Is a Beat in the Cards for Travelers This Earnings Season?

The Travelers Companies, Inc. TRV is expected to register an improvement in its top and bottom lines when it reports second-quarter 2025 results on July 17, before the opening bell.

The Zacks Consensus Estimate for TRV’s second-quarter revenues is pegged at $12.20 billion, indicating 7.5% growth from the year-ago reported figure.

The consensus estimate for earnings is pegged at $3.49 per share. The Zacks Consensus Estimate for TRV’s second-quarter earnings has moved down 0.8% in the past 30 days. The estimate suggests a year-over-year increase of 39%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

What the Zacks Model Unveils for AIZ

Our proven model predicts an earnings beat for Travelers this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the chances of an earnings beat.

Earnings ESP: Travelers has an Earnings ESP of +8.76%. This is because the Most Accurate Estimate of $3.80 is pegged higher than the Zacks Consensus Estimate of $3.49. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Travelers Companies, Inc. Price and EPS Surprise

The Travelers Companies, Inc. price-eps-surprise | The Travelers Companies, Inc. Quote

Zacks Rank: TRV carries a Zacks Rank #3 at present.

Factors to Consider

Better performances across all three segments are likely to aid Travelers’ second-quarter results. 

Premiums are likely to have benefited from better pricing, solid renewal rate change, strong retention and exposure growth. The Zacks Consensus Estimate is currently pegged at $11 billion, indicating an increase of 7.8% from the year-ago reported number. We estimate premiums to increase 7.2% to $10.9 billion. 

Higher long-term average yields and a higher average level of fixed maturity investments are likely to aid investment results in the to-be-reported quarter. Management estimates fixed income NII, including earnings from short-term securities, to be approximately $725 million for the second quarter of 2025. The Zacks Consensus Estimate is currently pegged at $945 million, implying an increase of 6.8% from the year-ago reported number. We estimate net investment income to increase 12.2% to $992.8 million. 

The Personal Insurance segment is likely to have benefited from strong retention rates, increased new business premiums and positive renewal premium change, particularly in the Homeowners business. The Zacks Consensus Estimate is currently pegged at $4.4 billion, indicating an increase of 7.4% from the year-ago reported number. We estimate premiums at Personal Insurance to be $4.4 billion, suggesting an improvement of 8.3% from the year-ago reported figure.  

The Bond & Specialty Insurance segment is likely to have benefited from excellent retention in high-quality Management Liability business, increases in the United Kingdom and broader Europe. The Zacks Consensus Estimate is currently pegged at $1 billion, indicating an increase of 8.2% from the year-ago reported number. We estimate earned premiums at Bond & Specialty Insurance to be $1 billion, suggesting an improvement of 12.1% from the year-ago reported figure. 

Strong retention rates, positive renewal premium changes, and increased new business premiums are likely to have aided premiums at Business Insurance. The Zacks Consensus Estimate is currently pegged at $5.5 billion, indicating an increase of 7.8% from the year-ago reported number. We estimate earned premiums at Business Insurance to be $5.4 billion, suggesting an improvement of 5.4% from the year-ago reported figure. 

An increase in net written premiums, coupled with higher net investment income and other revenues, is likely to have aided the top line in the to-be-reported quarter. 

Better pricing and increased exposure, coupled with prudent underwriting, are expected to have aided underwriting profitability, which, in turn, is expected to have led to an improvement in the combined ratio. We estimate the combined ratio to be 105.5. The Zacks Consensus Estimate is currently pegged at 99. 

However, expenses are expected to have risen on higher claims and claim adjustment expenses, amortization of deferred acquisition costs, general and administrative expenses, as well as interest expenses. We estimate expenses to increase 6.4% in the to-be-reported quarter to $11.4 billion.  

Continued share buybacks are anticipated to have provided an additional boost to the bottom line.

Other Stocks to Consider

Here are three P&C insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat: 

Arch Capital Group Ltd. ACGL has an Earnings ESP of +7.92% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $2.34, indicating a year-over-year decrease of 8.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACGL’s earnings beat estimates in each of the last four reported quarters. 

Kinsale Capital Group, Inc. KNSL has an Earnings ESP of +2.33% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $4.39, indicating a year-over-year increase of 17%. 

KNSL’s earnings beat estimates in each of the last four reported quarters.

RenaissanceRe Holdings Ltd. RNR has an Earnings ESP of +2.16% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $10.19, indicating a year-over-year decrease of 17.8%. 

RNR’s earnings beat estimates in three of the last four reported quarters and missed in one.

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This article originally published on Zacks Investment Research (zacks.com).

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