Travelers Q4 Earnings Beat on Strong Net Investment Income

The Travelers Companies, Inc. TRV reported fourth-quarter 2025 core income of $11.13 per share, which beat the Zacks Consensus Estimate by 32% and improved 22% year over year. The improvement was primarily due to a higher underlying underwriting gain, improved net investment income, lower catastrophe losses, and higher net favorable prior year reserve development.

Behind Q4 Headlines

Travelers’ total revenues increased 3.2% from the year-ago quarter to $12.4 billion, primarily driven by higher premiums, net investment income, and other revenues. The top line beat the Zacks Consensus Estimate by 0.08%.

Net written premiums increased 1% year over year to a record $10.8 billion, driven by strong growth across Business Insurance and Bond & Specialty Insurance segments.

Net investment income increased 10.3% year over year to $1 billion, primarily due to growth in average invested assets and a higher average yield in the long-term fixed income investment portfolio. The figure matched the Zacks Consensus Estimate.

Catastrophe loss was $95 million, pre-tax, narrower than a loss of $175 million, pre-tax, incurred in the year-ago quarter.

Travelers witnessed an underwriting gain of $1.7 billion, up 21.7% year over year. The consolidated underlying combined ratio of 82.2 improved 180 basis points (bps) year over year. The combined ratio improved 300 bps year over year to 80.2, driven by an improvement in the underlying combined ratio, lower catastrophe losses, and higher net favorable prior year reserve development. The Zacks Consensus Estimate was pegged at 87.

Segment Update

Business Insurance: Net written premiums increased 2% year over year to about $5.5 billion, reflecting growth of 4% in Select Accounts small commercial business and 3% in core Middle Market business. It was partially offset by a decline in net written premiums in National Property, reflecting disciplined underwriting. 

The combined ratio improved 80 bps year over year to 84.4 due to higher net favorable prior year reserve development and lower catastrophe losses. It was partially offset by a higher underlying combined ratio. The Zacks Consensus Estimate was pegged at 90.

Segment income of $1.3 billion increased 8.7% year over year, primarily due to higher net investment income, higher net favorable prior year reserve development, and lower catastrophe losses, partially offset by a lower underlying underwriting gain. 

Bond & Specialty Insurance: Net written premiums increased 4% year over year to $1 billion, reflecting production growth in both surety and management liability.

The combined ratio deteriorated 30 bps year over year to 83 due to lower net favorable prior year reserve development. It was partially offset by a lower underlying combined ratio and lower catastrophe losses. The Zacks Consensus Estimate was pegged at 84.

Segment income of $236 million increased 3.5% year over year due to higher net investment income and a higher underlying underwriting gain. It was partially offset by lower net favorable prior year reserve development. The underlying underwriting gain benefited from higher business volumes. 

Personal Insurance: Net written premiums of $4.2 billion remained flat year over year.

The combined ratio improved 670 bps year over year to 74% due to an improvement in the underlying combined ratio, lower catastrophe losses, and higher net favorable prior year reserve development. The Zacks Consensus Estimate was pegged at 85.

Segment income was $1 billion, up 36% year over year, driven by a higher underlying underwriting gain, lower catastrophe losses, higher net investment income and higher net favorable prior year reserve development.

Full-Year Highlights

Travelers reported 2025 core income of $27.59 per share, up 28% from 2024. The figure beat the Zacks Consensus Estimate of $24.89 per share. 

Net written premiums increased 2% year over year to a record $44.4 billion.

Travelers witnessed an underwriting gain of $3.4 billion, which grew 42.6% year over year. The combined ratio of 89.9 improved 260 bps year over year. 

Core return on equity expanded 220 basis points to 19.4%.

Adjusted book value per share of $158.01 was up 14% from 2024. 

At 2025-end, statutory capital and surplus were $31.06 billion, and the debt-to-capital ratio was 22%, which improved 40 bps year over year.

Dividend and Share Repurchase Update

This property and casualty insurer returned $1.89 billion. Travelers repurchased 5.8 million shares in the fourth quarter for $1.65 billion. As of Dec. 31, 2025, TRV had $2.01 billion remaining under its share repurchase authorizations.

The board also authorized an additional $5 billion of share repurchases. This amount is in addition to the $2.01 billion. The board also announced a quarterly dividend of $1.10 per share. The dividend will be paid out on March 31, 2026, to shareholders of record at the close of business on March 10, 2026.

Zacks Rank

TRV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

RLI Corp. RLI is scheduled to report fourth-quarter 2025 results on Jan. 21, after market close. The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at 76 cents, suggesting an increase of 85.3% from the year-ago quarter’s reported figure.

RLI’s earnings beat estimates in three of the last four quarters, while missing in one.

Brown & Brown, Inc. BRO is set to report fourth-quarter 2025 results on Jan. 26, after market close. The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at 91 cents per share, indicating an increase of 5.8% from the year-ago quarter’s reported figure.

BRO’s earnings beat estimates in three of the last four quarters, while missing in one.

The Progressive Corporation PGR is set to report fourth-quarter 2025 results on Jan. 28, before market open. The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $4.44, suggesting an increase of 8.8% from the year-ago quarter’s reported figure.

PGR’s earnings beat estimates in two of the last four quarters, while missing in the other two.

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