Travelers CEO: Q3 core income ‘impacted by elevated catastrophe losses’

“Core income of $454 million for the quarter benefited from very strong underlying underwriting returns and net investment income but was also impacted by elevated catastrophe losses,” said Alan Schnitzer, Chairman and CEO. “We are very pleased with the underlying fundamentals of our business. Underlying underwriting income of $868 million pre-tax was up 43% over the prior year quarter, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio which improved 1.9 points to an excellent 90.6%. The underlying combined ratio in our commercial segments remained excellent, and the underlying combined ratio in Personal Insurance improved by more than 5 points to 94.2%. Our high-quality investment portfolio continued to perform extremely well, generating after-tax net investment income of $640 million. Through excellent marketplace execution across all three segments, we delivered growth of $1.3 billion, or 14%, in net written premiums to a record $10.5 billion. In Business Insurance, we grew net written premiums by 16%. Renewal premium change in the segment was very strong at 12.9%. Renewal rate change accelerated sequentially to 7.9%, while retention remained historically high at 87%. New business was strong and higher broadly across the segment. In Bond & Specialty Insurance, we grew net written premiums to a milestone $1 billion, achieved 91% retention of our high-quality management liability business and grew net written premiums in our industry-leading surety business by 13%. Given the attractive returns, we are very pleased with the strong production results in both of our commercial business segments. In Personal Insurance, 14% top-line growth was driven by higher pricing. Renewal premium change was 19.4% in our Homeowners and Other business and increased to a record high 18.2% in our Auto business. The fundamentals in our commercial businesses are terrific, the underlying results in our personal insurance business are improving and heading in the right direction and we are achieving steadily rising returns in our growing fixed income portfolio. Alongside that momentum, we are making excellent progress in the execution of our focused innovation agenda. For those reasons and more, we are very confident in the outlook across our diversified business.”