Travelers(US:TRV)2024-10-17 11:01Financial Performance - Net income for Q3 2024 was $1.26 billion, a 212% increase from $404 million in Q3 2023, resulting in diluted earnings per share of $5.42, up 211% from $1.74 [162]. - Net earned premiums reached $10.70 billion in Q3 2024, a 10% increase from $9.72 billion in Q3 2023, and $31.07 billion for the first nine months, a 12% increase from $27.79 billion [166]. - Net investment income for Q3 2024 was $904 million, an 18% increase from $769 million in Q3 2023, and $2.64 billion for the first nine months, a 23% increase from $2.14 billion [169]. - Total capital returned to shareholders was $496 million, including $253 million in share repurchases and $243 million in dividends [158]. - Segment income for the first nine months of 2024 was $2.12 billion, a 30% increase from $1.63 billion in the same period of 2023 [199]. Claims and Expenses - Claims and claim adjustment expenses in Q3 2024 were $7.00 billion, a decrease of $153 million or 2% compared to Q3 2023 [173]. - Claims and claim adjustment expenses for the first nine months of 2024 totaled $21.03 billion, an increase of $690 million or 3% compared to the same period in 2023 [175]. - General and administrative expenses in Q3 2024 were $1.46 billion, an increase of $148 million or 11% compared to Q3 2023 [183]. - The combined ratio improved to 93.2% in Q3 2024 from 101.0% in Q3 2023, reflecting better underwriting performance [161]. - The combined ratio for the first nine months of 2024 was 95.1%, down 2.6 points from 97.7% in the same period of 2023 [210]. Investment and Capital Management - The company reported a total debt of $8.03 billion, resulting in a debt-to-total capital ratio of 22.5% [158]. - The company's invested assets totaled $95.45 billion as of September 30, 2024, with 94% allocated to fixed maturity and short-term investments [286]. - The carrying value of the fixed maturity portfolio was $83.99 billion, maintaining a weighted average credit quality of "Aa2" [287]. - The company held $12.00 billion in residential mortgage-backed securities as of September 30, 2024, up from $7.82 billion in December 2023 [289]. - The company plans to continue returning capital to shareholders, with dividends and share repurchases likely not exceeding net income over time [315]. Premiums and Underwriting - Gross written premiums for Business Insurance increased to $18.73 billion in the first nine months of 2024, up 9% from $17.18 billion in 2023 [192]. - Total gross written premiums for the first nine months of 2024 were $35.32 billion, a 9% increase compared to $32.52 billion in the same period of 2023 [193]. - Domestic automobile net written premiums were $2.14 billion in Q3 2024, a 6% increase from Q3 2023, and $6.00 billion in the first nine months of 2024, a 9% increase from the same period in 2023 [262]. - The underwriting expense ratio for the first nine months of 2024 was 39.7%, an increase of 2.7 points from 37.0% in the same period of 2023 [232]. - The combined ratio for Q3 2024 was 92.5%, a decrease of 17.5 points from 110.0% in Q3 2023 [255]. Catastrophe and Environmental Claims - Catastrophe losses in Q3 2024 were $939 million, compared to $850 million in Q3 2023, while total catastrophe losses for the first nine months were $3.16 billion, up from $2.87 billion [162]. - The company holds gross claims and claim adjustment expense reserves totaling $2.22 billion for asbestos and environmental claims as of September 30, 2024 [337]. - The company increased its net environmental reserves by $21 million in Q3 2024 and $58 million in the first nine months of 2024, compared to $26 million and $74 million in the same periods of 2023 [280]. - Net asbestos paid loss and loss expenses were $201 million in the first nine months of 2024, up from $156 million in the same period of 2023 [274]. - The preliminary estimate for Hurricane Milton's incurred losses is between $75 million and $175 million for Q4 2024, after reinsurance and before taxes [302]. Market and Competitive Environment - The property and casualty insurance market is expected to remain competitive for new business through 2025, affecting underwriting profitability [299]. - The Company anticipates strong retention levels for expiring premiums during the remainder of 2024 and into 2025 [298]. - The company is focused on strategic initiatives to improve growth, profitability, and competitiveness, including advancements in artificial intelligence [343]. - The company is exposed to risks from high levels of catastrophe losses and changing climate conditions, which could adversely affect its financial position [344]. - The company is subject to regulatory risks that could affect profitability and growth, including changes in tax regulations [348].