------------------|:-----------------------------|:-----------------------------| | Earned premiums | $956 | $875 | | Net investment income | $90 | $73 | | Other revenues | $9 | $5 | | Total revenues | $1,055 | $953 | | Total claims and expenses | $815 | $705 | | Segment income | $195 | $207 | | Loss and loss adjustment expense ratio | 44.4% | 43.0% | | Underwriting expense ratio | 40.1% | 37.0% | | Combined ratio | 84.5% | 80.0% | - Segment income decreased by **6%** to **$195 million** in Q1 2024, primarily due to lower net favorable prior year reserve development (**$24 million** in Q1 2024 vs. **$58 million** in Q1 2023), partially offset by higher net investment income and underlying underwriting margins[192](index=192&type=chunk) - Earned premiums increased by **9%** to **$956 million**, driven by increases in net written premiums from prior quarters, including longer duration surety bonds and multi-year management liability policies[193](index=193&type=chunk) - The combined ratio increased by **4.5 points** to **84.5%**, with the underwriting expense ratio rising due to the acquisition of Corvus and higher employee/technology expenses[196](index=196&type=chunk)[198](index=198&type=chunk) [Personal Insurance](index=40&type=section&id=Personal%20Insurance) Personal Insurance Segment Performance (in millions) | Metric (dollars in millions) | 2024 (3 Months Ended Mar 31) | 2023 (3 Months Ended Mar 31) | |:-----------------------------|:-----------------------------|:-----------------------------| | Earned premiums | $4,010 | $3,502 | | Net investment income | $147 | $117 | | Fee income | $8 | $7 | | Other revenues | $26 | $23 | | Total revenues | $4,191 | $3,649 | | Total claims and expenses | $3,924 | $3,591 | | Segment income | $220 | $83 | | Loss

The Travelers Companies, Inc. Financial Supplement - First Quarter 2024 Exhibit 99.2 Page Number Consolidated Results Financial Highlights 1 Reconciliation to Net Income (Loss) and Earnings Per Share 2 Statement of Income (Loss) 3 Net Income (Loss) by Major Component and Combined Ratio 4 Core Income 5 Selected Statistics - Property and Casualty Operations 6 Written and Earned Premiums - Property and Casualty Operations 7 Business Insurance Segment Income 8 Segment Income by Major Component and Combined Rati ...