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The Travelers Companies TRV reported second-quarter 2025 core income of $6.51 per share, which beat the Zacks Consensus Estimate by 83.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The bottom line more than doubled from the year-ago quarter, driven by lower catastrophe losses, a higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), higher net favorable prior year reserve development and net investment income.
Travelers’ total revenues increased 6.7% from the year-ago quarter to $12.1 billion, primarily driven by higher premiums, improved net investment income, higher fee income and other revenues. The top-line figure, however, missed the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 4% year over year to a record $11.5 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.9 billion.
The Travelers Companies, Inc. price-consensus-eps-surprise-chart | The Travelers Companies, Inc. Quote
Net investment income increased 6% year over year to $942 million, primarily due to growth in average invested assets and a higher average yield in the long-term fixed income investment portfolio. The figure was lower than our estimate of $992.8 million. The Zacks Consensus Estimate was pegged at $936 million.
Catastrophe loss was $927 million, pre-tax, narrower than a loss of $1.5 billion, pre-tax, incurred in the year-ago quarter.
Travelers witnessed an underwriting profit of $1 billion against a loss of $65 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 84.7 improved 300 basis points (bps) year over year. The combined ratio improved 990 bps year over year to 90.3 due to lower catastrophe losses, an improvement in the underlying combined ratio and higher net favorable prior year reserve development. The Zacks Consensus Estimate was pegged at 99.
Core return on equity expanded 1,070 basis points to 18.8%. Adjusted book value per share (excludes net unrealized investment gains/losses) of $144.57 increased 14% year over year. At quarter-end, statutory capital and surplus were $28.36 billion and the debt-to-capital ratio was 21.4%.
Business Insurance: Net written premiums increased 5% year over year to about $5.8 billion, reflecting a renewal premium change of 7.7%, retention of 85%, and new business of $744 million. Business Insurance net written premiums beat our estimate of $5.4 billion.
The combined ratio improved 250 bps year over year to 93.6 due to an improvement in the underlying combined ratio, higher net favorable prior year reserve development and lower catastrophe losses. Our estimate was 100. The Zacks Consensus Estimate was pegged at 98.
Segment income of $813 million increased 24% year over year, primarily due to a higher underlying underwriting gain, higher net favorable prior year reserve development, increased net investment income and lower catastrophe losses. The underlying underwriting gain benefited from higher business volumes. The figure was higher than our estimate of $724.2 million.
Bond & Specialty Insurance: Net written premiums increased 4% year over year to $1.1 billion, reflecting strong retention of 87% in high-quality management liability business. Our estimate was $1 billion.
The combined ratio improved 740 bps year over year to 80.3 due to higher net favorable prior year reserve development and lower catastrophe losses. It was partially offset by a higher underlying combined ratio. Our estimate was 84.1. The Zacks Consensus Estimate was pegged at 86.
Segment income of $244 million increased 43.5% year over year, primarily due to higher net favorable prior year reserve development, lower catastrophe losses and higher net investment income, partially offset by a lower underlying underwriting gain. The figure was lower than our estimate of $288.9 million.
Personal Insurance: Net written premiums of $4.7 billion increased 3% year over year, reflecting a strong renewal premium change in our Homeowners business. Our estimate was $4.4 billion.
The combined ratio improved 2010 bps year over year to 88.4, driven by lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development. Our estimate was 117.5. The Zacks Consensus Estimate was pegged at 105.
Segment income was $534 million against the loss of $153 million incurred in the year-ago quarter, attributable to lower catastrophe losses, a higher underlying underwriting gain and higher net investment income. It was partially offset by lower net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volume. Our estimate was a loss of $183.7 million.
This property and casualty insurer returned $809 million to shareholders in the second quarter of 2025. It bought back 2.1 million shares for $557 million in the second quarter. At June end, TRV had $4.29 billion remaining under its authorization.
The board also announced a quarterly dividend of $1.10 per share. The dividend will be paid out on Sept. 30, 2025, to shareholders of record at the close of business on Sept. 10, 2025.
Travelers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Progressive Corporation’s PGR second-quarter 2025 earnings per share of $4.88 beat the Zacks Consensus Estimate by 10.1%. The bottom line increased 84.1% year over year. Net premiums written were $20 billion in the quarter, up 12% from $17.9 billion a year ago.
Net premiums earned grew 18% to $20.3 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.1 billion.
Operating revenues increased 19.5% year over year to $42.2 billion, driven by 19% higher net premiums earned, a 29.3% increase in net investment income, an 18.9% rise in fees and 28% higher service revenues.
RLI Corporation RLI is set to report second-quarter 2025 results on July 21, after market close. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at 75 cents, suggesting a decrease of 12.7% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in three of the last four quarters, while missing in one.
Chubb Limited CB is slated to report second-quarter 2025 results on July 22, after market close. The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $5.85 per share, indicating an increase of 8.7% from the year-ago quarter’s reported figure.
CB’s earnings beat estimates in each of the last four quarters.
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This article originally published on Zacks Investment Research (zacks.com).
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