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The Travelers Companies TRV reported first-quarter 2025 core income of $1.91 per share, which beat the Zacks Consensus Estimate of 69 cents. Shares gained about 2.5% to reflect the outperformance.
The bottom line, however, declined 29.3% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.).
The decline was attributable to higher catastrophe losses. However, higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), higher net favorable prior year reserve development and higher net investment income limited the downside.
Travelers’ total revenues increased 6.1% from the year-ago quarter to $11.9 billion, primarily driven by higher premiums, net investment income and other revenues. The top-line figure, however, missed the Zacks Consensus Estimate of $12.1 billion.
The Travelers Companies, Inc. price-consensus-eps-surprise-chart | The Travelers Companies, Inc. Quote
Net written premiums increased 3% year over year to a record $10.5 billion, driven by strong growth across all three segments. Our estimate was $10.2 billion.
Net investment income increased 9.9% year over year to $930 million, primarily due to a higher average yield and growth in average invested assets. The figure was higher than our estimate of $927 million. The Zacks Consensus Estimate was pegged at $952 million.
Catastrophe loss was $2.3 billion, pre-tax, wider than a loss of $175 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting loss of $305 million against a $577 million gain in the year-ago quarter.
Underlying underwriting income of $1.6 billion improved more than 30% year over year, driven by strong net earned premiums.
The consolidated underlying combined ratio of 84.8 improved 290 basis points (bps) year over year. The combined ratio deteriorated 860 bps year over year to 102.5 due to higher catastrophe losses. The Zacks Consensus Estimate was pegged at 105.
Business Insurance: Net written premiums increased 2% year over year to about $5.7 billion, reflecting strong renewal premium change and retention. Our estimate was $5.7 billion.
The combined ratio declined 290 bps year over year to 96.2 due to higher catastrophe losses. Our estimate was 101.2, while the Zacks Consensus Estimate was pegged at 102.
Segment income of $683 million decreased 10.6% year over year due to higher catastrophe losses. The underlying underwriting gain stemmed from higher business volumes. Our estimate was $412.7 million.
Bond & Specialty Insurance: Net written premiums increased 6% year over year to $999 million, reflecting production growth in both surety and management liability. Our estimate was $1 billion.
The combined ratio improved 200 bps year over year to 82.5 due to higher net favorable prior year reserve development. Our estimate was 84.9. The Zacks Consensus Estimate was pegged at 85.
Segment income of $220 million increased 12.8% year over year due to higher net favorable prior year reserve development and higher net investment income. The underlying underwriting gain benefited from higher business volumes. The figure was higher than our estimate of $125.5 million.
Personal Insurance: Net written premiums of $3.8 billion increased 5% year over year, reflecting a strong renewal premium change. Our estimate was $4.2 billion.
The combined ratio deteriorated 1830 bps year over year to 115.2 due to higher catastrophe losses. Our estimate was 109.1. The Zacks Consensus Estimate was pegged at 115.
Segment loss was $374 million due to higher catastrophe losses against a gain of $220 million in the year-ago quarter. The underlying underwriting gain benefited from higher business volumes. Our estimate was a loss of $374 million.
Total investments and cash of $96.4 billion at first-quarter end increased 1.6% from Dec. 31, 2024.
Debt of $8 billion remained flat from 2024 end.
Operating cash flow was $1.4 billion, down 6.7% year over year.
Core return on equity contracted 980 basis points to 5.6%.
Adjusted book value was $138.99 per share, almost in line with Dec. 31, 2024.
This property and casualty insurer returned more than $600 million of excess capital to shareholders through dividends and share repurchases. It bought back 1 million shares for $358 million in the first quarter. At March end, TRV had $4.49 billion remaining under its authorization.
The board of directors declared a 5% increase in quarterly cash dividend to $1.10 per share, marking 21 consecutive years of dividend increases at a compound annual growth rate of 8% over that period. The dividend will be paid out on June 30, 2025, to shareholders of record as of June 10, 2025.
TRV currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RLI Corporation RLI will report first-quarter 2025 results on April 23, before market open. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at 90 cents, suggesting a decrease of 5.3% 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 will report first-quarter 2025 results on April 22, after market close. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $3.26 per share, indicating a decrease of 39.7% from the year-ago quarter’s reported figure.
CB’s earnings beat estimates in each of the last four quarters.
W.R. Berkley Corporation WRB will report first-quarter 2025 results on April 21, after market close. The Zacks Consensus Estimate for first-quarter earnings per share is pegged at $1.01, suggesting a decrease of 2.9% from the year-ago quarter’s reported figure.
WRB’s earnings beat estimates in each of the last four reported quarters.
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This article originally published on Zacks Investment Research (zacks.com).
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