EX-99.1 2 a991pressrelease63024.htm EX-99.1 Document

g34651mo25i001b12.gif                                            Exhibit 99.1
                                            The Travelers Companies, Inc.
                            485 Lexington Avenue
                                    New York, NY 10017-2630
                                        www.travelers.com
NYSE: TRV
Travelers Reports Strong Second Quarter and Year-to-Date Results
Excellent Underlying Results, Net Favorable Prior Year Reserve Development and Higher Net Investment Income More Than Offset Significant Catastrophe Losses from Severe Convective Storms
Second Quarter 2024 Net Income per Diluted Share of $2.29 and Return on Equity of 8.6%
Second Quarter 2024 Core Income per Diluted Share of $2.51 and Core Return on Equity of 8.1%
•Second quarter net income of $534 million and core income of $585 million.
•Consolidated combined ratio improved 6.3 points from the prior year quarter to 100.2%.
•Catastrophe losses of $1.509 billion pre-tax, compared to $1.481 billion pre-tax in the prior year quarter.
•Underlying combined ratio improved 3.4 points from the prior year quarter to an excellent 87.7%.
•Net favorable prior year reserve development of $230 million pre-tax, with favorable development in all three segments.
•Record net written premiums of $11.115 billion, up 8%, with growth in all three segments.
•Net investment income increased 24% pre-tax over the prior year quarter, primarily due to strong fixed income returns and growth in fixed maturity investments.
•Total capital of $498 million returned to shareholders, including $253 million of share repurchases.
•Book value per share of $109.08, up 14% over June 30, 2023; adjusted book value per share of $126.52, up 10% over June 30, 2023.
•Board of Directors declares regular cash dividend of $1.05 per share.

New York, July 19, 2024 — The Travelers Companies, Inc. today reported net income of $534 million, or $2.29 per diluted share, for the quarter ended June 30, 2024, compared to a net loss of $14 million, or $0.07 per diluted share, in the prior year quarter. Core income in the current quarter was $585 million, or $2.51 per diluted share, compared to $15 million, or $0.06 per diluted share, in the prior year quarter. Core income increased primarily due to a 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, partially offset by higher catastrophe losses. Net realized investment losses in the current quarter were $65 million pre-tax ($51 million after-tax), compared to net realized investment losses of $35 million pre-tax ($29 million after-tax) in the prior year quarter. Per diluted share amounts benefited from the impact of share repurchases.
Consolidated Highlights
($ in millions, except for per share amounts, and after-tax, except for premiums and revenues)Three Months Ended June 30,Six Months Ended June 30,
20242023Change20242023Change
Net written premiums$11,115 $10,318 8 %$21,297 $19,714 8 %
Total revenues$11,283 $10,098 12 $22,511 $19,802 14 
Net income (loss)$534 $(14)NM$1,657 $961 72 
per diluted share$2.29 $(0.07)NM$7.09 $4.09 73 
Core income$585 $15 NM$1,681 $985 71 
per diluted share$2.51 $0.06 NM$7.20 $4.19 72 
Diluted weighted average shares outstanding231.5 229.7 1 231.8 233.3 (1)
Combined ratio100.2 %106.5 %(6.3)pts97.1 %101.1 %(4.0)pts
Underlying combined ratio87.7 %91.1 %(3.4)pts87.7 %90.8 %(3.1)pts
Return on equity8.6 %(0.2)%8.8 pts13.3 %8.6 %4.7 pts
Core return on equity8.1 %0.2 %7.9 pts11.8 %7.4 %4.4 pts
As ofChange From
June 30,
2024		December 31,
2023		June 30,
2023		December 31,
2023		June 30,
2023
Book value per share$109.08 $109.19 $95.46 — %14 %
Adjusted book value per share126.52 122.90 115.45 3 %10 %
NM = Not meaningful.
See Glossary of Financial Measures for definitions and the statistical supplement for additional financial data.
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“We are pleased to have generated a strong bottom line result in a quarter that included a record level of severe convective storms across the United States,” said Alan Schnitzer, Chairman and Chief Executive Officer. “Core income of $585 million, or $2.51 per diluted share, benefited from excellent underlying results, favorable net prior year reserve development and higher investment income.
“Underlying underwriting income of $1.2 billion pre-tax was up 55% over the prior year quarter, driven by record net earned premiums of $10.2 billion and a consolidated underlying combined ratio that improved 3.4 points to an excellent 87.7%. Net earned premiums were higher in all three of our business segments. The underlying combined ratio in our Business Insurance segment was an excellent 89.2%; the underlying combined ratio in our Bond & Specialty Insurance business improved 1.7 points to a very strong 86.1%; and the underlying combined ratio in Personal Insurance improved by nearly eight points to a terrific 86.3%. Our high-quality investment portfolio continued to perform well, generating after-tax net investment income of $727 million, driven by strong and reliable returns from our growing fixed income portfolio and higher returns from our non-fixed income portfolio. We returned $498 million of excess capital to our shareholders this quarter, including $253 million of share repurchases.
“Through terrific marketplace execution across all three segments, we grew net written premiums in the quarter by 8% to $11.1 billion. In Business Insurance, we grew net written premiums by 7% to $5.5 billion. Renewal premium change in the segment remained very strong at 10.1%, while retention remained high at 85% and new business increased 9% to a record $732 million. In Bond & Specialty Insurance, we grew net written premiums by 8% to more than $1 billion, with excellent retention of 90% in our high-quality management liability business. In our industry-leading surety business, we grew net written premiums by 11%. Given the attractive returns, we are very pleased with the strong production results in both of our commercial business segments. In Personal Insurance, continued strong pricing drove 9% growth in net written premiums, with growth of 10% in Auto and 8% in Home.
“We continue to be very confident in the outlook for our business. Our results for the first half of the year include strong premium growth, excellent underlying underwriting profitability, record operating cash flow and steadily rising investment returns in our growing fixed income portfolio. With a strong and diversified business and balance sheet, we delivered 13.6% core return on equity over the last twelve months, despite elevated industrywide catastrophe losses. We also continue to grow adjusted book value per share, while making important investments in our business and returning substantial excess capital to shareholders. With this momentum and plenty of opportunity ahead of us, we remain well positioned for success this year and beyond.”

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Consolidated Results
Three Months Ended June 30,Six Months Ended June 30,
($ in millions and pre-tax, unless noted otherwise)20242023Change20242023Change
Underwriting gain (loss):$(65)$(640)$575 $512 $(273)$785 
Underwriting gain (loss) includes:
Net favorable prior year reserve development230 60 170 321 165 156 
Catastrophes, net of reinsurance(1,509)(1,481)(28)(2,221)(2,016)(205)
Net investment income885 712 173 1,731 1,375 356 
Other income (expense), including interest expense
(99)(85)(14)(187)(193)6 
Core income (loss) before income taxes721 (13)734 2,056 909 1,147 
Income tax expense (benefit)136 (28)164 375 (76)451 
Core income585 15 570 1,681 985 696 
Net realized investment losses after income taxes(51)(29)(22)(24)(24)— 
Net income (loss)$534 $(14)$548 $1,657 $961 $696 
Combined ratio100.2 %106.5 %(6.3)pts97.1 %101.1 %(4.0)pts
Impact on combined ratio
Net favorable prior year reserve development(2.2)pts(0.7)pts(1.5)pts(1.5)pts(0.9)pts(0.6)pts
Catastrophes, net of reinsurance14.7 pts16.1 pts(1.4)pts10.9 pts11.2 pts(0.3)pts
Underlying combined ratio87.7 %91.1 %(3.4)pts87.7 %90.8 %(3.1)pts
Net written premiums
Business Insurance$5,539$5,1757 %$11,135$10,3328 %
Bond & Specialty Insurance1,0409648 1,9831,8507 
Personal Insurance4,5364,1799 8,1797,5329 
Total$11,115$10,3188 %$21,297$19,7148 %
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)
Net income of $534 million increased $548 million, due to higher core income, partially offset by higher net realized investment losses. Core income of $585 million increased $570 million, primarily due to a higher underlying underwriting gain, higher net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. The underlying underwriting gain benefited from higher business volumes. Net realized investment losses were $65 million pre-tax ($51 million after-tax), compared to net realized investment losses of $35 million pre-tax ($29 million after-tax) in the prior year quarter.
Combined ratio:
•The combined ratio of 100.2% improved 6.3 points due to an improvement in the underlying combined ratio (3.4 points), higher net favorable prior year reserve development (1.5 points) and lower catastrophe losses as a percentage of net earned premiums (1.4 points).
•The underlying combined ratio improved 3.4 points to 87.7%. See below for further details by segment.
•Net favorable prior year reserve development occurred in all segments. See below for further details by segment.
•Catastrophe losses primarily resulted from numerous severe wind and hail storms in multiple states.

Net investment income of $885 million pre-tax ($727 million after-tax) increased 24%. Income from the fixed income investment portfolio increased over the prior year quarter due to a higher average yield and growth in fixed maturity investments. Income from the non-fixed income investment portfolio increased over the prior year quarter primarily
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due to higher private equity partnership returns. Non-fixed income returns are generally reported on a one-quarter lagged basis and directionally follow the broader equity markets.

Net written premiums of $11.115 billion increased 8%. See below for further details by segment.

Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
 
Net income of $1.657 billion increased $696 million, due to higher core income. Core income of $1.681 billion increased $696 million, primarily due to a higher underlying underwriting gain, higher net investment income and higher net favorable prior year reserve development, partially offset by higher catastrophe losses. The underlying underwriting gain benefited from higher business volumes. The underlying underwriting gain in the prior year included a one-time tax benefit of $211 million due to the expiration of the statute of limitations with respect to a tax item. Net realized investment losses were $30 million pre-tax ($24 million after-tax), compared to net realized investment losses of $29 million pre-tax ($24 million after-tax) in the prior year.

Combined ratio:
 
•The combined ratio of 97.1% improved 4.0 points due to an improvement in the underlying combined ratio (3.1 points), higher net favorable prior year reserve development (0.6 points) and lower catastrophe losses as a percentage of net earned premiums (0.3 points).

•The underlying combined ratio of 87.7% improved 3.1 points. See below for further details by segment.

•Net favorable prior year reserve development occurred in all segments. See below for further details by segment.

•Catastrophe losses included the second quarter events described above, as well as severe wind and hail storms in the central and eastern regions of the United States in the first three months of 2024.
Net investment income of $1.731 billion pre-tax ($1.425 billion after-tax) increased 26% driven by the same factors described above for the second quarter of 2024.

Net written premiums of $21.297 billion increased 8%. See below for further details by segment.

Shareholders’ Equity

Shareholders’ equity of $24.862 billion decreased slightly from year-end 2023, primarily due to higher net unrealized investment losses, common share repurchases and dividends to shareholders, largely offset by net income of $1.657 billion. Net unrealized investment losses included in shareholders’ equity were $5.043 billion pre-tax ($3.976 billion after-tax), compared to $3.970 billion pre-tax ($3.129 billion after-tax) at year-end 2023. The increase in net unrealized investment losses was driven primarily by higher interest rates. Book value per share of $109.08 was comparable with year-end 2023. Adjusted book value per share of $126.52, which excludes net unrealized investment gains (losses), increased 3% from year-end 2023.

The Company repurchased 1.2 million shares during the second quarter at an average price of $211.24 per share for a total cost of $253 million. At June 30, 2024, the Company had $5.540 billion of capacity remaining under its share repurchase authorizations approved by the Board of Directors. At the end of the quarter, statutory capital and surplus was $25.210 billion, and the ratio of debt-to-capital was 24.4%. The ratio of debt-to-capital excluding after-tax net unrealized investment gains (losses) included in shareholders’ equity was 21.8%, within the Company’s target range of 15% to 25%.

The Board of Directors declared a regular quarterly dividend of $1.05 per share. The dividend is payable September 30, 2024, to shareholders of record at the close of business on September 10, 2024.
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Business Insurance Segment Financial Results
 Three Months Ended June 30,Six Months Ended June 30,
($ in millions and pre-tax, unless noted otherwise)20242023Change20242023Change
Underwriting gain (loss):$193 $(14)$207 $527 $259 $268 
Underwriting gain (loss) includes:
Net favorable (unfavorable) prior year reserve development34 (101)135 34 (82)116 
Catastrophes, net of reinsurance
(389)(396)7 (598)(595)(3)
Net investment income632 509 123 1,241 982 259 
Other income (expense) (10)(10)— (19)(43)24 
Segment income before income taxes815 485 330 1,749 1,198 551 
Income tax expense159 83 76 329 40 289 
Segment income$656 $402 $254 $1,420 $1,158 $262 
Combined ratio96.1 %100.1 %(4.0)pts94.7 %96.9 %(2.2)pts
Impact on combined ratio
Net (favorable) unfavorable prior year reserve development(0.6)pts2.2 pts(2.8)pts(0.3)pts0.9 pts(1.2)pts
Catastrophes, net of reinsurance
7.5 pts8.5 pts(1.0)pts5.8 pts6.5 pts(0.7)pts
Underlying combined ratio89.2 %89.4 %(0.2)pts89.2 %89.5 %(0.3)pts
Net written premiums by market
Domestic
Select Accounts$975 $883 10 %$1,949 $1,791 9 %
Middle Market2,769 2,618 6 5,982 5,544 8 
National Accounts312 277 13 639 571 12 
National Property and Other912 862 6 1,554 1,452 7 
Total Domestic4,968 4,640 7 10,124 9,358 8 
International571 535 7 1,011 974 4 
Total$5,539 $5,175 7 %$11,135 $10,332 8 %
 
Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)
 
Segment income for Business Insurance was $656 million after-tax, an increase of $254 million. Segment income increased primarily due to net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year quarter, higher net investment income and a higher underlying underwriting gain. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

•The combined ratio of 96.1% improved 4.0 points due to net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year quarter (2.8 points), lower catastrophe losses (1.0 points) and an improvement in the underlying combined ratio (0.2 points).
•The underlying combined ratio remained excellent at 89.2%.
•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations’ workers’ compensation product line for multiple accident years, partially offset by higher than expected loss experience in the general liability product line for recent accident years, driven by excess coverages, as well as an addition to reserves related to run-off.

Net written premiums of $5.539 billion increased 7%, reflecting strong renewal premium change and retention, as well as higher levels of new business.

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Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
 
Segment income for Business Insurance was $1.420 billion after-tax, an increase of $262 million. Segment income increased primarily due to higher net investment income and net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year period, partially offset by a lower underlying underwriting gain. The underlying underwriting gain benefited from higher business volumes. The underlying underwriting gain in the prior year period included a one-time tax benefit of $171 million due to the expiration of the statute of limitations with respect to a tax item.
 
Combined ratio:

•The combined ratio of 94.7% improved 2.2 points due to net favorable prior year reserve development compared to net unfavorable prior year reserve development in the prior year period (1.2 points), lower catastrophe losses as a percentage of net earned premiums (0.7 points) and an improvement in the underlying combined ratio (0.3 points).
•The underlying combined ratio remained excellent at 89.2%.

•Net favorable prior year reserve development was primarily driven by the same factors described above for the second quarter of 2024.

Net written premiums of $11.135 billion increased 8%, reflecting the same factors described above for the second quarter of 2024.

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Bond & Specialty Insurance Segment Financial Results
Three Months Ended June 30,Six Months Ended June 30,
($ in millions and pre-tax, unless noted otherwise)20242023Change20242023 Change
Underwriting gain:$115 $205 $(90)$259 $376 $(117)
Underwriting gain includes:
Net favorable prior year reserve development24 119 (95)48 177 (129)
Catastrophes, net of reinsurance(40)(21)(19)(45)(26)(19)
Net investment income94 78 16 184 151 33 
Other income5 6 (1)11 10 1 
Segment income before income taxes214 289 (75)454 537 (83)
Income tax expense44 59 (15)89 100 (11)
Segment income$170 $230 $(60)$365 $437 $(72)
Combined ratio87.7 %77.1 %10.6 pts86.1 %78.5 %7.6 pts
Impact on combined ratio
Net favorable prior year reserve development(2.5)pts(13.0)pts10.5 pts(2.5)pts(9.9)pts7.4 pts
Catastrophes, net of reinsurance4.1 pts2.3 pts1.8 pts2.3 pts1.5 pts0.8 pts
Underlying combined ratio86.1 %87.8 %(1.7)pts86.3 %86.9 %(0.6)pts
Net written premiums
Domestic
Management Liability$586 $541 8 %$1,129 $1,052 7 %
Surety325 293 11 621 550 13 
Total Domestic911 834 9 1,750 1,602 9 
International129 130 (1)233 248 (6)
Total$1,040 $964 8 %$1,983 $1,850 7 %

Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)
 
Segment income for Bond & Specialty Insurance was $170 million after-tax, a decrease of $60 million. Segment income decreased primarily due to lower net favorable prior year reserve development and higher catastrophe losses, partially offset by a higher underlying underwriting gain and higher net investment income. The underlying underwriting gain benefited from higher business volumes.
Combined ratio:

•The combined ratio of 87.7% increased 10.6 points due to lower net favorable prior year reserve development (10.5 points) and higher catastrophe losses (1.8 points), partially offset by an improvement in the underlying combined ratio (1.7 points).

•The underlying combined ratio improved 1.7 points to a very strong 86.1%.

•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations’ fidelity and surety product lines for recent accident years.

Net written premiums of $1.040 billion increased 8%, reflecting strong production in both surety and management liability.

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Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
 
Segment income for Bond & Specialty Insurance was $365 million after-tax, a decrease of $72 million. Segment income decreased primarily due to lower net favorable prior year reserve development and higher catastrophe losses, partially offset by higher net investment income and a higher underlying underwriting gain. The underlying underwriting gain benefited from higher business volumes. The underlying underwriting gain in the prior year period included a one-time tax benefit of $9 million due to the expiration of the statute of limitations with respect to a tax item.

Combined ratio:

•The combined ratio of 86.1% increased 7.6 points due to lower net favorable prior year reserve development (7.4 points) and higher catastrophe losses (0.8 points), partially offset by an improvement in the underlying combined ratio (0.6 points).

•The underlying combined ratio improved 0.6 points to a very strong 86.3%.

•Net favorable prior year reserve development was primarily driven by the same factors described above for the second quarter of 2024.

Net written premiums of $1.983 billion increased 7%, reflecting the same factors described above for the second quarter of 2024.

Personal Insurance Segment Financial Results
Three Months Ended June 30,Six Months Ended June 30,
($ in millions and pre-tax, unless noted otherwise)20242023Change20242023Change
Underwriting loss:$(373)$(831)$458 $(274)$(908)$634 
Underwriting loss includes:
Net favorable prior year reserve development172 42 130 239 70 169 
Catastrophes, net of reinsurance(1,080)(1,064)(16)(1,578)(1,395)(183)
Net investment income159 125 34 306 242 64 
Other income16 21 (5)37 39 (2)
Segment income (loss) before income taxes(198)(685)487 69 (627)696 
Income tax expense (benefit)(45)(147)102 2 (172)174 
Segment income (loss)$(153)$(538)$385 $67 $(455)$522 
Combined ratio108.5 %122.0 %(13.5)pts102.8 %112.0 %(9.2)pts
Impact on combined ratio
Net favorable prior year reserve development(4.2)pts(1.2)pts(3.0)pts(2.9)pts(1.0)pts(1.9)pts
Catastrophes, net of reinsurance26.4 pts29.1 pts(2.7)pts19.5 pts19.5 pts— pts
Underlying combined ratio86.3 %94.1 %(7.8)pts86.2 %93.5 %(7.3)pts
Net written premiums
Domestic
Automobile$2,001 $1,823 10 %$3,860 $3,477 11 %
Homeowners and Other2,347 2,173 8 3,982 3,738 7 
Total Domestic4,348 3,996 9 7,842 7,215 9 
International188 183 3 337 317 6 
Total$4,536 $4,179 9 %$8,179 $7,532 9 %

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Second Quarter 2024 Results
(All comparisons vs. second quarter 2023, unless noted otherwise)

Segment loss for Personal Insurance was $153 million after-tax, compared with a segment loss of $538 million in the prior year quarter. The improvement in segment loss was primarily due to a higher underlying underwriting gain, higher net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. The underlying underwriting gain benefited from higher business volumes.

Combined ratio:

•The combined ratio of 108.5% improved 13.5 points due to an improvement in the underlying combined ratio (7.8 points), higher net favorable prior year reserve development (3.0 points) and lower catastrophe losses as a percentage of net earned premiums (2.7 points).

•The underlying combined ratio of 86.3% improved 7.8 points, reflecting improvement in both Automobile and Homeowners and Other.

•Net favorable prior year reserve development was primarily driven by better than expected loss experience in the domestic operations in both the homeowners and other and automobile product lines for recent accident years.

Net written premiums of $4.536 billion increased 9%, reflecting strong renewal premium change in both Domestic Automobile and Homeowners and Other.

Year-to-Date 2024 Results
(All comparisons vs. year-to-date 2023, unless noted otherwise)
 
Segment income for Personal Insurance was $67 million after-tax, compared with a segment loss of $455 million in 2023. Segment income increased primarily due to a higher underlying underwriting gain, higher net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. The underlying underwriting gain benefited from higher business volumes. The underlying underwriting gain in the prior year period included a one-time tax benefit of $31 million due to the expiration of the statute of limitations with respect to a tax item.

Combined ratio:

•The combined ratio of 102.8% improved 9.2 points due to an improvement in the underlying combined ratio (7.3 points) and higher net favorable prior year reserve development (1.9 points).

•The underlying combined ratio of 86.2% improved 7.3 points, reflecting improvement in both Automobile and Homeowners and Other.

•Net favorable prior year reserve development was primarily driven by the same factors described above for the second quarter of 2024.

Net written premiums of $8.179 billion increased 9%, reflecting the same factor described above for the second quarter of 2024.


Financial Supplement and Conference Call

The information in this press release should be read in conjunction with the financial supplement that is available on our website at Travelers.com. Travelers management will discuss the contents of this release and other relevant topics via webcast at 9 a.m. Eastern (8 a.m. Central) on Friday, July 19, 2024. Investors can access the call via webcast at investor.travelers.com or by dialing 1.888.440.6281 within the United States or 1.646.960.0218 outside the United States. Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the Company’s website.

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Following the live event, replays will be available via webcast for one year at investor.travelers.com and by telephone for 30 days by dialing 1.800.770.2030 within the United States or 1.647.362.9199 outside the United States. All callers should use conference ID 5449478.

About Travelers

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and generated revenues of more than $41 billion in 2023. For more information, visit Travelers.com.

Travelers may use its website and/or social media outlets, such as Facebook and X, as distribution channels of material Company information. Financial and other important information regarding the Company is routinely accessible through and posted on our website at investor.travelers.com, our Facebook page at facebook.com/travelers and our X account (@Travelers) at twitter.com/travelers. In addition, you may automatically receive email alerts and other information about Travelers when you enroll your email address by visiting the Email Notifications section at investor.travelers.com.

Travelers is organized into the following reportable business segments:

Business Insurance - Business Insurance offers a broad array of property and casualty insurance products and services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world, including as a corporate member of Lloyd’s.

Bond & Specialty Insurance - Bond & Specialty Insurance offers surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers, primarily in the United States, and certain surety and specialty insurance products in Canada, the United Kingdom and the Republic of Ireland, as well as Brazil through a joint venture, in each case utilizing various degrees of financially-based underwriting approaches.

Personal Insurance - Personal Insurance offers a broad range of property and casualty insurance products and services covering individuals’ personal risks, primarily in the United States, as well as in Canada. Personal Insurance’s primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.
 * * * * *
Forward-Looking Statements

This press release contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “will,” “should,” “likely,” “probably,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “views,” “ensures,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements include, among other things, the Company’s statements about:

•the Company’s outlook, the impact of trends on its business and its future results of operations and financial condition;
•the impact of legislative or regulatory actions or court decisions;
•share repurchase plans;
•future pension plan contributions;
•the sufficiency of the Company’s reserves, including asbestos;
•the impact of emerging claims issues as well as other insurance and non-insurance litigation;
•the cost and availability of reinsurance coverage;
•catastrophe losses and modeling;
•the impact of investment, economic and underwriting market conditions, including interest rates and inflation;
•the Company’s approach to managing its investment portfolio;
•the impact of changing climate conditions;
•strategic and operational initiatives to improve profitability and competitiveness;
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•the Company’s competitive advantages and innovation agenda, including executing on that agenda with respect to artificial intelligence;
•the Company’s cybersecurity policies and practices;
•new product offerings;
•the impact of developments in the tort environment;
•the impact of developments in the geopolitical environment; and
•the impact of the Company’s acquisition of Corvus Insurance Holdings, Inc.

The Company cautions investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the Company’s control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Some of the factors that could cause actual results to differ include, but are not limited to, the following:

Insurance-Related Risks

•high levels of catastrophe losses;
•actual claims may exceed the Company’s claims and claim adjustment expense reserves, or the estimated level of claims and claim adjustment expense reserves may increase, including as a result of, among other things, changes in the legal/tort, regulatory and economic environments, including increased inflation;
•the Company’s potential exposure to asbestos and environmental claims and related litigation;
•the Company is exposed to, and may face adverse developments involving, mass tort claims; and
•the effects of emerging claim and coverage issues on the Company’s business are uncertain, and court decisions or legislative changes that take place after the Company issues its policies can result in an unexpected increase in the number of claims.

Financial, Economic and Credit Risks

•a period of financial market disruption or an economic downturn;
•the Company’s investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses;
•the Company is exposed to credit risk related to reinsurance and structured settlements, and reinsurance coverage may not be available to the Company;
•the Company is exposed to credit risk in certain of its insurance operations and with respect to certain guarantee or indemnification arrangements that it has with third parties;
•a downgrade in the Company’s claims-paying and financial strength ratings; and
•the Company’s insurance subsidiaries may be unable to pay dividends to the Company’s holding company in sufficient amounts.

Business and Operational Risks

•the intense competition that the Company faces, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which it operates;
•disruptions to the Company’s relationships with its independent agents and brokers or the Company’s inability to manage effectively a changing distribution landscape;
•the Company’s efforts to develop new products or services, expand in targeted markets, improve business processes and workflows or make acquisitions may not be successful and may create enhanced risks;
•the Company's pricing and capital models may provide materially different indications than actual results;
•loss of or significant restrictions on the use of particular types of underwriting criteria, such as credit scoring, or other data or methodologies, in the pricing and underwriting of the Company’s products;
•the Company is subject to additional risks associated with its business outside the United States; and
•future pandemics (including new variants of COVID-19).
Technology and Intellectual Property Risks

•as a result of cyber attacks (the risk of which could be exacerbated by geopolitical tensions) or otherwise, the Company may experience difficulties with technology, data and network security or outsourcing relationships;
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•the Company’s dependence on effective information technology systems and on continuing to develop and implement improvements in technology, including with respect to artificial intelligence; and
•the Company may be unable to protect and enforce its own intellectual property or may be subject to claims for infringing the intellectual property of others.
Regulatory and Compliance Risks

•changes in regulation, including higher tax rates; and
•the Company's compliance controls may not be effective.
In addition, the Company’s share repurchase plans depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws (including the Inflation Reduction Act of 2022) and other factors.
Our forward-looking statements speak only as of the date of this press release or as of the date they are made, and we undertake no obligation to update forward-looking statements. For a more detailed discussion of these factors, see the information under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Forward Looking Statements” in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 15, 2024, as updated by our periodic filings with the SEC.

GLOSSARY OF FINANCIAL MEASURES AND RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

The following measures are used by the Company’s management to evaluate financial performance against historical results, to establish performance targets on a consolidated basis and for other reasons as discussed below. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated financial statements or are not required to be disclosed in the notes to financial statements or, in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure. Reconciliations of these measures to the most comparable GAAP measures also follow.

In the opinion of the Company’s management, a discussion of these measures provides investors, financial analysts, rating agencies and other financial statement users with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance.

Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, included in shareholders’ equity, which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends.

Other companies may calculate these measures differently, and, therefore, their measures may not be comparable to those used by the Company’s management.

RECONCILIATION OF NET INCOME TO CORE INCOME AND CERTAIN OTHER NON-GAAP MEASURES

Core income (loss) is consolidated net income (loss) excluding the after-tax impact of net realized investment gains (losses), discontinued operations, the effect of a change in tax laws and tax rates at enactment, and cumulative effect of changes in accounting principles when applicable. Segment income (loss) is determined in the same manner as core income (loss) on a segment basis. Management uses segment income (loss) to analyze each segment’s performance and as a tool in making business decisions. Financial statement users also consider core income (loss) when analyzing the results and trends of insurance companies. Core income (loss) per share is core income (loss) on a per common share basis.

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Reconciliation of Net Income (Loss) to Core Income (Loss) less Preferred Dividends
Three Months Ended June 30,Six Months Ended June 30,Twelve Months Ended June 30,
($ in millions, after-tax)20242023202420232024
Net income (loss)$534 $(14)$1,657 $961 $3,687 
Adjustments:
Net realized investment losses51 29 24 24 81 
Core income$585 $15 $1,681 $985 $3,768 

Three Months Ended June 30,Six Months Ended June 30,
($ in millions, pre-tax)2024202320242023
Net income (loss)$656 $(48)$2,026 $880 
Adjustments:
Net realized investment losses65 35 30 29 
Core income (loss)$721 $(13)$2,056 $909 
 Twelve Months Ended December 31,Average Annual
($ in millions, after-tax)202320222021202020192005 - 2018
Net income$2,991 $2,842 $3,662 $2,697 $2,622 $3,035 
Less: Loss from discontinued operations— — — — — (31)
Income from continuing operations2,991 2,842 3,662 2,697 2,622 3,066 
Adjustments:
Net realized investment (gains) losses81 156 (132)(11)(85)(41)
Impact of changes in tax laws and/or tax rates (1) (2)— — (8)— — 9 
Core income3,072 2,998 3,522 2,686 2,537 3,034 
Less: Preferred dividends— — — — — 2 
Core income, less preferred dividends$3,072 $2,998 $3,522 $2,686 $2,537 $3,032 
(1) Impact is recognized in the accounting period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

Reconciliation of Net Income (Loss) per Share to Core Income per Share on a Diluted Basis
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Diluted income (loss) per share    
Net income (loss)$2.29 $(0.07)$7.09 $4.09 
Adjustments:
Net realized investment losses, after-tax0.22 0.13 0.11 0.10 
Core income$2.51 $0.06 $7.20 $4.19 
Reconciliation of Segment Income (Loss) to Total Core Income
Three Months Ended June 30,Six Months Ended June 30,
($ in millions, after-tax)2024202320242023
Business Insurance$656 $402 $1,420 $1,158 
Bond & Specialty Insurance170 230 365 437 
Personal Insurance(153)(538)67 (455)
Total segment income673 94 1,852 1,140 
Interest Expense and Other(88)(79)(171)(155)
Total core income$585 $15 $1,681 $985 
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RECONCILIATION OF SHAREHOLDERS’ EQUITY TO ADJUSTED SHAREHOLDERS’ EQUITY AND CALCULATION OF RETURN ON EQUITY AND CORE RETURN ON EQUITY

Adjusted shareholders’ equity is shareholders’ equity excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity, net realized investment gains (losses), net of tax, for the period presented, the effect of a change in tax laws and tax rates at enactment (excluding the portion related to net unrealized investment gains (losses)), preferred stock and discontinued operations.

Reconciliation of Shareholders’ Equity to Adjusted Shareholders’ Equity
As of June 30,
($ in millions)20242023
Shareholders’ equity$24,862 $21,855 
Adjustments:
Net unrealized investment losses, net of tax, included in shareholders’ equity3,976 4,576 
Net realized investment losses, net of tax24 24 
Adjusted shareholders’ equity$28,862 $26,455 
As of December 31,Average Annual
($ in millions)202320222021202020192005 - 2018
Shareholders’ equity$24,921 $21,560 $28,887 $29,201 $25,943 $24,659 
Adjustments:
Net unrealized investment (gains) losses, net of tax, included in shareholders’ equity3,129 4,898 (2,415)(4,074)(2,246)(1,232)
Net realized investment (gains) losses, net of tax81 156 (132)(11)(85)(41)
Impact of changes in tax laws and/or tax rates (1) (2)— — (8)— — 20 
Preferred stock— — — — — (45)
Loss from discontinued operations— — — — — 31 
Adjusted shareholders’ equity$28,131 $26,614 $26,332 $25,116 $23,612 $23,392 
(1) Impact is recognized in the accounting period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

Return on equity is the ratio of annualized net income (loss) less preferred dividends to average shareholders’ equity for the periods presented. Core return on equity is the ratio of annualized core income (loss) less preferred dividends to adjusted average shareholders’ equity for the periods presented. In the opinion of the Company’s management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.

Average shareholders’ equity is (a) the sum of total shareholders’ equity excluding preferred stock at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two. Adjusted average shareholders’ equity is (a) the sum of total adjusted shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
Calculation of Return on Equity and Core Return on Equity
Three Months Ended June 30,Six Months Ended June 30,Twelve Months Ended June 30,
($ in millions, after-tax)20242023202420232024
Annualized net income (loss)$2,134 $(56)$3,313 $1,922 $3,687 
Average shareholders’ equity24,942 22,453 24,957 22,380 23,320 
Return on equity8.6 %(0.2)%13.3 %8.6 %15.8 %
Annualized core income$2,341 $57 $3,362 $1,969 $3,768 
Adjusted average shareholders’ equity28,817 26,690 28,600 26,688 27,728 
Core return on equity8.1 %0.2 %11.8 %7.4 %13.6 %

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 Twelve Months Ended 
December 31,		Average Annual
($ in millions, after-tax)202320222021202020192005 - 2018
Net income, less preferred dividends$2,991 $2,842 $3,662 $2,697 $2,622 $3,033 
Average shareholders’ equity22,031 23,384 28,735 26,892 24,922 24,677 
Return on equity13.6 %12.2 %12.7 %10.0 %10.5 %12.3 %
Core income, less preferred dividends$3,072 $2,998 $3,522 $2,686 $2,537 $3,032 
Adjusted average shareholders’ equity26,772 26,588 25,718 23,790 23,335 23,401 
Core return on equity11.5 %11.3 %13.7 %11.3 %10.9 %13.0 %

RECONCILIATION OF NET INCOME (LOSS) TO UNDERWRITING GAIN EXCLUDING CERTAIN ITEMS

Underwriting gain (loss) is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. In the opinion of the Company’s management, it is important to measure the profitability of each segment excluding the results of investing activities, which are managed separately from the insurance business. This measure is used to assess each segment’s business performance and as a tool in making business decisions. Underwriting gain, excluding the impact of catastrophes and net favorable (unfavorable) prior year loss reserve development, is the underwriting gain adjusted to exclude claims and claim adjustment expenses, reinstatement premiums and assessments related to catastrophes and loss reserve development related to time periods prior to the current year. In the opinion of the Company’s management, this measure is meaningful to users of the financial statements to understand the Company’s periodic earnings and the variability of earnings caused by the unpredictable nature (i.e., the timing and amount) of catastrophes and loss reserve development. This measure is also referred to as underlying underwriting gain, underlying underwriting margin, underlying underwriting income or underlying underwriting result.

A catastrophe is a severe loss designated, or reasonably expected by the Company to be designated, a catastrophe by one or more industry recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada. Catastrophes can be caused by various natural events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis, volcanic eruptions and other naturally-occurring events, such as solar flares. Catastrophes can also be man-made, such as terrorist attacks and other intentionally destructive acts including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and core income (loss) and claims and claim adjustment expense reserves upon occurrence. A catastrophe may result in the payment of reinsurance reinstatement premiums and assessments from various pools.

The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is reached and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company. Additionally, an aggregate threshold is applied for international business across all reportable segments. The threshold for 2024 ranges from $20 million to $30 million of losses before reinsurance and taxes.

Net favorable (unfavorable) prior year loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims, which may be related to one or more prior years. In the opinion of the Company’s management, a discussion of loss reserve development is meaningful to users of the financial statements as it allows them to assess the impact between prior and current year development on incurred claims and claim adjustment expenses, net and core income (loss), and changes in claims and claim adjustment expense reserve levels from period to period.

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Reconciliation of Net Income (Loss) to Pre-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)
Three Months Ended June 30,Six Months Ended June 30,
($ in millions, after-tax, except as noted)2024202320242023
Net income (loss)$534 $(14)$1,657 $961 
Net realized investment losses51 29 24 24 
Core income585 15 1,681 985 
Net investment income(727)(594)(1,425)(1,151)
Other (income) expense, including interest expense84 70 158 158 
Underwriting income (loss)(58)(509)414 (8)
Income tax expense (benefit) on underwriting results(7)(131)98 (265)
Pre-tax underwriting income (loss)(65)(640)512 (273)
Pre-tax impact of net favorable prior year reserve development(230)(60)(321)(165)
Pre-tax impact of catastrophes1,509 1,481 2,221 2,016 
Pre-tax underlying underwriting income$1,214 $781 $2,412 $1,578 
Reconciliation of Net Income (Loss) to After-Tax Underlying Underwriting Income (also known as Underlying Underwriting Gain)
 Three Months Ended June 30,Six Months Ended June 30,
($ in millions, after-tax)2024202320242023
Net income (loss)$534 $(14)$1,657 $961 
Net realized investment losses51 29 24 24 
Core income585 15 1,681 985 
Net investment income(727)(594)(1,425)(1,151)
Other (income) expense, including interest expense84 70 158 158 
Underwriting income (loss)(58)(509)414 (8)
Impact of net favorable prior year reserve development(182)(47)(253)(130)
Impact of catastrophes1,192 1,171 1,755 1,593 
Underlying underwriting income$952 $615 $1,916 $1,455 
 Twelve Months Ended December 31,
($ in millions, after-tax)202320222021202020192018201720162015201420132012
Net income$2,991 $2,842 $3,662 $2,697 $2,622 $2,523 $2,056 $3,014 $3,439 $3,692 $3,673 $2,473 
Net realized investment (gains) losses81 156 (132)(11)(85)(93)(142)(47)(2)(51)(106)(32)
Impact of changes in tax laws and/or tax rates (1) (2)
— — (8)— — — 129 — — — — — 
Core income3,072 2,998 3,522 2,686 2,537 2,430 2,043 2,967 3,437 3,641 3,567 2,441 
Net investment income(2,436)(2,170)(2,541)(1,908)(2,097)(2,102)(1,872)(1,846)(1,905)(2,216)(2,186)(2,316)
Other (income) expense, including interest expense337 277 235 232 214 248 179 78 193 159 61 171 
Underwriting income973 1,105 1,216 1,010 654 576 350 1,199 1,725 1,584 1,442 296 
Impact of net (favorable) unfavorable prior year reserve development(113)(512)(424)(276)47 (409)(378)(510)(617)(616)(552)(622)
Impact of catastrophes2,361 1,480 1,459 1,274 699 1,355 1,267 576 338 462 387 1,214 
Underlying underwriting income$3,221 $2,073 $2,251 $2,008 $1,400 $1,522 $1,239 $1,265 $1,446 $1,430 $1,277 $888 
(1) Impact is recognized in the accounting period in which the change is enacted
(2) 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA)

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COMBINED RATIO AND ADJUSTMENTS FOR UNDERLYING COMBINED RATIO
 
Combined ratio: For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators. The combined ratio, as used in this earnings release, is the equivalent of, and is calculated in the same manner as, the SAP combined ratio except that the SAP underwriting expense ratio is based on net written premiums and the underwriting expense ratio as used in this earnings release is based on net earned premiums.
For SAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses less certain administrative services fee income to net earned premiums as defined in the statutory financial statements required by insurance regulators. The loss and LAE ratio as used in this earnings release is calculated in the same manner as the SAP ratio.

For SAP, the underwriting expense ratio is the ratio of underwriting expenses incurred (including commissions paid), less certain administrative services fee income and billing and policy fees and other, to net written premiums as defined in the statutory financial statements required by insurance regulators. The underwriting expense ratio as used in this earnings release, is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income, billing and policy fees and other, to net earned premiums.

The combined ratio, loss and LAE ratio, and underwriting expense ratio are used as indicators of the Company’s underwriting discipline, efficiency in acquiring and servicing its business and overall underwriting profitability. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.

Underlying combined ratio represents the combined ratio excluding the impact of net prior year reserve development and catastrophes. The underlying combined ratio is an indicator of the Company’s underwriting discipline and underwriting profitability for the current accident year.

Other companies’ method of computing similarly titled measures may not be comparable to the Company’s method of computing these ratios.

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Calculation of the Combined Ratio
Three Months Ended June 30,Six Months Ended June 30,
($ in millions, pre-tax)2024202320242023
Loss and loss adjustment expense ratio
Claims and claim adjustment expenses$7,373 $7,227 $14,029 $13,186 
Less:
Policyholder dividends12 10 24 22 
Allocated fee income42 40 81 82 
Loss ratio numerator$7,319 $7,177 $13,924 $13,082 
Underwriting expense ratio
Amortization of deferred acquisition costs$1,678 $1,519 $3,376 $2,981 
General and administrative expenses (G&A)1,478 1,308 2,884 2,575 
Less:
Non-insurance G&A106 92 208 187 
Allocated fee income73 66 143 130 
Billing and policy fees and other30 28 60 56 
Expense ratio numerator$2,947 $2,641 $5,849 $5,183 
Earned premium$10,243 $9,216 $20,369 $18,070 
Combined ratio (1)
Loss and loss adjustment expense ratio71.4 %77.9 %68.4 %72.4 %
Underwriting expense ratio28.8 %28.6 %28.7 %28.7 %
Combined ratio100.2 %106.5 %97.1 %101.1 %
Impact on combined ratio:
Net favorable prior year reserve development(2.2)%(0.7)%(1.5)%(0.9)%
Catastrophes, net of reinsurance14.7 %16.1 %10.9 %11.2 %
Underlying combined ratio87.7 %91.1 %87.7 %90.8 %
(1)  For purposes of computing ratios, billing and policy fees and other (which are a component of other revenues) are allocated as a reduction of underwriting expenses.  In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and underwriting expenses. These allocations are to conform the calculation of the combined ratio with statutory accounting. Additionally, general and administrative expenses include non-insurance expenses that are excluded from underwriting expenses, and accordingly are excluded in calculating the combined ratio. 

RECONCILIATION OF BOOK VALUE PER SHARE AND SHAREHOLDERS’ EQUITY TO CERTAIN NON-GAAP MEASURES
 
Book value per share is total common shareholders’ equity divided by the number of common shares outstanding. Adjusted book value per share is total common shareholders’ equity excluding net unrealized investment gains and losses, net of tax, included in shareholders’ equity, divided by the number of common shares outstanding. In the opinion of the Company’s management, adjusted book value per share is useful in an analysis of a property casualty company’s book value per share as it removes the effect of changing prices on invested assets (i.e., net unrealized investment gains (losses), net of tax), which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves. Tangible book value per share is adjusted book value per share excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding. In the opinion of the Company’s management, tangible book value per share is useful in an analysis of a property casualty company’s book value on a nominal basis as it removes certain effects of purchase accounting (i.e., goodwill and other intangible assets), in addition to the effect of changing prices on invested assets.

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Reconciliation of Shareholders’ Equity to Tangible Shareholders’ Equity, Excluding Net Unrealized Investment Losses, Net of Tax and Calculation of Book Value Per Share, Adjusted Book Value Per Share and Tangible Book Value Per Share
 As of
($ in millions, except per share amounts)June 30,
2024		December 31,
2023		June 30,
2023
Shareholders’ equity$24,862 $24,921 $21,855 
Less: Net unrealized investment losses, net of tax, included in shareholders’ equity(3,976)(3,129)(4,576)
Shareholders’ equity, excluding net unrealized investment losses, net of tax, included in shareholders’ equity28,838 28,050 26,431 
Less:
Goodwill4,250 3,976 3,975 
Other intangible assets371 277 283 
Impact of deferred tax on other intangible assets(86)(69)(67)
Tangible shareholders’ equity, excluding net unrealized investment losses, net of tax, included in shareholders’ equity$24,303 $23,866 $22,240 
Common shares outstanding227.9 228.2 228.9 
Book value per share$109.08 $109.19 $95.46 
Adjusted book value per share126.52 122.90 115.45 
Tangible book value per share, excluding net unrealized investment losses, net of tax, included in shareholders’ equity106.62 104.57 97.14 

RECONCILIATION OF TOTAL CAPITALIZATION TO TOTAL CAPITALIZATION EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES), NET OF TAX
 
Total capitalization is the sum of total shareholders’ equity and debt. Debt-to-capital ratio excluding net unrealized gains (losses) on investments, net of tax, included in shareholders’ equity, is the ratio of debt to total capitalization excluding the after-tax impact of net unrealized investment gains and losses included in shareholders’ equity. In the opinion of the Company’s management, the debt-to-capital ratio is useful in an analysis of the Company’s financial leverage.
 As of
($ in millions)June 30,
2024		December 31,
2023
Debt    $8,032 $8,031 
Shareholders’ equity  24,862 24,921 
Total capitalization  
32,894 32,952 
Less: Net unrealized investment losses, net of tax, included in shareholders’ equity(3,976)(3,129)
Total capitalization excluding net unrealized losses on investments, net of tax, included in shareholders’ equity$36,870 $36,081 
Debt-to-capital ratio  24.4 %24.4 %
Debt-to-capital ratio excluding net unrealized investment losses, net of tax, included in shareholders’ equity21.8 %22.3 %
 

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RECONCILIATION OF INVESTED ASSETS TO INVESTED ASSETS EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES)

 As of June 30,
($ in millions)20242023
Invested assets$89,511 $82,973 
Less: Net unrealized investment losses, pre-tax(5,043)(5,815)
Invested assets excluding net unrealized investment losses$94,554 $88,788 

  As of December 31,
($ in millions)202320222021202020192018201720162015201420132012
Invested assets$88,810 $80,454 $87,375 $84,423 $77,884 $72,278 $72,502 $70,488 $70,470 $73,261 $73,160 $73,838 
Less: Net unrealized investment gains (losses), pre-tax(3,970)(6,220)3,060 5,175 2,853 (137)1,414 1,112 1,974 3,008 2,030 4,761 
Invested assets excluding net unrealized investment gains (losses)$92,780 $86,674 $84,315 $79,248 $75,031 $72,415 $71,088 $69,376 $68,496 $70,253 $71,130 $69,077 

OTHER DEFINITIONS

Gross written premiums reflect the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. Net written premiums reflect gross written premiums less premiums ceded to reinsurers.

For Business Insurance and Bond & Specialty Insurance, retention is the amount of premium available for renewal that was retained, excluding rate and exposure changes. For Personal Insurance, retention is the ratio of the expected number of renewal policies that will be retained throughout the annual policy period to the number of available renewal base policies. For all of the segments, renewal rate change represents the estimated change in average premium on policies that renew, excluding exposure changes. Exposure is the measure of risk used in the pricing of an insurance product. The change in exposure is the amount of change in premium on policies that renew attributable to the change in portfolio risk. Renewal premium change represents the estimated change in average premium on policies that renew, including rate and exposure changes. New business is the amount of written premium related to new policyholders and additional products sold to existing policyholders. These are operating statistics, which are in part dependent on the use of estimates and are therefore subject to change. For Business Insurance, retention, renewal premium change and new business exclude National Accounts. For Bond & Specialty Insurance, retention, renewal premium change and new business exclude surety and other products that are generally sold on a non-recurring, project specific basis. For each of the segments, production statistics referred to herein are domestic only unless otherwise indicated.

Statutory capital and surplus represents the excess of an insurance company’s admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.

Holding company liquidity is the total funds available at the holding company level to fund general corporate purposes, primarily the payment of shareholder dividends and debt service. These funds consist of total cash, short-term invested assets and other readily marketable securities held by the holding company.

For a glossary of other financial terms used in this press release, we refer you to the Company’s most recent annual report on Form 10-K filed with the SEC on February 15, 2024, and subsequent periodic filings with the SEC.
 
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Contacts
Media:
Institutional Investors:
Patrick LinehanAbbe Goldstein
917.778.6267917.778.6825


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