UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 2015
The Travelers Companies, Inc.
(Exact name of registrant as specified in its charter)
Minnesota |
|
001-10898 |
|
41-0518860 |
(State or other jurisdiction of |
|
(Commission File Number) |
|
(IRS Employer Identification |
485 Lexington Avenue |
|
10017 |
(Address of principal executive offices) |
|
(Zip Code) |
(917) 778-6000
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On July 21, 2015, The Travelers Companies, Inc. (the Company) issued a press release announcing the results of the Companys operations for the quarter ended June 30, 2015, and the availability of the Companys second quarter financial supplement on the Companys web site. The press release and the financial supplement are furnished as Exhibits 99.1 and 99.2 to this Report and are hereby incorporated by reference in this Item 2.02.
As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release, dated July 21, 2015, reporting results of operations (This exhibit is furnished and not filed.) |
99.2 |
|
Second Quarter 2015 Financial Supplement of The Travelers Companies, Inc. (This exhibit is furnished and not filed.) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 21, 2015 |
THE TRAVELERS COMPANIES, INC. | ||
|
|
| |
|
By: |
/s/ Kenneth F. Spence III | |
|
|
Name: |
Kenneth F. Spence III |
|
|
Title: |
Executive Vice President and General Counsel |
Exhibit 99.1
|
|
NYSE: TRV
Travelers Reports Second Quarter Net Income per Diluted Share of $2.53, Up 30% from Prior Year Quarter
Operating Income per Diluted Share of $2.52, Up 31% from Prior Year Quarter
Return on Equity and Operating Return on Equity of 13.3% and 14.2%, Respectively
· Net income and operating income of $812 million and $806 million, up 19% and 20%, respectively, from prior year quarter.
· Consolidated combined ratio of 90.8% with strong underwriting results in each business segment.
· Net written premiums of $6.169 billion comparable to prior year quarter. Continued to achieve very strong business retention.
· Total capital returned to shareholders of $995 million in the quarter, including $801 million of share repurchases. Year-to-date total capital returned to shareholders of $1.845 billion, including $1.473 billion of share repurchases.
· Book value per share of $77.51 increased 3% from the prior year quarter end and 1% from year-end 2014. Adjusted book value per share of $73.09 increased 5% and 3%, respectively, from the same dates.
· Board of Directors approves quarterly dividend per share of $0.61.
New York, July 21, 2015 The Travelers Companies, Inc. today reported net income of $812 million, or $2.53 per diluted share, for the quarter ended June 30, 2015, compared to net income of $683 million, or $1.95 per diluted share, in the prior year quarter. Operating income in the current quarter was $806 million, or $2.52 per diluted share, compared to $673 million, or $1.93 per diluted share, in the prior year quarter. The increase in net and operating income primarily resulted from lower catastrophe losses and a $32 million benefit from the resolution of prior year tax matters, partially offset by lower net investment income. Per diluted share amounts also benefited from the impact of share repurchases.
Consolidated Highlights
($ in millions, except for per share amounts, and after-tax, |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||
except for premiums & revenues) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| ||||
Net written premiums |
|
$ |
6,169 |
|
$ |
6,162 |
|
|
% |
$ |
12,066 |
|
$ |
12,035 |
|
|
% |
Total revenues |
|
$ |
6,706 |
|
$ |
6,785 |
|
(1 |
) |
$ |
13,332 |
|
$ |
13,493 |
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
806 |
|
$ |
673 |
|
20 |
|
$ |
1,633 |
|
$ |
1,725 |
|
(5 |
) |
per diluted share |
|
$ |
2.52 |
|
$ |
1.93 |
|
31 |
|
$ |
5.05 |
|
$ |
4.89 |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
812 |
|
$ |
683 |
|
19 |
|
$ |
1,645 |
|
$ |
1,735 |
|
(5 |
) |
per diluted share |
|
$ |
2.53 |
|
$ |
1.95 |
|
30 |
|
$ |
5.08 |
|
$ |
4.91 |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted weighted average shares outstanding |
|
318.0 |
|
346.7 |
|
(8 |
) |
321.2 |
|
350.5 |
|
(8 |
) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Combined ratio |
|
90.8 |
% |
95.1 |
% |
(4.3 |
)pts |
89.9 |
% |
90.5 |
% |
(0.6 |
)pts | ||||
Underlying combined ratio |
|
90.6 |
% |
90.9 |
% |
(0.3 |
)pts |
90.4 |
% |
89.6 |
% |
0.8 |
pts | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating return on equity |
|
14.2 |
% |
11.4 |
% |
2.8 |
pts |
14.3 |
% |
14.6 |
% |
(0.3 |
)pts | ||||
Return on equity |
|
13.3 |
% |
10.7 |
% |
2.6 |
pts |
13.3 |
% |
13.7 |
% |
(0.4 |
)pts |
|
|
|
|
|
|
|
|
Change from |
| |||||
|
|
June 30, |
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December 31, |
|
June 30, |
|
December 31, |
|
June 30, |
| |||
|
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2015 |
|
2014 |
|
2014 |
|
2014 |
|
2014 |
| |||
Book value per share |
|
$ |
77.51 |
|
$ |
77.08 |
|
$ |
75.32 |
|
1 |
% |
3 |
% |
Adjusted book value per share |
|
73.09 |
|
70.98 |
|
69.38 |
|
3 |
|
5 |
| |||
See Glossary of Financial Measures for definitions and the statistical supplement for additional financial data.
We are pleased to report another strong quarter, with operating income of $806 million and operating return on equity of 14.2%, commented Jay Fishman, Chairman and Chief Executive Officer. Our results were driven by strong underwriting performance across all of our business segments, as reflected in our consolidated combined ratio of 90.8%, as well as net investment income which was consistent with our expectations. We continue to deploy our capital first by seeking opportunities that offer attractive returns, and then by returning excess capital to shareholders. In the quarter, we returned almost $1 billion to shareholders, including approximately $800 million in share repurchases.
We remain very pleased with both the stability of the markets in which we compete, as well as how we have executed on our strategies. Given our strong product returns, our goal has been to retain a high percentage of business that meets our return thresholds, to improve profitability where needed, and to actively seek and quote on new business that is consistent with our profitability targets. For the first half of the year, we have achieved our goals as evidenced by historically high retentions, broadly stable renewal pricing, and solid new business. We believe these results demonstrate the value we provide to our agents, brokers, and customers.
We continue to believe that creating shareholder value is achieved by building meaningful and sustainable competitive advantages which deliver superior returns over time and returning excess capital to shareholders. This strategy has been extremely effective for us, and with our data-driven decisions and relentless focus on execution, we remain well positioned to continue to deliver superior shareholder value.
Consolidated Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| ||||||
Underwriting gain: |
|
$ |
511 |
|
$ |
257 |
|
$ |
254 |
|
$ |
1,131 |
|
$ |
1,048 |
|
$ |
83 |
|
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
207 |
|
183 |
|
24 |
|
450 |
|
477 |
|
(27 |
) | ||||||
Catastrophes, net of reinsurance |
|
(221 |
) |
(436 |
) |
215 |
|
(383 |
) |
(585 |
) |
202 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
632 |
|
695 |
|
(63 |
) |
1,224 |
|
1,431 |
|
(207 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income/(expense), including interest expense |
|
(77 |
) |
(67 |
) |
(10 |
) |
(151 |
) |
(125 |
) |
(26 |
) | ||||||
Operating income before income taxes |
|
1,066 |
|
885 |
|
181 |
|
2,204 |
|
2,354 |
|
(150 |
) | ||||||
Income tax expense |
|
260 |
|
212 |
|
48 |
|
571 |
|
629 |
|
(58 |
) | ||||||
Operating income |
|
806 |
|
673 |
|
133 |
|
1,633 |
|
1,725 |
|
(92 |
) | ||||||
Net realized investment gains after income taxes |
|
6 |
|
10 |
|
(4 |
) |
12 |
|
10 |
|
2 |
| ||||||
Net Income |
|
$ |
812 |
|
$ |
683 |
|
$ |
129 |
|
$ |
1,645 |
|
$ |
1,735 |
|
$ |
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
90.8 |
% |
95.1 |
% |
(4.3 |
)pts |
89.9 |
% |
90.5 |
% |
(0.6 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(3.5 |
) |
(3.1 |
) |
(0.4 |
)pts |
(3.8 |
) |
(4.1 |
) |
0.3 |
pts | ||||||
Catastrophes, net of reinsurance |
|
3.7 |
|
7.3 |
|
(3.6 |
)pts |
3.3 |
|
5.0 |
|
(1.7 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
90.6 |
% |
90.9 |
% |
(0.3 |
)pts |
90.4 |
% |
89.6 |
% |
0.8 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Business and International Insurance |
|
$ |
3,679 |
|
$ |
3,729 |
|
(1 |
)% |
$ |
7,476 |
|
$ |
7,501 |
|
|
% | ||
Bond & Specialty Insurance |
|
534 |
|
540 |
|
(1 |
) |
1,012 |
|
1,022 |
|
(1 |
) | ||||||
Personal Insurance |
|
1,956 |
|
1,893 |
|
3 |
|
3,578 |
|
3,512 |
|
2 |
| ||||||
Total |
|
$ |
6,169 |
|
$ |
6,162 |
|
|
% |
$ |
12,066 |
|
$ |
12,035 |
|
|
% |
Second Quarter 2015 Results
(All comparisons vs. second quarter 2014, unless noted otherwise)
Net income of $812 million after-tax and operating income of $806 million after-tax increased $129 million and $133 million, respectively, primarily driven by lower catastrophe losses and a $32 million benefit from the resolution of prior year tax matters, partially offset by lower net investment income.
Underwriting results
· The combined ratio improved 4.3 points to 90.8% due to lower catastrophe losses (3.6 points), higher net favorable prior year reserve development (0.4 points), and a lower underlying combined ratio (0.3 points).
· The underlying combined ratio remained strong, improving 0.3 points to 90.6%.
· Net favorable prior year reserve development occurred in all segments. Catastrophe losses primarily resulted from wind and hail storms in several regions of the United States.
Net investment income of $632 million pre-tax ($503 million after-tax) decreased primarily due to lower private equity and fixed income returns. Private equity returns were particularly high in the prior year quarter and were impacted in the current quarter by lower valuations for energy-related investments. Fixed income returns declined due to lower reinvestment rates and modestly lower fixed income investments that were impacted by the Companys $579 million payment in the first quarter 2015 related to the settlement of the Asbestos Direct Action Litigation.
Net written premiums of $6.169 billion were comparable to the prior year quarter, benefitting from positive renewal premium changes, strong retention in each business segment, and a significant increase in new business in Personal Insurance, partially offset by the impact of changes in foreign currency exchange rates.
Year-to-Date 2015 Results
(All comparisons vs. year-to-date 2014, unless noted otherwise)
Net income of $1.645 billion after-tax and operating income of $1.633 billion after-tax decreased $90 million and $92 million, respectively, primarily driven by lower net investment income and a lower underlying underwriting gain (i.e., excluding net favorable prior year reserve development and catastrophe losses), partially offset by lower catastrophe losses and the $32 million benefit from the resolution of prior year tax matters. The underlying underwriting gain in the prior year period benefitted from a $49 million after-tax ($76 million pre-tax) reduction in the estimated liability for state assessments to be paid by the Company related to workers compensation premiums due to a change in state law.
Underwriting results
· The combined ratio improved 0.6 points to 89.9% due to lower catastrophe losses (1.7 points), partially offset by a higher underlying combined ratio (0.8 points) and lower net favorable prior year reserve development (0.3 points).
· The underlying combined ratio, while remaining strong, increased 0.8 points to 90.4%, due to an increase in the expense ratio (1.1 points). The expense ratio increased primarily due to the inclusion in the prior year period of the above mentioned state assessments benefit (0.6 points).
· Net favorable prior year reserve development occurred in all segments. Catastrophe losses included the second quarter 2015 events discussed above, as well as a winter storm in the eastern United States in the first quarter 2015.
Net investment income of $1.224 billion pre-tax ($981 million after-tax) decreased primarily due to lower private equity returns and fixed income returns. Private equity returns were particularly high in the prior year period and were impacted in the current period by lower valuations for energy-related investments. Fixed income returns declined due to lower reinvestment rates and modestly lower fixed income investments that were impacted by the Companys $579 million payment in the first quarter 2015 related to the settlement of the Asbestos Direct Action Litigation.
Net written premiums of $12.066 billion increased slightly from the prior year period, benefitting from positive renewal premium changes and an increase in retention and new business, partially offset by the impact of changes in the timing and structure of certain of the Companys reinsurance treaties and the impact of changes in foreign currency exchange rates.
Shareholders Equity
Shareholders equity of $24.121 billion decreased 3% from year-end 2014 primarily due to a reduction in after-tax net unrealized investment gains. After-tax net unrealized investment gains were $1.376 billion, compared to $1.966 billion at year-end 2014. Book value per share of $77.51 increased 1% from year-end 2014, while adjusted book value per share of $73.09 increased 3% from year-end 2014.
The Company repurchased 7.9 million shares during the second quarter and 14.2 million shares year-to-date at a total cost of $801 million and $1.473 billion, respectively, leaving $5.084 billion of remaining capacity under its existing share repurchase authorization at the end of the quarter. Also as of the end of the quarter, statutory capital and surplus was $20.851 billion and the ratio of debt-to-capital (excluding after-tax net unrealized investment gains) was 21.8%, well within the Companys target range of 15% to 25%.
The Board of Directors today declared a quarterly dividend of $0.61 per share. This dividend is payable on September 30, 2015, to shareholders of record as of the close of business on September 10, 2015.
Business and International Insurance Segment Financial Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underwriting gain: |
|
$ |
230 |
|
$ |
55 |
|
$ |
175 |
|
$ |
458 |
|
$ |
424 |
|
$ |
34 |
|
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
103 |
|
47 |
|
56 |
|
180 |
|
142 |
|
38 |
| ||||||
Catastrophes, net of reinsurance |
|
(108 |
) |
(242 |
) |
134 |
|
(207 |
) |
(325 |
) |
118 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
487 |
|
539 |
|
(52 |
) |
941 |
|
1,109 |
|
(168 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
5 |
|
10 |
|
(5 |
) |
13 |
|
22 |
|
(9 |
) | ||||||
Operating income before income taxes |
|
722 |
|
604 |
|
118 |
|
1,412 |
|
1,555 |
|
(143 |
) | ||||||
Income tax expense |
|
179 |
|
133 |
|
46 |
|
354 |
|
390 |
|
(36 |
) | ||||||
Operating income |
|
$ |
543 |
|
$ |
471 |
|
$ |
72 |
|
$ |
1,058 |
|
$ |
1,165 |
|
$ |
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
93.2 |
% |
98.1 |
% |
(4.9 |
)pts |
93.3 |
% |
93.7 |
% |
(0.4 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(2.8 |
) |
(1.3 |
) |
(1.5 |
)pts |
(2.5 |
) |
(2.0 |
) |
(0.5 |
)pts | ||||||
Catastrophes, net of reinsurance |
|
2.9 |
|
6.6 |
|
(3.7 |
)pts |
2.9 |
|
4.5 |
|
(1.6 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
93.1 |
% |
92.8 |
% |
0.3 |
pts |
92.9 |
% |
91.2 |
% |
1.7 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Domestic |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Select Accounts |
|
$ |
709 |
|
$ |
705 |
|
1 |
% |
$ |
1,431 |
|
$ |
1,423 |
|
1 |
% | ||
Middle Market |
|
1,456 |
|
1,420 |
|
3 |
|
3,189 |
|
3,052 |
|
4 |
| ||||||
National Accounts |
|
228 |
|
243 |
|
(6 |
) |
527 |
|
543 |
|
(3 |
) | ||||||
First Party |
|
452 |
|
450 |
|
|
|
792 |
|
837 |
|
(5 |
) | ||||||
Specialized Distribution |
|
300 |
|
283 |
|
6 |
|
568 |
|
550 |
|
3 |
| ||||||
Total Domestic |
|
3,145 |
|
3,101 |
|
1 |
|
6,507 |
|
6,405 |
|
2 |
| ||||||
International |
|
534 |
|
628 |
|
(15 |
) |
969 |
|
1,096 |
|
(12 |
) | ||||||
Total |
|
$ |
3,679 |
|
$ |
3,729 |
|
(1 |
)% |
$ |
7,476 |
|
$ |
7,501 |
|
|
% |
Second Quarter 2015 Results
(All comparisons vs. second quarter 2014, unless noted otherwise)
Business and International Insurance had another strong quarter with operating income of $543 million after-tax and a combined ratio of 93.2%. Operating income increased $72 million primarily due to lower catastrophes, higher net favorable prior year reserve development, and a $12 million benefit from the resolution of prior year tax matters in the current quarter, partially offset by lower net investment income and a slightly lower underlying underwriting gain.
Underwriting results
· The combined ratio improved 4.9 points to 93.2%, due to lower catastrophe losses (3.7 points) and higher net favorable prior year reserve development (1.5 points), partially offset by a higher underlying combined ratio (0.3 points).
· The underlying combined ratio, while remaining strong, increased by 0.3 points to 93.1%.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in the workers compensation product line for accident years 2006 and prior, better than expected loss experience in the general liability product line primarily related to primary coverages for accident years 2008 through 2013, reflecting more favorable legal and judicial environments than what the Company previously expected, better than expected loss experience in the Companys operations at Lloyds and in Canada, better than expected loss experience for property coverages in the commercial multi-peril product line primarily related to non-catastrophe losses for accident years 2012 and 2014, and better than expected loss experience for the property product line related to catastrophe losses for accident year 2014. These improvements were partially offset by a $47 million after-tax ($72 million pre-tax) increase to environmental reserves.
Net written premiums decreased 1% to $3.679 billion. Domestic net written premiums increased 1% driven by positive renewal premium changes and an increase in retention rates. International net written premiums decreased 15% primarily due to the impact of changes in foreign currency exchange rates.
Year-to-Date 2015 Results
(All comparisons vs. year-to-date 2014, unless noted otherwise)
Business and International Insurance performed well in the period with operating income of $1.058 billion after-tax and a combined ratio of 93.3%. Operating income decreased $107 million primarily due to lower net investment income and a lower underlying underwriting gain, partially offset by lower catastrophe losses, higher net favorable prior year reserve development and the $12 million benefit from the resolution of prior year tax matters. The underlying underwriting gain in the prior year period benefitted from a $49 million after-tax ($76 million pre-tax) reduction in the estimated liability for state assessments to be paid by the Company related to workers compensation premiums due to a change in state law.
Underwriting results
· The combined ratio improved 0.4 points to 93.3%, due to lower catastrophe losses (1.6 points) and higher net favorable prior year reserve development (0.5 points), partially offset by a higher underlying combined ratio (1.7 points).
· The underlying combined ratio, while remaining strong, increased 1.7 points to 92.9%, due to an increase in the expense ratio (1.7 points). The expense ratio increased primarily due to the inclusion in the prior year quarter of the above mentioned state assessments benefit (1.1 points).
· Net favorable prior year reserve development primarily resulted from the same factors as discussed above for the second quarter, as well as better than expected loss experience in the general liability product line primarily related to primary coverages for accident years 2005 and prior, and better than expected loss experience for the property product line related to catastrophe losses for accident years 2012 and 2013.
Net written premiums of $7.476 billion were comparable to the prior year. Domestic net written premiums increased 2% driven by positive renewal premium changes, an increase in retention rates, and an increase in new business, partially offset by the impact of changes in the timing and structure of certain of the Companys reinsurance treaties. International net written premiums decreased 12% primarily due to the impact of changes in foreign currency exchange rates.
Bond & Specialty Insurance Segment Financial Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underwriting gain: |
|
$ |
136 |
|
$ |
217 |
|
$ |
(81 |
) |
$ |
254 |
|
$ |
371 |
|
$ |
(117 |
) |
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
40 |
|
124 |
|
(84 |
) |
75 |
|
191 |
|
(116 |
) | ||||||
Catastrophes, net of reinsurance |
|
(1 |
) |
(4 |
) |
3 |
|
(2 |
) |
(5 |
) |
3 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
57 |
|
62 |
|
(5 |
) |
113 |
|
128 |
|
(15 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
5 |
|
6 |
|
(1 |
) |
10 |
|
10 |
|
|
| ||||||
Operating income before income taxes |
|
198 |
|
285 |
|
(87 |
) |
377 |
|
509 |
|
(132 |
) | ||||||
Income tax expense |
|
47 |
|
93 |
|
(46 |
) |
102 |
|
163 |
|
(61 |
) | ||||||
Operating income |
|
$ |
151 |
|
$ |
192 |
|
$ |
(41 |
) |
$ |
275 |
|
$ |
346 |
|
$ |
(71 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
73.7 |
% |
58.4 |
% |
15.3 |
pts |
74.9 |
% |
63.4 |
% |
11.5 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(7.7 |
) |
(23.7 |
) |
16.0 |
pts |
(7.3 |
) |
(18.6 |
) |
11.3 |
pts | ||||||
Catastrophes, net of reinsurance |
|
0.3 |
|
0.9 |
|
(0.6 |
)pts |
0.2 |
|
0.6 |
|
(0.4 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
81.1 |
% |
81.2 |
% |
(0.1 |
)pts |
82.0 |
% |
81.4 |
% |
0.6 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Management Liability |
|
$ |
322 |
|
$ |
331 |
|
(3 |
)% |
$ |
643 |
|
$ |
655 |
|
(2 |
)% | ||
Surety |
|
212 |
|
209 |
|
1 |
|
369 |
|
367 |
|
1 |
| ||||||
Total |
|
$ |
534 |
|
$ |
540 |
|
(1 |
)% |
$ |
1,012 |
|
$ |
1,022 |
|
(1 |
)% |
Second Quarter 2015 Results
(All comparisons vs. second quarter 2014, unless noted otherwise)
Bond & Specialty Insurance had another strong quarter, with operating income of $151 million after-tax and a combined ratio of 73.7%. Operating income was $41 million lower than the prior year quarter due to lower net favorable prior year reserve development, partially offset by a $16 million benefit from the resolution of prior year tax matters in the current quarter.
Underwriting results
· The combined ratio, while remaining strong at 73.7%, increased 15.3 points primarily due to lower net favorable prior year reserve development (16.0 points).
· The underlying combined ratio remained strong at 81.1% and was comparable to the prior year quarter.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in the contract surety product line for accident years 2010 through 2013.
Bond & Specialty Insurance net written premiums decreased slightly to $534 million.
Year-to-Date 2015 Results
(All comparisons vs. year-to-date 2014, unless noted otherwise)
Bond & Specialty Insurance performed well in the period with operating income of $275 million after-tax and a combined ratio of 74.9%. Operating income decreased by $71 million due to lower net favorable prior year reserve development, partially offset by the $16 million benefit from the resolution of prior year tax matters.
Underwriting results
· The combined ratio remained strong at 74.9% while increasing 11.5 points primarily due to lower net favorable prior year reserve development (11.3 points).
· The underlying combined ratio remained strong at 82.0%.
· Net favorable prior year reserve development primarily resulted from the same factors as discussed above for the second quarter.
Bond & Specialty Insurance net written premiums decreased slightly to $1.012 billion.
Personal Insurance Segment Financial Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underwriting gain/(loss): |
|
$ |
145 |
|
$ |
(15 |
) |
$ |
160 |
|
$ |
419 |
|
$ |
253 |
|
$ |
166 |
|
Underwriting gain/(loss) includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
64 |
|
12 |
|
52 |
|
195 |
|
144 |
|
51 |
| ||||||
Catastrophes, net of reinsurance |
|
(112 |
) |
(190 |
) |
78 |
|
(174 |
) |
(255 |
) |
81 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
88 |
|
94 |
|
(6 |
) |
170 |
|
194 |
|
(24 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
12 |
|
17 |
|
(5 |
) |
24 |
|
43 |
|
(19 |
) | ||||||
Operating income before income taxes |
|
245 |
|
96 |
|
149 |
|
613 |
|
490 |
|
123 |
| ||||||
Income tax expense |
|
71 |
|
21 |
|
50 |
|
187 |
|
147 |
|
40 |
| ||||||
Operating income |
|
$ |
174 |
|
$ |
75 |
|
$ |
99 |
|
$ |
426 |
|
$ |
343 |
|
$ |
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
91.1 |
% |
99.8 |
% |
(8.7 |
)pts |
87.3 |
% |
91.7 |
% |
(4.4 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(3.5 |
) |
(0.7 |
) |
(2.8 |
)pts |
(5.5 |
) |
(4.1 |
) |
(1.4 |
)pts | ||||||
Catastrophes, net of reinsurance |
|
6.2 |
|
10.7 |
|
(4.5 |
)pts |
4.9 |
|
7.2 |
|
(2.3 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
88.4 |
% |
89.8 |
% |
(1.4 |
)pts |
87.9 |
% |
88.6 |
% |
(0.7 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Agency Automobile(1) |
|
$ |
890 |
|
$ |
831 |
|
7 |
% |
$ |
1,712 |
|
$ |
1,619 |
|
6 |
% | ||
Agency Homeowners & Other(1) |
|
1,010 |
|
1,016 |
|
(1 |
) |
1,758 |
|
1,804 |
|
(3 |
) | ||||||
Direct to Consumer |
|
56 |
|
46 |
|
22 |
|
108 |
|
89 |
|
21 |
| ||||||
Total |
|
$ |
1,956 |
|
$ |
1,893 |
|
3 |
% |
$ |
3,578 |
|
$ |
3,512 |
|
2 |
% |
(1) Represents business sold through agents, brokers and other intermediaries, and excludes direct to consumer.
Second Quarter 2015 Results
(All comparisons vs. second quarter 2014, unless noted otherwise)
Personal Insurance operating income of $174 million after-tax increased by $99 million due to strong underwriting performance, primarily driven by lower catastrophe losses, higher net favorable prior year reserve development, a higher underlying underwriting gain, and a $4 million benefit from the resolution of prior year tax matters in the current quarter.
Underwriting results
· The combined ratio improved 8.7 points to 91.1%, primarily driven by lower catastrophe losses (4.5 points), higher net favorable prior year reserve development (2.8 points), and a lower underlying combined ratio (1.4 points).
· The underlying combined ratio remained strong, improving 1.4 points to 88.4%, primarily due to lower non-catastrophe weather-related losses.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in the homeowners and other product line for liability coverages for accident years 2011 through 2014 and for non-catastrophe weather-related losses for accident year 2014, and better than expected loss experience in the Automobile product line for liability coverages for accident years 2012 through 2014.
Personal Insurance net written premiums of $1.956 billion increased 3%. Agency Automobile net written premiums grew by 7%, primarily due to higher new business that was driven by the continued success of Quantum 2.0. Agency Automobile policies in force increased by 4% from the prior year quarter. While Agency Homeowners & Other net written premiums were comparable to the prior year quarter, new business has improved. Agency Homeowners & Other policies in force, while down 2% from the prior year quarter, increased slightly on a sequential quarter basis.
Year-to-Date 2015 Results
(All comparisons vs. year-to-date 2014, unless noted otherwise)
Personal Insurance operating income of $426 million after-tax increased $83 million due to strong underwriting performance, primarily driven by lower catastrophe losses, higher net favorable prior year reserve development, a higher underlying underwriting gain, and the $4 million benefit from the resolution of prior year tax matters.
Underwriting results
· The combined ratio improved 4.4 points to 87.3%, primarily driven by lower catastrophe losses (2.3 points), higher net favorable prior year reserve development (1.4 points), and a lower underlying combined ratio (0.7 points).
· The underlying combined ratio remained strong, improving 0.7 points to 87.9%, primarily driven by lower non-catastrophe weather-related losses.
· Net favorable prior year reserve development primarily resulted from the same factors as discussed above for the second quarter, as well as better than expected loss experience for catastrophe weather-related losses for accident year 2011.
Other income of $24 million decreased primarily due to the inclusion in the prior year period of revenues associated with the runoff of the Companys National Flood Insurance Program which was sold on a renewal rights basis in 2013.
Personal Insurance net written premiums of $3.578 billion increased 2%. Agency Automobile net written premiums increased 6% due to higher new business. Agency Homeowners & Other net written premiums decreased 3%, primarily driven by the impact of changes in the timing and structure of certain of the Companys reinsurance treaties.
Financial Supplement and Conference Call
The information in this press release should be read in conjunction with a financial supplement that is available on our website at www.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 Tuesday, July 21, 2015. Investors can access the call via webcast at http://investor.travelers.com or by dialing 1-800-272-6255 within the U.S. and 1-303-223-2680 outside the U.S. (use passcode 14788 for both the U.S. and international calls). Prior to the webcast, a slide presentation pertaining to the quarterly earnings will be available on the Companys website.
Following the live event, an audio playback of the webcast and the slide presentation will be available at the same website. An audio playback can also be accessed by phone at 1-800-633-8284 within the U.S. and 1-402-977-9140 outside the U.S. (use reservation 21770122 for both the U.S. and international calls).
About Travelers
The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. The Companys diverse business lines offer its customers a wide range of coverage sold primarily through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and operations in the United States and selected International markets. For more information, visit www.travelers.com.
From time to time, Travelers may use its website and/or social media outlets, such as Facebook and Twitter, 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 http://investor.travelers.com, our Facebook page at https://www.facebook.com/travelers and our Twitter account (@Travelers) at https://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 http://investor.travelers.com.
Travelers is organized into the following reportable business segments:
Business and International Insurance: The Business and International Insurance segment offers a broad array of property and casualty insurance and insurance related services to its clients, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyds.
Bond & Specialty Insurance: The Bond & Specialty Insurance segment provides surety, crime, management and professional liability coverages and related risk management services to a wide range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches.
Personal Insurance: The Personal Insurance segment writes a broad range of property and casualty insurance covering individuals personal risks. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.
* * * * *
Forward-Looking Statement
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, anticipates, expects, intends, plans, projects, believes, estimates and similar expressions are used to identify these forward-looking statements. Specifically, statements about the Companys outlook, share repurchase plans, expected margin improvement, potential returns, future pension plan contributions and the potential impact of investment markets and other economic conditions on the Companys investment portfolio and underwriting results, among others, are forward looking, and the Company may also make forward-looking statements about, among other things:
· its results of operations and financial condition (including, among other things, premium volume, premium rates, net and operating income, investment income and performance, loss costs, return on equity, and expected current returns and combined ratios);
· the sufficiency of the Companys asbestos and other reserves;
· the impact of emerging claims issues as well as other insurance and non-insurance litigation;
· the cost and availability of reinsurance coverage;
· catastrophe losses;
· the impact of investment, economic (including rapid changes in commodity prices, such as a significant decline in oil and gas prices, as well as fluctuations in foreign currency exchange rates) and underwriting market conditions; and
· strategic initiatives, including initiatives such as in Personal Insurance, to improve profitability and competitiveness.
The Company cautions investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond the Companys 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:
· catastrophe losses could materially and adversely affect the Companys results of operations, its financial position and/or liquidity, and could adversely impact the Companys ratings, the Companys ability to raise capital and the availability and cost of reinsurance;
· during or following a period of financial market disruption or economic downturn, the Companys business could be materially and adversely affected;
· if actual claims exceed the Companys claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, the Companys financial results could be materially and adversely affected;
· the Companys investment portfolio may suffer reduced returns or material realized or unrealized losses;
· the Companys business could be harmed because of its potential exposure to asbestos and environmental claims and related litigation;
· the Company is exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances;
· the effects of emerging claim and coverage issues on the Companys business are uncertain;
· the intense competition that the Company faces could harm its ability to maintain or increase its business volumes and its profitability;
· consolidation within the insurance industry, including among insurance companies, reinsurance companies and brokers and independent insurance agencies, could alter the competitive environment in which the Company operates, which may impact the Companys premium volume, the rate it can charge for its products, and the terms on which its products are offered;
· the Company may not be able to collect all amounts due to it from reinsurers and reinsurance coverage may not be available to the Company in the future at commercially reasonable rates or at all;
· the Company is exposed to credit risk in certain of its business and investment operations including reinsurance or structured settlements;
· within the United States, the Companys businesses are heavily regulated by the states in which it conducts business, including licensing and supervision, and changes in regulation may reduce the Companys profitability and limit its growth;
· changes in federal regulation could impose significant burdens on the Company and otherwise adversely impact the Companys results;
· a downgrade in the Companys claims-paying and financial strength ratings could adversely impact the Companys business volumes, adversely impact the Companys ability to access the capital markets and increase the Companys borrowing costs;
· the inability of the Companys insurance subsidiaries to pay dividends to the Companys holding company in sufficient amounts would harm the Companys ability to meet its obligations, pay future shareholder dividends or make future share repurchases;
· disruptions to the Companys relationships with its independent agents and brokers could adversely affect the Company;
· the Companys efforts to develop new products or expand in targeted markets may not be successful and may create enhanced risks;
· the Company may be adversely affected if its pricing and capital models provide materially different indications than actual results;
· the Companys business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology;
· if the Company experiences difficulties with technology, data and network security and/or outsourcing relationships, including cloud-based, the Companys ability to conduct its business could be negatively impacted;
· the Company is subject to a number of risks associated with its business outside the United States;
· new regulations outside of the United States, including in the European Union, could adversely impact the Companys results of operations and limit its growth;
· 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 Companys products could reduce the Companys future profitability;
· acquisitions and integration of acquired businesses may result in operating difficulties and other unintended consequences;
· the Company could be adversely affected if its controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective;
· the Companys businesses may be adversely affected if it is unable to hire and retain qualified employees;
· intellectual property is important to the Companys business, and the Company may be unable to protect and enforce its own intellectual property or the Company may be subject to claims for infringing the intellectual property of others;
· changes to existing accounting standards may adversely impact the Companys reported results;
· changes in U.S. tax laws or in the tax laws of other jurisdictions in which the Company operates could adversely impact the Company; and
· the Companys share repurchase plans depend on a variety of factors, including the Companys financial position, earnings, share price, catastrophe losses, maintaining capital levels commensurate with the Companys desired ratings from independent rating agencies, funding of the Companys qualified pension plan, capital requirements of the Companys operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions 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 and Managements Discussion and Analysis of Financial Condition and Results of Operations in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 12, 2015.
*****
GLOSSARY OF FINANCIAL MEASURES AND RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP MEASURES
The following measures are used by the Companys management to evaluate financial performance against historical results and establish targets on a consolidated basis. 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 non-GAAP measures to their most directly comparable GAAP measures also follow.
In the opinion of the Companys 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 Companys periodic results of operations and how management evaluates the Companys financial performance. Internally, the Companys management uses these measures to evaluate performance against historical results, to establish financial targets on a consolidated basis and for other reasons, which are discussed below.
Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, 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 Companys management.
RECONCILIATION OF OPERATING INCOME AND CERTAIN OTHER NON-GAAP MEASURES TO NET INCOME
Operating income is net income excluding the after-tax impact of net realized investment gains (losses) and discontinued operations. Management uses operating income to analyze each segments performance and as a tool in making business decisions. Financial statement users also consider operating income when analyzing the results and trends of insurance companies. Operating earnings per share is operating income on a per common share basis.
Reconciliation of Operating Income less Preferred Dividends to Net Income
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, pre-tax) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
1,066 |
|
$ |
885 |
|
$ |
2,204 |
|
$ |
2,354 |
|
Net realized investment gains |
|
10 |
|
16 |
|
20 |
|
17 |
| ||||
Net income |
|
$ |
1,076 |
|
$ |
901 |
|
$ |
2,224 |
|
$ |
2,371 |
|
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
806 |
|
$ |
673 |
|
$ |
1,633 |
|
$ |
1,725 |
|
Net realized investment gains |
|
6 |
|
10 |
|
12 |
|
10 |
| ||||
Net income |
|
$ |
812 |
|
$ |
683 |
|
$ |
1,645 |
|
$ |
1,735 |
|
|
|
Twelve Months Ended December 31, |
| ||||||||||||||||||||||||||||
($ in millions, after-tax) |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Operating income, less preferred dividends |
|
$ |
3,641 |
|
$ |
3,567 |
|
$ |
2,441 |
|
$ |
1,389 |
|
$ |
3,040 |
|
$ |
3,597 |
|
$ |
3,191 |
|
$ |
4,496 |
|
$ |
4,195 |
|
$ |
2,020 |
|
Preferred dividends |
|
|
|
|
|
|
|
1 |
|
3 |
|
3 |
|
4 |
|
4 |
|
5 |
|
6 |
| ||||||||||
Operating income |
|
3,641 |
|
3,567 |
|
2,441 |
|
1,390 |
|
3,043 |
|
3,600 |
|
3,195 |
|
4,500 |
|
4,200 |
|
2,026 |
| ||||||||||
Net realized investment gains (losses) |
|
51 |
|
106 |
|
32 |
|
36 |
|
173 |
|
22 |
|
(271 |
) |
101 |
|
8 |
|
35 |
| ||||||||||
Income from continuing operations |
|
3,692 |
|
3,673 |
|
2,473 |
|
1,426 |
|
3,216 |
|
3,622 |
|
2,924 |
|
4,601 |
|
4,208 |
|
2,061 |
| ||||||||||
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439 |
) | ||||||||||
Net income |
|
$ |
3,692 |
|
$ |
3,673 |
|
$ |
2,473 |
|
$ |
1,426 |
|
$ |
3,216 |
|
$ |
3,622 |
|
$ |
2,924 |
|
$ |
4,601 |
|
$ |
4,208 |
|
$ |
1,622 |
|
Reconciliation of Operating Earnings per Share to Net Income per Share on a Basic and Diluted Basis
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share |
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
2.54 |
|
$ |
1.95 |
|
$ |
5.10 |
|
$ |
4.94 |
|
Net realized investment gains |
|
0.02 |
|
0.03 |
|
0.04 |
|
0.03 |
| ||||
Net income |
|
$ |
2.56 |
|
$ |
1.98 |
|
$ |
5.14 |
|
$ |
4.97 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share |
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
2.52 |
|
$ |
1.93 |
|
$ |
5.05 |
|
$ |
4.89 |
|
Net realized investment gains |
|
0.01 |
|
0.02 |
|
0.03 |
|
0.02 |
| ||||
Net income |
|
$ |
2.53 |
|
$ |
1.95 |
|
$ |
5.08 |
|
$ |
4.91 |
|
Reconciliation of Operating Income by Segment to Total Operating Income
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Business and International Insurance |
|
$ |
543 |
|
$ |
471 |
|
$ |
1,058 |
|
$ |
1,165 |
|
Bond & Specialty Insurance |
|
151 |
|
192 |
|
275 |
|
346 |
| ||||
Personal Insurance |
|
174 |
|
75 |
|
426 |
|
343 |
| ||||
Total segment operating income |
|
868 |
|
738 |
|
1,759 |
|
1,854 |
| ||||
Interest Expense and Other |
|
(62 |
) |
(65 |
) |
(126 |
) |
(129 |
) | ||||
Total operating income |
|
$ |
806 |
|
$ |
673 |
|
$ |
1,633 |
|
$ |
1,725 |
|
RECONCILIATION OF ADJUSTED SHAREHOLDERS EQUITY TO SHAREHOLDERS EQUITY AND OPERATING RETURN ON EQUITY TO RETURN ON EQUITY
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 shareholders equity is shareholders equity excluding net unrealized investment gains (losses), net of tax, net realized investment gains (losses), net of tax, for the period presented, preferred stock and discontinued operations. Adjusted average shareholders equity is average shareholders equity excluding net unrealized investment gains (losses), net of tax, for all quarters included in the calculation and, for each quarterly period included in the calculation, that quarters net realized investment gains (losses), net of tax and discontinued operations.
Reconciliation of Adjusted Shareholders Equity to Shareholders Equity
|
|
As of June 30, |
| ||||
($ in millions) |
|
2015 |
|
2014 |
| ||
|
|
|
|
|
| ||
Adjusted shareholders equity |
|
$ |
22,733 |
|
$ |
23,509 |
|
Net unrealized investment gains, net of tax |
|
1,376 |
|
2,013 |
| ||
Net realized investment gains, net of tax |
|
12 |
|
10 |
| ||
Shareholders equity |
|
$ |
24,121 |
|
$ |
25,532 |
|
|
|
| ||||||||||||||||||||||||||||||||
($ in millions) |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
|
2004 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Adjusted shareholders equity |
|
$ |
22,819 |
|
$ |
23,368 |
|
$ |
22,270 |
|
$ |
21,570 |
|
$ |
23,375 |
|
$ |
25,458 |
|
$ |
25,647 |
|
$ |
25,783 |
|
$ |
24,545 |
|
$ |
22,227 |
|
$ |
20,087 |
|
Net unrealized investment gains (losses), net of tax |
|
1,966 |
|
1,322 |
|
3,103 |
|
2,871 |
|
1,859 |
|
1,856 |
|
(146 |
) |
620 |
|
453 |
|
327 |
|
866 |
| |||||||||||
Net realized investment gains (losses), net of tax |
|
51 |
|
106 |
|
32 |
|
36 |
|
173 |
|
22 |
|
(271 |
) |
101 |
|
8 |
|
35 |
|
(28 |
) | |||||||||||
Preferred stock |
|
|
|
|
|
|
|
|
|
68 |
|
79 |
|
89 |
|
112 |
|
129 |
|
153 |
|
188 |
| |||||||||||
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439 |
) |
88 |
| |||||||||||
Shareholders equity |
|
$ |
24,836 |
|
$ |
24,796 |
|
$ |
25,405 |
|
$ |
24,477 |
|
$ |
25,475 |
|
$ |
27,415 |
|
$ |
25,319 |
|
$ |
26,616 |
|
$ |
25,135 |
|
$ |
22,303 |
|
$ |
21,201 |
|
Return on equity is the ratio of annualized net income less preferred dividends to average shareholders equity for the periods presented. Operating return on equity is the ratio of annualized operating income less preferred dividends to adjusted average shareholders equity for the periods presented. In the opinion of the Companys management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.
Calculation of Operating Return on Equity and Return on Equity
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Annualized operating income |
|
$ |
3,225 |
|
$ |
2,693 |
|
$ |
3,266 |
|
$ |
3,450 |
|
Adjusted average shareholders equity |
|
22,755 |
|
23,612 |
|
22,786 |
|
23,603 |
| ||||
Operating return on equity |
|
14.2 |
% |
11.4 |
% |
14.3 |
% |
14.6 |
% | ||||
|
|
|
|
|
|
|
|
|
| ||||
Annualized net income |
|
$ |
3,247 |
|
$ |
2,730 |
|
$ |
3,289 |
|
$ |
3,470 |
|
Average shareholders equity |
|
24,484 |
|
25,460 |
|
24,662 |
|
25,276 |
| ||||
Return on equity |
|
13.3 |
% |
10.7 |
% |
13.3 |
% |
13.7 |
% |
Average annual operating return on equity over a period is the ratio of:
a) the sum of operating income less preferred dividends for the periods presented to
b) the sum of: 1) the sum of the adjusted average shareholders equity for all full years in the period presented, and 2) for partial years in the period presented, the number of quarters in that partial year divided by four, multiplied by the adjusted average shareholders equity of the partial year.
Calculation of Average Annual Operating Return on Equity from January 1, 2005 through June 30, 2015
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
|
June 30, |
|
Twelve Months Ended December 31, |
| ||||||||||||||||||||||||||||||||
($ in millions) |
|
2015 |
|
2014 |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating income, less preferred dividends |
|
$ |
1,633 |
|
$ |
1,725 |
|
$ |
3,641 |
|
$ |
3,567 |
|
$ |
2,441 |
|
$ |
1,389 |
|
$ |
3,040 |
|
$ |
3,597 |
|
$ |
3,191 |
|
$ |
4,496 |
|
$ |
4,195 |
|
$ |
2,020 |
|
Annualized operating income |
|
3,266 |
|
3,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Adjusted average shareholders equity |
|
22,786 |
|
23,603 |
|
23,447 |
|
23,004 |
|
22,158 |
|
22,806 |
|
24,285 |
|
25,777 |
|
25,668 |
|
25,350 |
|
23,381 |
|
21,118 |
| ||||||||||||
Operating return on equity |
|
14.3 |
% |
14.6 |
% |
15.5 |
% |
15.5 |
% |
11.0 |
% |
6.1 |
% |
12.5 |
% |
14.0 |
% |
12.4 |
% |
17.7 |
% |
17.9 |
% |
9.6 |
% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Average annual operating return on equity for the period Jan. 1, 2005 through June 30, 2015 |
|
|
|
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
RECONCILIATION OF PRE-TAX UNDERWRITING GAIN EXCLUDING CERTAIN ITEMS TO NET INCOME
Underwriting gain is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. In the opinion of the Companys 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 segments business performance and as a tool in making business decisions. Pre-tax underwriting gain, excluding the impact of catastrophes and net favorable 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 Companys management, this measure is meaningful to users of the financial statements to understand the Companys 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 margin or underlying underwriting gain.
A catastrophe is a severe loss, resulting from natural and man-made events, including risks such as fire, earthquake, windstorm, explosion, terrorism and other similar events. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and operating income 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. In the opinion of the Companys management, a discussion of the impact of catastrophes is meaningful to users of the financial statements to understand the Companys periodic earnings and the variability in periodic earnings caused by the unpredictable nature of catastrophes.
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 Companys 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 operating income (loss), and changes in claims and claim adjustment expense reserve levels from period to period.
Reconciliation of Pre-tax Underwriting Gain (Excluding the Impact of Catastrophes and Net Favorable Prior Year Loss Reserve Development) to Net Income
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax except as noted) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax underwriting gain excluding the impact of catastrophes and net favorable prior year loss reserve development |
|
$ |
525 |
|
$ |
510 |
|
$ |
1,064 |
|
$ |
1,156 |
|
Pre-tax impact of catastrophes |
|
(221 |
) |
(436 |
) |
(383 |
) |
(585 |
) | ||||
Pre-tax impact of net favorable prior year loss reserve development |
|
207 |
|
183 |
|
450 |
|
477 |
| ||||
Pre-tax underwriting gain |
|
511 |
|
257 |
|
1,131 |
|
1,048 |
| ||||
Income tax expense on underwriting results |
|
158 |
|
95 |
|
383 |
|
379 |
| ||||
Underwriting gain |
|
353 |
|
162 |
|
748 |
|
669 |
| ||||
Net investment income |
|
503 |
|
553 |
|
981 |
|
1,135 |
| ||||
Other expense, including interest expense |
|
(50 |
) |
(42 |
) |
(96 |
) |
(79 |
) | ||||
Operating income |
|
806 |
|
673 |
|
1,633 |
|
1,725 |
| ||||
Net realized investment gains |
|
6 |
|
10 |
|
12 |
|
10 |
| ||||
Net income |
|
$ |
812 |
|
$ |
683 |
|
$ |
1,645 |
|
$ |
1,735 |
|
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 premium and the underwriting expense ratio as used in this earnings release is based on net earned premiums.
For SAP, 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, 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 Companys 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.
Other companies method of computing similarly titled measures may not be comparable to the Companys method of computing these ratios.
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 Companys underwriting discipline and underwriting profitability for the current accident year.
Calculation of the Combined Ratio
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, pre-tax) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss and loss adjustment expense ratio |
|
|
|
|
|
|
|
|
| ||||
Claims and claim adjustment expenses |
|
$ |
3,547 |
|
$ |
3,826 |
|
$ |
6,978 |
|
$ |
7,141 |
|
Less: |
|
|
|
|
|
|
|
|
| ||||
Policyholder dividends |
|
10 |
|
7 |
|
19 |
|
18 |
| ||||
Allocated fee income |
|
43 |
|
46 |
|
85 |
|
89 |
| ||||
Loss ratio numerator |
|
$ |
3,494 |
|
$ |
3,773 |
|
$ |
6,874 |
|
$ |
7,034 |
|
|
|
|
|
|
|
|
|
|
| ||||
Underwriting expense ratio |
|
|
|
|
|
|
|
|
| ||||
Amortization of deferred acquisition costs |
|
$ |
963 |
|
$ |
965 |
|
$ |
1,926 |
|
$ |
1,915 |
|
General and administrative expenses (G&A) |
|
1,028 |
|
1,001 |
|
2,020 |
|
1,882 |
| ||||
Less: |
|
|
|
|
|
|
|
|
| ||||
G&A included in Interest Expense and Other |
|
7 |
|
9 |
|
14 |
|
16 |
| ||||
Allocated fee income |
|
68 |
|
66 |
|
137 |
|
130 |
| ||||
Billing and policy fees and other |
|
22 |
|
25 |
|
45 |
|
55 |
| ||||
Expense ratio numerator |
|
$ |
1,894 |
|
$ |
1,866 |
|
$ |
3,750 |
|
$ |
3,596 |
|
|
|
|
|
|
|
|
|
|
| ||||
Earned premium |
|
$ |
5,931 |
|
$ |
5,928 |
|
$ |
11,819 |
|
$ |
11,751 |
|
|
|
|
|
|
|
|
|
|
| ||||
Combined ratio (1) |
|
|
|
|
|
|
|
|
| ||||
Loss and loss adjustment expense ratio |
|
58.9 |
% |
63.6 |
% |
58.2 |
% |
59.9 |
% | ||||
Underwriting expense ratio |
|
31.9 |
% |
31.5 |
% |
31.7 |
% |
30.6 |
% | ||||
Combined ratio |
|
90.8 |
% |
95.1 |
% |
89.9 |
% |
90.5 |
% |
(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.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO BOOK VALUE PER SHARE AND SHAREHOLDERS EQUITY
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 the after-tax impact of net unrealized investment gains and losses, divided by the number of common shares outstanding. In the opinion of the Companys management, adjusted book value per share is useful in an analysis of a property casualty companys 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 Companys management, tangible book value per share is useful in an analysis of a property casualty companys 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.
Reconciliation of Tangible and Shareholders Equity, excluding net unrealized investment gains, net of tax, to Shareholders Equity
|
|
As of |
| |||||||
|
|
June 30, |
|
December 31, |
|
June 30, |
| |||
($ in millions, except per share amounts) |
|
2015 |
|
2014 |
|
2014 |
| |||
|
|
|
|
|
|
|
| |||
Tangible shareholders equity |
|
$ |
18,924 |
|
$ |
19,011 |
|
$ |
19,613 |
|
Goodwill |
|
3,594 |
|
3,611 |
|
3,634 |
| |||
Other intangible assets |
|
284 |
|
304 |
|
328 |
| |||
Less: Impact of deferred tax on other intangible assets |
|
(57 |
) |
(56 |
) |
(56 |
) | |||
Shareholders equity, excluding net unrealized investment gains, net of tax |
|
22,745 |
|
22,870 |
|
23,519 |
| |||
Net unrealized investment gains, net of tax |
|
1,376 |
|
1,966 |
|
2,013 |
| |||
Shareholders equity |
|
$ |
24,121 |
|
$ |
24,836 |
|
$ |
25,532 |
|
|
|
|
|
|
|
|
| |||
Common shares outstanding |
|
311.2 |
|
322.2 |
|
339.0 |
| |||
|
|
|
|
|
|
|
| |||
Tangible book value per share |
|
$ |
60.81 |
|
$ |
59.00 |
|
$ |
57.86 |
|
Adjusted book value per share |
|
73.09 |
|
70.98 |
|
69.38 |
| |||
Book value per share |
|
77.51 |
|
77.08 |
|
75.32 |
|
RECONCILIATION OF CERTAIN NON-GAAP MEASURES TO TOTAL CAPITALIZATION
Total capitalization is the sum of total shareholders equity and debt. Debt-to-capital ratio excluding net unrealized gain on investments is the ratio of debt to total capitalization excluding the after-tax impact of net unrealized investment gains and losses. In the opinion of the Companys management, the debt to capital ratio is useful in an analysis of the Companys financial leverage.
Reconciliation of Total Debt and Equity Excluding Net Unrealized Investment Gain to Total Capitalization
|
|
As of |
| |||||||
|
|
June 30, |
|
December 31, |
|
June 30, |
| |||
($ in millions) |
|
2015 |
|
2014 |
|
2014 |
| |||
|
|
|
|
|
|
|
| |||
Debt |
|
$ |
6,350 |
|
$ |
6,349 |
|
$ |
6,347 |
|
Shareholders equity |
|
24,121 |
|
24,836 |
|
25,532 |
| |||
Total capitalization |
|
30,471 |
|
31,185 |
|
31,879 |
| |||
Net unrealized investment gains, net of tax |
|
1,376 |
|
1,966 |
|
2,013 |
| |||
Total capitalization excluding net unrealized gain on investments, net of tax |
|
$ |
29,095 |
|
$ |
29,219 |
|
$ |
29,866 |
|
|
|
|
|
|
|
|
| |||
Debt-to-capital ratio |
|
20.8 |
% |
20.4 |
% |
19.9 |
% | |||
Debt-to-capital ratio excluding net unrealized investment gains, net of tax |
|
21.8 |
% |
21.7 |
% |
21.3 |
% |
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. These are GAAP measures.
For the Business and International Insurance and Bond & Specialty Insurance segments, retention is the amount of premium available for renewal that was retained, excluding rate and exposure changes. For the Personal Insurance segment, 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 the Business and International Insurance segment, retention, renewal premium change and new business exclude National Accounts and surety.
Statutory capital and surplus represents the excess of an insurance companys admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices (SAP).
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 Companys most recent annual report on Form 10-K filed with the SEC.
###
Contacts |
|
|
|
|
|
|
|
|
|
Media: |
|
Institutional Investors: |
|
Individual Investors: |
Patrick Linehan |
|
Gabriella Nawi |
|
Marc Parr |
917.778.6267 |
|
917.778.6844 |
|
860.277.0779 |
|
|
-or- |
|
|
|
|
Kellen Booher |
|
|
|
|
917.778.6027 |
|
|
Exhibit 99.2
The Travelers Companies, Inc. Financial Supplement - Second Quarter 2015 |
|
|
Page Number |
|
|
Consolidated Results |
|
Financial Highlights |
1 |
Reconciliation to Net Income and Earnings Per Share |
2 |
Statement of Income |
3 |
Net Income by Major Component and Combined Ratio |
4 |
Operating Income |
5 |
Selected Statistics - Property and Casualty Operations |
6 |
Written and Earned Premiums - Property and Casualty Operations |
7 |
|
|
Business and International Insurance |
|
Operating Income |
8 |
Operating Income by Major Component and Combined Ratio |
9 |
Selected Statistics |
10 |
Net Written Premiums |
11 |
|
|
Bond & Specialty Insurance |
|
Operating Income |
12 |
Operating Income by Major Component and Combined Ratio |
13 |
Selected Statistics |
14 |
Net Written Premiums |
15 |
|
|
Personal Insurance |
|
Operating Income |
16 |
Operating Income by Major Component and Combined Ratio |
17 |
Selected Statistics |
18 |
Selected Statistics - Agency Automobile |
19 |
Selected Statistics - Agency Homeowners and Other |
20 |
Selected Statistics - Direct to Consumer |
21 |
|
|
Supplemental Detail |
|
Interest Expense and Other |
22 |
Consolidated Balance Sheet |
23 |
Investment Portfolio |
24 |
Investment Portfolio - Fixed Maturities Data |
25 |
Investment Income |
26 |
Net Realized and Unrealized Investment Gains |
27 |
Reinsurance Recoverables |
28 |
Net Reserves for Losses and Loss Adjustment Expense |
29 |
Asbestos and Environmental Reserves |
30 |
Capitalization |
31 |
Statutory Capital and Surplus to GAAP Shareholders Equity Reconciliation |
32 |
Statement of Cash Flows |
33 |
Statement of Cash Flows (continued) |
34 |
|
|
Glossary of Financial Measures and Description of Reportable Business Segments |
35 |
The information included in the Financial Supplement is unaudited. This document should be read in conjunction with the Companys Form 10-Q which will be filed with the Securities and Exchange Commission.
Index
The Travelers Companies, Inc. Financial Highlights ($ and shares in millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
$ |
2.98 |
|
$ |
1.98 |
|
$ |
2.72 |
|
$ |
3.15 |
|
$ |
2.58 |
|
$ |
2.56 |
|
$ |
4.97 |
|
$ |
5.14 |
|
Diluted |
|
$ |
2.95 |
|
$ |
1.95 |
|
$ |
2.69 |
|
$ |
3.11 |
|
$ |
2.55 |
|
$ |
2.53 |
|
$ |
4.91 |
|
$ |
5.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
1,052 |
|
$ |
673 |
|
$ |
893 |
|
$ |
1,023 |
|
$ |
827 |
|
$ |
806 |
|
$ |
1,725 |
|
$ |
1,633 |
|
Operating income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
$ |
2.98 |
|
$ |
1.95 |
|
$ |
2.64 |
|
$ |
3.11 |
|
$ |
2.56 |
|
$ |
2.54 |
|
$ |
4.94 |
|
$ |
5.10 |
|
Diluted |
|
$ |
2.95 |
|
$ |
1.93 |
|
$ |
2.61 |
|
$ |
3.07 |
|
$ |
2.53 |
|
$ |
2.52 |
|
$ |
4.89 |
|
$ |
5.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Return on equity |
|
16.8 |
% |
10.7 |
% |
14.5 |
% |
16.6 |
% |
13.4 |
% |
13.3 |
% |
13.7 |
% |
13.3 |
% | ||||||||
Operating return on equity |
|
17.8 |
% |
11.4 |
% |
15.2 |
% |
17.7 |
% |
14.5 |
% |
14.2 |
% |
14.6 |
% |
14.3 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total assets, at period end |
|
$ |
104,134 |
|
$ |
104,811 |
|
$ |
104,522 |
|
$ |
103,078 |
|
$ |
102,691 |
|
$ |
101,664 |
|
$ |
104,811 |
|
$ |
101,664 |
|
Total equity, at period end |
|
$ |
25,387 |
|
$ |
25,532 |
|
$ |
25,321 |
|
$ |
24,836 |
|
$ |
24,847 |
|
$ |
24,121 |
|
$ |
25,532 |
|
$ |
24,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Book value per share, at period end |
|
$ |
73.06 |
|
$ |
75.32 |
|
$ |
76.42 |
|
$ |
77.08 |
|
$ |
77.96 |
|
$ |
77.51 |
|
$ |
75.32 |
|
$ |
77.51 |
|
Less: Net unrealized investment gains, net of tax |
|
4.81 |
|
5.94 |
|
5.78 |
|
6.10 |
|
6.51 |
|
4.42 |
|
5.94 |
|
4.42 |
| ||||||||
Adjusted book value per share, at period end |
|
$ |
68.25 |
|
$ |
69.38 |
|
$ |
70.64 |
|
$ |
70.98 |
|
$ |
71.45 |
|
$ |
73.09 |
|
$ |
69.38 |
|
$ |
73.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average number of common shares outstanding (basic) |
|
350.9 |
|
343.0 |
|
335.1 |
|
326.8 |
|
320.8 |
|
314.8 |
|
346.9 |
|
317.7 |
| ||||||||
Weighted average number of common shares outstanding and common stock equivalents (diluted) |
|
354.6 |
|
346.7 |
|
338.9 |
|
331.0 |
|
324.5 |
|
318.0 |
|
350.5 |
|
321.2 |
| ||||||||
Common shares outstanding at period end |
|
347.5 |
|
339.0 |
|
331.4 |
|
322.2 |
|
318.7 |
|
311.2 |
|
339.0 |
|
311.2 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock dividends declared |
|
$ |
177 |
|
$ |
190 |
|
$ |
186 |
|
$ |
182 |
|
$ |
178 |
|
$ |
194 |
|
$ |
367 |
|
$ |
372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock repurchased: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Under Board of Directors authorization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shares |
|
7.8 |
|
9.5 |
|
8.1 |
|
9.7 |
|
5.6 |
|
7.9 |
|
17.3 |
|
13.5 |
| ||||||||
Cost |
|
$ |
650 |
|
$ |
875 |
|
$ |
750 |
|
$ |
1,000 |
|
$ |
600 |
|
$ |
800 |
|
$ |
1,525 |
|
$ |
1,400 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shares |
|
0.7 |
|
|
|
|
|
|
|
0.7 |
|
|
|
0.7 |
|
0.7 |
| ||||||||
Cost |
|
$ |
55 |
|
$ |
1 |
|
$ |
1 |
|
$ |
1 |
|
$ |
72 |
|
$ |
1 |
|
$ |
56 |
|
$ |
73 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Reconciliation to Net Income and Earnings Per Share ($ and shares in millions, except earnings per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
1,052 |
|
$ |
673 |
|
$ |
893 |
|
$ |
1,023 |
|
$ |
827 |
|
$ |
806 |
|
$ |
1,725 |
|
$ |
1,633 |
|
Net realized investment gains, after-tax |
|
|
|
10 |
|
26 |
|
15 |
|
6 |
|
6 |
|
10 |
|
12 |
| ||||||||
Net income |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
2.98 |
|
$ |
1.95 |
|
$ |
2.64 |
|
$ |
3.11 |
|
$ |
2.56 |
|
$ |
2.54 |
|
$ |
4.94 |
|
$ |
5.10 |
|
Net realized investment gains, after-tax |
|
|
|
0.03 |
|
0.08 |
|
0.04 |
|
0.02 |
|
0.02 |
|
0.03 |
|
0.04 |
| ||||||||
Net income |
|
$ |
2.98 |
|
$ |
1.98 |
|
$ |
2.72 |
|
$ |
3.15 |
|
$ |
2.58 |
|
$ |
2.56 |
|
$ |
4.97 |
|
$ |
5.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
2.95 |
|
$ |
1.93 |
|
$ |
2.61 |
|
$ |
3.07 |
|
$ |
2.53 |
|
$ |
2.52 |
|
$ |
4.89 |
|
$ |
5.05 |
|
Net realized investment gains, after-tax |
|
|
|
0.02 |
|
0.08 |
|
0.04 |
|
0.02 |
|
0.01 |
|
0.02 |
|
0.03 |
| ||||||||
Net income |
|
$ |
2.95 |
|
$ |
1.95 |
|
$ |
2.69 |
|
$ |
3.11 |
|
$ |
2.55 |
|
$ |
2.53 |
|
$ |
4.91 |
|
$ |
5.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Adjustments to net income and weighted average shares for net income EPS calculations: (1) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income, as reported |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
Participating share-based awards - allocated income |
|
(7 |
) |
(5 |
) |
(7 |
) |
(8 |
) |
(6 |
) |
(6 |
) |
(12 |
) |
(12 |
) | ||||||||
Net income available to common shareholders - basic and diluted |
|
$ |
1,045 |
|
$ |
678 |
|
$ |
912 |
|
$ |
1,030 |
|
$ |
827 |
|
$ |
806 |
|
$ |
1,723 |
|
$ |
1,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average shares outstanding |
|
350.9 |
|
343.0 |
|
335.1 |
|
326.8 |
|
320.8 |
|
314.8 |
|
346.9 |
|
317.7 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average shares outstanding |
|
350.9 |
|
343.0 |
|
335.1 |
|
326.8 |
|
320.8 |
|
314.8 |
|
346.9 |
|
317.7 |
| ||||||||
Weighted average effects of dilutive securities - stock options and performance shares |
|
3.7 |
|
3.7 |
|
3.8 |
|
4.2 |
|
3.7 |
|
3.2 |
|
3.6 |
|
3.5 |
| ||||||||
Diluted weighted average shares outstanding |
|
354.6 |
|
346.7 |
|
338.9 |
|
331.0 |
|
324.5 |
|
318.0 |
|
350.5 |
|
321.2 |
|
(1) Adjustments to net income and weighted average shares for net income EPS calculations can generally be used for the operating income EPS calculations.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Statement of Income - Consolidated ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
5,823 |
|
$ |
5,928 |
|
$ |
5,983 |
|
$ |
5,979 |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
11,751 |
|
$ |
11,819 |
|
Net investment income |
|
736 |
|
695 |
|
719 |
|
637 |
|
592 |
|
632 |
|
1,431 |
|
1,224 |
| ||||||||
Fee income |
|
107 |
|
112 |
|
110 |
|
109 |
|
111 |
|
111 |
|
219 |
|
222 |
| ||||||||
Net realized investment gains |
|
1 |
|
16 |
|
40 |
|
22 |
|
10 |
|
10 |
|
17 |
|
20 |
| ||||||||
Other revenues |
|
41 |
|
34 |
|
34 |
|
36 |
|
25 |
|
22 |
|
75 |
|
47 |
| ||||||||
Total revenues |
|
6,708 |
|
6,785 |
|
6,886 |
|
6,783 |
|
6,626 |
|
6,706 |
|
13,493 |
|
13,332 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
3,315 |
|
3,826 |
|
3,520 |
|
3,209 |
|
3,431 |
|
3,547 |
|
7,141 |
|
6,978 |
| ||||||||
Amortization of deferred acquisition costs |
|
950 |
|
965 |
|
984 |
|
983 |
|
963 |
|
963 |
|
1,915 |
|
1,926 |
| ||||||||
General and administrative expenses |
|
881 |
|
1,001 |
|
1,031 |
|
1,039 |
|
992 |
|
1,028 |
|
1,882 |
|
2,020 |
| ||||||||
Interest expense |
|
92 |
|
92 |
|
93 |
|
92 |
|
92 |
|
92 |
|
184 |
|
184 |
| ||||||||
Total claims and expenses |
|
5,238 |
|
5,884 |
|
5,628 |
|
5,323 |
|
5,478 |
|
5,630 |
|
11,122 |
|
11,108 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income before income taxes |
|
1,470 |
|
901 |
|
1,258 |
|
1,460 |
|
1,148 |
|
1,076 |
|
2,371 |
|
2,224 |
| ||||||||
Income tax expense |
|
418 |
|
218 |
|
339 |
|
422 |
|
315 |
|
264 |
|
636 |
|
579 |
| ||||||||
Net income |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other-than-temporary impairments (OTTI) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total OTTI losses |
|
$ |
(7 |
) |
$ |
(1 |
) |
$ |
(8 |
) |
$ |
(6 |
) |
$ |
(4 |
) |
$ |
(8 |
) |
$ |
(8 |
) |
$ |
(12 |
) |
OTTI losses recognized in net realized investment gains |
|
$ |
(9 |
) |
$ |
(1 |
) |
$ |
(10 |
) |
$ |
(6 |
) |
$ |
(3 |
) |
$ |
(6 |
) |
$ |
(10 |
) |
$ |
(9 |
) |
OTTI gains (losses) recognized in other comprehensive income |
|
$ |
2 |
|
$ |
|
|
$ |
2 |
|
$ |
|
|
$ |
(1 |
) |
$ |
(2 |
) |
$ |
2 |
|
$ |
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
21.0 |
% |
20.5 |
% |
20.9 |
% |
19.6 |
% |
19.3 |
% |
20.5 |
% |
20.7 |
% |
19.9 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
582 |
|
$ |
553 |
|
$ |
568 |
|
$ |
513 |
|
$ |
478 |
|
$ |
503 |
|
$ |
1,135 |
|
$ |
981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
149 |
|
$ |
436 |
|
$ |
83 |
|
$ |
41 |
|
$ |
162 |
|
$ |
221 |
|
$ |
585 |
|
$ |
383 |
|
After-tax |
|
$ |
97 |
|
$ |
284 |
|
$ |
54 |
|
$ |
27 |
|
$ |
106 |
|
$ |
143 |
|
$ |
381 |
|
$ |
249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
294 |
|
$ |
183 |
|
$ |
113 |
|
$ |
351 |
|
$ |
243 |
|
$ |
207 |
|
$ |
477 |
|
$ |
450 |
|
After-tax |
|
$ |
190 |
|
$ |
122 |
|
$ |
74 |
|
$ |
230 |
|
$ |
158 |
|
$ |
133 |
|
$ |
312 |
|
$ |
291 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Net Income by Major Component and Combined Ratio - Consolidated ($ in millions, net of tax) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
507 |
|
$ |
162 |
|
$ |
364 |
|
$ |
551 |
|
$ |
395 |
|
$ |
353 |
|
$ |
669 |
|
$ |
748 |
|
Net investment income |
|
582 |
|
553 |
|
568 |
|
513 |
|
478 |
|
503 |
|
1,135 |
|
981 |
| ||||||||
Other income (expense), including interest expense |
|
(37 |
) |
(42 |
) |
(39 |
) |
(41 |
) |
(46 |
) |
(50 |
) |
(79 |
) |
(96 |
) | ||||||||
Operating income |
|
1,052 |
|
673 |
|
893 |
|
1,023 |
|
827 |
|
806 |
|
1,725 |
|
1,633 |
| ||||||||
Net realized investment gains |
|
|
|
10 |
|
26 |
|
15 |
|
6 |
|
6 |
|
10 |
|
12 |
| ||||||||
Net income |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
56.0 |
% |
63.6 |
% |
58.0 |
% |
52.8 |
% |
57.4 |
% |
58.9 |
% |
59.9 |
% |
58.2 |
% | ||||||||
Underwriting expense ratio |
|
29.7 |
% |
31.5 |
% |
32.0 |
% |
32.2 |
% |
31.5 |
% |
31.9 |
% |
30.6 |
% |
31.7 |
% | ||||||||
Combined ratio |
|
85.7 |
% |
95.1 |
% |
90.0 |
% |
85.0 |
% |
88.9 |
% |
90.8 |
% |
90.5 |
% |
89.9 |
% | ||||||||
Combined ratio excluding incremental impact of direct to consumer initiative |
|
85.3 |
% |
94.6 |
% |
89.4 |
% |
84.4 |
% |
88.5 |
% |
90.3 |
% |
90.0 |
% |
89.4 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
2.6 |
% |
7.3 |
% |
1.4 |
% |
0.7 |
% |
2.7 |
% |
3.7 |
% |
5.0 |
% |
3.3 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-5.1 |
% |
-3.1 |
% |
-1.9 |
% |
-5.9 |
% |
-4.1 |
% |
-3.5 |
% |
-4.1 |
% |
-3.8 |
% |
(1) Before policyholder dividends.
(2) 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 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Billing and policy fees and other |
|
$ |
30 |
|
$ |
25 |
|
$ |
25 |
|
$ |
23 |
|
$ |
23 |
|
$ |
22 |
|
$ |
55 |
|
$ |
45 |
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expenses |
|
$ |
43 |
|
$ |
46 |
|
$ |
43 |
|
$ |
40 |
|
$ |
42 |
|
$ |
43 |
|
$ |
89 |
|
$ |
85 |
|
Underwriting expenses |
|
64 |
|
66 |
|
67 |
|
69 |
|
69 |
|
68 |
|
130 |
|
137 |
| ||||||||
Total fee income |
|
$ |
107 |
|
$ |
112 |
|
$ |
110 |
|
$ |
109 |
|
$ |
111 |
|
$ |
111 |
|
$ |
219 |
|
$ |
222 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income - Consolidated ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
5,823 |
|
$ |
5,928 |
|
$ |
5,983 |
|
$ |
5,979 |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
11,751 |
|
$ |
11,819 |
|
Net investment income |
|
736 |
|
695 |
|
719 |
|
637 |
|
592 |
|
632 |
|
1,431 |
|
1,224 |
| ||||||||
Fee income |
|
107 |
|
112 |
|
110 |
|
109 |
|
111 |
|
111 |
|
219 |
|
222 |
| ||||||||
Other revenues |
|
41 |
|
34 |
|
34 |
|
36 |
|
25 |
|
22 |
|
75 |
|
47 |
| ||||||||
Total revenues |
|
6,707 |
|
6,769 |
|
6,846 |
|
6,761 |
|
6,616 |
|
6,696 |
|
13,476 |
|
13,312 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
3,315 |
|
3,826 |
|
3,520 |
|
3,209 |
|
3,431 |
|
3,547 |
|
7,141 |
|
6,978 |
| ||||||||
Amortization of deferred acquisition costs |
|
950 |
|
965 |
|
984 |
|
983 |
|
963 |
|
963 |
|
1,915 |
|
1,926 |
| ||||||||
General and administrative expenses |
|
881 |
|
1,001 |
|
1,031 |
|
1,039 |
|
992 |
|
1,028 |
|
1,882 |
|
2,020 |
| ||||||||
Interest expense |
|
92 |
|
92 |
|
93 |
|
92 |
|
92 |
|
92 |
|
184 |
|
184 |
| ||||||||
Total claims and expenses |
|
5,238 |
|
5,884 |
|
5,628 |
|
5,323 |
|
5,478 |
|
5,630 |
|
11,122 |
|
11,108 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
1,469 |
|
885 |
|
1,218 |
|
1,438 |
|
1,138 |
|
1,066 |
|
2,354 |
|
2,204 |
| ||||||||
Income tax expense |
|
417 |
|
212 |
|
325 |
|
415 |
|
311 |
|
260 |
|
629 |
|
571 |
| ||||||||
Operating income |
|
$ |
1,052 |
|
$ |
673 |
|
$ |
893 |
|
$ |
1,023 |
|
$ |
827 |
|
$ |
806 |
|
$ |
1,725 |
|
$ |
1,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
21.0 |
% |
20.5 |
% |
20.9 |
% |
19.6 |
% |
19.3 |
% |
20.5 |
% |
20.7 |
% |
19.9 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
582 |
|
$ |
553 |
|
$ |
568 |
|
$ |
513 |
|
$ |
478 |
|
$ |
503 |
|
$ |
1,135 |
|
$ |
981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
149 |
|
$ |
436 |
|
$ |
83 |
|
$ |
41 |
|
$ |
162 |
|
$ |
221 |
|
$ |
585 |
|
$ |
383 |
|
After-tax |
|
$ |
97 |
|
$ |
284 |
|
$ |
54 |
|
$ |
27 |
|
$ |
106 |
|
$ |
143 |
|
$ |
381 |
|
$ |
249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
294 |
|
$ |
183 |
|
$ |
113 |
|
$ |
351 |
|
$ |
243 |
|
$ |
207 |
|
$ |
477 |
|
$ |
450 |
|
After-tax |
|
$ |
190 |
|
$ |
122 |
|
$ |
74 |
|
$ |
230 |
|
$ |
158 |
|
$ |
133 |
|
$ |
312 |
|
$ |
291 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
6,401 |
|
$ |
6,525 |
|
$ |
6,578 |
|
$ |
6,134 |
|
$ |
6,474 |
|
$ |
6,542 |
|
$ |
12,926 |
|
$ |
13,016 |
|
Net written premiums |
|
$ |
5,873 |
|
$ |
6,168 |
|
$ |
6,033 |
|
$ |
5,836 |
|
$ |
5,897 |
|
$ |
6,169 |
|
$ |
12,041 |
|
$ |
12,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
5,823 |
|
$ |
5,934 |
|
$ |
5,983 |
|
$ |
5,979 |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
11,757 |
|
$ |
11,819 |
|
Losses and loss adjustment expenses |
|
3,267 |
|
3,766 |
|
3,468 |
|
3,157 |
|
3,379 |
|
3,495 |
|
7,033 |
|
6,874 |
| ||||||||
Underwriting expenses |
|
1,783 |
|
1,918 |
|
1,946 |
|
1,885 |
|
1,890 |
|
1,949 |
|
3,701 |
|
3,839 |
| ||||||||
Statutory underwriting gain |
|
773 |
|
250 |
|
569 |
|
937 |
|
619 |
|
487 |
|
1,023 |
|
1,106 |
| ||||||||
Policyholder dividends |
|
11 |
|
7 |
|
9 |
|
11 |
|
9 |
|
10 |
|
18 |
|
19 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
762 |
|
$ |
243 |
|
$ |
560 |
|
$ |
926 |
|
$ |
610 |
|
$ |
477 |
|
$ |
1,005 |
|
$ |
1,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statutory statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Reserves for losses and loss adjustment expenses |
|
$ |
41,383 |
|
$ |
41,715 |
|
$ |
41,525 |
|
$ |
41,007 |
|
$ |
40,296 |
|
$ |
40,273 |
|
$ |
41,715 |
|
$ |
40,273 |
|
Increase (decrease) in reserves |
|
$ |
(185 |
) |
$ |
332 |
|
$ |
(190 |
) |
$ |
(518 |
) |
$ |
(711 |
) |
$ |
(23 |
) |
$ |
147 |
|
$ |
(734 |
) |
Statutory capital and surplus |
|
$ |
21,440 |
|
$ |
21,036 |
|
$ |
21,005 |
|
$ |
21,049 |
|
$ |
20,944 |
|
$ |
20,851 |
|
$ |
21,036 |
|
$ |
20,851 |
|
Net written premiums/surplus (1) |
|
1.07:1 |
|
1.11:1 |
|
1.13:1 |
|
1.14:1 |
|
1.14:1 |
|
1.15:1 |
|
1.11:1 |
|
1.15:1 |
|
(1) Based on 12 months of rolling net written premiums.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
6,401 |
|
$ |
6,519 |
|
$ |
6,578 |
|
$ |
6,134 |
|
$ |
6,474 |
|
$ |
6,542 |
|
$ |
12,920 |
|
$ |
13,016 |
|
Ceded |
|
(528 |
) |
(357 |
) |
(545 |
) |
(298 |
) |
(577 |
) |
(373 |
) |
(885 |
) |
(950 |
) | ||||||||
Net |
|
$ |
5,873 |
|
$ |
6,162 |
|
$ |
6,033 |
|
$ |
5,836 |
|
$ |
5,897 |
|
$ |
6,169 |
|
$ |
12,035 |
|
$ |
12,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Earned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
6,295 |
|
$ |
6,378 |
|
$ |
6,437 |
|
$ |
6,443 |
|
$ |
6,308 |
|
$ |
6,356 |
|
$ |
12,673 |
|
$ |
12,664 |
|
Ceded |
|
(472 |
) |
(450 |
) |
(454 |
) |
(464 |
) |
(420 |
) |
(425 |
) |
(922 |
) |
(845 |
) | ||||||||
Net |
|
$ |
5,823 |
|
$ |
5,928 |
|
$ |
5,983 |
|
$ |
5,979 |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
11,751 |
|
$ |
11,819 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
3,558 |
|
$ |
3,631 |
|
$ |
3,660 |
|
$ |
3,663 |
|
$ |
3,620 |
|
$ |
3,609 |
|
$ |
7,189 |
|
$ |
7,229 |
|
Net investment income |
|
570 |
|
539 |
|
557 |
|
490 |
|
454 |
|
487 |
|
1,109 |
|
941 |
| ||||||||
Fee income |
|
107 |
|
112 |
|
110 |
|
109 |
|
111 |
|
111 |
|
219 |
|
222 |
| ||||||||
Other revenues |
|
12 |
|
10 |
|
10 |
|
14 |
|
8 |
|
5 |
|
22 |
|
13 |
| ||||||||
Total revenues |
|
4,247 |
|
4,292 |
|
4,337 |
|
4,276 |
|
4,193 |
|
4,212 |
|
8,539 |
|
8,405 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
2,177 |
|
2,455 |
|
2,360 |
|
2,153 |
|
2,265 |
|
2,238 |
|
4,632 |
|
4,503 |
| ||||||||
Amortization of deferred acquisition costs |
|
565 |
|
580 |
|
589 |
|
587 |
|
584 |
|
578 |
|
1,145 |
|
1,162 |
| ||||||||
General and administrative expenses |
|
554 |
|
653 |
|
661 |
|
673 |
|
654 |
|
674 |
|
1,207 |
|
1,328 |
| ||||||||
Total claims and expenses |
|
3,296 |
|
3,688 |
|
3,610 |
|
3,413 |
|
3,503 |
|
3,490 |
|
6,984 |
|
6,993 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
951 |
|
604 |
|
727 |
|
863 |
|
690 |
|
722 |
|
1,555 |
|
1,412 |
| ||||||||
Income tax expense |
|
257 |
|
133 |
|
175 |
|
233 |
|
175 |
|
179 |
|
390 |
|
354 |
| ||||||||
Operating income |
|
$ |
694 |
|
$ |
471 |
|
$ |
552 |
|
$ |
630 |
|
$ |
515 |
|
$ |
543 |
|
$ |
1,165 |
|
$ |
1,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
21.1 |
% |
20.6 |
% |
21.0 |
% |
19.6 |
% |
19.4 |
% |
20.7 |
% |
20.9 |
% |
20.0 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
450 |
|
$ |
427 |
|
$ |
440 |
|
$ |
394 |
|
$ |
366 |
|
$ |
386 |
|
$ |
877 |
|
$ |
752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
83 |
|
$ |
242 |
|
$ |
31 |
|
$ |
11 |
|
$ |
99 |
|
$ |
108 |
|
$ |
325 |
|
$ |
207 |
|
After-tax |
|
$ |
55 |
|
$ |
158 |
|
$ |
19 |
|
$ |
7 |
|
$ |
65 |
|
$ |
70 |
|
$ |
213 |
|
$ |
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
95 |
|
$ |
47 |
|
$ |
21 |
|
$ |
159 |
|
$ |
77 |
|
$ |
103 |
|
$ |
142 |
|
$ |
180 |
|
After-tax |
|
$ |
61 |
|
$ |
33 |
|
$ |
14 |
|
$ |
106 |
|
$ |
50 |
|
$ |
65 |
|
$ |
94 |
|
$ |
115 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
236 |
|
$ |
37 |
|
$ |
104 |
|
$ |
227 |
|
$ |
142 |
|
$ |
155 |
|
$ |
273 |
|
$ |
297 |
|
Net investment income |
|
450 |
|
427 |
|
440 |
|
394 |
|
366 |
|
386 |
|
877 |
|
752 |
| ||||||||
Other income (expense) |
|
8 |
|
7 |
|
8 |
|
9 |
|
7 |
|
2 |
|
15 |
|
9 |
| ||||||||
Operating income |
|
$ |
694 |
|
$ |
471 |
|
$ |
552 |
|
$ |
630 |
|
$ |
515 |
|
$ |
543 |
|
$ |
1,165 |
|
$ |
1,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
59.8 |
% |
66.2 |
% |
63.1 |
% |
57.4 |
% |
61.2 |
% |
60.6 |
% |
63.0 |
% |
60.9 |
% | ||||||||
Underwriting expense ratio |
|
29.4 |
% |
31.9 |
% |
32.1 |
% |
32.4 |
% |
32.1 |
% |
32.6 |
% |
30.7 |
% |
32.4 |
% | ||||||||
Combined ratio |
|
89.2 |
% |
98.1 |
% |
95.2 |
% |
89.8 |
% |
93.3 |
% |
93.2 |
% |
93.7 |
% |
93.3 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
2.4 |
% |
6.6 |
% |
0.9 |
% |
0.2 |
% |
2.7 |
% |
2.9 |
% |
4.5 |
% |
2.9 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-2.7 |
% |
-1.3 |
% |
-0.6 |
% |
-4.3 |
% |
-2.1 |
% |
-2.8 |
% |
-2.0 |
% |
-2.5 |
% |
(1) Before policyholder dividends.
(2) 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 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
Billing and policy fees and other |
|
$ |
8 |
|
$ |
7 |
|
$ |
7 |
|
$ |
7 |
|
$ |
7 |
|
$ |
6 |
|
$ |
15 |
|
$ |
13 |
|
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Loss and loss adjustment expenses |
|
$ |
43 |
|
$ |
46 |
|
$ |
43 |
|
$ |
40 |
|
$ |
42 |
|
$ |
43 |
|
$ |
89 |
|
$ |
85 |
|
|
Underwriting expenses |
|
64 |
|
66 |
|
67 |
|
69 |
|
69 |
|
68 |
|
130 |
|
137 |
| ||||||||
|
Total fee income |
|
$ |
107 |
|
$ |
112 |
|
$ |
110 |
|
$ |
109 |
|
$ |
111 |
|
$ |
111 |
|
$ |
219 |
|
$ |
222 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
4,224 |
|
$ |
4,067 |
|
$ |
4,057 |
|
$ |
3,860 |
|
$ |
4,276 |
|
$ |
4,027 |
|
$ |
8,291 |
|
$ |
8,303 |
|
Net written premiums |
|
$ |
3,772 |
|
$ |
3,735 |
|
$ |
3,560 |
|
$ |
3,575 |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
7,507 |
|
$ |
7,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
3,558 |
|
$ |
3,637 |
|
$ |
3,660 |
|
$ |
3,663 |
|
$ |
3,620 |
|
$ |
3,609 |
|
$ |
7,195 |
|
$ |
7,229 |
|
Losses and loss adjustment expenses |
|
2,132 |
|
2,397 |
|
2,310 |
|
2,103 |
|
2,216 |
|
2,187 |
|
4,529 |
|
4,403 |
| ||||||||
Underwriting expenses |
|
1,105 |
|
1,178 |
|
1,169 |
|
1,156 |
|
1,206 |
|
1,192 |
|
2,283 |
|
2,398 |
| ||||||||
Statutory underwriting gain |
|
321 |
|
62 |
|
181 |
|
404 |
|
198 |
|
230 |
|
383 |
|
428 |
| ||||||||
Policyholder dividends |
|
8 |
|
5 |
|
7 |
|
9 |
|
7 |
|
8 |
|
13 |
|
15 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
313 |
|
$ |
57 |
|
$ |
174 |
|
$ |
395 |
|
$ |
191 |
|
$ |
222 |
|
$ |
370 |
|
$ |
413 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Net Written Premiums - Business and International Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Domestic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Select Accounts |
|
$ |
718 |
|
$ |
705 |
|
$ |
654 |
|
$ |
630 |
|
$ |
722 |
|
$ |
709 |
|
$ |
1,423 |
|
$ |
1,431 |
|
Middle Market |
|
1,632 |
|
1,420 |
|
1,545 |
|
1,511 |
|
1,733 |
|
1,456 |
|
3,052 |
|
3,189 |
| ||||||||
National Accounts |
|
300 |
|
243 |
|
249 |
|
255 |
|
299 |
|
228 |
|
543 |
|
527 |
| ||||||||
First Party |
|
387 |
|
450 |
|
369 |
|
373 |
|
340 |
|
452 |
|
837 |
|
792 |
| ||||||||
Specialized Distribution |
|
267 |
|
283 |
|
262 |
|
262 |
|
268 |
|
300 |
|
550 |
|
568 |
| ||||||||
Total Domestic |
|
3,304 |
|
3,101 |
|
3,079 |
|
3,031 |
|
3,362 |
|
3,145 |
|
6,405 |
|
6,507 |
| ||||||||
International |
|
468 |
|
628 |
|
481 |
|
544 |
|
435 |
|
534 |
|
1,096 |
|
969 |
| ||||||||
Total |
|
$ |
3,772 |
|
$ |
3,729 |
|
$ |
3,560 |
|
$ |
3,575 |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
7,501 |
|
$ |
7,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Workers compensation |
|
$ |
1,076 |
|
$ |
904 |
|
$ |
921 |
|
$ |
893 |
|
$ |
1,142 |
|
$ |
906 |
|
$ |
1,980 |
|
$ |
2,048 |
|
Commercial automobile |
|
490 |
|
456 |
|
484 |
|
462 |
|
503 |
|
487 |
|
946 |
|
990 |
| ||||||||
Commercial property |
|
440 |
|
505 |
|
415 |
|
433 |
|
392 |
|
507 |
|
945 |
|
899 |
| ||||||||
General liability |
|
469 |
|
477 |
|
478 |
|
467 |
|
494 |
|
474 |
|
946 |
|
968 |
| ||||||||
Commercial multi-peril |
|
821 |
|
750 |
|
759 |
|
773 |
|
824 |
|
765 |
|
1,571 |
|
1,589 |
| ||||||||
International |
|
468 |
|
628 |
|
481 |
|
544 |
|
435 |
|
534 |
|
1,096 |
|
969 |
| ||||||||
Other |
|
8 |
|
9 |
|
22 |
|
3 |
|
7 |
|
6 |
|
17 |
|
13 |
| ||||||||
Total |
|
$ |
3,772 |
|
$ |
3,729 |
|
$ |
3,560 |
|
$ |
3,575 |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
7,501 |
|
$ |
7,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
National Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Additions to claim volume under administration (1) |
|
$ |
727 |
|
$ |
511 |
|
$ |
546 |
|
$ |
616 |
|
$ |
761 |
|
$ |
536 |
|
$ |
1,238 |
|
$ |
1,297 |
|
Written fees |
|
$ |
111 |
|
$ |
87 |
|
$ |
95 |
|
$ |
86 |
|
$ |
114 |
|
$ |
92 |
|
$ |
198 |
|
$ |
206 |
|
(1) Includes new and renewal business.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income - Bond & Specialty Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
503 |
|
$ |
524 |
|
$ |
527 |
|
$ |
522 |
|
$ |
504 |
|
$ |
524 |
|
$ |
1,027 |
|
$ |
1,028 |
|
Net investment income |
|
66 |
|
62 |
|
64 |
|
60 |
|
56 |
|
57 |
|
128 |
|
113 |
| ||||||||
Other revenues |
|
4 |
|
6 |
|
5 |
|
4 |
|
5 |
|
5 |
|
10 |
|
10 |
| ||||||||
Total revenues |
|
573 |
|
592 |
|
596 |
|
586 |
|
565 |
|
586 |
|
1,165 |
|
1,151 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
159 |
|
110 |
|
152 |
|
60 |
|
192 |
|
192 |
|
269 |
|
384 |
| ||||||||
Amortization of deferred acquisition costs |
|
93 |
|
95 |
|
101 |
|
99 |
|
94 |
|
97 |
|
188 |
|
191 |
| ||||||||
General and administrative expenses |
|
97 |
|
102 |
|
101 |
|
103 |
|
100 |
|
99 |
|
199 |
|
199 |
| ||||||||
Total claims and expenses |
|
349 |
|
307 |
|
354 |
|
262 |
|
386 |
|
388 |
|
656 |
|
774 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
224 |
|
285 |
|
242 |
|
324 |
|
179 |
|
198 |
|
509 |
|
377 |
| ||||||||
Income tax expense |
|
70 |
|
93 |
|
77 |
|
108 |
|
55 |
|
47 |
|
163 |
|
102 |
| ||||||||
Operating income |
|
$ |
154 |
|
$ |
192 |
|
$ |
165 |
|
$ |
216 |
|
$ |
124 |
|
$ |
151 |
|
$ |
346 |
|
$ |
275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
18.9 |
% |
18.4 |
% |
19.0 |
% |
18.1 |
% |
18.3 |
% |
18.6 |
% |
18.7 |
% |
18.4 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
53 |
|
$ |
52 |
|
$ |
51 |
|
$ |
49 |
|
$ |
46 |
|
$ |
47 |
|
$ |
105 |
|
$ |
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
1 |
|
$ |
4 |
|
$ |
1 |
|
$ |
|
|
$ |
1 |
|
$ |
1 |
|
$ |
5 |
|
$ |
2 |
|
After-tax |
|
$ |
|
|
$ |
3 |
|
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
1 |
|
$ |
3 |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
67 |
|
$ |
124 |
|
$ |
79 |
|
$ |
180 |
|
$ |
35 |
|
$ |
40 |
|
$ |
191 |
|
$ |
75 |
|
After-tax |
|
$ |
43 |
|
$ |
81 |
|
$ |
52 |
|
$ |
116 |
|
$ |
23 |
|
$ |
26 |
|
$ |
124 |
|
$ |
49 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income by Major Component and Combined Ratio - Bond & Specialty Insurance ($ in millions, net of tax) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
99 |
|
$ |
136 |
|
$ |
110 |
|
$ |
164 |
|
$ |
75 |
|
$ |
101 |
|
$ |
235 |
|
$ |
176 |
|
Net investment income |
|
53 |
|
52 |
|
51 |
|
49 |
|
46 |
|
47 |
|
105 |
|
93 |
| ||||||||
Other income (expense) |
|
2 |
|
4 |
|
4 |
|
3 |
|
3 |
|
3 |
|
6 |
|
6 |
| ||||||||
Operating income |
|
$ |
154 |
|
$ |
192 |
|
$ |
165 |
|
$ |
216 |
|
$ |
124 |
|
$ |
151 |
|
$ |
346 |
|
$ |
275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
31.0 |
% |
20.5 |
% |
28.7 |
% |
11.1 |
% |
37.6 |
% |
36.3 |
% |
25.7 |
% |
36.9 |
% | ||||||||
Underwriting expense ratio |
|
37.6 |
% |
37.9 |
% |
38.2 |
% |
38.6 |
% |
38.5 |
% |
37.4 |
% |
37.7 |
% |
38.0 |
% | ||||||||
Combined ratio |
|
68.6 |
% |
58.4 |
% |
66.9 |
% |
49.7 |
% |
76.1 |
% |
73.7 |
% |
63.4 |
% |
74.9 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
0.2 |
% |
0.9 |
% |
0.2 |
% |
0.0 |
% |
0.1 |
% |
0.3 |
% |
0.6 |
% |
0.2 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-13.2 |
% |
-23.7 |
% |
-15.0 |
% |
-34.4 |
% |
-6.9 |
% |
-7.7 |
% |
-18.6 |
% |
-7.3 |
% |
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Bond & Specialty Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
528 |
|
$ |
542 |
|
$ |
562 |
|
$ |
533 |
|
$ |
522 |
|
$ |
537 |
|
$ |
1,070 |
|
$ |
1,059 |
|
Net written premiums |
|
$ |
482 |
|
$ |
540 |
|
$ |
556 |
|
$ |
525 |
|
$ |
478 |
|
$ |
534 |
|
$ |
1,022 |
|
$ |
1,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
503 |
|
$ |
524 |
|
$ |
527 |
|
$ |
522 |
|
$ |
504 |
|
$ |
524 |
|
$ |
1,027 |
|
$ |
1,028 |
|
Losses and loss adjustment expenses |
|
155 |
|
108 |
|
152 |
|
58 |
|
189 |
|
191 |
|
263 |
|
380 |
| ||||||||
Underwriting expenses |
|
197 |
|
201 |
|
205 |
|
198 |
|
196 |
|
199 |
|
398 |
|
395 |
| ||||||||
Statutory underwriting gain |
|
151 |
|
215 |
|
170 |
|
266 |
|
119 |
|
134 |
|
366 |
|
253 |
| ||||||||
Policyholder dividends |
|
3 |
|
2 |
|
2 |
|
2 |
|
2 |
|
2 |
|
5 |
|
4 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
148 |
|
$ |
213 |
|
$ |
168 |
|
$ |
264 |
|
$ |
117 |
|
$ |
132 |
|
$ |
361 |
|
$ |
249 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Net Written Premiums - Bond & Specialty Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fidelity & surety |
|
$ |
211 |
|
$ |
257 |
|
$ |
260 |
|
$ |
235 |
|
$ |
206 |
|
$ |
259 |
|
$ |
468 |
|
$ |
465 |
|
General liability |
|
223 |
|
239 |
|
247 |
|
252 |
|
226 |
|
236 |
|
462 |
|
462 |
| ||||||||
Other |
|
48 |
|
44 |
|
49 |
|
38 |
|
46 |
|
39 |
|
92 |
|
85 |
| ||||||||
Total |
|
$ |
482 |
|
$ |
540 |
|
$ |
556 |
|
$ |
525 |
|
$ |
478 |
|
$ |
534 |
|
$ |
1,022 |
|
$ |
1,012 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income - Personal Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
1,762 |
|
$ |
1,773 |
|
$ |
1,796 |
|
$ |
1,794 |
|
$ |
1,764 |
|
$ |
1,798 |
|
$ |
3,535 |
|
$ |
3,562 |
|
Net investment income |
|
100 |
|
94 |
|
98 |
|
87 |
|
82 |
|
88 |
|
194 |
|
170 |
| ||||||||
Other revenues |
|
26 |
|
17 |
|
19 |
|
18 |
|
12 |
|
12 |
|
43 |
|
24 |
| ||||||||
Total revenues |
|
1,888 |
|
1,884 |
|
1,913 |
|
1,899 |
|
1,858 |
|
1,898 |
|
3,772 |
|
3,756 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
979 |
|
1,261 |
|
1,008 |
|
996 |
|
974 |
|
1,117 |
|
2,240 |
|
2,091 |
| ||||||||
Amortization of deferred acquisition costs |
|
292 |
|
290 |
|
294 |
|
297 |
|
285 |
|
288 |
|
582 |
|
573 |
| ||||||||
General and administrative expenses |
|
223 |
|
237 |
|
263 |
|
254 |
|
231 |
|
248 |
|
460 |
|
479 |
| ||||||||
Total claims and expenses |
|
1,494 |
|
1,788 |
|
1,565 |
|
1,547 |
|
1,490 |
|
1,653 |
|
3,282 |
|
3,143 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
394 |
|
96 |
|
348 |
|
352 |
|
368 |
|
245 |
|
490 |
|
613 |
| ||||||||
Income tax expense |
|
126 |
|
21 |
|
109 |
|
110 |
|
116 |
|
71 |
|
147 |
|
187 |
| ||||||||
Operating income |
|
$ |
268 |
|
$ |
75 |
|
$ |
239 |
|
$ |
242 |
|
$ |
252 |
|
$ |
174 |
|
$ |
343 |
|
$ |
426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
21.3 |
% |
20.7 |
% |
21.8 |
% |
20.2 |
% |
19.6 |
% |
20.8 |
% |
21.0 |
% |
20.2 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
79 |
|
$ |
74 |
|
$ |
77 |
|
$ |
70 |
|
$ |
66 |
|
$ |
70 |
|
$ |
153 |
|
$ |
136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
65 |
|
$ |
190 |
|
$ |
51 |
|
$ |
30 |
|
$ |
62 |
|
$ |
112 |
|
$ |
255 |
|
$ |
174 |
|
After-tax |
|
$ |
42 |
|
$ |
123 |
|
$ |
34 |
|
$ |
20 |
|
$ |
41 |
|
$ |
72 |
|
$ |
165 |
|
$ |
113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
132 |
|
$ |
12 |
|
$ |
13 |
|
$ |
12 |
|
$ |
131 |
|
$ |
64 |
|
$ |
144 |
|
$ |
195 |
|
After-tax |
|
$ |
86 |
|
$ |
8 |
|
$ |
8 |
|
$ |
8 |
|
$ |
85 |
|
$ |
42 |
|
$ |
94 |
|
$ |
127 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income by Major Component and Combined Ratio - Personal Insurance ($ in millions, net of tax) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain (loss) |
|
$ |
172 |
|
$ |
(11 |
) |
$ |
150 |
|
$ |
160 |
|
$ |
178 |
|
$ |
97 |
|
$ |
161 |
|
$ |
275 |
|
Net investment income |
|
79 |
|
74 |
|
77 |
|
70 |
|
66 |
|
70 |
|
153 |
|
136 |
| ||||||||
Other income (expense) |
|
17 |
|
12 |
|
12 |
|
12 |
|
8 |
|
7 |
|
29 |
|
15 |
| ||||||||
Operating income |
|
$ |
268 |
|
$ |
75 |
|
$ |
239 |
|
$ |
242 |
|
$ |
252 |
|
$ |
174 |
|
$ |
343 |
|
$ |
426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
55.6 |
% |
71.1 |
% |
56.0 |
% |
55.5 |
% |
55.2 |
% |
62.2 |
% |
63.4 |
% |
58.7 |
% | ||||||||
Underwriting expense ratio |
|
28.0 |
% |
28.7 |
% |
30.1 |
% |
29.8 |
% |
28.3 |
% |
28.9 |
% |
28.3 |
% |
28.6 |
% | ||||||||
Combined ratio |
|
83.6 |
% |
99.8 |
% |
86.1 |
% |
85.3 |
% |
83.5 |
% |
91.1 |
% |
91.7 |
% |
87.3 |
% | ||||||||
Combined ratio excluding incremental impact of direct to consumer initiative |
|
82.0 |
% |
98.3 |
% |
84.2 |
% |
83.5 |
% |
81.8 |
% |
89.4 |
% |
90.1 |
% |
85.6 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
3.7 |
% |
10.7 |
% |
2.8 |
% |
1.7 |
% |
3.5 |
% |
6.2 |
% |
7.2 |
% |
4.9 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-7.5 |
% |
-0.7 |
% |
-0.7 |
% |
-0.7 |
% |
-7.5 |
% |
-3.5 |
% |
-4.1 |
% |
-5.5 |
% |
(1) Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses. Billing and policy fees and other are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
Billing and policy fees and other |
|
$ |
22 |
|
$ |
18 |
|
$ |
18 |
|
$ |
16 |
|
$ |
16 |
|
$ |
16 |
|
$ |
40 |
|
$ |
32 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Personal Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
1,649 |
|
$ |
1,916 |
|
$ |
1,959 |
|
$ |
1,741 |
|
$ |
1,676 |
|
$ |
1,978 |
|
$ |
3,565 |
|
$ |
3,654 |
|
Net written premiums |
|
$ |
1,619 |
|
$ |
1,893 |
|
$ |
1,917 |
|
$ |
1,736 |
|
$ |
1,622 |
|
$ |
1,956 |
|
$ |
3,512 |
|
$ |
3,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
1,762 |
|
$ |
1,773 |
|
$ |
1,796 |
|
$ |
1,794 |
|
$ |
1,764 |
|
$ |
1,798 |
|
$ |
3,535 |
|
$ |
3,562 |
|
Losses and loss adjustment expenses |
|
980 |
|
1,261 |
|
1,006 |
|
996 |
|
974 |
|
1,117 |
|
2,241 |
|
2,091 |
| ||||||||
Underwriting expenses |
|
481 |
|
539 |
|
572 |
|
531 |
|
488 |
|
558 |
|
1,020 |
|
1,046 |
| ||||||||
Statutory underwriting gain (loss) |
|
$ |
301 |
|
$ |
(27 |
) |
$ |
218 |
|
$ |
267 |
|
$ |
302 |
|
$ |
123 |
|
$ |
274 |
|
$ |
425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
2,068 |
|
2,068 |
|
2,083 |
|
2,097 |
|
2,125 |
|
2,166 |
|
2,068 |
|
2,166 |
| ||||||||
Homeowners and other |
|
4,232 |
|
4,199 |
|
4,164 |
|
4,128 |
|
4,107 |
|
4,121 |
|
4,199 |
|
4,121 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Personal Insurance (Agency Automobile) (1) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
795 |
|
$ |
834 |
|
$ |
852 |
|
$ |
797 |
|
$ |
828 |
|
$ |
893 |
|
$ |
1,629 |
|
$ |
1,721 |
|
Net written premiums |
|
$ |
788 |
|
$ |
831 |
|
$ |
849 |
|
$ |
792 |
|
$ |
822 |
|
$ |
890 |
|
$ |
1,619 |
|
$ |
1,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
787 |
|
$ |
792 |
|
$ |
804 |
|
$ |
812 |
|
$ |
802 |
|
$ |
827 |
|
$ |
1,579 |
|
$ |
1,629 |
|
Losses and loss adjustment expenses |
|
533 |
|
588 |
|
564 |
|
583 |
|
516 |
|
582 |
|
1,121 |
|
1,098 |
| ||||||||
Underwriting expenses |
|
208 |
|
221 |
|
224 |
|
215 |
|
215 |
|
230 |
|
429 |
|
445 |
| ||||||||
Statutory underwriting gain (loss) |
|
$ |
46 |
|
$ |
(17 |
) |
$ |
16 |
|
$ |
14 |
|
$ |
71 |
|
$ |
15 |
|
$ |
29 |
|
$ |
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
67.7 |
% |
74.3 |
% |
70.1 |
% |
71.7 |
% |
64.4 |
% |
70.4 |
% |
71.0 |
% |
67.4 |
% | ||||||||
Underwriting expense ratio |
|
25.6 |
% |
26.5 |
% |
26.6 |
% |
26.2 |
% |
25.8 |
% |
26.1 |
% |
26.1 |
% |
26.0 |
% | ||||||||
Combined ratio |
|
93.3 |
% |
100.8 |
% |
96.7 |
% |
97.9 |
% |
90.2 |
% |
96.5 |
% |
97.1 |
% |
93.4 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
0.0 |
% |
4.6 |
% |
0.6 |
% |
0.0 |
% |
0.0 |
% |
2.1 |
% |
2.3 |
% |
1.1 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
0.0 |
% |
0.0 |
% |
0.0 |
% |
0.0 |
% |
-2.8 |
% |
-2.5 |
% |
0.0 |
% |
-2.7 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
|
|
$ |
36 |
|
$ |
5 |
|
$ |
|
|
$ |
|
|
$ |
18 |
|
$ |
36 |
|
$ |
18 |
|
After-tax |
|
$ |
|
|
$ |
23 |
|
$ |
4 |
|
$ |
|
|
$ |
|
|
$ |
12 |
|
$ |
23 |
|
$ |
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
22 |
|
$ |
21 |
|
$ |
|
|
$ |
43 |
|
After-tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
15 |
|
$ |
14 |
|
$ |
|
|
$ |
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
1,985 |
|
1,981 |
|
1,990 |
|
2,000 |
|
2,021 |
|
2,057 |
|
|
|
|
| ||||||||
Change from prior year quarter |
|
-9.4 |
% |
-6.7 |
% |
-3.3 |
% |
-0.5 |
% |
1.8 |
% |
3.8 |
% |
|
|
|
| ||||||||
Change from prior quarter |
|
-1.3 |
% |
-0.2 |
% |
0.5 |
% |
0.5 |
% |
1.1 |
% |
1.8 |
% |
|
|
|
|
(1) Represents Automobile policies sold through agents, brokers and other intermediaries, and excludes direct to consumer.
(2) Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses. Billing and policy fees and other are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Billing and policy fees and other |
|
$ |
9 |
|
$ |
8 |
|
$ |
9 |
|
$ |
8 |
|
$ |
9 |
|
$ |
8 |
|
$ |
17 |
|
$ |
17 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Personal Insurance (Agency Homeowners and Other) (1) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
811 |
|
$ |
1,036 |
|
$ |
1,055 |
|
$ |
898 |
|
$ |
795 |
|
$ |
1,029 |
|
$ |
1,847 |
|
$ |
1,824 |
|
Net written premiums |
|
$ |
788 |
|
$ |
1,016 |
|
$ |
1,017 |
|
$ |
897 |
|
$ |
748 |
|
$ |
1,010 |
|
$ |
1,804 |
|
$ |
1,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
935 |
|
$ |
938 |
|
$ |
948 |
|
$ |
935 |
|
$ |
914 |
|
$ |
920 |
|
$ |
1,873 |
|
$ |
1,834 |
|
Losses and loss adjustment expenses |
|
419 |
|
639 |
|
414 |
|
381 |
|
425 |
|
498 |
|
1,058 |
|
923 |
| ||||||||
Underwriting expenses |
|
240 |
|
283 |
|
303 |
|
276 |
|
236 |
|
289 |
|
523 |
|
525 |
| ||||||||
Statutory underwriting gain |
|
$ |
276 |
|
$ |
16 |
|
$ |
231 |
|
$ |
278 |
|
$ |
253 |
|
$ |
133 |
|
$ |
292 |
|
$ |
386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
44.8 |
% |
68.1 |
% |
43.6 |
% |
40.8 |
% |
46.5 |
% |
54.2 |
% |
56.5 |
% |
50.3 |
% | ||||||||
Underwriting expense ratio |
|
27.6 |
% |
28.0 |
% |
29.9 |
% |
30.2 |
% |
27.9 |
% |
28.8 |
% |
27.8 |
% |
28.4 |
% | ||||||||
Combined ratio |
|
72.4 |
% |
96.1 |
% |
73.5 |
% |
71.0 |
% |
74.4 |
% |
83.0 |
% |
84.3 |
% |
78.7 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
6.8 |
% |
15.9 |
% |
4.8 |
% |
3.1 |
% |
6.7 |
% |
10.1 |
% |
11.4 |
% |
8.4 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-14.1 |
% |
-1.3 |
% |
-1.4 |
% |
-1.1 |
% |
-11.8 |
% |
-4.6 |
% |
-7.7 |
% |
-8.2 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
64 |
|
$ |
150 |
|
$ |
46 |
|
$ |
29 |
|
$ |
61 |
|
$ |
93 |
|
$ |
214 |
|
$ |
154 |
|
After-tax |
|
$ |
41 |
|
$ |
98 |
|
$ |
30 |
|
$ |
19 |
|
$ |
40 |
|
$ |
60 |
|
$ |
139 |
|
$ |
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
132 |
|
$ |
12 |
|
$ |
13 |
|
$ |
10 |
|
$ |
108 |
|
$ |
43 |
|
$ |
144 |
|
$ |
151 |
|
After-tax |
|
$ |
86 |
|
$ |
8 |
|
$ |
8 |
|
$ |
7 |
|
$ |
70 |
|
$ |
28 |
|
$ |
94 |
|
$ |
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
4,146 |
|
4,110 |
|
4,072 |
|
4,032 |
|
4,008 |
|
4,017 |
|
|
|
|
| ||||||||
Change from prior year quarter |
|
-7.5 |
% |
-6.5 |
% |
-5.4 |
% |
-4.2 |
% |
-3.3 |
% |
-2.3 |
% |
|
|
|
| ||||||||
Change from prior quarter |
|
-1.5 |
% |
-0.9 |
% |
-0.9 |
% |
-1.0 |
% |
-0.6 |
% |
0.2 |
% |
|
|
|
|
(1) Represents Homeowners and Other Lines sold through agents, brokers and other intermediaries, and excludes direct to consumer.
(2) Billing and policy fees and other, which are a component of other revenues, are allocated as a reduction of underwriting expenses. Billing and policy fees and other are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Billing and policy fees and other |
|
$ |
13 |
|
$ |
9 |
|
$ |
9 |
|
$ |
7 |
|
$ |
7 |
|
$ |
7 |
|
$ |
22 |
|
$ |
14 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Direct to Consumer (1) ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
$ |
31 |
|
$ |
31 |
|
$ |
36 |
|
$ |
32 |
|
$ |
38 |
|
$ |
38 |
|
$ |
62 |
|
$ |
76 |
|
Homeowners and other |
|
12 |
|
15 |
|
15 |
|
15 |
|
14 |
|
18 |
|
27 |
|
32 |
| ||||||||
Total net written premiums |
|
$ |
43 |
|
$ |
46 |
|
$ |
51 |
|
$ |
47 |
|
$ |
52 |
|
$ |
56 |
|
$ |
89 |
|
$ |
108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
40 |
|
$ |
43 |
|
$ |
44 |
|
$ |
47 |
|
$ |
48 |
|
$ |
51 |
|
$ |
83 |
|
$ |
99 |
|
Other revenues |
|
|
|
|
|
1 |
|
|
|
|
|
1 |
|
|
|
1 |
| ||||||||
Total revenues |
|
40 |
|
43 |
|
45 |
|
47 |
|
48 |
|
52 |
|
83 |
|
100 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
28 |
|
33 |
|
29 |
|
32 |
|
32 |
|
39 |
|
61 |
|
71 |
| ||||||||
Amortization of deferred acquisition costs |
|
1 |
|
1 |
|
1 |
|
1 |
|
1 |
|
1 |
|
2 |
|
2 |
| ||||||||
General and administrative expenses |
|
33 |
|
35 |
|
43 |
|
39 |
|
37 |
|
38 |
|
68 |
|
75 |
| ||||||||
Total claims and expenses |
|
62 |
|
69 |
|
73 |
|
72 |
|
70 |
|
78 |
|
131 |
|
148 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss before income taxes |
|
(22 |
) |
(26 |
) |
(28 |
) |
(25 |
) |
(22 |
) |
(26 |
) |
(48 |
) |
(48 |
) | ||||||||
Income taxes |
|
(8 |
) |
(9 |
) |
(10 |
) |
(8 |
) |
(8 |
) |
(9 |
) |
(17 |
) |
(17 |
) | ||||||||
Operating loss |
|
$ |
(14 |
) |
$ |
(17 |
) |
$ |
(18 |
) |
$ |
(17 |
) |
$ |
(14 |
) |
$ |
(17 |
) |
$ |
(31 |
) |
$ |
(31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
83 |
|
87 |
|
93 |
|
97 |
|
104 |
|
109 |
|
|
|
|
| ||||||||
Homeowners and other |
|
86 |
|
89 |
|
92 |
|
96 |
|
99 |
|
104 |
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
1 |
|
$ |
4 |
|
$ |
|
|
$ |
1 |
|
$ |
1 |
|
$ |
1 |
|
$ |
5 |
|
$ |
2 |
|
After-tax |
|
$ |
1 |
|
$ |
2 |
|
$ |
|
|
$ |
1 |
|
$ |
1 |
|
$ |
|
|
$ |
3 |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
2 |
|
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
1 |
|
After-tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
(1) Represents incremental premiums, other revenues and claims and expenses of Direct to Consumer business activities included in Personal Insurance operating income (loss).
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Interest Expense and Other ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other revenues |
|
$ |
(1 |
) |
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest expense |
|
92 |
|
92 |
|
93 |
|
92 |
|
92 |
|
92 |
|
184 |
|
184 |
| ||||||||
General and administrative expenses |
|
7 |
|
9 |
|
6 |
|
9 |
|
7 |
|
7 |
|
16 |
|
14 |
| ||||||||
Total claims and expenses |
|
99 |
|
101 |
|
99 |
|
101 |
|
99 |
|
99 |
|
200 |
|
198 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss before income tax benefit |
|
(100 |
) |
(100 |
) |
(99 |
) |
(101 |
) |
(99 |
) |
(99 |
) |
(200 |
) |
(198 |
) | ||||||||
Income taxes |
|
(36 |
) |
(35 |
) |
(36 |
) |
(36 |
) |
(35 |
) |
(37 |
) |
(71 |
) |
(72 |
) | ||||||||
Operating loss |
|
$ |
(64 |
) |
$ |
(65 |
) |
$ |
(63 |
) |
$ |
(65 |
) |
$ |
(64 |
) |
$ |
(62 |
) |
$ |
(129 |
) |
$ |
(126 |
) |
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Consolidated Balance Sheet (in millions) |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Fixed maturities, available for sale, at fair value (amortized cost $60,103 and $60,801) |
|
$ |
61,933 |
|
$ |
63,474 |
|
Equity securities, available for sale, at fair value (cost $573 and $579) |
|
828 |
|
899 |
| ||
Real estate investments |
|
980 |
|
938 |
| ||
Short-term securities |
|
3,924 |
|
4,364 |
| ||
Other investments |
|
3,565 |
|
3,586 |
| ||
Total investments |
|
71,230 |
|
73,261 |
| ||
|
|
|
|
|
| ||
Cash |
|
317 |
|
374 |
| ||
Investment income accrued |
|
655 |
|
685 |
| ||
Premiums receivable |
|
6,764 |
|
6,298 |
| ||
Reinsurance recoverables |
|
8,965 |
|
9,260 |
| ||
Ceded unearned premiums |
|
782 |
|
678 |
| ||
Deferred acquisition costs |
|
1,891 |
|
1,835 |
| ||
Deferred taxes |
|
216 |
|
33 |
| ||
Contractholder receivables |
|
4,473 |
|
4,362 |
| ||
Goodwill |
|
3,594 |
|
3,611 |
| ||
Other intangible assets |
|
284 |
|
304 |
| ||
Other assets |
|
2,493 |
|
2,377 |
| ||
Total assets |
|
$ |
101,664 |
|
$ |
103,078 |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
|
|
|
|
|
| ||
Liabilities |
|
|
|
|
| ||
Claims and claim adjustment expense reserves |
|
$ |
48,833 |
|
$ |
49,850 |
|
Unearned premium reserves |
|
12,153 |
|
11,839 |
| ||
Contractholder payables |
|
4,473 |
|
4,362 |
| ||
Payables for reinsurance premiums |
|
428 |
|
336 |
| ||
Debt |
|
6,350 |
|
6,349 |
| ||
Other liabilities |
|
5,306 |
|
5,506 |
| ||
Total liabilities |
|
77,543 |
|
78,242 |
| ||
|
|
|
|
|
| ||
Shareholders equity |
|
|
|
|
| ||
Common stock (1,750.0 shares authorized; 311.2 and 322.2 shares issued and outstanding) |
|
22,039 |
|
21,843 |
| ||
Retained earnings |
|
28,524 |
|
27,251 |
| ||
Accumulated other comprehensive income |
|
169 |
|
880 |
| ||
Treasury stock, at cost (451.5 and 437.3 shares) |
|
(26,611 |
) |
(25,138 |
) | ||
Total shareholders equity |
|
24,121 |
|
24,836 |
| ||
Total liabilities and shareholders equity |
|
$ |
101,664 |
|
$ |
103,078 |
|
The Travelers Companies, Inc. Investment Portfolio (at carrying value, $ in millions) |
|
|
|
June 30, |
|
Pre-tax Book |
|
December 31, |
|
Pre-tax Book |
| ||
|
|
2015 |
|
Yield (1) |
|
2014 |
|
Yield (1) |
| ||
Investment portfolio |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Taxable fixed maturities (including redeemable preferred stock) |
|
$ |
29,586 |
|
3.36 |
% |
$ |
30,283 |
|
3.42 |
% |
Tax-exempt fixed maturities |
|
32,347 |
|
3.67 |
% |
33,191 |
|
3.72 |
% | ||
Total fixed maturities |
|
61,933 |
|
3.52 |
% |
63,474 |
|
3.58 |
% | ||
|
|
|
|
|
|
|
|
|
| ||
Non-redeemable preferred stocks |
|
189 |
|
5.65 |
% |
208 |
|
5.60 |
% | ||
Public common stocks |
|
639 |
|
|
|
691 |
|
|
| ||
Total equity securities |
|
828 |
|
|
|
899 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Real estate investments |
|
980 |
|
|
|
938 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Short-term securities |
|
3,924 |
|
0.20 |
% |
4,364 |
|
0.17 |
% | ||
|
|
|
|
|
|
|
|
|
| ||
Private equities |
|
2,062 |
|
|
|
2,090 |
|
|
| ||
Hedge funds |
|
442 |
|
|
|
414 |
|
|
| ||
Real estate partnerships |
|
617 |
|
|
|
593 |
|
|
| ||
Other investments |
|
444 |
|
|
|
489 |
|
|
| ||
Total other investments |
|
3,565 |
|
|
|
3,586 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Total investments |
|
$ |
71,230 |
|
|
|
$ |
73,261 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net unrealized investment gains, net of tax, included in shareholders equity |
|
$ |
1,376 |
|
|
|
$ |
1,966 |
|
|
|
|
|
| |
(1) Yields are provided for those investments with an embedded book yield. |
The Travelers Companies, Inc. Investment Portfolio - Fixed Maturities Data (at carrying value, $ in millions) |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
Fixed maturities |
|
|
|
|
| ||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies |
|
$ |
2,046 |
|
$ |
2,053 |
|
Obligations of states and political subdivisions: |
|
|
|
|
| ||
Pre-refunded |
|
7,271 |
|
7,561 |
| ||
All other |
|
25,439 |
|
26,012 |
| ||
Total |
|
32,710 |
|
33,573 |
| ||
Debt securities issued by foreign governments |
|
2,100 |
|
2,368 |
| ||
Mortgage-backed securities - principally obligations of U.S. Government agencies |
|
2,046 |
|
2,213 |
| ||
Corporates (including redeemable preferreds) |
|
23,031 |
|
23,267 |
| ||
Total fixed maturities |
|
$ |
61,933 |
|
$ |
63,474 |
|
Fixed Maturities
Quality Characteristics (1)
|
|
June 30, 2015 |
| |||
|
|
Amount |
|
% of Total |
| |
Quality Ratings |
|
|
|
|
| |
Aaa |
|
$ |
25,932 |
|
41.9 |
% |
Aa |
|
18,195 |
|
29.4 |
| |
A |
|
9,445 |
|
15.2 |
| |
Baa |
|
6,535 |
|
10.6 |
| |
Total investment grade |
|
60,107 |
|
97.1 |
| |
Ba |
|
1,087 |
|
1.7 |
| |
B |
|
393 |
|
0.6 |
| |
Caa and lower |
|
346 |
|
0.6 |
| |
Total below investment grade |
|
1,826 |
|
2.9 |
| |
Total fixed maturities |
|
$ |
61,933 |
|
100.0 |
% |
Average weighted quality |
|
Aa2, AA |
|
|
| |
Average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases |
|
3.9 |
|
|
|
(1) Rated using external rating agencies or by Travelers when a public rating does not exist. Below investment grade assets refer to securities rated Ba or below.
The Travelers Companies, Inc. Investment Income ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
$ |
580 |
|
$ |
562 |
|
$ |
552 |
|
$ |
550 |
|
$ |
531 |
|
$ |
526 |
|
$ |
1,142 |
|
$ |
1,057 |
|
Short-term securities |
|
2 |
|
2 |
|
2 |
|
3 |
|
2 |
|
3 |
|
4 |
|
5 |
| ||||||||
Other |
|
163 |
|
140 |
|
174 |
|
96 |
|
69 |
|
113 |
|
303 |
|
182 |
| ||||||||
|
|
745 |
|
704 |
|
728 |
|
649 |
|
602 |
|
642 |
|
1,449 |
|
1,244 |
| ||||||||
Investment expenses |
|
9 |
|
9 |
|
9 |
|
12 |
|
10 |
|
10 |
|
18 |
|
20 |
| ||||||||
Net investment income, pre-tax |
|
736 |
|
695 |
|
719 |
|
637 |
|
592 |
|
632 |
|
1,431 |
|
1,224 |
| ||||||||
Income taxes |
|
154 |
|
142 |
|
151 |
|
124 |
|
114 |
|
129 |
|
296 |
|
243 |
| ||||||||
Net investment income, after-tax |
|
$ |
582 |
|
$ |
553 |
|
$ |
568 |
|
$ |
513 |
|
$ |
478 |
|
$ |
503 |
|
$ |
1,135 |
|
$ |
981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate |
|
21.0 |
% |
20.5 |
% |
20.9 |
% |
19.6 |
% |
19.3 |
% |
20.5 |
% |
20.7 |
% |
19.9 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average invested assets (1) |
|
$ |
72,112 |
|
$ |
71,880 |
|
$ |
72,062 |
|
$ |
72,071 |
|
$ |
70,722 |
|
$ |
70,291 |
|
$ |
72,010 |
|
$ |
70,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average yield pre-tax (1) |
|
4.1 |
% |
3.9 |
% |
4.0 |
% |
3.5 |
% |
3.3 |
% |
3.6 |
% |
4.0 |
% |
3.5 |
% | ||||||||
Average yield after-tax |
|
3.2 |
% |
3.1 |
% |
3.2 |
% |
2.8 |
% |
2.7 |
% |
2.9 |
% |
3.2 |
% |
2.8 |
% |
(1) Excludes net unrealized investment gains, net of tax, and is adjusted for cash, receivables for investment sales, payables on investment purchases and accrued investment income.
The Travelers Companies, Inc. Net Realized and Unrealized Investment Gains ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| |||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| |||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net realized investment gains (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Fixed maturities |
|
$ |
6 |
|
$ |
9 |
|
$ |
|
|
$ |
1 |
|
$ |
17 |
|
$ |
14 |
|
$ |
15 |
|
$ |
31 |
| |
Equity securities |
|
(4 |
) |
15 |
|
|
|
4 |
|
|
|
(1 |
) |
11 |
|
(1 |
) | |||||||||
Other (1) |
|
(1 |
) |
(8 |
) |
40 |
|
17 |
|
(7 |
) |
(3 |
) |
(9 |
) |
(10 |
) | |||||||||
Realized investment gains before tax |
|
1 |
|
16 |
|
40 |
|
22 |
|
10 |
|
10 |
|
17 |
|
20 |
| |||||||||
Related taxes |
|
1 |
|
6 |
|
14 |
|
7 |
|
4 |
|
4 |
|
7 |
|
8 |
| |||||||||
Net realized investment gains |
|
$ |
|
|
$ |
10 |
|
$ |
26 |
|
$ |
15 |
|
$ |
6 |
|
$ |
6 |
|
$ |
10 |
|
$ |
12 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Gross investment gains (1) |
|
$ |
59 |
|
$ |
46 |
|
$ |
101 |
|
$ |
93 |
|
$ |
71 |
|
$ |
102 |
|
$ |
105 |
|
$ |
173 |
| |
Gross investment losses before impairments (1) |
|
(49 |
) |
(29 |
) |
(51 |
) |
(65 |
) |
(58 |
) |
(86 |
) |
(78 |
) |
(144 |
) | |||||||||
Net investment gains before impairments |
|
10 |
|
17 |
|
50 |
|
28 |
|
13 |
|
16 |
|
27 |
|
29 |
| |||||||||
Other-than-temporary impairment losses |
|
(9 |
) |
(1 |
) |
(10 |
) |
(6 |
) |
(3 |
) |
(6 |
) |
(10 |
) |
(9 |
) | |||||||||
Net realized investment gains before tax |
|
1 |
|
16 |
|
40 |
|
22 |
|
10 |
|
10 |
|
17 |
|
20 |
| |||||||||
Related taxes |
|
1 |
|
6 |
|
14 |
|
7 |
|
4 |
|
4 |
|
7 |
|
8 |
| |||||||||
Net realized investment gains |
|
$ |
|
|
$ |
10 |
|
$ |
26 |
|
$ |
15 |
|
$ |
6 |
|
$ |
6 |
|
$ |
10 |
|
$ |
12 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
|
|
|
| |||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net unrealized investment gains, net of tax, by asset type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Fixed maturities |
|
$ |
2,276 |
|
$ |
2,742 |
|
$ |
2,579 |
|
$ |
2,673 |
|
$ |
2,853 |
|
$ |
1,830 |
|
|
|
|
| |||
Equity securities & other |
|
293 |
|
346 |
|
356 |
|
335 |
|
319 |
|
274 |
|
|
|
|
| |||||||||
Unrealized investment gains before tax |
|
2,569 |
|
3,088 |
|
2,935 |
|
3,008 |
|
3,172 |
|
2,104 |
|
|
|
|
| |||||||||
Related taxes |
|
895 |
|
1,075 |
|
1,021 |
|
1,042 |
|
1,096 |
|
728 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance, end of period |
|
$ |
1,674 |
|
$ |
2,013 |
|
$ |
1,914 |
|
$ |
1,966 |
|
$ |
2,076 |
|
$ |
1,376 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
| |||||||||||||||||||||||||
(1) Includes the following gross investment gains and gross investment losses related to U.S. Treasury futures, which are settled daily: |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
Gross investment Treasury future gains |
|
$ |
4 |
|
$ |
4 |
|
$ |
6 |
|
$ |
28 |
|
$ |
44 |
|
$ |
56 |
|
$ |
8 |
|
$ |
100 |
|
|
Gross investment Treasury future losses |
|
$ |
3 |
|
$ |
5 |
|
$ |
6 |
|
$ |
29 |
|
$ |
54 |
|
$ |
47 |
|
$ |
8 |
|
$ |
101 |
|
The Company entered into these arrangements as part of its strategy to manage the duration of its fixed maturity portfolio. In a changing interest rate environment, the change in the value of the futures contracts can be expected to partially offset changes in the value of the fixed maturity portfolio.
The Travelers Companies, Inc. Reinsurance Recoverables ($ in millions) |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses |
|
$ |
4,013 |
|
$ |
4,270 |
|
Allowance for uncollectible reinsurance |
|
(194 |
) |
(203 |
) | ||
Net reinsurance recoverables (i) |
|
3,819 |
|
4,067 |
| ||
Mandatory pools and associations (ii) |
|
1,947 |
|
1,909 |
| ||
Structured settlements (iii) |
|
3,199 |
|
3,284 |
| ||
Total reinsurance recoverables |
|
$ |
8,965 |
|
$ |
9,260 |
|
(i) The Companys top five reinsurer groups, including retroactive reinsurance, included in net reinsurance recoverables is as follows:
|
|
A.M. Best Rating of Groups |
|
June 30, |
| |
Reinsurer |
|
Predominant Reinsurer |
|
2015 |
| |
Swiss Re Group |
|
A+ second highest of 16 ratings |
|
$ |
436 |
|
Munich Re Group |
|
A+ second highest of 16 ratings |
|
404 |
| |
Berkshire Hathaway |
|
A++ highest of 16 ratings |
|
267 |
| |
Sompo Japan Nipponkoa Group |
|
A+ second highest of 16 ratings |
|
246 |
| |
XL Capital Group |
|
A third highest of 16 ratings |
|
198 |
| |
On January 25, 2015, AXIS Capital Holdings Limited and PartnerRe Ltd. announced that they had signed a definitive amalgamation agreement. The Companys aggregated reinsurance recoverables from these entities at June 30, 2015 totaled approximately $221 million. The A.M. Best ratings for each entity at July 20, 2015 was A+ (second highest of 16 ratings). A.M. Best has placed the ratings of each entity under review with negative implications. Subsequent to January 25, 2015, another organization has expressed interest in acquiring PartnerRe Ltd.
The gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and incurred but not reported claims. The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves. Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.
The net reinsurance recoverables reflect an allowance for uncollectible reinsurance that is based upon the Companys ongoing review of amounts outstanding, reinsurer solvency, the Companys experience, current economic conditions, and other relevant factors. Of the total net recoverables due from reinsurers at June 30, 2015, after deducting mandatory pools and associations and structured settlement balances, $3.1 billion, or 82%, were rated by A.M. Best Company. Of the total rated by A.M. Best Company, 99% were rated A- or better. The remaining 18% of net recoverables from reinsurers were comprised of the following: 6% related to the Companys participation in voluntary pools, 9% related to recoverables from captive insurance companies and 3% were balances from other companies not rated by A.M. Best Company. In addition, $1.2 billion of the net recoverables were collateralized by letters of credit, funds held or trust agreements at June 30, 2015.
(ii) The mandatory pools and associations represent various involuntary assigned risk pools that the Company is required to participate in. These pools principally involve workers compensation and automobile insurance, which provide various insurance coverages to insureds that otherwise are unable to purchase coverage in the open market. The costs of these mandatory pools in most states are usually charged back to the participating members in proportion to voluntary writings of related business in that state. In the event that a member of the pool becomes insolvent, the remaining members assume an additional pro rata share of the pools liabilities. Recoverables due from the National Flood Insurance Program are included with mandatory pools.
(iii) Included in reinsurance recoverables are certain amounts related to structured settlements, which comprise annuities purchased from various life insurance companies to settle certain personal physical injury claims, of which workers compensation claims comprise a significant portion. In cases where the Company did not receive a release from the claimant, the amount due from the life insurance company related to the structured settlement is included in the Companys consolidated balance sheet as a liability and as a reinsurance recoverable, as the Company retains the contingent liability to pay the claimant in the event that the life insurance company fails to make the required annuity payments. The Company would be required to make such payments, to the extent the purchased annuities are not covered by state guaranty associations.
The Companys top five groups by structured settlement is as follows:
|
|
A.M. Best Rating of Groups |
|
June 30, |
| |
Group |
|
Predominant Insurer |
|
2015 |
| |
Fidelity and Guaranty Life |
|
B++ fifth highest of 16 ratings |
|
$ |
922 |
|
Metlife |
|
A+ second highest of 16 ratings |
|
419 |
| |
Genworth Financial Group |
|
A- fourth highest of 16 ratings |
|
387 |
| |
John Hancock Group |
|
A+ second highest of 16 ratings |
|
249 |
| |
Symetra Financial Corporation |
|
A third highest of 16 ratings |
|
235 |
| |
The Travelers Companies, Inc. Net Reserves for Losses and Loss Adjustment Expense ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
Statutory Reserves for Losses and Loss Adjustment Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Business and International Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
34,717 |
|
$ |
34,661 |
|
$ |
34,929 |
|
$ |
34,887 |
|
$ |
34,568 |
|
$ |
33,924 |
|
$ |
34,717 |
|
$ |
34,568 |
|
Incurred |
|
2,132 |
|
2,397 |
|
2,310 |
|
2,103 |
|
2,216 |
|
2,187 |
|
4,529 |
|
4,403 |
| ||||||||
Paid |
|
(2,109 |
) |
(2,231 |
) |
(2,170 |
) |
(2,300 |
) |
(2,616 |
) |
(2,291 |
) |
(4,340 |
) |
(4,907 |
) | ||||||||
Foreign exchange and other |
|
(79 |
) |
102 |
|
(182 |
) |
(122 |
) |
(244 |
) |
85 |
|
23 |
|
(159 |
) | ||||||||
End of period |
|
$ |
34,661 |
|
$ |
34,929 |
|
$ |
34,887 |
|
$ |
34,568 |
|
$ |
33,924 |
|
$ |
33,905 |
|
$ |
34,929 |
|
$ |
33,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bond & Specialty Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
3,595 |
|
$ |
3,585 |
|
$ |
3,501 |
|
$ |
3,416 |
|
$ |
3,239 |
|
$ |
3,228 |
|
$ |
3,595 |
|
$ |
3,239 |
|
Incurred |
|
155 |
|
108 |
|
152 |
|
58 |
|
189 |
|
191 |
|
263 |
|
380 |
| ||||||||
Paid |
|
(165 |
) |
(192 |
) |
(237 |
) |
(235 |
) |
(200 |
) |
(207 |
) |
(357 |
) |
(407 |
) | ||||||||
End of period |
|
$ |
3,585 |
|
$ |
3,501 |
|
$ |
3,416 |
|
$ |
3,239 |
|
$ |
3,228 |
|
$ |
3,212 |
|
$ |
3,501 |
|
$ |
3,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Personal Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
3,256 |
|
$ |
3,137 |
|
$ |
3,285 |
|
$ |
3,222 |
|
$ |
3,200 |
|
$ |
3,144 |
|
$ |
3,256 |
|
$ |
3,200 |
|
Incurred |
|
980 |
|
1,261 |
|
1,006 |
|
996 |
|
974 |
|
1,117 |
|
2,241 |
|
2,091 |
| ||||||||
Paid |
|
(1,099 |
) |
(1,113 |
) |
(1,069 |
) |
(1,018 |
) |
(1,030 |
) |
(1,105 |
) |
(2,212 |
) |
(2,135 |
) | ||||||||
End of period |
|
$ |
3,137 |
|
$ |
3,285 |
|
$ |
3,222 |
|
$ |
3,200 |
|
$ |
3,144 |
|
$ |
3,156 |
|
$ |
3,285 |
|
$ |
3,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
41,568 |
|
$ |
41,383 |
|
$ |
41,715 |
|
$ |
41,525 |
|
$ |
41,007 |
|
$ |
40,296 |
|
$ |
41,568 |
|
$ |
41,007 |
|
Incurred |
|
3,267 |
|
3,766 |
|
3,468 |
|
3,157 |
|
3,379 |
|
3,495 |
|
7,033 |
|
6,874 |
| ||||||||
Paid |
|
(3,373 |
) |
(3,536 |
) |
(3,476 |
) |
(3,553 |
) |
(3,846 |
) |
(3,603 |
) |
(6,909 |
) |
(7,449 |
) | ||||||||
Foreign exchange and other |
|
(79 |
) |
102 |
|
(182 |
) |
(122 |
) |
(244 |
) |
85 |
|
23 |
|
(159 |
) | ||||||||
End of period |
|
$ |
41,383 |
|
$ |
41,715 |
|
$ |
41,525 |
|
$ |
41,007 |
|
$ |
40,296 |
|
$ |
40,273 |
|
$ |
41,715 |
|
$ |
40,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior Year Reserve Development: Unfavorable (Favorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Business and International Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Asbestos |
|
$ |
|
|
$ |
|
|
$ |
250 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Environmental |
|
|
|
87 |
|
|
|
|
|
|
|
72 |
|
87 |
|
72 |
| ||||||||
All other |
|
(95 |
) |
(134 |
) |
(271 |
) |
(159 |
) |
(77 |
) |
(175 |
) |
(229 |
) |
(252 |
) | ||||||||
Total Business and International Insurance (1) |
|
(95 |
) |
(47 |
) |
(21 |
) |
(159 |
) |
(77 |
) |
(103 |
) |
(142 |
) |
(180 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bond & Specialty Insurance |
|
(67 |
) |
(124 |
) |
(79 |
) |
(180 |
) |
(35 |
) |
(40 |
) |
(191 |
) |
(75 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Personal Insurance |
|
(132 |
) |
(12 |
) |
(13 |
) |
(12 |
) |
(131 |
) |
(64 |
) |
(144 |
) |
(195 |
) | ||||||||
Total |
|
$ |
(294 |
) |
$ |
(183 |
) |
$ |
(113 |
) |
$ |
(351 |
) |
$ |
(243 |
) |
$ |
(207 |
) |
$ |
(477 |
) |
$ |
(450 |
) |
(1) Excludes accretion of discount.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Asbestos and Environmental Reserves ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Asbestos reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
2,606 |
|
$ |
2,547 |
|
$ |
2,482 |
|
$ |
2,665 |
|
$ |
2,520 |
|
$ |
1,959 |
|
$ |
2,606 |
|
$ |
2,520 |
|
Ceded |
|
(256 |
) |
(242 |
) |
(232 |
) |
(220 |
) |
(163 |
) |
(123 |
) |
(256 |
) |
(163 |
) | ||||||||
Net |
|
2,350 |
|
2,305 |
|
2,250 |
|
2,445 |
|
2,357 |
|
1,836 |
|
2,350 |
|
2,357 |
| ||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
|
|
258 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ceded |
|
|
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||
Paid loss and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
59 |
|
65 |
|
74 |
|
145 |
|
560 |
|
104 |
|
124 |
|
664 |
| ||||||||
Ceded |
|
(14 |
) |
(10 |
) |
(20 |
) |
(57 |
) |
(40 |
) |
(1 |
) |
(24 |
) |
(41 |
) | ||||||||
Foreign exchange and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
1 |
|
|
|
|
| ||||||||
Ceded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
2,547 |
|
2,482 |
|
2,665 |
|
2,520 |
|
1,959 |
|
1,856 |
|
2,482 |
|
1,856 |
| ||||||||
Ceded |
|
(242 |
) |
(232 |
) |
(220 |
) |
(163 |
) |
(123 |
) |
(122 |
) |
(232 |
) |
(122 |
) | ||||||||
Net |
|
$ |
2,305 |
|
$ |
2,250 |
|
$ |
2,445 |
|
$ |
2,357 |
|
$ |
1,836 |
|
$ |
1,734 |
|
$ |
2,250 |
|
$ |
1,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Environmental reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
355 |
|
$ |
331 |
|
$ |
396 |
|
$ |
375 |
|
$ |
353 |
|
$ |
341 |
|
$ |
355 |
|
$ |
353 |
|
Ceded |
|
(11 |
) |
(11 |
) |
(14 |
) |
(11 |
) |
(7 |
) |
(6 |
) |
(11 |
) |
(7 |
) | ||||||||
Net |
|
344 |
|
320 |
|
382 |
|
364 |
|
346 |
|
335 |
|
344 |
|
346 |
| ||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
94 |
|
|
|
|
|
|
|
81 |
|
94 |
|
81 |
| ||||||||
Ceded |
|
|
|
(7 |
) |
|
|
|
|
|
|
(9 |
) |
(7 |
) |
(9 |
) | ||||||||
Paid loss and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
24 |
|
29 |
|
20 |
|
22 |
|
11 |
|
15 |
|
53 |
|
26 |
| ||||||||
Ceded |
|
|
|
(4 |
) |
(3 |
) |
(4 |
) |
(1 |
) |
|
|
(4 |
) |
(1 |
) | ||||||||
Acquired reserves, foreign exchange and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
(1 |
) |
|
|
(2 |
) | ||||||||
Ceded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
331 |
|
396 |
|
375 |
|
353 |
|
341 |
|
406 |
|
396 |
|
406 |
| ||||||||
Ceded |
|
(11 |
) |
(14 |
) |
(11 |
) |
(7 |
) |
(6 |
) |
(15 |
) |
(14 |
) |
(15 |
) | ||||||||
Net |
|
$ |
320 |
|
$ |
382 |
|
$ |
364 |
|
$ |
346 |
|
$ |
335 |
|
$ |
391 |
|
$ |
382 |
|
$ |
391 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 |
|
2014 |
| ||
Debt |
|
|
|
|
| ||
|
|
|
|
|
| ||
Short-term debt |
|
|
|
|
| ||
Commercial paper |
|
$ |
100 |
|
$ |
100 |
|
5.50% Senior notes due December 1, 2015 (1) |
|
400 |
|
400 |
| ||
6.25% Senior notes due June 20, 2016 (1) |
|
400 |
|
|
| ||
Total short-term debt |
|
900 |
|
500 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
|
|
|
| ||
6.25% Senior notes due June 20, 2016 (1) |
|
|
|
400 |
| ||
5.75% Senior notes due December 15, 2017 (1) |
|
450 |
|
450 |
| ||
5.80% Senior notes due May 15, 2018 (1) |
|
500 |
|
500 |
| ||
5.90% Senior notes due June 2, 2019 (1) |
|
500 |
|
500 |
| ||
3.90% Senior notes due November 1, 2020 (1) |
|
500 |
|
500 |
| ||
7.75% Senior notes due April 15, 2026 |
|
200 |
|
200 |
| ||
7.625% Junior subordinated debentures due December 15, 2027 |
|
125 |
|
125 |
| ||
6.375% Senior notes due March 15, 2033 (1) |
|
500 |
|
500 |
| ||
6.75% Senior notes due June 20, 2036 (1) |
|
400 |
|
400 |
| ||
6.25% Senior notes due June 15, 2037 (1) |
|
800 |
|
800 |
| ||
5.35% Senior notes due November 1, 2040 (1) |
|
750 |
|
750 |
| ||
4.60% Senior notes due August 1, 2043 (1) |
|
500 |
|
500 |
| ||
8.50% Junior subordinated debentures due December 15, 2045 |
|
56 |
|
56 |
| ||
8.312% Junior subordinated debentures due July 1, 2046 |
|
73 |
|
73 |
| ||
6.25% Fixed-to-floating rate junior subordinated debentures due March 15, 2067 (1) |
|
107 |
|
107 |
| ||
Total long-term debt |
|
5,461 |
|
5,861 |
| ||
Unamortized fair value adjustment |
|
49 |
|
50 |
| ||
Unamortized debt issuance costs |
|
(60 |
) |
(62 |
) | ||
|
|
5,450 |
|
5,849 |
| ||
Total debt |
|
6,350 |
|
6,349 |
| ||
|
|
|
|
|
| ||
Common equity (excluding net unrealized investment gains, net of tax) |
|
22,745 |
|
22,870 |
| ||
|
|
|
|
|
| ||
Total capital (excluding net unrealized investment gains, net of tax) |
|
$ |
29,095 |
|
$ |
29,219 |
|
|
|
|
|
|
| ||
Total debt to capital (excluding net unrealized investment gains, net of tax) |
|
21.8 |
% |
21.7 |
% |
(1) Redeemable anytime with make-whole premium.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2015 (1) |
|
2014 |
| ||
|
|
|
|
|
| ||
Statutory capital and surplus |
|
$ |
20,851 |
|
$ |
21,049 |
|
|
|
|
|
|
| ||
GAAP adjustments |
|
|
|
|
| ||
|
|
|
|
|
| ||
Goodwill and intangible assets |
|
3,712 |
|
3,750 |
| ||
|
|
|
|
|
| ||
Investments |
|
2,381 |
|
3,315 |
| ||
|
|
|
|
|
| ||
Noninsurance companies |
|
(4,526 |
) |
(4,635 |
) | ||
|
|
|
|
|
| ||
Deferred acquisition costs |
|
1,891 |
|
1,835 |
| ||
|
|
|
|
|
| ||
Deferred federal income tax |
|
(1,408 |
) |
(1,672 |
) | ||
|
|
|
|
|
| ||
Current federal income tax |
|
(18 |
) |
(47 |
) | ||
|
|
|
|
|
| ||
Reinsurance recoverables |
|
113 |
|
117 |
| ||
|
|
|
|
|
| ||
Furniture, equipment & software |
|
641 |
|
662 |
| ||
|
|
|
|
|
| ||
Agents balances |
|
152 |
|
145 |
| ||
|
|
|
|
|
| ||
Other |
|
332 |
|
317 |
| ||
|
|
|
|
|
| ||
Total GAAP adjustments |
|
3,270 |
|
3,787 |
| ||
|
|
|
|
|
| ||
GAAP shareholders equity |
|
$ |
24,121 |
|
$ |
24,836 |
|
(1) Estimated and Preliminary
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income |
|
$ |
1,052 |
|
$ |
683 |
|
$ |
919 |
|
$ |
1,038 |
|
$ |
833 |
|
$ |
812 |
|
$ |
1,735 |
|
$ |
1,645 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net realized investment gains |
|
(1 |
) |
(16 |
) |
(40 |
) |
(22 |
) |
(10 |
) |
(10 |
) |
(17 |
) |
(20 |
) | ||||||||
Depreciation and amortization |
|
227 |
|
215 |
|
211 |
|
211 |
|
225 |
|
204 |
|
442 |
|
429 |
| ||||||||
Deferred federal income tax expense |
|
153 |
|
(22 |
) |
(38 |
) |
28 |
|
133 |
|
9 |
|
131 |
|
142 |
| ||||||||
Amortization of deferred acquisition costs |
|
950 |
|
965 |
|
984 |
|
983 |
|
963 |
|
963 |
|
1,915 |
|
1,926 |
| ||||||||
Equity in income from other investments |
|
(139 |
) |
(118 |
) |
(155 |
) |
(74 |
) |
(43 |
) |
(91 |
) |
(257 |
) |
(134 |
) | ||||||||
Premiums receivable |
|
(189 |
) |
(274 |
) |
129 |
|
127 |
|
(258 |
) |
(228 |
) |
(463 |
) |
(486 |
) | ||||||||
Reinsurance recoverables |
|
106 |
|
100 |
|
197 |
|
(3 |
) |
69 |
|
194 |
|
206 |
|
263 |
| ||||||||
Deferred acquisition costs |
|
(986 |
) |
(1,003 |
) |
(1,004 |
) |
(933 |
) |
(987 |
) |
(1,004 |
) |
(1,989 |
) |
(1,991 |
) | ||||||||
Claims and claim adjustment expense reserves |
|
(209 |
) |
149 |
|
(238 |
) |
(406 |
) |
(561 |
) |
(265 |
) |
(60 |
) |
(826 |
) | ||||||||
Unearned premium reserves |
|
94 |
|
141 |
|
144 |
|
(306 |
) |
185 |
|
177 |
|
235 |
|
362 |
| ||||||||
Other |
|
(355 |
) |
(195 |
) |
731 |
|
(118 |
) |
(350 |
) |
(85 |
) |
(550 |
) |
(435 |
) | ||||||||
Net cash provided by operating activities |
|
703 |
|
625 |
|
1,840 |
|
525 |
|
199 |
|
676 |
|
1,328 |
|
875 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Proceeds from maturities of fixed maturities |
|
2,312 |
|
2,603 |
|
3,060 |
|
2,919 |
|
2,830 |
|
2,484 |
|
4,915 |
|
5,314 |
| ||||||||
Proceeds from sales of investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
406 |
|
379 |
|
142 |
|
122 |
|
906 |
|
320 |
|
785 |
|
1,226 |
| ||||||||
Equity securities |
|
36 |
|
59 |
|
33 |
|
30 |
|
11 |
|
17 |
|
95 |
|
28 |
| ||||||||
Real estate investments |
|
1 |
|
4 |
|
|
|
10 |
|
7 |
|
3 |
|
5 |
|
10 |
| ||||||||
Other investments |
|
167 |
|
171 |
|
274 |
|
243 |
|
146 |
|
208 |
|
338 |
|
354 |
| ||||||||
Purchases of investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
(2,715 |
) |
(2,734 |
) |
(2,788 |
) |
(3,088 |
) |
(3,325 |
) |
(2,914 |
) |
(5,449 |
) |
(6,239 |
) | ||||||||
Equity securities |
|
(18 |
) |
(22 |
) |
(7 |
) |
(5 |
) |
(8 |
) |
(14 |
) |
(40 |
) |
(22 |
) | ||||||||
Real estate investments |
|
(9 |
) |
(27 |
) |
(5 |
) |
(7 |
) |
(6 |
) |
(63 |
) |
(36 |
) |
(69 |
) | ||||||||
Other investments |
|
(113 |
) |
(113 |
) |
(180 |
) |
(148 |
) |
(168 |
) |
(107 |
) |
(226 |
) |
(275 |
) | ||||||||
Net sales (purchases) of short-term securities |
|
(160 |
) |
220 |
|
(1,223 |
) |
665 |
|
(134 |
) |
567 |
|
60 |
|
433 |
| ||||||||
Securities transactions in course of settlement |
|
240 |
|
(36 |
) |
(85 |
) |
(37 |
) |
305 |
|
(122 |
) |
204 |
|
183 |
| ||||||||
Acquisition, net of cash acquired |
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
(12 |
) |
|
| ||||||||
Other |
|
(60 |
) |
(92 |
) |
(110 |
) |
(96 |
) |
(90 |
) |
(88 |
) |
(152 |
) |
(178 |
) | ||||||||
Net cash provided by (used in) investing activities |
|
75 |
|
412 |
|
(889 |
) |
608 |
|
474 |
|
291 |
|
487 |
|
765 |
| ||||||||
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2014 |
|
2014 |
|
2014 |
|
2014 |
|
2015 |
|
2015 |
|
2014 |
|
2015 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Treasury stock acquired - share repurchase authorization |
|
(650 |
) |
(875 |
) |
(750 |
) |
(1,000 |
) |
(600 |
) |
(800 |
) |
(1,525 |
) |
(1,400 |
) | ||||||||
Treasury stock acquired - net employee share-based compensation |
|
(54 |
) |
(1 |
) |
(1 |
) |
(1 |
) |
(71 |
) |
(1 |
) |
(55 |
) |
(72 |
) | ||||||||
Dividends paid to shareholders |
|
(176 |
) |
(189 |
) |
(184 |
) |
(180 |
) |
(177 |
) |
(192 |
) |
(365 |
) |
(369 |
) | ||||||||
Issuance of common stock - employee share options |
|
57 |
|
65 |
|
32 |
|
41 |
|
90 |
|
27 |
|
122 |
|
117 |
| ||||||||
Excess tax benefits from share-based payment arrangements |
|
13 |
|
11 |
|
14 |
|
19 |
|
27 |
|
4 |
|
24 |
|
31 |
| ||||||||
Net cash used in financing activities |
|
(810 |
) |
(989 |
) |
(889 |
) |
(1,121 |
) |
(731 |
) |
(962 |
) |
(1,799 |
) |
(1,693 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effect of exchange rate changes on cash |
|
(2 |
) |
3 |
|
(6 |
) |
(5 |
) |
(8 |
) |
4 |
|
1 |
|
(4 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net increase (decrease) in cash |
|
(34 |
) |
51 |
|
56 |
|
7 |
|
(66 |
) |
9 |
|
17 |
|
(57 |
) | ||||||||
Cash at beginning of period |
|
294 |
|
260 |
|
311 |
|
367 |
|
374 |
|
308 |
|
294 |
|
374 |
| ||||||||
Cash at end of period |
|
$ |
260 |
|
$ |
311 |
|
$ |
367 |
|
$ |
374 |
|
$ |
308 |
|
$ |
317 |
|
$ |
311 |
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income taxes paid |
|
$ |
93 |
|
$ |
634 |
|
$ |
58 |
|
$ |
362 |
|
$ |
126 |
|
$ |
471 |
|
$ |
727 |
|
$ |
597 |
|
Interest paid |
|
$ |
34 |
|
$ |
149 |
|
$ |
34 |
|
$ |
148 |
|
$ |
34 |
|
$ |
149 |
|
$ |
183 |
|
$ |
183 |
|
The Travelers Companies, Inc. |
|
The following measures are used by the Companys management to evaluate financial performance against historical results and establish targets on a consolidated basis. 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.
In the opinion of the Companys 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 Companys periodic results of operations and how management evaluates the Companys financial performance. Internally, the Companys management uses these measures to evaluate performance against historical results and establish financial targets on a consolidated basis.
Some of these measures exclude net realized investment gains (losses), net of tax, and/or net unrealized investment gains (losses), net of tax, 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 Companys management.
Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses). Management uses operating income (loss) to analyze each segments performance and as a tool in making business decisions. Financial statement users also consider operating income when analyzing the results and trends of insurance companies. Operating earnings (loss) per share is operating income (loss) on a per common share basis.
Average shareholders equity is (a) the sum of total 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. Adjusted shareholders equity is shareholders equity excluding net unrealized investment gains (losses), net of tax and net realized investment gains (losses), net of tax, for the period presented. Adjusted average shareholders equity is average shareholders equity excluding net unrealized investment gains (losses), net of tax, for all quarters included in the calculation and, for each quarterly period included in the calculation that quarters net realized investment gains (losses), net of tax.
Return on equity is the ratio of annualized net income (loss) to average shareholders equity for the periods presented. Operating return on equity is the ratio of annualized operating income (loss) to adjusted average shareholders equity for the periods presented. In the opinion of the Companys management, these are important indicators of how well management creates value for its shareholders through its operating activities and its capital management.
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 Companys 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 segments business performance and as a tool in making business decisions.
A catastrophe is a severe loss, resulting from a variety of events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis and volcanic eruptions. Catastrophes can also result from a terrorist attack (including those involving nuclear, biological, chemical or radiological events), explosions, infrastructure failures or as a consequence of political instability. Each catastrophe has unique characteristics and catastrophes are not predictable as to timing or amount. Their effects are included in net and operating income 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. In the opinion of the Companys management, a discussion of the impact of catastrophes is meaningful to users of the financial statements to understand the Companys periodic earnings and the variability in periodic earnings caused by the unpredictable nature of catastrophes.
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 Companys 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 operating income (loss), and changes in claims and claim adjustment expense reserve levels from period to period.
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 financial supplement, 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 premium and the underwriting expense ratio as used in this financial supplement 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 financial supplement 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, to net written premiums as defined in the statutory financial statements required by insurance regulators. The underwriting expense ratio as used in this financial supplement, is the ratio of underwriting expenses (including the amortization of deferred acquisition costs), less certain administrative services fee income and billing and policy fees, to net earned premiums.
The combined ratio, loss and LAE ratio, and underwriting expense ratio are used as indicators of the Companys 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.
Other companies method of computing similarly titled measures may not be comparable to the Companys method of computing these ratios.
Combined ratio excluding the incremental impact of the direct to consumer initiative is the combined ratio adjusted to exclude the direct, variable impact of the Companys direct-to-consumer initiative in Personal Insurance. In the opinion of the Companys management, this is useful in an analysis of the profitability of the Companys ongoing agency business.
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.
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 the after-tax impact of net unrealized investment gains and losses, divided by the number of common shares outstanding. In the opinion of the Companys management, adjusted book value per share is useful in an analysis of a property casualty companys 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.
Total capital is the sum of total shareholders equity and debt. Debt-to-capital ratio excluding net unrealized gain (loss) on investments is the ratio of debt to total capital excluding the after-tax impact of net unrealized investment gains and losses. In the opinion of the Companys management, the debt to capital ratio is useful in an analysis of the Companys financial leverage.
Statutory capital and surplus represents the excess of an insurance companys admitted assets over its liabilities, including loss reserves, as determined in accordance with statutory accounting practices.
Travelers has organized its businesses into the following reportable business segments:
Business and International Insurance - The Business and International Insurance segment offers a broad array of property and casualty insurance and insurance related services to its clients, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyds. Business and International Insurance is organized as follows: Select Accounts; Middle Market including Commercial Accounts, Construction, Technology, Public Sector Services, Oil & Gas, Excess Casualty and Global Partner Services; National Accounts; First Party including National Property, Inland Marine, Ocean Marine and Boiler & Machinery; Specialized Distribution including Northland, National Programs, and Agribusiness; and International. In addition, the Company owns 49.5% of the common stock of J. Malucelli Participações em Seguros e Resseguros S.A., its joint venture in Brazil. Business and International Insurance also includes the Special Liability Group (which manages the Companys asbestos and environmental liabilities) and the assumed reinsurance and certain other runoff operations, which are collectively referred to as Business and International Insurance Other.
Bond & Specialty Insurance - The Bond & Specialty Insurance segment provides surety, crime, management and professional liability coverages and related risk management services to a wide range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The range of coverages includes performance, payment and commercial surety and fidelity bonds for construction and general commercial enterprises; management liability coverages for losses caused by the actual or alleged negligence or misconduct of directors and officers or employee dishonesty; employment practices liability coverages and fiduciary coverages for public corporations, private companies and not-for-profit organizations; professional liability coverage for actual or alleged errors and omissions committed in the course of professional conduct or practice for a variety of professionals including, among others, lawyers and design professionals; and professional and management liability, property, workers compensation, auto and general liability and fidelity insurance for financial institutions.
Personal Insurance - The Personal Insurance segment writes a broad range of property and casualty insurance covering individuals personal risks. The primary products of automobile and homeowners insurance are complemented by a broad suite of related coverages.
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