The Travelers Companies Inc (TRV) Q3 2023 Earnings: Net Income Drops to $404 Million Amidst ...

GuruFocus Research
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In this article:

  • The Travelers Companies Inc (NYSE:TRV) reports Q3 2023 net income of $404 million, down from $454 million in the same quarter last year.

  • Record net written premiums of $10.493 billion, up 14% over the prior year quarter.

  • Underlying underwriting income of $868 million pre-tax, up 43%.

  • Catastrophe losses of $850 million pre-tax, significantly higher than $512 million pre-tax in Q3 2022.


Released on October 18, 2023, The Travelers Companies Inc (NYSE:TRV)'s Q3 2023 earnings report shows a net income of $404 million, down from $454 million in the same quarter last year. The decrease in net income is primarily attributed to higher catastrophe losses and net unfavorable prior year reserve development. However, the company reported record net written premiums of $10.493 billion, a 14% increase over the prior year quarter, and an excellent underlying underwriting income of $868 million pre-tax, up 43%.

Financial Highlights


The company's consolidated combined ratio was 101.0%, with an underlying combined ratio of 90.6%, showing a 1.9 point improvement. However, catastrophe losses increased significantly to $850 million pre-tax, compared to $512 million pre-tax in the prior year quarter. Net investment income also saw a substantial increase of 30% pre-tax over the prior year quarter, primarily due to strong fixed income returns.

According to the company's Chairman and Chief Executive Officer, Alan Schnitzer,

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."

Segment Performance


The Business Insurance segment reported an underwriting gain of $31 million, down from $148 million in the same quarter last year. Net written premiums in this segment increased by 16% to $5.080 billion. The Bond & Specialty Insurance segment reported an underwriting gain of $241 million, slightly up from $234 million in Q3 2022, with net written premiums increasing by 4% to $1.003 billion.

Outlook


Despite the challenges, The Travelers Companies Inc (NYSE:TRV) remains confident in its business fundamentals. The company is making excellent progress in executing its focused innovation agenda, and with steadily rising returns in its growing fixed income portfolio, the outlook across its diversified business remains positive.

This article first appeared on GuruFocus.

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