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, 2016
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, 2016, The Travelers Companies, Inc. (the Company) issued a press release announcing the results of the Companys operations for the quarter ended June 30, 2016, 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 |
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|
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99.1 |
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Press Release, dated July 21, 2016, reporting results of operations (This exhibit is furnished and not filed.) |
99.2 |
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Second Quarter 2016 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, 2016 |
THE TRAVELERS COMPANIES, INC. | ||
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| |
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By: |
/s/ Kenneth F. Spence III | |
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Name: |
Kenneth F. Spence III |
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Title: |
Executive Vice President and General Counsel |
Exhibit 99.1
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NYSE: TRV
Travelers Reports Second Quarter Net and Operating Income per Diluted Share of $2.24 and $2.20, Respectively
Return on Equity and Operating Return on Equity of 10.9% and 11.6%, Respectively
· Net and operating income of $664 million and $649 million, respectively, declined from the prior year quarter, primarily due to higher catastrophe losses, including the Fort McMurray wildfires, higher non-catastrophe weather-related losses and lower net investment income.
· Strong consolidated underwriting results, as reflected in combined ratio of 93.1% and underlying combined ratio of 92.3%.
· Record net written premiums of $6.345 billion, up 3% from prior year quarter.
· Total capital returned to shareholders of $747 million in the quarter, including $550 million of share repurchases. Year-to-date total capital returned to shareholders of $1.537 billion, including $1.159 billion of share repurchases.
· Book value per share of $85.73 increased 11% from end of prior year quarter and 7% from year-end 2015. Adjusted book value per share of $77.61 increased 6% and 3%, respectively, from same dates.
· Board of Directors declared quarterly dividend per share of $0.67.
New York, July 21, 2016 The Travelers Companies, Inc. today reported net income of $664 million, or $2.24 per diluted share, for the quarter ended June 30, 2016, compared to $812 million, or $2.53 per diluted share, in the prior year quarter. Operating income in the current quarter was $649 million, or $2.20 per diluted share, compared to $806 million, or $2.52 per diluted share, in the prior year quarter. These declines were primarily driven by catastrophe and certain non-catastrophe weather-related losses (i.e., losses from events designated by Property Claim Services (PCS) as catastrophes that did not meet the Companys reporting thresholds for catastrophe losses) that were higher by $135 million after-tax ($200 million pre-tax) and net investment income that was lower by $61 million after-tax ($83 million pre-tax), partially offset by net favorable prior year reserve development that was higher by $59 million after-tax ($81 million pre-tax). The prior year quarter also included a $32 million tax benefit. Per diluted share amounts benefited from the impact of share repurchases.
Consolidated Highlights
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($ in millions, except for per share amounts, and after-tax, |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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except for premiums & revenues) |
|
2016 |
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2015 |
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Change |
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2016 |
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2015 |
|
Change |
| |||||
Net written premiums |
|
$ |
6,345 |
|
$ |
6,169 |
|
3 |
% |
$ |
12,511 |
|
$ |
12,066 |
|
4 |
% | |
Total revenues |
|
$ |
6,785 |
|
$ |
6,710 |
|
1 |
|
$ |
13,471 |
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$ |
13,339 |
|
1 |
| |
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Net income |
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$ |
664 |
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$ |
812 |
|
(18 |
) |
$ |
1,355 |
|
$ |
1,645 |
|
(18 |
) | |
per diluted share |
|
$ |
2.24 |
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$ |
2.53 |
|
(11 |
) |
$ |
4.55 |
|
$ |
5.08 |
|
(10 |
) | |
Operating income |
|
$ |
649 |
|
$ |
806 |
|
(19 |
) |
$ |
1,347 |
|
$ |
1,633 |
|
(18 |
) | |
per diluted share |
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$ |
2.20 |
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$ |
2.52 |
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(13 |
) |
$ |
4.52 |
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$ |
5.05 |
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(10 |
) | |
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Diluted weighted average shares outstanding |
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293.6 |
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318.0 |
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(8 |
) |
295.6 |
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321.2 |
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(8 |
) | |||||
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Combined ratio |
|
93.1 |
% |
90.8 |
% |
2.3 |
pts |
92.7 |
% |
89.9 |
% |
2.8 |
pts | |||||
Underlying combined ratio |
|
92.3 |
% |
90.6 |
% |
1.7 |
pts |
91.2 |
% |
90.4 |
% |
0.8 |
pts | |||||
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Return on equity |
|
10.9 |
% |
13.3 |
% |
(2.4 |
)pts |
11.2 |
% |
13.3 |
% |
(2.1 |
)pts | |||||
Operating return on equity |
|
11.6 |
% |
14.2 |
% |
(2.6 |
)pts |
12.0 |
% |
14.3 |
% |
(2.3 |
)pts |
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Change from |
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June 30, |
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December 31, |
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June 30, |
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December 31, |
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June 30, |
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2016 |
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2015 |
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2015 |
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2015 |
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2015 |
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Book value per share |
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$ |
85.73 |
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$ |
79.75 |
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$ |
77.51 |
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7 |
% |
11 |
% |
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Adjusted book value per share |
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77.61 |
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75.39 |
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73.09 |
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3 |
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6 |
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See Glossary of Financial Measures for definitions and the statistical supplement for additional financial data.
Our second quarter results were solid, with operating income of $649 million and operating return on equity of 11.6%, commented Alan Schnitzer, Chief Executive Officer. We were particularly pleased with our operating return on equity relative to the persistent and increasingly low interest rate environment, which highlights our ability to continue to generate attractive underwriting returns. Our underwriting results remained strong, as reflected in a 93.1% combined ratio, despite catastrophe and other PCS weather-related losses being higher by $135 million after-tax as compared to the prior year quarter. As a consequence of the interest rate environment, returns from our high-quality fixed income portfolio declined by $21 million after-tax, in line with our expectations. Returns from our non-fixed income portfolio declined from the prior year period but remained positive and improved from recent quarters. In terms of capital management, we returned $747 million of excess capital to shareholders in the quarter, including $550 million of share repurchases, bringing the total capital returned to shareholders year-to-date to more than $1.5 billion.
We continue to be very pleased with the execution of our marketplace strategies, both in terms of the record volume of premium we wrote in the quarter and the modeled returns on that business. In our commercial businesses, retentions remained at historically high levels, with positive renewal premium change and strong new business growth, including 10% new business growth in domestic Business Insurance. Personal Insurance net written premiums grew 9% from the prior year quarter to a record of over $2.1 billion, driven by accelerating growth in both auto and homeowners policies in force.
Our results this quarter again demonstrate the value of our significant competitive advantages, our strong balance sheet, the best talent in the business and our return-focused underwriting culture. With these strengths and our active capital management philosophy, we remain well-positioned to continue to deliver superior shareholder value over time.
Consolidated Results
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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($ in millions and pre-tax, unless noted otherwise) |
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2016 |
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2015 |
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Change |
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2016 |
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2015 |
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Change |
| ||||||
Underwriting gain: |
|
$ |
388 |
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$ |
511 |
|
$ |
(123 |
) |
$ |
816 |
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$ |
1,131 |
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$ |
(315 |
) |
Underwriting gain includes: |
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Net favorable prior year reserve development |
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288 |
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207 |
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81 |
|
468 |
|
450 |
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18 |
| ||||||
Catastrophes, net of reinsurance |
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(333 |
) |
(221 |
) |
(112 |
) |
(651 |
) |
(383 |
) |
(268 |
) | ||||||
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Net investment income |
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549 |
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632 |
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(83 |
) |
1,093 |
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1,224 |
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(131 |
) | ||||||
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Other income/(expense), including interest expense |
|
(69 |
) |
(77 |
) |
8 |
|
(115 |
) |
(151 |
) |
36 |
| ||||||
Operating income before income taxes |
|
868 |
|
1,066 |
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(198 |
) |
1,794 |
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2,204 |
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(410 |
) | ||||||
Income tax expense |
|
219 |
|
260 |
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(41 |
) |
447 |
|
571 |
|
(124 |
) | ||||||
Operating income |
|
649 |
|
806 |
|
(157 |
) |
1,347 |
|
1,633 |
|
(286 |
) | ||||||
Net realized investment gains after income taxes |
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15 |
|
6 |
|
9 |
|
8 |
|
12 |
|
(4 |
) | ||||||
Net Income |
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$ |
664 |
|
$ |
812 |
|
$ |
(148 |
) |
$ |
1,355 |
|
$ |
1,645 |
|
$ |
(290 |
) |
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| ||||||
Combined ratio |
|
93.1 |
% |
90.8 |
% |
2.3 |
pts |
92.7 |
% |
89.9 |
% |
2.8 |
pts | ||||||
|
|
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| ||||||
Impact on combined ratio |
|
|
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| ||||||
Net favorable prior year reserve development |
|
(4.7 |
) |
(3.5 |
) |
(1.2 |
)pts |
(3.9 |
) |
(3.8 |
) |
(0.1 |
)pts | ||||||
Catastrophes, net of reinsurance |
|
5.5 |
|
3.7 |
|
1.8 |
pts |
5.4 |
|
3.3 |
|
2.1 |
pts | ||||||
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| ||||||
Underlying combined ratio |
|
92.3 |
% |
90.6 |
% |
1.7 |
pts |
91.2 |
% |
90.4 |
% |
0.8 |
pts | ||||||
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| ||||||
Net written premiums |
|
|
|
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|
|
|
|
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|
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| ||||||
Business and International Insurance |
|
$ |
3,680 |
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$ |
3,679 |
|
|
% |
$ |
7,594 |
|
$ |
7,476 |
|
2 |
% | ||
Bond & Specialty Insurance |
|
536 |
|
534 |
|
|
|
1,028 |
|
1,012 |
|
2 |
| ||||||
Personal Insurance |
|
2,129 |
|
1,956 |
|
9 |
|
3,889 |
|
3,578 |
|
9 |
| ||||||
Total |
|
$ |
6,345 |
|
$ |
6,169 |
|
3 |
% |
$ |
12,511 |
|
$ |
12,066 |
|
4 |
% |
Second Quarter 2016 Results
(All comparisons vs. second quarter 2015, unless noted otherwise)
Net income of $664 million after-tax decreased $148 million, or 18%. Within net income, operating income of $649 million after-tax decreased by $157 million, or 19%, primarily driven by catastrophe and certain non-catastrophe weather-related losses that were higher by $135 million after-tax ($200 million pre-tax) and net investment income that was lower by $61 million after-tax ($83 million pre-tax), partially offset by net favorable prior year reserve development that was higher by $59 million after-tax ($81 million pre-tax). The prior year quarter also included a $32 million tax benefit. In addition, net income benefited from net realized investment gains of $15 million after-tax ($19 million pre-tax) in the current quarter compared to net realized investment gains of $6 million after-tax ($10 million pre-tax) in the prior year quarter.
Underwriting results
· The combined ratio remained strong at 93.1%. It increased 2.3 points due to higher catastrophe losses (1.8 points) and a higher underlying combined ratio (1.7 points), partially offset by higher net favorable prior year reserve development (1.2 points).
· The underlying combined ratio of 92.3% increased 1.7 points, primarily driven by higher non-catastrophe weather-related losses and, to a lesser extent, the impact of loss cost trends that exceeded earned pricing.
· Net favorable prior year reserve development occurred in Business and International Insurance and Bond & Specialty Insurance. Catastrophe losses primarily resulted from wind and hail storms in several regions of the United States and the Fort McMurray wildfires in Canada.
Net investment income of $549 million pre-tax ($442 million after-tax) decreased due to lower returns in both the non-fixed income and fixed-income portfolios. Non-fixed income returns declined due to lower private equity and real estate partnership returns but remained positive and improved from recent quarters. As a consequence of the low interest rate environment, returns from our high-quality fixed-income portfolio declined in line with our expectations.
Record net written premiums of $6.345 billion increased 3%, primarily driven by growth in Personal Insurance and domestic Business Insurance net written premiums.
Year-to-Date 2016 Results
(All comparisons vs. year-to-date 2015, unless noted otherwise)
Net income of $1.355 billion after-tax decreased $290 million due to lower operating income and lower after-tax net realized investment gains. Operating income of $1.347 billion after-tax decreased $286 million, primarily driven by higher catastrophe losses and lower net investment income. The prior year period also included a $32 million tax benefit.
Underwriting results
· The combined ratio remained strong at 92.7%. It increased 2.8 points due to higher catastrophe losses (2.1 points) and a higher underlying combined ratio (0.8 points), partially offset by higher net favorable prior year reserve development (0.1 points).
· The underlying combined ratio of 91.2% increased 0.8 points, primarily driven by the impact of loss cost trends that exceeded earned pricing.
· Net favorable prior year reserve development occurred in all segments. Catastrophe losses included the second quarter events discussed above, as well as wind and hail storms in Texas and several other regions of the United States and winter storms in the eastern United States in the first quarter.
Net investment income of $1.093 billion pre-tax ($881 million after-tax) decreased primarily due to the same factors discussed above, as well as lower hedge fund returns.
Other income/(expense) included proceeds from the favorable settlement of a claims-related legal matter in the first quarter of 2016.
Record net written premiums of $12.511 billion increased 4%, benefiting from strong retention, positive renewal premium changes and increases in new business volumes in each segment.
Shareholders Equity
Shareholders equity of $24.714 billion increased 5% from year-end 2015, primarily due to an increase in after-tax net unrealized investment gains. After-tax net unrealized investment gains were $2.341 billion ($3.585 billion pre-tax), compared to $1.289 billion after-tax ($1.974 billion pre-tax) at year-end 2015. Book value per share of $85.73 and adjusted book value per share of $77.61 increased 7% and 3%, respectively, from year-end 2015.
The Company repurchased 4.9 million shares during the second quarter at an average price of $112.12 per share for a total cost of $550 million, leaving $2.234 billion of remaining capacity under the existing share repurchase authorization at the end of the quarter. At the end of second quarter 2016, statutory capital and surplus was $20.634 billion and the ratio of debt-to-capital was 20.7%. The ratio of debt-to-capital excluding after-tax net unrealized investment gains was 22.3%, well within the Companys target range of 15% to 25%.
The Board of Directors today declared a quarterly dividend of $0.67 per share. This dividend is payable on September 30, 2016, to shareholders of record as of the close of business on September 9, 2016.
Business and International Insurance Segment Financial Results
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|
Three Months Ended June 30, |
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Six Months Ended June 30, |
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($ in millions and pre-tax, unless noted otherwise) |
|
2016 |
|
2015 |
|
Change |
|
2016 |
|
2015 |
|
Change |
| ||||||
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|
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|
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| ||||||
Underwriting gain: |
|
$ |
77 |
|
$ |
230 |
|
$ |
(153 |
) |
$ |
249 |
|
$ |
458 |
|
$ |
(209 |
) |
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
138 |
|
103 |
|
35 |
|
231 |
|
180 |
|
51 |
| ||||||
Catastrophes, net of reinsurance |
|
(212 |
) |
(108 |
) |
(104 |
) |
(360 |
) |
(207 |
) |
(153 |
) | ||||||
|
|
|
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|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
420 |
|
487 |
|
(67 |
) |
835 |
|
941 |
|
(106 |
) | ||||||
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|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
8 |
|
5 |
|
3 |
|
41 |
|
13 |
|
28 |
| ||||||
Operating income before income taxes |
|
505 |
|
722 |
|
(217 |
) |
1,125 |
|
1,412 |
|
(287 |
) | ||||||
Income tax expense |
|
112 |
|
179 |
|
(67 |
) |
256 |
|
354 |
|
(98 |
) | ||||||
Operating income |
|
$ |
393 |
|
$ |
543 |
|
$ |
(150 |
) |
$ |
869 |
|
$ |
1,058 |
|
$ |
(189 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
97.5 |
% |
93.2 |
% |
4.3 |
pts |
96.2 |
% |
93.3 |
% |
2.9 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(3.8 |
) |
(2.8 |
) |
(1.0 |
)pts |
(3.2 |
) |
(2.5 |
) |
(0.7 |
)pts | ||||||
Catastrophes, net of reinsurance |
|
5.8 |
|
2.9 |
|
2.9 |
pts |
5.0 |
|
2.9 |
|
2.1 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
95.5 |
% |
93.1 |
% |
2.4 |
pts |
94.4 |
% |
92.9 |
% |
1.5 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Domestic |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Select Accounts |
|
$ |
709 |
|
$ |
709 |
|
|
% |
$ |
1,433 |
|
$ |
1,431 |
|
|
% | ||
Middle Market |
|
1,494 |
|
1,451 |
|
3 |
|
3,323 |
|
3,177 |
|
5 |
| ||||||
National Accounts |
|
234 |
|
228 |
|
3 |
|
554 |
|
527 |
|
5 |
| ||||||
First Party |
|
466 |
|
452 |
|
3 |
|
824 |
|
792 |
|
4 |
| ||||||
Specialized Distribution |
|
302 |
|
300 |
|
1 |
|
588 |
|
568 |
|
4 |
| ||||||
Total Domestic |
|
3,205 |
|
3,140 |
|
2 |
|
6,722 |
|
6,495 |
|
3 |
| ||||||
International |
|
475 |
|
539 |
|
(12 |
) |
872 |
|
981 |
|
(11 |
) | ||||||
Total |
|
$ |
3,680 |
|
$ |
3,679 |
|
|
% |
$ |
7,594 |
|
$ |
7,476 |
|
2 |
% |
Second Quarter 2016 Results
(All comparisons vs. second quarter 2015, unless noted otherwise)
Operating income for Business and International Insurance was $393 million after-tax, a decrease of $150 million, primarily driven by higher catastrophe losses, higher non-catastrophe weather-related losses and lower net investment income, partially offset by higher net favorable prior year reserve development. The prior year quarter also included a $12 million tax benefit.
Underwriting results
· The combined ratio of 97.5% increased 4.3 points due to higher catastrophe losses (2.9 points) and a higher underlying combined ratio (2.4 points), partially offset by higher net favorable prior year reserve development (1.0 point).
· The underlying combined ratio of 95.5% increased 2.4 points, primarily driven by higher non-catastrophe weather-related losses and the impact of loss cost trends that exceeded earned pricing.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in the Companys domestic operations in (i) the workers compensation product line for accident years 2006 and prior as well as accident year 2015 and (ii) the general liability product line for both primary and excess coverages for accident years 2011 and 2015, as well as in the Companys international operations in Europe. These improvements were partially offset by a $53 million after-tax ($82 million pre-tax) increase to environmental reserves.
Net written premiums of $3.680 billion were comparable with the prior year quarter. Domestic net written premiums increased 2%, primarily driven by an increase in retention rates, positive renewal premium changes and an increase in new business volume. International net written premiums decreased 12%, primarily driven by the impact of changes in foreign currency exchange rates and the impacts of disciplined underwriting and lower levels of economic activity impacting insured exposures in the Companys European operations, including Lloyds.
Year-to-Date 2016 Results
(All comparisons vs. year-to-date 2015, unless noted otherwise)
Operating income for Business and International Insurance was $869 million after-tax, a decrease of $189 million, primarily driven by higher catastrophe losses and lower net investment income. The prior year period also included a $12 million tax benefit.
Underwriting results
· The combined ratio of 96.2% increased 2.9 points due to higher catastrophe losses (2.1 points) and a higher underlying combined ratio (1.5 points), partially offset by higher net favorable prior year reserve development (0.7 points).
· The underlying combined ratio of 94.4% increased 1.5 points, primarily driven by the impact of loss cost trends that exceeded earned pricing and a slight increase in the expense ratio due to normal quarterly fluctuations in expenses and the impact of strategic initiatives in the Companys international businesses.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in the Companys domestic operations in (i) the workers compensation product line for accident years 2006 and prior as well as accident year 2015 and (ii) the general liability product line related to both primary and excess coverages for accident years 2011, 2013 and 2015 and (iii) the commercial automobile product line for accident years 2010 and prior, as well as in the Companys international operations in Europe and Canada. These improvements were partially offset by a $53 million after-tax ($82 million pre-tax) increase to environmental reserves.
Other income included proceeds from the favorable settlement of a claims-related legal matter in the first quarter of 2016.
Net written premiums of $7.594 billion increased 2% due to the same factors discussed above for the second quarter.
Bond & Specialty Insurance Segment Financial Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2016 |
|
2015 |
|
Change |
|
2016 |
|
2015 |
|
Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underwriting gain: |
|
$ |
244 |
|
$ |
136 |
|
$ |
108 |
|
$ |
398 |
|
$ |
254 |
|
$ |
144 |
|
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
150 |
|
40 |
|
110 |
|
210 |
|
75 |
|
135 |
| ||||||
Catastrophes, net of reinsurance |
|
(3 |
) |
(1 |
) |
(2 |
) |
(4 |
) |
(2 |
) |
(2 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
51 |
|
57 |
|
(6 |
) |
103 |
|
113 |
|
(10 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
6 |
|
5 |
|
1 |
|
9 |
|
10 |
|
(1 |
) | ||||||
Operating income before income taxes |
|
301 |
|
198 |
|
103 |
|
510 |
|
377 |
|
133 |
| ||||||
Income tax expense |
|
99 |
|
47 |
|
52 |
|
164 |
|
102 |
|
62 |
| ||||||
Operating income |
|
$ |
202 |
|
$ |
151 |
|
$ |
51 |
|
$ |
346 |
|
$ |
275 |
|
$ |
71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
52.4 |
% |
73.7 |
% |
(21.3 |
)pts |
60.8 |
% |
74.9 |
% |
(14.1 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
(29.1 |
)pts |
(7.7 |
)pts |
(21.4 |
)pts |
(20.6 |
)pts |
(7.3 |
)pts |
(13.3 |
)pts | ||||||
Catastrophes, net of reinsurance |
|
0.6 |
pts |
0.3 |
pts |
0.3 |
pts |
0.4 |
pts |
0.2 |
pts |
0.2 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
80.9 |
% |
81.1 |
% |
(0.2 |
)pts |
81.0 |
% |
82.0 |
% |
(1.0 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Management Liability |
|
$ |
331 |
|
$ |
322 |
|
3 |
% |
$ |
656 |
|
$ |
643 |
|
2 |
% | ||
Surety |
|
205 |
|
212 |
|
(3 |
) |
372 |
|
369 |
|
1 |
| ||||||
Total |
|
$ |
536 |
|
$ |
534 |
|
|
% |
$ |
1,028 |
|
$ |
1,012 |
|
2 |
% |
Second Quarter 2016 Results
(All comparisons vs. second quarter 2015, unless noted otherwise)
Operating income for Bond & Specialty Insurance was $202 million after-tax, an increase of $51 million, primarily driven by higher net favorable prior year reserve development. The prior year quarter included a $16 million tax benefit.
Underwriting results
· The combined ratio was very strong at 52.4% and improved 21.3 points due to higher net favorable prior year reserve development (21.4 points) and a lower underlying combined ratio (0.2 points), partially offset by higher catastrophe losses (0.3 points).
· The underlying combined ratio was strong at 80.9%.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in (i) the fidelity and surety product line for accident years 2010, 2013 and 2014 and (ii) the general liability product line for accident years 2007 through 2011.
Net written premiums of $536 million were comparable to the prior year quarter.
Year-to-Date 2016 Results
(All comparisons vs. year-to-date 2015, unless noted otherwise)
Operating income for Bond & Specialty Insurance was $346 million after-tax, an increase of $71 million, primarily driven by the same factors discussed above for the second quarter.
Underwriting results
· The combined ratio of 60.8% improved 14.1 points due to higher net favorable prior year reserve development (13.3 points) and a lower underlying combined ratio (1.0 point), partially offset by higher catastrophe losses (0.2 points).
· The underlying combined ratio of 81.0% improved 1.0 point, primarily driven by the impact of certain customer-related intangible assets which became fully amortized during the second quarter of 2015.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in (i) the surety and fidelity product line for accident years 2010 through 2014 and (ii) the general liability product line for accident years 2007 through 2011.
Net written premiums of $1.028 billion increased 2%, primarily driven by an increase in retention rates, positive renewal premium changes and an increase in new business volume in Management Liability, as well as higher volume in Surety.
Personal Insurance Segment Financial Results
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||||||||
($ in millions and pre-tax, unless noted otherwise) |
|
2016 |
|
2015 |
|
Change |
|
2016 |
|
2015 |
|
Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underwriting gain: |
|
$ |
67 |
|
$ |
145 |
|
$ |
(78 |
) |
$ |
169 |
|
$ |
419 |
|
$ |
(250 |
) |
Underwriting gain includes: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
|
|
64 |
|
(64 |
) |
27 |
|
195 |
|
(168 |
) | ||||||
Catastrophes, net of reinsurance |
|
(118 |
) |
(112 |
) |
(6 |
) |
(287 |
) |
(174 |
) |
(113 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income |
|
78 |
|
88 |
|
(10 |
) |
155 |
|
170 |
|
(15 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income |
|
14 |
|
12 |
|
2 |
|
28 |
|
24 |
|
4 |
| ||||||
Operating income before income taxes |
|
159 |
|
245 |
|
(86 |
) |
352 |
|
613 |
|
(261 |
) | ||||||
Income tax expense |
|
43 |
|
71 |
|
(28 |
) |
97 |
|
187 |
|
(90 |
) | ||||||
Operating income |
|
$ |
116 |
|
$ |
174 |
|
$ |
(58 |
) |
$ |
255 |
|
$ |
426 |
|
$ |
(171 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Combined ratio |
|
95.7 |
% |
91.1 |
% |
4.6 |
pts |
94.7 |
% |
87.3 |
% |
7.4 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Impact on combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net favorable prior year reserve development |
|
|
pts |
(3.5 |
)pts |
3.5 |
pts |
(0.7 |
)pts |
(5.5 |
)pts |
4.8 |
pts | ||||||
Catastrophes, net of reinsurance |
|
6.2 |
pts |
6.2 |
pts |
|
pts |
7.6 |
pts |
4.9 |
pts |
2.7 |
pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Underlying combined ratio |
|
89.5 |
% |
88.4 |
% |
1.1 |
pts |
87.8 |
% |
87.9 |
% |
(0.1 |
)pts | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Agency Automobile(1) |
|
$ |
1,018 |
|
$ |
890 |
|
14 |
% |
$ |
1,950 |
|
$ |
1,712 |
|
14 |
% | ||
Agency Homeowners & Other(1) |
|
1,036 |
|
1,010 |
|
3 |
|
1,796 |
|
1,758 |
|
2 |
| ||||||
Direct to Consumer |
|
75 |
|
56 |
|
34 |
|
143 |
|
108 |
|
32 |
| ||||||
Total |
|
$ |
2,129 |
|
$ |
1,956 |
|
9 |
% |
$ |
3,889 |
|
$ |
3,578 |
|
9 |
% |
(1) Represents business sold through agents, brokers and other intermediaries, and excludes direct to consumer.
Second Quarter 2016 Results
(All comparisons vs. second quarter 2015, unless noted otherwise)
Operating income for Personal Insurance was $116 million after-tax, a decrease of $58 million, primarily driven by lower net favorable prior year reserve development. The prior year quarter included a $4 million tax benefit.
Underwriting results
· The combined ratio of 95.7% increased 4.6 points due to lower net favorable prior year reserve development (3.5 points) and a higher underlying combined ratio (1.1 points).
· The underlying combined ratio of 89.5% increased 1.1 points, primarily driven by the impact of significantly higher new business volumes in recent years and normal quarterly variability in weather and other loss activity, partially offset by a lower expense ratio.
Record net written premiums of $2.129 billion increased 9%. Agency Automobile net written premiums grew 14% with an increase in policies in force of 11% from the prior year period, driven by the success of Quantum Auto 2.0. Agency Homeowners & Other net written premiums grew 3% with an increase in policies in force of 2% from the prior year period.
Year-to-Date 2016 Results
(All comparisons vs. year-to-date 2015, unless noted otherwise)
Operating income for Personal Insurance was $255 million after-tax, a decrease of $171 million, primarily due to lower net favorable prior year reserve development, higher catastrophe losses and lower net investment income, partially offset by a higher underlying underwriting gain (i.e., excluding net favorable prior year reserve development and catastrophe losses). The prior year period included a $4 million tax benefit.
Underwriting results
· The combined ratio of 94.7% increased 7.4 points due to lower net favorable prior year reserve development (4.8 points) and higher catastrophe losses (2.7 points).
· The underlying combined ratio remained strong at 87.8%.
· Net favorable prior year reserve development primarily resulted from better than expected loss experience in (i) the Automobile product line for accident year 2014 and (ii) the Homeowners and Other product line for liability coverages for accident year 2014.
Record net written premiums of $3.889 billion increased 9% due to the same factors as discussed above for second quarter 2016.
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 Thursday, July 21, 2016. Investors can access the call via webcast at http://investor.travelers.com or by dialing 1-800-763-5615 within the U.S. and 1-212-231-2926 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 21811916 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. A component of the Dow Jones Industrial Average, Travelers has approximately 30,000 employees and generated revenues of approximately $27 billion in 2015. 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 and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil 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, and cyber risk 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 Statements
This press release contains, and management may make, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as may, will, should, likely, anticipates, expects, intends, plans, projects, believes, estimates and similar expressions are used to identify these forward-looking statements. These statements include, among other things, the Companys statements about:
· the Companys outlook and its future results of operations and financial condition (including, among other things, anticipated premium volume, premium rates, margins, net and operating income, investment income and performance, loss costs, return on equity and expected current returns and combined ratios);
· share repurchase plans;
· future pension plan contributions;
· 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 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, economic downturn or prolonged period of slow economic growth, 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 material realized or unrealized losses. The Companys investment portfolio may also suffer reduced or low returns, particularly if interest rates remain at historically low levels for a prolonged period of time or decline further as a result of actions taken by central banks (a risk which potentially could be increased by, among other things, the United Kingdoms expected withdrawal from the European Union);
· 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;
· disruptions to the Companys relationships with its independent agents and brokers could adversely affect the Company;
· 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 through the utilization of reinsurance or structured settlements, as well as guarantees or indemnifications from third parties;
· 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;
· 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, including as a result of cyber-attacks, outsourcing relationships, or cloud-based technology, the Companys ability to conduct its business could be negatively impacted;
· the Company is also subject to a number of additional risks associated with its business outside the United States, including foreign currency exchange fluctuations and restrictive regulations, as well as the risks and uncertainties associated with the United Kingdoms expected withdrawal from the European Union;
· regulatory changes outside of the United States, including in Canada and 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 11, 2016, as updated by our periodic filings with the SEC.
*****
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) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
Operating income |
|
$ |
868 |
|
$ |
1,066 |
|
$ |
1,794 |
|
$ |
2,204 |
|
Net realized investment gains |
|
19 |
|
10 |
|
10 |
|
20 |
| ||||
Net income |
|
$ |
887 |
|
$ |
1,076 |
|
$ |
1,804 |
|
$ |
2,224 |
|
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
Operating income |
|
$ |
649 |
|
$ |
806 |
|
$ |
1,347 |
|
$ |
1,633 |
|
Net realized investment gains |
|
15 |
|
6 |
|
8 |
|
12 |
| ||||
Net income |
|
$ |
664 |
|
$ |
812 |
|
$ |
1,355 |
|
$ |
1,645 |
|
|
|
Twelve Months Ended December 31, |
| |||||||||||||||||||||||||||||||
($ in millions, after-tax) |
|
2015 |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
| |||||||||||
Operating income, less preferred dividends |
|
$ |
3,437 |
|
$ |
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 |
|
3,437 |
|
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) |
|
2 |
|
51 |
|
106 |
|
32 |
|
36 |
|
173 |
|
22 |
|
(271 |
) |
101 |
|
8 |
|
35 |
| |||||||||||
Income from continuing operations |
|
3,439 |
|
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 |
|
$ |
3,439 |
|
$ |
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, |
| ||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share |
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
2.22 |
|
$ |
2.54 |
|
$ |
4.58 |
|
$ |
5.10 |
|
Net realized investment gains |
|
0.05 |
|
0.02 |
|
0.02 |
|
0.04 |
| ||||
Net income |
|
$ |
2.27 |
|
$ |
2.56 |
|
$ |
4.60 |
|
$ |
5.14 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share |
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
$ |
2.20 |
|
$ |
2.52 |
|
$ |
4.52 |
|
$ |
5.05 |
|
Net realized investment gains |
|
0.04 |
|
0.01 |
|
0.03 |
|
0.03 |
| ||||
Net income |
|
$ |
2.24 |
|
$ |
2.53 |
|
$ |
4.55 |
|
$ |
5.08 |
|
Reconciliation of Operating Income by Segment to Total Operating Income
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Business and International Insurance |
|
$ |
393 |
|
$ |
543 |
|
$ |
869 |
|
$ |
1,058 |
|
Bond & Specialty Insurance |
|
202 |
|
151 |
|
346 |
|
275 |
| ||||
Personal Insurance |
|
116 |
|
174 |
|
255 |
|
426 |
| ||||
Total segment operating income |
|
711 |
|
868 |
|
1,470 |
|
1,759 |
| ||||
Interest Expense and Other |
|
(62 |
) |
(62 |
) |
(123 |
) |
(126 |
) | ||||
Total operating income |
|
$ |
649 |
|
$ |
806 |
|
$ |
1,347 |
|
$ |
1,633 |
|
RECONCILIATION OF ADJUSTED SHAREHOLDERS EQUITY TO SHAREHOLDERS EQUITY AND OPERATING RETURN ON EQUITY TO RETURN ON EQUITY
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.
Reconciliation of Adjusted Shareholders Equity to Shareholders Equity
|
|
As of December 31, |
| |||||||||||||||||||||||||||||||
($ in millions) |
|
2015 |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Adjusted shareholders equity |
|
$ |
22,307 |
|
$ |
22,819 |
|
$ |
23,368 |
|
$ |
22,270 |
|
$ |
21,570 |
|
$ |
23,375 |
|
$ |
25,458 |
|
$ |
25,647 |
|
$ |
25,783 |
|
$ |
24,545 |
|
$ |
22,227 |
|
Net unrealized investment gains/(losses), net of tax |
|
1,289 |
|
1,966 |
|
1,322 |
|
3,103 |
|
2,871 |
|
1,859 |
|
1,856 |
|
(146 |
) |
620 |
|
453 |
|
327 |
| |||||||||||
Net realized investment gains/(losses), net of tax |
|
2 |
|
51 |
|
106 |
|
32 |
|
36 |
|
173 |
|
22 |
|
(271 |
) |
101 |
|
8 |
|
35 |
| |||||||||||
Preferred stock |
|
|
|
|
|
|
|
|
|
|
|
68 |
|
79 |
|
89 |
|
112 |
|
129 |
|
153 |
| |||||||||||
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439 |
) | |||||||||||
Shareholders equity |
|
$ |
23,598 |
|
$ |
24,836 |
|
$ |
24,796 |
|
$ |
25,405 |
|
$ |
24,477 |
|
$ |
25,475 |
|
$ |
27,415 |
|
$ |
25,319 |
|
$ |
26,616 |
|
$ |
25,135 |
|
$ |
22,303 |
|
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.
Average shareholders equity is (a) the sum of total shareholders equity excluding preferred stock at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two. Adjusted average shareholders equity is (a) the sum of adjusted shareholders equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
Calculation of Operating Return on Equity and Return on Equity
|
|
Three Months Ended |
|
Six Months Ended |
| ||||||||
|
|
June 30, |
|
June 30, |
| ||||||||
($ in millions, after-tax) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Annualized operating income |
|
$ |
2,598 |
|
$ |
3,225 |
|
$ |
2,695 |
|
$ |
3,266 |
|
Adjusted average shareholders equity |
|
22,383 |
|
22,755 |
|
22,372 |
|
22,786 |
| ||||
Operating return on equity |
|
11.6 |
% |
14.2 |
% |
12.0 |
% |
14.3 |
% | ||||
|
|
|
|
|
|
|
|
|
| ||||
Annualized net income |
|
$ |
2,654 |
|
$ |
3,247 |
|
$ |
2,710 |
|
$ |
3,289 |
|
Average shareholders equity |
|
24,440 |
|
24,484 |
|
24,161 |
|
24,662 |
| ||||
Return on equity |
|
10.9 |
% |
13.3 |
% |
11.2 |
% |
13.3 |
% |
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, 2016
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
|
|
June 30, |
|
Twelve Months Ended December 31, |
| |||||||||||||||||||||||||||||||||||
($ in millions) |
|
2016 |
|
2015 |
|
2015 |
|
2014 |
|
2013 |
|
2012 |
|
2011 |
|
2010 |
|
2009 |
|
2008 |
|
2007 |
|
2006 |
|
2005 |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating income, less preferred dividends |
|
$ |
1,347 |
|
$ |
1,633 |
|
$ |
3,437 |
|
$ |
3,641 |
|
$ |
3,567 |
|
$ |
2,441 |
|
$ |
1,389 |
|
$ |
3,040 |
|
$ |
3,597 |
|
$ |
3,191 |
|
$ |
4,496 |
|
$ |
4,195 |
|
$ |
2,020 |
|
Annualized operating income |
|
2,695 |
|
3,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Adjusted average shareholders equity |
|
22,372 |
|
22,786 |
|
22,681 |
|
23,447 |
|
23,004 |
|
22,158 |
|
22,806 |
|
24,285 |
|
25,777 |
|
25,668 |
|
25,350 |
|
23,381 |
|
21,118 |
| |||||||||||||
Operating return on equity |
|
12.0 |
% |
14.3 |
% |
15.2 |
% |
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, 2016 |
|
|
|
|
|
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) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Pre-tax underwriting gain excluding the impact of catastrophes and net favorable prior year loss reserve development |
|
$ |
433 |
|
$ |
525 |
|
$ |
999 |
|
$ |
1,064 |
|
Pre-tax impact of catastrophes |
|
(333 |
) |
(221 |
) |
(651 |
) |
(383 |
) | ||||
Pre-tax impact of net favorable prior year loss reserve development |
|
288 |
|
207 |
|
468 |
|
450 |
| ||||
Pre-tax underwriting gain |
|
388 |
|
511 |
|
816 |
|
1,131 |
| ||||
Income tax expense on underwriting results |
|
140 |
|
158 |
|
279 |
|
383 |
| ||||
Underwriting gain |
|
248 |
|
353 |
|
537 |
|
748 |
| ||||
Net investment income |
|
442 |
|
503 |
|
881 |
|
981 |
| ||||
Other expense, including interest expense |
|
(41 |
) |
(50 |
) |
(71 |
) |
(96 |
) | ||||
Operating income |
|
649 |
|
806 |
|
1,347 |
|
1,633 |
| ||||
Net realized investment gains |
|
15 |
|
6 |
|
8 |
|
12 |
| ||||
Net income |
|
$ |
664 |
|
$ |
812 |
|
$ |
1,355 |
|
$ |
1,645 |
|
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, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses less certain administrative services fee income to net earned premiums as defined in the statutory financial statements required by insurance regulators. The loss and LAE ratio as used in this earnings release is calculated in the same manner as the SAP ratio.
For SAP, the underwriting expense ratio is the ratio of underwriting expenses incurred (including commissions paid), less certain administrative services fee income and billing and policy fees, 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) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss and loss adjustment expense ratio |
|
|
|
|
|
|
|
|
| ||||
Claims and claim adjustment expenses |
|
$ |
3,762 |
|
$ |
3,547 |
|
$ |
7,474 |
|
$ |
6,978 |
|
Less: |
|
|
|
|
|
|
|
|
| ||||
Policyholder dividends |
|
11 |
|
10 |
|
21 |
|
19 |
| ||||
Allocated fee income |
|
45 |
|
43 |
|
89 |
|
85 |
| ||||
Loss ratio numerator |
|
$ |
3,706 |
|
$ |
3,494 |
|
$ |
7,364 |
|
$ |
6,874 |
|
|
|
|
|
|
|
|
|
|
| ||||
Underwriting expense ratio |
|
|
|
|
|
|
|
|
| ||||
Amortization of deferred acquisition costs |
|
$ |
989 |
|
$ |
963 |
|
$ |
1,960 |
|
$ |
1,926 |
|
General and administrative expenses (G&A) |
|
1,054 |
|
1,032 |
|
2,049 |
|
2,027 |
| ||||
Less: |
|
|
|
|
|
|
|
|
| ||||
G&A included in Interest Expense and Other |
|
7 |
|
7 |
|
15 |
|
14 |
| ||||
Allocated fee income |
|
74 |
|
72 |
|
147 |
|
144 |
| ||||
Billing and policy fees and other |
|
22 |
|
22 |
|
44 |
|
45 |
| ||||
Expense ratio numerator |
|
$ |
1,940 |
|
$ |
1,894 |
|
$ |
3,803 |
|
$ |
3,750 |
|
|
|
|
|
|
|
|
|
|
| ||||
Earned premium |
|
$ |
6,067 |
|
$ |
5,931 |
|
$ |
12,048 |
|
$ |
11,819 |
|
|
|
|
|
|
|
|
|
|
| ||||
Combined ratio (1) |
|
|
|
|
|
|
|
|
| ||||
Loss and loss adjustment expense ratio |
|
61.1 |
% |
58.9 |
% |
61.1 |
% |
58.2 |
% | ||||
Underwriting expense ratio |
|
32.0 |
% |
31.9 |
% |
31.6 |
% |
31.7 |
% | ||||
Combined ratio |
|
93.1 |
% |
90.8 |
% |
92.7 |
% |
89.9 |
% |
(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) |
|
2016 |
|
2015 |
|
2015 |
| |||
|
|
|
|
|
|
|
| |||
Tangible shareholders equity |
|
$ |
18,573 |
|
$ |
18,517 |
|
$ |
18,924 |
|
Goodwill |
|
3,588 |
|
3,573 |
|
3,594 |
| |||
Other intangible assets |
|
274 |
|
279 |
|
284 |
| |||
Less: Impact of deferred tax on other intangible assets |
|
(62 |
) |
(60 |
) |
(57 |
) | |||
Shareholders equity, excluding net unrealized investment gains, net of tax |
|
22,373 |
|
22,309 |
|
22,745 |
| |||
Net unrealized investment gains, net of tax |
|
2,341 |
|
1,289 |
|
1,376 |
| |||
Shareholders equity |
|
$ |
24,714 |
|
$ |
23,598 |
|
$ |
24,121 |
|
|
|
|
|
|
|
|
| |||
Common shares outstanding |
|
288.3 |
|
295.9 |
|
311.2 |
| |||
|
|
|
|
|
|
|
| |||
Tangible book value per share |
|
$ |
64.43 |
|
$ |
62.58 |
|
$ |
60.81 |
|
Adjusted book value per share |
|
77.61 |
|
75.39 |
|
73.09 |
| |||
Book value per share |
|
85.73 |
|
79.75 |
|
77.51 |
|
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) |
|
2016 |
|
2015 |
|
2015 |
| |||
|
|
|
|
|
|
|
| |||
Debt |
|
$ |
6,436 |
|
$ |
6,344 |
|
$ |
6,350 |
|
Shareholders equity |
|
24,714 |
|
23,598 |
|
24,121 |
| |||
Total capitalization |
|
31,150 |
|
29,942 |
|
30,471 |
| |||
Net unrealized investment gains, net of tax |
|
2,341 |
|
1,289 |
|
1,376 |
| |||
Total capitalization excluding net unrealized gain on investments, net of tax |
|
$ |
28,809 |
|
$ |
28,653 |
|
$ |
29,095 |
|
|
|
|
|
|
|
|
| |||
Debt-to-capital ratio |
|
20.7 |
% |
21.2 |
% |
20.8 |
% | |||
Debt-to-capital ratio excluding net unrealized investment gains, net of tax |
|
22.3 |
% |
22.1 |
% |
21.8 |
% |
OTHER DEFINITIONS
Gross written premiums reflect the direct and assumed contractually determined amounts charged to policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. Net written premiums reflect gross written premiums less premiums ceded to reinsurers.
For 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. For the Bond & Specialty Insurance segment, retention, renewal premium change and new business exclude 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 on February 11, 2016.
###
Contacts
Media: |
|
Institutional Investors: |
|
Individual Investors: |
Patrick Linehan |
|
Gabriella Nawi |
|
Chris Hubbard |
917.778.6267 |
|
917.778.6844 |
|
860.954.6662 |
|
|
Kellen Booher |
|
|
|
|
917.778.6027 |
|
|
Exhibit 99.2
The Travelers Companies, Inc. Financial Supplement - Second Quarter 2016 |
|
|
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 (Losses) |
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
$ |
2.58 |
|
$ |
2.56 |
|
$ |
3.00 |
|
$ |
2.87 |
|
$ |
2.33 |
|
$ |
2.27 |
|
$ |
5.14 |
|
$ |
4.60 |
|
Diluted |
|
$ |
2.55 |
|
$ |
2.53 |
|
$ |
2.97 |
|
$ |
2.83 |
|
$ |
2.30 |
|
$ |
2.24 |
|
$ |
5.08 |
|
$ |
4.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
827 |
|
$ |
806 |
|
$ |
918 |
|
$ |
886 |
|
$ |
698 |
|
$ |
649 |
|
$ |
1,633 |
|
$ |
1,347 |
|
Operating income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
$ |
2.56 |
|
$ |
2.54 |
|
$ |
2.96 |
|
$ |
2.94 |
|
$ |
2.35 |
|
$ |
2.22 |
|
$ |
5.10 |
|
$ |
4.58 |
|
Diluted |
|
$ |
2.53 |
|
$ |
2.52 |
|
$ |
2.93 |
|
$ |
2.90 |
|
$ |
2.33 |
|
$ |
2.20 |
|
$ |
5.05 |
|
$ |
4.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Return on equity |
|
13.4 |
% |
13.3 |
% |
15.4 |
% |
14.5 |
% |
11.6 |
% |
10.9 |
% |
13.3 |
% |
11.2 |
% | ||||||||
Operating return on equity |
|
14.5 |
% |
14.2 |
% |
16.2 |
% |
15.8 |
% |
12.5 |
% |
11.6 |
% |
14.3 |
% |
12.0 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total assets, at period end |
|
$ |
102,691 |
|
$ |
101,664 |
|
$ |
102,110 |
|
$ |
100,184 |
|
$ |
101,680 |
|
$ |
102,446 |
|
$ |
101,664 |
|
$ |
102,446 |
|
Total equity, at period end |
|
$ |
24,847 |
|
$ |
24,121 |
|
$ |
24,033 |
|
$ |
23,598 |
|
$ |
24,166 |
|
$ |
24,714 |
|
$ |
24,121 |
|
$ |
24,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Book value per share, at period end |
|
$ |
77.96 |
|
$ |
77.51 |
|
$ |
79.00 |
|
$ |
79.75 |
|
$ |
82.65 |
|
$ |
85.73 |
|
$ |
77.51 |
|
$ |
85.73 |
|
Less: Net unrealized investment gains, net of tax |
|
6.51 |
|
4.42 |
|
4.65 |
|
4.36 |
|
6.02 |
|
8.12 |
|
4.42 |
|
8.12 |
| ||||||||
Adjusted book value per share, at period end |
|
$ |
71.45 |
|
$ |
73.09 |
|
$ |
74.35 |
|
$ |
75.39 |
|
$ |
76.63 |
|
$ |
77.61 |
|
$ |
73.09 |
|
$ |
77.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average number of common shares outstanding (basic) |
|
320.8 |
|
314.8 |
|
307.6 |
|
299.7 |
|
294.2 |
|
290.1 |
|
317.7 |
|
292.1 |
| ||||||||
Weighted average number of common shares outstanding and common stock equivalents (diluted) |
|
324.5 |
|
318.0 |
|
311.0 |
|
303.3 |
|
297.9 |
|
293.6 |
|
321.2 |
|
295.6 |
| ||||||||
Common shares outstanding at period end |
|
318.7 |
|
311.2 |
|
304.2 |
|
295.9 |
|
292.4 |
|
288.3 |
|
311.2 |
|
288.3 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock dividends declared |
|
$ |
178 |
|
$ |
194 |
|
$ |
189 |
|
$ |
183 |
|
$ |
181 |
|
$ |
197 |
|
$ |
372 |
|
$ |
378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock repurchased: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Under Board of Directors authorization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shares |
|
5.6 |
|
7.9 |
|
7.3 |
|
8.8 |
|
5.1 |
|
4.9 |
|
13.5 |
|
10.0 |
| ||||||||
Cost |
|
$ |
600 |
|
$ |
800 |
|
$ |
750 |
|
$ |
1,000 |
|
$ |
550 |
|
$ |
550 |
|
$ |
1,400 |
|
$ |
1,100 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Shares |
|
0.7 |
|
|
|
|
|
|
|
0.5 |
|
|
|
0.7 |
|
0.5 |
| ||||||||
Cost |
|
$ |
72 |
|
$ |
1 |
|
$ |
|
|
$ |
1 |
|
$ |
59 |
|
$ |
|
|
$ |
73 |
|
$ |
59 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
827 |
|
$ |
806 |
|
$ |
918 |
|
$ |
886 |
|
$ |
698 |
|
$ |
649 |
|
$ |
1,633 |
|
$ |
1,347 |
|
Net realized investment gains (losses), after-tax |
|
6 |
|
6 |
|
10 |
|
(20 |
) |
(7 |
) |
15 |
|
12 |
|
8 |
| ||||||||
Net income |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
2.56 |
|
$ |
2.54 |
|
$ |
2.96 |
|
$ |
2.94 |
|
$ |
2.35 |
|
$ |
2.22 |
|
$ |
5.10 |
|
$ |
4.58 |
|
Net realized investment gains (losses), after-tax |
|
0.02 |
|
0.02 |
|
0.04 |
|
(0.07 |
) |
(0.02 |
) |
0.05 |
|
0.04 |
|
0.02 |
| ||||||||
Net income |
|
$ |
2.58 |
|
$ |
2.56 |
|
$ |
3.00 |
|
$ |
2.87 |
|
$ |
2.33 |
|
$ |
2.27 |
|
$ |
5.14 |
|
$ |
4.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income |
|
$ |
2.53 |
|
$ |
2.52 |
|
$ |
2.93 |
|
$ |
2.90 |
|
$ |
2.33 |
|
$ |
2.20 |
|
$ |
5.05 |
|
$ |
4.52 |
|
Net realized investment gains (losses), after-tax |
|
0.02 |
|
0.01 |
|
0.04 |
|
(0.07 |
) |
(0.03 |
) |
0.04 |
|
0.03 |
|
0.03 |
| ||||||||
Net income |
|
$ |
2.55 |
|
$ |
2.53 |
|
$ |
2.97 |
|
$ |
2.83 |
|
$ |
2.30 |
|
$ |
2.24 |
|
$ |
5.08 |
|
$ |
4.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Adjustments to net income and weighted average shares for net income EPS calculations: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income, as reported |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
Participating share-based awards - allocated income |
|
(6 |
) |
(6 |
) |
(6 |
) |
(6 |
) |
(5 |
) |
(5 |
) |
(12 |
) |
(10 |
) | ||||||||
Net income available to common shareholders - basic and diluted |
|
$ |
827 |
|
$ |
806 |
|
$ |
922 |
|
$ |
860 |
|
$ |
686 |
|
$ |
659 |
|
$ |
1,633 |
|
$ |
1,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average shares outstanding |
|
320.8 |
|
314.8 |
|
307.6 |
|
299.7 |
|
294.2 |
|
290.1 |
|
317.7 |
|
292.1 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average shares outstanding |
|
320.8 |
|
314.8 |
|
307.6 |
|
299.7 |
|
294.2 |
|
290.1 |
|
317.7 |
|
292.1 |
| ||||||||
Weighted average effects of dilutive securities - stock options and performance shares |
|
3.7 |
|
3.2 |
|
3.4 |
|
3.6 |
|
3.7 |
|
3.5 |
|
3.5 |
|
3.5 |
| ||||||||
Diluted weighted average shares outstanding |
|
324.5 |
|
318.0 |
|
311.0 |
|
303.3 |
|
297.9 |
|
293.6 |
|
321.2 |
|
295.6 |
|
(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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
6,032 |
|
$ |
6,023 |
|
$ |
5,981 |
|
$ |
6,067 |
|
$ |
11,819 |
|
$ |
12,048 |
|
Net investment income |
|
592 |
|
632 |
|
614 |
|
541 |
|
544 |
|
549 |
|
1,224 |
|
1,093 |
| ||||||||
Fee income |
|
114 |
|
115 |
|
116 |
|
115 |
|
117 |
|
119 |
|
229 |
|
236 |
| ||||||||
Net realized investment gains (losses) |
|
10 |
|
10 |
|
15 |
|
(32 |
) |
(9 |
) |
19 |
|
20 |
|
10 |
| ||||||||
Other revenues |
|
25 |
|
22 |
|
21 |
|
31 |
|
53 |
|
31 |
|
47 |
|
84 |
| ||||||||
Total revenues |
|
6,629 |
|
6,710 |
|
6,798 |
|
6,678 |
|
6,686 |
|
6,785 |
|
13,339 |
|
13,471 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
3,431 |
|
3,547 |
|
3,382 |
|
3,363 |
|
3,712 |
|
3,762 |
|
6,978 |
|
7,474 |
| ||||||||
Amortization of deferred acquisition costs |
|
963 |
|
963 |
|
987 |
|
972 |
|
971 |
|
989 |
|
1,926 |
|
1,960 |
| ||||||||
General and administrative expenses |
|
995 |
|
1,032 |
|
1,028 |
|
1,039 |
|
995 |
|
1,054 |
|
2,027 |
|
2,049 |
| ||||||||
Interest expense |
|
92 |
|
92 |
|
94 |
|
95 |
|
91 |
|
93 |
|
184 |
|
184 |
| ||||||||
Total claims and expenses |
|
5,481 |
|
5,634 |
|
5,491 |
|
5,469 |
|
5,769 |
|
5,898 |
|
11,115 |
|
11,667 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income before income taxes |
|
1,148 |
|
1,076 |
|
1,307 |
|
1,209 |
|
917 |
|
887 |
|
2,224 |
|
1,804 |
| ||||||||
Income tax expense |
|
315 |
|
264 |
|
379 |
|
343 |
|
226 |
|
223 |
|
579 |
|
449 |
| ||||||||
Net income |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other-than-temporary impairments (OTTI) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total OTTI losses |
|
$ |
(4 |
) |
$ |
(8 |
) |
$ |
(14 |
) |
$ |
(28 |
) |
$ |
(28 |
) |
$ |
(4 |
) |
$ |
(12 |
) |
$ |
(32 |
) |
OTTI losses recognized in net realized investment gains (losses) |
|
$ |
(3 |
) |
$ |
(6 |
) |
$ |
(14 |
) |
$ |
(29 |
) |
$ |
(18 |
) |
$ |
(4 |
) |
$ |
(9 |
) |
$ |
(22 |
) |
OTTI gains (losses) recognized in other comprehensive income |
|
$ |
(1 |
) |
$ |
(2 |
) |
$ |
|
|
$ |
1 |
|
$ |
(10 |
) |
$ |
|
|
$ |
(3 |
) |
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
19.3 |
% |
20.5 |
% |
21.1 |
% |
18.7 |
% |
19.3 |
% |
19.4 |
% |
19.9 |
% |
19.3 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
478 |
|
$ |
503 |
|
$ |
484 |
|
$ |
440 |
|
$ |
439 |
|
$ |
442 |
|
$ |
981 |
|
$ |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
162 |
|
$ |
221 |
|
$ |
85 |
|
$ |
46 |
|
$ |
318 |
|
$ |
333 |
|
$ |
383 |
|
$ |
651 |
|
After-tax |
|
$ |
106 |
|
$ |
143 |
|
$ |
56 |
|
$ |
33 |
|
$ |
207 |
|
$ |
222 |
|
$ |
249 |
|
$ |
429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
243 |
|
$ |
207 |
|
$ |
199 |
|
$ |
292 |
|
$ |
180 |
|
$ |
288 |
|
$ |
450 |
|
$ |
468 |
|
After-tax |
|
$ |
158 |
|
$ |
133 |
|
$ |
132 |
|
$ |
194 |
|
$ |
119 |
|
$ |
192 |
|
$ |
291 |
|
$ |
311 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
395 |
|
$ |
353 |
|
$ |
486 |
|
$ |
491 |
|
$ |
289 |
|
$ |
248 |
|
$ |
748 |
|
$ |
537 |
|
Net investment income |
|
478 |
|
503 |
|
484 |
|
440 |
|
439 |
|
442 |
|
981 |
|
881 |
| ||||||||
Other income (expense), including interest expense |
|
(46 |
) |
(50 |
) |
(52 |
) |
(45 |
) |
(30 |
) |
(41 |
) |
(96 |
) |
(71 |
) | ||||||||
Operating income |
|
827 |
|
806 |
|
918 |
|
886 |
|
698 |
|
649 |
|
1,633 |
|
1,347 |
| ||||||||
Net realized investment gains (losses) |
|
6 |
|
6 |
|
10 |
|
(20 |
) |
(7 |
) |
15 |
|
12 |
|
8 |
| ||||||||
Net income |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
57.4 |
% |
58.9 |
% |
55.2 |
% |
55.0 |
% |
61.1 |
% |
61.1 |
% |
58.2 |
% |
61.1 |
% | ||||||||
Underwriting expense ratio |
|
31.5 |
% |
31.9 |
% |
31.7 |
% |
31.6 |
% |
31.2 |
% |
32.0 |
% |
31.7 |
% |
31.6 |
% | ||||||||
Combined ratio |
|
88.9 |
% |
90.8 |
% |
86.9 |
% |
86.6 |
% |
92.3 |
% |
93.1 |
% |
89.9 |
% |
92.7 |
% | ||||||||
Combined ratio excluding incremental impact of direct to consumer initiative |
|
88.5 |
% |
90.3 |
% |
86.4 |
% |
86.1 |
% |
92.0 |
% |
92.7 |
% |
89.4 |
% |
92.4 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
2.7 |
% |
3.7 |
% |
1.4 |
% |
0.8 |
% |
5.3 |
% |
5.5 |
% |
3.3 |
% |
5.4 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-4.1 |
% |
-3.5 |
% |
-3.3 |
% |
-4.9 |
% |
-3.0 |
% |
-4.7 |
% |
-3.8 |
% |
-3.9 |
% |
(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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Billing and policy fees and other |
|
$ |
23 |
|
$ |
22 |
|
$ |
20 |
|
$ |
22 |
|
$ |
22 |
|
$ |
22 |
|
$ |
45 |
|
$ |
44 |
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expenses |
|
$ |
42 |
|
$ |
43 |
|
$ |
44 |
|
$ |
41 |
|
$ |
44 |
|
$ |
45 |
|
$ |
85 |
|
$ |
89 |
|
Underwriting expenses |
|
72 |
|
72 |
|
72 |
|
74 |
|
73 |
|
74 |
|
144 |
|
147 |
| ||||||||
Total fee income |
|
$ |
114 |
|
$ |
115 |
|
$ |
116 |
|
$ |
115 |
|
$ |
117 |
|
$ |
119 |
|
$ |
229 |
|
$ |
236 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
6,032 |
|
$ |
6,023 |
|
$ |
5,981 |
|
$ |
6,067 |
|
$ |
11,819 |
|
$ |
12,048 |
|
Net investment income |
|
592 |
|
632 |
|
614 |
|
541 |
|
544 |
|
549 |
|
1,224 |
|
1,093 |
| ||||||||
Fee income |
|
114 |
|
115 |
|
116 |
|
115 |
|
117 |
|
119 |
|
229 |
|
236 |
| ||||||||
Other revenues |
|
25 |
|
22 |
|
21 |
|
31 |
|
53 |
|
31 |
|
47 |
|
84 |
| ||||||||
Total revenues |
|
6,619 |
|
6,700 |
|
6,783 |
|
6,710 |
|
6,695 |
|
6,766 |
|
13,319 |
|
13,461 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
3,431 |
|
3,547 |
|
3,382 |
|
3,363 |
|
3,712 |
|
3,762 |
|
6,978 |
|
7,474 |
| ||||||||
Amortization of deferred acquisition costs |
|
963 |
|
963 |
|
987 |
|
972 |
|
971 |
|
989 |
|
1,926 |
|
1,960 |
| ||||||||
General and administrative expenses |
|
995 |
|
1,032 |
|
1,028 |
|
1,039 |
|
995 |
|
1,054 |
|
2,027 |
|
2,049 |
| ||||||||
Interest expense |
|
92 |
|
92 |
|
94 |
|
95 |
|
91 |
|
93 |
|
184 |
|
184 |
| ||||||||
Total claims and expenses |
|
5,481 |
|
5,634 |
|
5,491 |
|
5,469 |
|
5,769 |
|
5,898 |
|
11,115 |
|
11,667 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
1,138 |
|
1,066 |
|
1,292 |
|
1,241 |
|
926 |
|
868 |
|
2,204 |
|
1,794 |
| ||||||||
Income tax expense |
|
311 |
|
260 |
|
374 |
|
355 |
|
228 |
|
219 |
|
571 |
|
447 |
| ||||||||
Operating income |
|
$ |
827 |
|
$ |
806 |
|
$ |
918 |
|
$ |
886 |
|
$ |
698 |
|
$ |
649 |
|
$ |
1,633 |
|
$ |
1,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
19.3 |
% |
20.5 |
% |
21.1 |
% |
18.7 |
% |
19.3 |
% |
19.4 |
% |
19.9 |
% |
19.3 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
478 |
|
$ |
503 |
|
$ |
484 |
|
$ |
440 |
|
$ |
439 |
|
$ |
442 |
|
$ |
981 |
|
$ |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
162 |
|
$ |
221 |
|
$ |
85 |
|
$ |
46 |
|
$ |
318 |
|
$ |
333 |
|
$ |
383 |
|
$ |
651 |
|
After-tax |
|
$ |
106 |
|
$ |
143 |
|
$ |
56 |
|
$ |
33 |
|
$ |
207 |
|
$ |
222 |
|
$ |
249 |
|
$ |
429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
243 |
|
$ |
207 |
|
$ |
199 |
|
$ |
292 |
|
$ |
180 |
|
$ |
288 |
|
$ |
450 |
|
$ |
468 |
|
After-tax |
|
$ |
158 |
|
$ |
133 |
|
$ |
132 |
|
$ |
194 |
|
$ |
119 |
|
$ |
192 |
|
$ |
291 |
|
$ |
311 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Property and Casualty Operations ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
6,474 |
|
$ |
6,542 |
|
$ |
6,618 |
|
$ |
6,148 |
|
$ |
6,712 |
|
$ |
6,688 |
|
$ |
13,016 |
|
$ |
13,400 |
|
Net written premiums |
|
$ |
5,897 |
|
$ |
6,169 |
|
$ |
6,191 |
|
$ |
5,864 |
|
$ |
6,166 |
|
$ |
6,345 |
|
$ |
12,066 |
|
$ |
12,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
6,032 |
|
$ |
6,023 |
|
$ |
5,981 |
|
$ |
6,067 |
|
$ |
11,819 |
|
$ |
12,048 |
|
Losses and loss adjustment expenses |
|
3,379 |
|
3,495 |
|
3,333 |
|
3,307 |
|
3,663 |
|
3,709 |
|
6,874 |
|
7,372 |
| ||||||||
Underwriting expenses |
|
1,890 |
|
1,949 |
|
1,947 |
|
1,867 |
|
1,932 |
|
2,009 |
|
3,839 |
|
3,941 |
| ||||||||
Statutory underwriting gain |
|
619 |
|
487 |
|
752 |
|
849 |
|
386 |
|
349 |
|
1,106 |
|
735 |
| ||||||||
Policyholder dividends |
|
9 |
|
10 |
|
10 |
|
12 |
|
10 |
|
11 |
|
19 |
|
21 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
610 |
|
$ |
477 |
|
$ |
742 |
|
$ |
837 |
|
$ |
376 |
|
$ |
338 |
|
$ |
1,087 |
|
$ |
714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statutory statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Reserves for losses and loss adjustment expenses |
|
$ |
40,296 |
|
$ |
40,273 |
|
$ |
40,091 |
|
$ |
39,782 |
|
$ |
40,224 |
|
$ |
39,797 |
|
$ |
40,273 |
|
$ |
39,797 |
|
Increase (decrease) in reserves |
|
$ |
(711 |
) |
$ |
(23 |
) |
$ |
(182 |
) |
$ |
(309 |
) |
$ |
442 |
|
$ |
(427 |
) |
$ |
(734 |
) |
$ |
15 |
|
Statutory capital and surplus |
|
$ |
20,944 |
|
$ |
20,851 |
|
$ |
20,822 |
|
$ |
20,567 |
|
$ |
20,569 |
|
$ |
20,634 |
|
$ |
20,851 |
|
$ |
20,634 |
|
Net written premiums/surplus (1) |
|
1.14:1 |
|
1.15:1 |
|
1.16:1 |
|
1.17:1 |
|
1.19:1 |
|
1.19:1 |
|
1.15:1 |
|
1.19:1 |
|
(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. Written and Earned Premiums - Property and Casualty Operations ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
6,474 |
|
$ |
6,542 |
|
$ |
6,618 |
|
$ |
6,148 |
|
$ |
6,712 |
|
$ |
6,688 |
|
$ |
13,016 |
|
$ |
13,400 |
|
Ceded |
|
(577 |
) |
(373 |
) |
(427 |
) |
(284 |
) |
(546 |
) |
(343 |
) |
(950 |
) |
(889 |
) | ||||||||
Net |
|
$ |
5,897 |
|
$ |
6,169 |
|
$ |
6,191 |
|
$ |
5,864 |
|
$ |
6,166 |
|
$ |
6,345 |
|
$ |
12,066 |
|
$ |
12,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Earned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
6,308 |
|
$ |
6,356 |
|
$ |
6,447 |
|
$ |
6,443 |
|
$ |
6,381 |
|
$ |
6,487 |
|
$ |
12,664 |
|
$ |
12,868 |
|
Ceded |
|
(420 |
) |
(425 |
) |
(415 |
) |
(420 |
) |
(400 |
) |
(420 |
) |
(845 |
) |
(820 |
) | ||||||||
Net |
|
$ |
5,888 |
|
$ |
5,931 |
|
$ |
6,032 |
|
$ |
6,023 |
|
$ |
5,981 |
|
$ |
6,067 |
|
$ |
11,819 |
|
$ |
12,048 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Operating Income - Business and International Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
3,620 |
|
$ |
3,609 |
|
$ |
3,653 |
|
$ |
3,639 |
|
$ |
3,599 |
|
$ |
3,631 |
|
$ |
7,229 |
|
$ |
7,230 |
|
Net investment income |
|
454 |
|
487 |
|
471 |
|
412 |
|
415 |
|
420 |
|
941 |
|
835 |
| ||||||||
Fee income |
|
111 |
|
111 |
|
112 |
|
111 |
|
114 |
|
115 |
|
222 |
|
229 |
| ||||||||
Other revenues |
|
8 |
|
5 |
|
5 |
|
5 |
|
33 |
|
8 |
|
13 |
|
41 |
| ||||||||
Total revenues |
|
4,193 |
|
4,212 |
|
4,241 |
|
4,167 |
|
4,161 |
|
4,174 |
|
8,405 |
|
8,335 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
2,265 |
|
2,238 |
|
2,229 |
|
2,127 |
|
2,299 |
|
2,385 |
|
4,503 |
|
4,684 |
| ||||||||
Amortization of deferred acquisition costs |
|
584 |
|
578 |
|
589 |
|
578 |
|
579 |
|
588 |
|
1,162 |
|
1,167 |
| ||||||||
General and administrative expenses |
|
654 |
|
674 |
|
675 |
|
683 |
|
663 |
|
696 |
|
1,328 |
|
1,359 |
| ||||||||
Total claims and expenses |
|
3,503 |
|
3,490 |
|
3,493 |
|
3,388 |
|
3,541 |
|
3,669 |
|
6,993 |
|
7,210 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
690 |
|
722 |
|
748 |
|
779 |
|
620 |
|
505 |
|
1,412 |
|
1,125 |
| ||||||||
Income tax expense |
|
175 |
|
179 |
|
202 |
|
213 |
|
144 |
|
112 |
|
354 |
|
256 |
| ||||||||
Operating income |
|
$ |
515 |
|
$ |
543 |
|
$ |
546 |
|
$ |
566 |
|
$ |
476 |
|
$ |
393 |
|
$ |
1,058 |
|
$ |
869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
19.4 |
% |
20.7 |
% |
21.5 |
% |
18.9 |
% |
19.4 |
% |
19.5 |
% |
20.0 |
% |
19.5 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
366 |
|
$ |
386 |
|
$ |
371 |
|
$ |
334 |
|
$ |
335 |
|
$ |
337 |
|
$ |
752 |
|
$ |
672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
99 |
|
$ |
108 |
|
$ |
39 |
|
$ |
1 |
|
$ |
148 |
|
$ |
212 |
|
$ |
207 |
|
$ |
360 |
|
After-tax |
|
$ |
65 |
|
$ |
70 |
|
$ |
25 |
|
$ |
4 |
|
$ |
97 |
|
$ |
143 |
|
$ |
135 |
|
$ |
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
77 |
|
$ |
103 |
|
$ |
49 |
|
$ |
176 |
|
$ |
93 |
|
$ |
138 |
|
$ |
180 |
|
$ |
231 |
|
After-tax |
|
$ |
50 |
|
$ |
65 |
|
$ |
35 |
|
$ |
118 |
|
$ |
63 |
|
$ |
94 |
|
$ |
115 |
|
$ |
157 |
|
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 - Business and International Insurance ($ in millions, net of tax) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
142 |
|
$ |
155 |
|
$ |
172 |
|
$ |
227 |
|
$ |
121 |
|
$ |
48 |
|
$ |
297 |
|
$ |
169 |
|
Net investment income |
|
366 |
|
386 |
|
371 |
|
334 |
|
335 |
|
337 |
|
752 |
|
672 |
| ||||||||
Other income (expense) |
|
7 |
|
2 |
|
3 |
|
5 |
|
20 |
|
8 |
|
9 |
|
28 |
| ||||||||
Operating income |
|
$ |
515 |
|
$ |
543 |
|
$ |
546 |
|
$ |
566 |
|
$ |
476 |
|
$ |
393 |
|
$ |
1,058 |
|
$ |
869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
61.2 |
% |
60.6 |
% |
59.6 |
% |
57.0 |
% |
62.4 |
% |
64.2 |
% |
60.9 |
% |
63.3 |
% | ||||||||
Underwriting expense ratio |
|
32.1 |
% |
32.6 |
% |
32.6 |
% |
32.6 |
% |
32.4 |
% |
33.3 |
% |
32.4 |
% |
32.9 |
% | ||||||||
Combined ratio |
|
93.3 |
% |
93.2 |
% |
92.2 |
% |
89.6 |
% |
94.8 |
% |
97.5 |
% |
93.3 |
% |
96.2 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
2.7 |
% |
2.9 |
% |
1.1 |
% |
0.0 |
% |
4.1 |
% |
5.8 |
% |
2.9 |
% |
5.0 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-2.1 |
% |
-2.8 |
% |
-1.4 |
% |
-4.8 |
% |
-2.6 |
% |
-3.8 |
% |
-2.5 |
% |
-3.2 |
% |
(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 |
| ||||||||
|
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
Billing and policy fees and other |
|
$ |
7 |
|
$ |
6 |
|
$ |
4 |
|
$ |
6 |
|
$ |
6 |
|
$ |
6 |
|
$ |
13 |
|
$ |
12 |
|
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Loss and loss adjustment expenses |
|
$ |
42 |
|
$ |
43 |
|
$ |
44 |
|
$ |
41 |
|
$ |
44 |
|
$ |
45 |
|
$ |
85 |
|
$ |
89 |
|
|
Underwriting expenses |
|
69 |
|
68 |
|
68 |
|
70 |
|
70 |
|
70 |
|
137 |
|
140 |
| ||||||||
|
Total fee income |
|
$ |
111 |
|
$ |
111 |
|
$ |
112 |
|
$ |
111 |
|
$ |
114 |
|
$ |
115 |
|
$ |
222 |
|
$ |
229 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. Selected Statistics - Business and International Insurance ($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
4,276 |
|
$ |
4,027 |
|
$ |
3,981 |
|
$ |
3,783 |
|
$ |
4,366 |
|
$ |
3,997 |
|
$ |
8,303 |
|
$ |
8,363 |
|
Net written premiums |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
3,590 |
|
$ |
3,517 |
|
$ |
3,914 |
|
$ |
3,680 |
|
$ |
7,476 |
|
$ |
7,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
3,620 |
|
$ |
3,609 |
|
$ |
3,653 |
|
$ |
3,639 |
|
$ |
3,599 |
|
$ |
3,631 |
|
$ |
7,229 |
|
$ |
7,230 |
|
Losses and loss adjustment expenses |
|
2,216 |
|
2,187 |
|
2,182 |
|
2,073 |
|
2,252 |
|
2,334 |
|
4,403 |
|
4,586 |
| ||||||||
Underwriting expenses |
|
1,206 |
|
1,192 |
|
1,178 |
|
1,151 |
|
1,236 |
|
1,231 |
|
2,398 |
|
2,467 |
| ||||||||
Statutory underwriting gain |
|
198 |
|
230 |
|
293 |
|
415 |
|
111 |
|
66 |
|
428 |
|
177 |
| ||||||||
Policyholder dividends |
|
7 |
|
8 |
|
7 |
|
9 |
|
8 |
|
9 |
|
15 |
|
17 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
191 |
|
$ |
222 |
|
$ |
286 |
|
$ |
406 |
|
$ |
103 |
|
$ |
57 |
|
$ |
413 |
|
$ |
160 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Domestic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Select Accounts |
|
$ |
722 |
|
$ |
709 |
|
$ |
654 |
|
$ |
631 |
|
$ |
724 |
|
$ |
709 |
|
$ |
1,431 |
|
$ |
1,433 |
|
Middle Market |
|
1,726 |
|
1,451 |
|
1,597 |
|
1,528 |
|
1,829 |
|
1,494 |
|
3,177 |
|
3,323 |
| ||||||||
National Accounts |
|
299 |
|
228 |
|
254 |
|
267 |
|
320 |
|
234 |
|
527 |
|
554 |
| ||||||||
First Party |
|
340 |
|
452 |
|
411 |
|
361 |
|
358 |
|
466 |
|
792 |
|
824 |
| ||||||||
Specialized Distribution |
|
268 |
|
300 |
|
277 |
|
266 |
|
286 |
|
302 |
|
568 |
|
588 |
| ||||||||
Total Domestic |
|
3,355 |
|
3,140 |
|
3,193 |
|
3,053 |
|
3,517 |
|
3,205 |
|
6,495 |
|
6,722 |
| ||||||||
International |
|
442 |
|
539 |
|
397 |
|
464 |
|
397 |
|
475 |
|
981 |
|
872 |
| ||||||||
Total |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
3,590 |
|
$ |
3,517 |
|
$ |
3,914 |
|
$ |
3,680 |
|
$ |
7,476 |
|
$ |
7,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Workers compensation |
|
$ |
1,142 |
|
$ |
906 |
|
$ |
957 |
|
$ |
910 |
|
$ |
1,198 |
|
$ |
916 |
|
$ |
2,048 |
|
$ |
2,114 |
|
Commercial automobile |
|
502 |
|
487 |
|
494 |
|
475 |
|
544 |
|
517 |
|
989 |
|
1,061 |
| ||||||||
Commercial property |
|
391 |
|
507 |
|
451 |
|
411 |
|
406 |
|
520 |
|
898 |
|
926 |
| ||||||||
General liability |
|
491 |
|
469 |
|
489 |
|
475 |
|
537 |
|
471 |
|
960 |
|
1,008 |
| ||||||||
Commercial multi-peril |
|
822 |
|
765 |
|
780 |
|
779 |
|
829 |
|
777 |
|
1,587 |
|
1,606 |
| ||||||||
International |
|
442 |
|
539 |
|
397 |
|
464 |
|
397 |
|
475 |
|
981 |
|
872 |
| ||||||||
Other |
|
7 |
|
6 |
|
22 |
|
3 |
|
3 |
|
4 |
|
13 |
|
7 |
| ||||||||
Total |
|
$ |
3,797 |
|
$ |
3,679 |
|
$ |
3,590 |
|
$ |
3,517 |
|
$ |
3,914 |
|
$ |
3,680 |
|
$ |
7,476 |
|
$ |
7,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
National Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Additions to claim volume under administration (1) |
|
$ |
761 |
|
$ |
536 |
|
$ |
558 |
|
$ |
667 |
|
$ |
797 |
|
$ |
545 |
|
$ |
1,297 |
|
$ |
1,342 |
|
Written fees |
|
$ |
114 |
|
$ |
92 |
|
$ |
91 |
|
$ |
88 |
|
$ |
115 |
|
$ |
91 |
|
$ |
206 |
|
$ |
206 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
(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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
504 |
|
$ |
524 |
|
$ |
539 |
|
$ |
518 |
|
$ |
508 |
|
$ |
518 |
|
$ |
1,028 |
|
$ |
1,026 |
|
Net investment income |
|
56 |
|
57 |
|
56 |
|
54 |
|
52 |
|
51 |
|
113 |
|
103 |
| ||||||||
Other revenues |
|
5 |
|
5 |
|
4 |
|
8 |
|
3 |
|
6 |
|
10 |
|
9 |
| ||||||||
Total revenues |
|
565 |
|
586 |
|
599 |
|
580 |
|
563 |
|
575 |
|
1,151 |
|
1,138 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
192 |
|
192 |
|
113 |
|
146 |
|
164 |
|
80 |
|
384 |
|
244 |
| ||||||||
Amortization of deferred acquisition costs |
|
94 |
|
97 |
|
104 |
|
98 |
|
96 |
|
98 |
|
191 |
|
194 |
| ||||||||
General and administrative expenses |
|
100 |
|
99 |
|
93 |
|
97 |
|
94 |
|
96 |
|
199 |
|
190 |
| ||||||||
Total claims and expenses |
|
386 |
|
388 |
|
310 |
|
341 |
|
354 |
|
274 |
|
774 |
|
628 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
179 |
|
198 |
|
289 |
|
239 |
|
209 |
|
301 |
|
377 |
|
510 |
| ||||||||
Income tax expense |
|
55 |
|
47 |
|
93 |
|
77 |
|
65 |
|
99 |
|
102 |
|
164 |
| ||||||||
Operating income |
|
$ |
124 |
|
$ |
151 |
|
$ |
196 |
|
$ |
162 |
|
$ |
144 |
|
$ |
202 |
|
$ |
275 |
|
$ |
346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
18.3 |
% |
18.6 |
% |
18.6 |
% |
17.6 |
% |
18.1 |
% |
18.1 |
% |
18.4 |
% |
18.1 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
46 |
|
$ |
47 |
|
$ |
45 |
|
$ |
44 |
|
$ |
42 |
|
$ |
42 |
|
$ |
93 |
|
$ |
84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
1 |
|
$ |
1 |
|
$ |
1 |
|
$ |
|
|
$ |
1 |
|
$ |
3 |
|
$ |
2 |
|
$ |
4 |
|
After-tax |
|
$ |
|
|
$ |
1 |
|
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
2 |
|
$ |
1 |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
35 |
|
$ |
40 |
|
$ |
103 |
|
$ |
80 |
|
$ |
60 |
|
$ |
150 |
|
$ |
75 |
|
$ |
210 |
|
After-tax |
|
$ |
23 |
|
$ |
26 |
|
$ |
67 |
|
$ |
52 |
|
$ |
39 |
|
$ |
98 |
|
$ |
49 |
|
$ |
137 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
75 |
|
$ |
101 |
|
$ |
148 |
|
$ |
113 |
|
$ |
100 |
|
$ |
156 |
|
$ |
176 |
|
$ |
256 |
|
Net investment income |
|
46 |
|
47 |
|
45 |
|
44 |
|
42 |
|
42 |
|
93 |
|
84 |
| ||||||||
Other income (expense) |
|
3 |
|
3 |
|
3 |
|
5 |
|
2 |
|
4 |
|
6 |
|
6 |
| ||||||||
Operating income |
|
$ |
124 |
|
$ |
151 |
|
$ |
196 |
|
$ |
162 |
|
$ |
144 |
|
$ |
202 |
|
$ |
275 |
|
$ |
346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
37.6 |
% |
36.3 |
% |
20.6 |
% |
27.6 |
% |
31.9 |
% |
15.0 |
% |
36.9 |
% |
23.4 |
% | ||||||||
Underwriting expense ratio |
|
38.5 |
% |
37.4 |
% |
36.5 |
% |
37.5 |
% |
37.4 |
% |
37.4 |
% |
38.0 |
% |
37.4 |
% | ||||||||
Combined ratio |
|
76.1 |
% |
73.7 |
% |
57.1 |
% |
65.1 |
% |
69.3 |
% |
52.4 |
% |
74.9 |
% |
60.8 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
0.1 |
% |
0.3 |
% |
0.1 |
% |
0.0 |
% |
0.1 |
% |
0.6 |
% |
0.2 |
% |
0.4 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-6.9 |
% |
-7.7 |
% |
-19.1 |
% |
-15.6 |
% |
-11.9 |
% |
-29.1 |
% |
-7.3 |
% |
-20.6 |
% |
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
522 |
|
$ |
537 |
|
$ |
580 |
|
$ |
514 |
|
$ |
536 |
|
$ |
549 |
|
$ |
1,059 |
|
$ |
1,085 |
|
Net written premiums |
|
$ |
478 |
|
$ |
534 |
|
$ |
565 |
|
$ |
504 |
|
$ |
492 |
|
$ |
536 |
|
$ |
1,012 |
|
$ |
1,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
504 |
|
$ |
524 |
|
$ |
539 |
|
$ |
518 |
|
$ |
508 |
|
$ |
518 |
|
$ |
1,028 |
|
$ |
1,026 |
|
Losses and loss adjustment expenses |
|
189 |
|
191 |
|
111 |
|
143 |
|
162 |
|
78 |
|
380 |
|
240 |
| ||||||||
Underwriting expenses |
|
196 |
|
199 |
|
202 |
|
188 |
|
195 |
|
198 |
|
395 |
|
393 |
| ||||||||
Statutory underwriting gain |
|
119 |
|
134 |
|
226 |
|
187 |
|
151 |
|
242 |
|
253 |
|
393 |
| ||||||||
Policyholder dividends |
|
2 |
|
2 |
|
3 |
|
3 |
|
2 |
|
2 |
|
4 |
|
4 |
| ||||||||
Statutory underwriting gain after policyholder dividends |
|
$ |
117 |
|
$ |
132 |
|
$ |
223 |
|
$ |
184 |
|
$ |
149 |
|
$ |
240 |
|
$ |
249 |
|
$ |
389 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fidelity & surety |
|
$ |
206 |
|
$ |
259 |
|
$ |
267 |
|
$ |
220 |
|
$ |
219 |
|
$ |
255 |
|
$ |
465 |
|
$ |
474 |
|
General liability |
|
226 |
|
236 |
|
247 |
|
243 |
|
227 |
|
240 |
|
462 |
|
467 |
| ||||||||
Other |
|
46 |
|
39 |
|
51 |
|
41 |
|
46 |
|
41 |
|
85 |
|
87 |
| ||||||||
Total |
|
$ |
478 |
|
$ |
534 |
|
$ |
565 |
|
$ |
504 |
|
$ |
492 |
|
$ |
536 |
|
$ |
1,012 |
|
$ |
1,028 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
1,764 |
|
$ |
1,798 |
|
$ |
1,840 |
|
$ |
1,866 |
|
$ |
1,874 |
|
$ |
1,918 |
|
$ |
3,562 |
|
$ |
3,792 |
|
Net investment income |
|
82 |
|
88 |
|
87 |
|
75 |
|
77 |
|
78 |
|
170 |
|
155 |
| ||||||||
Fee income |
|
3 |
|
4 |
|
4 |
|
4 |
|
3 |
|
4 |
|
7 |
|
7 |
| ||||||||
Other revenues |
|
12 |
|
12 |
|
9 |
|
15 |
|
14 |
|
14 |
|
24 |
|
28 |
| ||||||||
Total revenues |
|
1,861 |
|
1,902 |
|
1,940 |
|
1,960 |
|
1,968 |
|
2,014 |
|
3,763 |
|
3,982 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
974 |
|
1,117 |
|
1,040 |
|
1,090 |
|
1,249 |
|
1,297 |
|
2,091 |
|
2,546 |
| ||||||||
Amortization of deferred acquisition costs |
|
285 |
|
288 |
|
294 |
|
296 |
|
296 |
|
303 |
|
573 |
|
599 |
| ||||||||
General and administrative expenses |
|
234 |
|
252 |
|
252 |
|
250 |
|
230 |
|
255 |
|
486 |
|
485 |
| ||||||||
Total claims and expenses |
|
1,493 |
|
1,657 |
|
1,586 |
|
1,636 |
|
1,775 |
|
1,855 |
|
3,150 |
|
3,630 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating income before income taxes |
|
368 |
|
245 |
|
354 |
|
324 |
|
193 |
|
159 |
|
613 |
|
352 |
| ||||||||
Income tax expense |
|
116 |
|
71 |
|
113 |
|
102 |
|
54 |
|
43 |
|
187 |
|
97 |
| ||||||||
Operating income |
|
$ |
252 |
|
$ |
174 |
|
$ |
241 |
|
$ |
222 |
|
$ |
139 |
|
$ |
116 |
|
$ |
426 |
|
$ |
255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate on net investment income |
|
19.6 |
% |
20.8 |
% |
20.9 |
% |
18.5 |
% |
19.5 |
% |
19.7 |
% |
20.2 |
% |
19.6 |
% | ||||||||
Net investment income (after-tax) |
|
$ |
66 |
|
$ |
70 |
|
$ |
68 |
|
$ |
62 |
|
$ |
62 |
|
$ |
63 |
|
$ |
136 |
|
$ |
125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
62 |
|
$ |
112 |
|
$ |
45 |
|
$ |
45 |
|
$ |
169 |
|
$ |
118 |
|
$ |
174 |
|
$ |
287 |
|
After-tax |
|
$ |
41 |
|
$ |
72 |
|
$ |
30 |
|
$ |
29 |
|
$ |
110 |
|
$ |
77 |
|
$ |
113 |
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
131 |
|
$ |
64 |
|
$ |
47 |
|
$ |
36 |
|
$ |
27 |
|
$ |
|
|
$ |
195 |
|
$ |
27 |
|
After-tax |
|
$ |
85 |
|
$ |
42 |
|
$ |
30 |
|
$ |
24 |
|
$ |
17 |
|
$ |
|
|
$ |
127 |
|
$ |
17 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Underwriting gain |
|
$ |
178 |
|
$ |
97 |
|
$ |
166 |
|
$ |
151 |
|
$ |
68 |
|
$ |
44 |
|
$ |
275 |
|
$ |
112 |
|
Net investment income |
|
66 |
|
70 |
|
68 |
|
62 |
|
62 |
|
63 |
|
136 |
|
125 |
| ||||||||
Other income (expense) |
|
8 |
|
7 |
|
7 |
|
9 |
|
9 |
|
9 |
|
15 |
|
18 |
| ||||||||
Operating income |
|
$ |
252 |
|
$ |
174 |
|
$ |
241 |
|
$ |
222 |
|
$ |
139 |
|
$ |
116 |
|
$ |
426 |
|
$ |
255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
55.2 |
% |
62.2 |
% |
56.5 |
% |
58.5 |
% |
66.7 |
% |
67.6 |
% |
58.7 |
% |
67.1 |
% | ||||||||
Underwriting expense ratio |
|
28.3 |
% |
28.9 |
% |
28.6 |
% |
28.2 |
% |
27.0 |
% |
28.1 |
% |
28.6 |
% |
27.6 |
% | ||||||||
Combined ratio |
|
83.5 |
% |
91.1 |
% |
85.1 |
% |
86.7 |
% |
93.7 |
% |
95.7 |
% |
87.3 |
% |
94.7 |
% | ||||||||
Combined ratio excluding incremental impact of direct to consumer initiative |
|
81.8 |
% |
89.4 |
% |
83.2 |
% |
85.0 |
% |
92.8 |
% |
94.6 |
% |
85.6 |
% |
93.7 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
3.5 |
% |
6.2 |
% |
2.5 |
% |
2.4 |
% |
9.0 |
% |
6.2 |
% |
4.9 |
% |
7.6 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-7.5 |
% |
-3.5 |
% |
-2.6 |
% |
-1.9 |
% |
-1.4 |
% |
0.0 |
% |
-5.5 |
% |
-0.7 |
% |
(1) Billing and policy fees and other, which are a component of other revenues, and fee income are allocated as a reduction of underwriting expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
Billing and policy fees and other |
|
$ |
16 |
|
$ |
16 |
|
$ |
16 |
|
$ |
16 |
|
$ |
16 |
|
$ |
16 |
|
$ |
32 |
|
$ |
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Fee income |
|
$ |
3 |
|
$ |
4 |
|
$ |
4 |
|
$ |
4 |
|
$ |
3 |
|
$ |
4 |
|
$ |
7 |
|
$ |
7 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
1,676 |
|
$ |
1,978 |
|
$ |
2,057 |
|
$ |
1,851 |
|
$ |
1,810 |
|
$ |
2,142 |
|
$ |
3,654 |
|
$ |
3,952 |
|
Net written premiums |
|
$ |
1,622 |
|
$ |
1,956 |
|
$ |
2,036 |
|
$ |
1,843 |
|
$ |
1,760 |
|
$ |
2,129 |
|
$ |
3,578 |
|
$ |
3,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
1,764 |
|
$ |
1,798 |
|
$ |
1,840 |
|
$ |
1,866 |
|
$ |
1,874 |
|
$ |
1,918 |
|
$ |
3,562 |
|
$ |
3,792 |
|
Losses and loss adjustment expenses |
|
974 |
|
1,117 |
|
1,040 |
|
1,091 |
|
1,249 |
|
1,297 |
|
2,091 |
|
2,546 |
| ||||||||
Underwriting expenses |
|
488 |
|
558 |
|
567 |
|
528 |
|
501 |
|
580 |
|
1,046 |
|
1,081 |
| ||||||||
Statutory underwriting gain |
|
$ |
302 |
|
$ |
123 |
|
$ |
233 |
|
$ |
247 |
|
$ |
124 |
|
$ |
41 |
|
$ |
425 |
|
$ |
165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
2,125 |
|
2,166 |
|
2,224 |
|
2,283 |
|
2,346 |
|
2,417 |
|
2,166 |
|
2,417 |
| ||||||||
Homeowners and other |
|
4,107 |
|
4,121 |
|
4,145 |
|
4,158 |
|
4,188 |
|
4,244 |
|
4,121 |
|
4,244 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
828 |
|
$ |
893 |
|
$ |
938 |
|
$ |
892 |
|
$ |
939 |
|
$ |
1,022 |
|
$ |
1,721 |
|
$ |
1,961 |
|
Net written premiums |
|
$ |
822 |
|
$ |
890 |
|
$ |
934 |
|
$ |
888 |
|
$ |
932 |
|
$ |
1,018 |
|
$ |
1,712 |
|
$ |
1,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
802 |
|
$ |
827 |
|
$ |
854 |
|
$ |
878 |
|
$ |
891 |
|
$ |
925 |
|
$ |
1,629 |
|
$ |
1,816 |
|
Losses and loss adjustment expenses |
|
516 |
|
582 |
|
585 |
|
640 |
|
626 |
|
703 |
|
1,098 |
|
1,329 |
| ||||||||
Underwriting expenses |
|
215 |
|
230 |
|
234 |
|
227 |
|
234 |
|
252 |
|
445 |
|
486 |
| ||||||||
Statutory underwriting gain (loss) |
|
$ |
71 |
|
$ |
15 |
|
$ |
35 |
|
$ |
11 |
|
$ |
31 |
|
$ |
(30 |
) |
$ |
86 |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
64.4 |
% |
70.4 |
% |
68.5 |
% |
73.0 |
% |
70.3 |
% |
75.9 |
% |
67.4 |
% |
73.2 |
% | ||||||||
Underwriting expense ratio |
|
25.8 |
% |
26.1 |
% |
25.4 |
% |
25.1 |
% |
24.9 |
% |
25.4 |
% |
26.0 |
% |
25.1 |
% | ||||||||
Combined ratio |
|
90.2 |
% |
96.5 |
% |
93.9 |
% |
98.1 |
% |
95.2 |
% |
101.3 |
% |
93.4 |
% |
98.3 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
0.0 |
% |
2.1 |
% |
0.1 |
% |
0.1 |
% |
2.0 |
% |
2.7 |
% |
1.1 |
% |
2.4 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-2.8 |
% |
-2.5 |
% |
-2.4 |
% |
-2.2 |
% |
-0.8 |
% |
0.0 |
% |
-2.7 |
% |
-0.4 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
|
|
$ |
18 |
|
$ |
|
|
$ |
1 |
|
$ |
19 |
|
$ |
24 |
|
$ |
18 |
|
$ |
43 |
|
After-tax |
|
$ |
|
|
$ |
12 |
|
$ |
|
|
$ |
|
|
$ |
12 |
|
$ |
16 |
|
$ |
12 |
|
$ |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
22 |
|
$ |
21 |
|
$ |
21 |
|
$ |
20 |
|
$ |
7 |
|
$ |
|
|
$ |
43 |
|
$ |
7 |
|
After-tax |
|
$ |
15 |
|
$ |
14 |
|
$ |
13 |
|
$ |
13 |
|
$ |
4 |
|
$ |
|
|
$ |
29 |
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
2,021 |
|
2,057 |
|
2,106 |
|
2,157 |
|
2,212 |
|
2,275 |
|
|
|
|
| ||||||||
Change from prior year quarter |
|
1.8 |
% |
3.8 |
% |
5.8 |
% |
7.9 |
% |
9.5 |
% |
10.6 |
% |
|
|
|
| ||||||||
Change from prior quarter |
|
1.1 |
% |
1.8 |
% |
2.4 |
% |
2.4 |
% |
2.5 |
% |
2.8 |
% |
|
|
|
|
(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, and fee income are allocated as a reduction of underwriting expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Billing and policy fees and other |
|
$ |
9 |
|
$ |
8 |
|
$ |
8 |
|
$ |
9 |
|
$ |
9 |
|
$ |
9 |
|
$ |
17 |
|
$ |
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fee income |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
4 |
|
$ |
4 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross written premiums |
|
$ |
795 |
|
$ |
1,029 |
|
$ |
1,052 |
|
$ |
897 |
|
$ |
803 |
|
$ |
1,045 |
|
$ |
1,824 |
|
$ |
1,848 |
|
Net written premiums |
|
$ |
748 |
|
$ |
1,010 |
|
$ |
1,035 |
|
$ |
894 |
|
$ |
760 |
|
$ |
1,036 |
|
$ |
1,758 |
|
$ |
1,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net earned premiums |
|
$ |
914 |
|
$ |
920 |
|
$ |
930 |
|
$ |
929 |
|
$ |
920 |
|
$ |
926 |
|
$ |
1,834 |
|
$ |
1,846 |
|
Losses and loss adjustment expenses |
|
425 |
|
498 |
|
414 |
|
407 |
|
578 |
|
541 |
|
923 |
|
1,119 |
| ||||||||
Underwriting expenses |
|
236 |
|
289 |
|
291 |
|
263 |
|
236 |
|
297 |
|
525 |
|
533 |
| ||||||||
Statutory underwriting gain |
|
$ |
253 |
|
$ |
133 |
|
$ |
225 |
|
$ |
259 |
|
$ |
106 |
|
$ |
88 |
|
$ |
386 |
|
$ |
194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Combined ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Loss and loss adjustment expense ratio |
|
46.5 |
% |
54.2 |
% |
44.6 |
% |
43.8 |
% |
62.8 |
% |
58.4 |
% |
50.3 |
% |
60.6 |
% | ||||||||
Underwriting expense ratio |
|
27.9 |
% |
28.8 |
% |
28.8 |
% |
28.8 |
% |
27.6 |
% |
29.5 |
% |
28.4 |
% |
28.6 |
% | ||||||||
Combined ratio |
|
74.4 |
% |
83.0 |
% |
73.4 |
% |
72.6 |
% |
90.4 |
% |
87.9 |
% |
78.7 |
% |
89.2 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Impact of catastrophes on combined ratio |
|
6.7 |
% |
10.1 |
% |
4.7 |
% |
4.7 |
% |
16.0 |
% |
9.7 |
% |
8.4 |
% |
12.9 |
% | ||||||||
Impact of prior year reserve development on combined ratio |
|
-11.8 |
% |
-4.6 |
% |
-2.8 |
% |
-1.6 |
% |
-1.8 |
% |
0.0 |
% |
-8.2 |
% |
-0.9 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
61 |
|
$ |
93 |
|
$ |
43 |
|
$ |
44 |
|
$ |
147 |
|
$ |
91 |
|
$ |
154 |
|
$ |
238 |
|
After-tax |
|
$ |
40 |
|
$ |
60 |
|
$ |
28 |
|
$ |
29 |
|
$ |
96 |
|
$ |
59 |
|
$ |
100 |
|
$ |
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
108 |
|
$ |
43 |
|
$ |
26 |
|
$ |
15 |
|
$ |
17 |
|
$ |
|
|
$ |
151 |
|
$ |
17 |
|
After-tax |
|
$ |
70 |
|
$ |
28 |
|
$ |
17 |
|
$ |
10 |
|
$ |
11 |
|
$ |
|
|
$ |
98 |
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
4,008 |
|
4,017 |
|
4,034 |
|
4,042 |
|
4,068 |
|
4,117 |
|
|
|
|
| ||||||||
Change from prior year quarter |
|
-3.3 |
% |
-2.3 |
% |
-0.9 |
% |
0.2 |
% |
1.5 |
% |
2.5 |
% |
|
|
|
| ||||||||
Change from prior quarter |
|
-0.6 |
% |
0.2 |
% |
0.4 |
% |
0.2 |
% |
0.6 |
% |
1.2 |
% |
|
|
|
|
(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, and fee income are allocated as a reduction of underwriting expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Billing and policy fees and other |
|
$ |
7 |
|
$ |
7 |
|
$ |
7 |
|
$ |
6 |
|
$ |
7 |
|
$ |
6 |
|
$ |
14 |
|
$ |
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fee income |
|
$ |
1 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
2 |
|
$ |
3 |
|
$ |
4 |
|
Certain prior period amounts have been restated to conform to the 2016 presentation.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
$ |
38 |
|
$ |
38 |
|
$ |
47 |
|
$ |
43 |
|
$ |
51 |
|
$ |
53 |
|
$ |
76 |
|
$ |
104 |
|
Homeowners and other |
|
14 |
|
18 |
|
20 |
|
18 |
|
17 |
|
22 |
|
32 |
|
39 |
| ||||||||
Total net written premiums |
|
$ |
52 |
|
$ |
56 |
|
$ |
67 |
|
$ |
61 |
|
$ |
68 |
|
$ |
75 |
|
$ |
108 |
|
$ |
143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Premiums |
|
$ |
48 |
|
$ |
51 |
|
$ |
56 |
|
$ |
59 |
|
$ |
63 |
|
$ |
67 |
|
$ |
99 |
|
$ |
130 |
|
Other revenues |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
1 |
|
1 |
| ||||||||
Total revenues |
|
48 |
|
52 |
|
56 |
|
60 |
|
63 |
|
68 |
|
100 |
|
131 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and claim adjustment expenses |
|
32 |
|
39 |
|
39 |
|
45 |
|
45 |
|
53 |
|
71 |
|
98 |
| ||||||||
Amortization of deferred acquisition costs |
|
1 |
|
1 |
|
2 |
|
1 |
|
1 |
|
2 |
|
2 |
|
3 |
| ||||||||
General and administrative expenses |
|
37 |
|
38 |
|
41 |
|
37 |
|
30 |
|
30 |
|
75 |
|
60 |
| ||||||||
Total claims and expenses |
|
70 |
|
78 |
|
82 |
|
83 |
|
76 |
|
85 |
|
148 |
|
161 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss before income taxes |
|
(22 |
) |
(26 |
) |
(26 |
) |
(23 |
) |
(13 |
) |
(17 |
) |
(48 |
) |
(30 |
) | ||||||||
Income taxes |
|
(8 |
) |
(9 |
) |
(9 |
) |
(8 |
) |
(5 |
) |
(5 |
) |
(17 |
) |
(10 |
) | ||||||||
Operating loss |
|
$ |
(14 |
) |
$ |
(17 |
) |
$ |
(17 |
) |
$ |
(15 |
) |
$ |
(8 |
) |
$ |
(12 |
) |
$ |
(31 |
) |
$ |
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Policies in force (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Automobile |
|
104 |
|
109 |
|
118 |
|
126 |
|
134 |
|
142 |
|
|
|
|
| ||||||||
Homeowners and other |
|
99 |
|
104 |
|
111 |
|
116 |
|
120 |
|
127 |
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
1 |
|
$ |
1 |
|
$ |
2 |
|
$ |
|
|
$ |
3 |
|
$ |
3 |
|
$ |
2 |
|
$ |
6 |
|
After-tax |
|
$ |
1 |
|
$ |
|
|
$ |
2 |
|
$ |
|
|
$ |
2 |
|
$ |
2 |
|
$ |
1 |
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior year reserve development - favorable (unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Pre-tax |
|
$ |
1 |
|
$ |
|
|
$ |
|
|
$ |
1 |
|
$ |
3 |
|
$ |
|
|
$ |
1 |
|
$ |
3 |
|
After-tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
1 |
|
$ |
2 |
|
$ |
|
|
$ |
|
|
$ |
2 |
|
(1) Represents incremental premiums, other revenues and claims and expenses of Direct to Consumer business activities included in Personal Insurance operating income.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Other revenues |
|
$ |
|
|
$ |
|
|
$ |
3 |
|
$ |
3 |
|
$ |
3 |
|
$ |
3 |
|
$ |
|
|
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Interest expense |
|
92 |
|
92 |
|
94 |
|
95 |
|
91 |
|
93 |
|
184 |
|
184 |
| ||||||||
General and administrative expenses |
|
7 |
|
7 |
|
8 |
|
9 |
|
8 |
|
7 |
|
14 |
|
15 |
| ||||||||
Total claims and expenses |
|
99 |
|
99 |
|
102 |
|
104 |
|
99 |
|
100 |
|
198 |
|
199 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss before income tax benefit |
|
(99 |
) |
(99 |
) |
(99 |
) |
(101 |
) |
(96 |
) |
(97 |
) |
(198 |
) |
(193 |
) | ||||||||
Income taxes |
|
(35 |
) |
(37 |
) |
(34 |
) |
(37 |
) |
(35 |
) |
(35 |
) |
(72 |
) |
(70 |
) | ||||||||
Operating loss |
|
$ |
(64 |
) |
$ |
(62 |
) |
$ |
(65 |
) |
$ |
(64 |
) |
$ |
(61 |
) |
$ |
(62 |
) |
$ |
(126 |
) |
$ |
(123 |
) |
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, |
| ||
|
|
2016 |
|
2015 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Fixed maturities, available for sale, at fair value (amortized cost $59,975 and $58,878) |
|
$ |
63,311 |
|
$ |
60,658 |
|
Equity securities, available for sale, at fair value (cost $525 and $528) |
|
752 |
|
705 |
| ||
Real estate investments |
|
929 |
|
989 |
| ||
Short-term securities |
|
3,988 |
|
4,671 |
| ||
Other investments |
|
3,490 |
|
3,447 |
| ||
Total investments |
|
72,470 |
|
70,470 |
| ||
|
|
|
|
|
| ||
Cash |
|
265 |
|
380 |
| ||
Investment income accrued |
|
627 |
|
642 |
| ||
Premiums receivable |
|
7,014 |
|
6,437 |
| ||
Reinsurance recoverables |
|
8,603 |
|
8,910 |
| ||
Ceded unearned premiums |
|
726 |
|
656 |
| ||
Deferred acquisition costs |
|
1,954 |
|
1,849 |
| ||
Deferred taxes |
|
|
|
296 |
| ||
Contractholder receivables |
|
4,541 |
|
4,374 |
| ||
Goodwill |
|
3,588 |
|
3,573 |
| ||
Other intangible assets |
|
274 |
|
279 |
| ||
Other assets |
|
2,384 |
|
2,318 |
| ||
Total assets |
|
$ |
102,446 |
|
$ |
100,184 |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2016 |
|
2015 |
| ||
|
|
|
|
|
| ||
Liabilities |
|
|
|
|
| ||
Claims and claim adjustment expense reserves |
|
$ |
47,953 |
|
$ |
48,295 |
|
Unearned premium reserves |
|
12,520 |
|
11,971 |
| ||
Contractholder payables |
|
4,541 |
|
4,374 |
| ||
Payables for reinsurance premiums |
|
401 |
|
296 |
| ||
Deferred taxes |
|
370 |
|
|
| ||
Debt |
|
6,436 |
|
6,344 |
| ||
Other liabilities |
|
5,511 |
|
5,306 |
| ||
Total liabilities |
|
77,732 |
|
76,586 |
| ||
|
|
|
|
|
| ||
Shareholders equity |
|
|
|
|
| ||
Common stock (1,750.0 shares authorized; 288.3 and 295.9 shares issued and outstanding) |
|
22,349 |
|
22,172 |
| ||
Retained earnings |
|
30,921 |
|
29,945 |
| ||
Accumulated other comprehensive income (loss) |
|
965 |
|
(157 |
) | ||
Treasury stock, at cost (478.1 and 467.6 shares) |
|
(29,521 |
) |
(28,362 |
) | ||
Total shareholders equity |
|
24,714 |
|
23,598 |
| ||
Total liabilities and shareholders equity |
|
$ |
102,446 |
|
$ |
100,184 |
|
The Travelers Companies, Inc. Investment Portfolio (at carrying value, $ in millions) |
|
|
|
June 30, |
|
Pre-tax Book |
|
December 31, |
|
Pre-tax Book |
| ||
|
|
2016 |
|
Yield (1) |
|
2015 |
|
Yield (1) |
| ||
Investment portfolio |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Taxable fixed maturities (including redeemable preferred stock) |
|
$ |
29,998 |
|
3.23 |
% |
$ |
29,612 |
|
3.30 |
% |
Tax-exempt fixed maturities |
|
33,313 |
|
3.44 |
% |
31,046 |
|
3.58 |
% | ||
Total fixed maturities |
|
63,311 |
|
3.34 |
% |
60,658 |
|
3.44 |
% | ||
|
|
|
|
|
|
|
|
|
| ||
Non-redeemable preferred stocks |
|
155 |
|
5.70 |
% |
162 |
|
5.73 |
% | ||
Public common stocks |
|
597 |
|
|
|
543 |
|
|
| ||
Total equity securities |
|
752 |
|
|
|
705 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Real estate investments |
|
929 |
|
|
|
989 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Short-term securities |
|
3,988 |
|
0.57 |
% |
4,671 |
|
0.37 |
% | ||
|
|
|
|
|
|
|
|
|
| ||
Private equities |
|
2,021 |
|
|
|
2,056 |
|
|
| ||
Hedge funds |
|
395 |
|
|
|
416 |
|
|
| ||
Real estate partnerships |
|
659 |
|
|
|
626 |
|
|
| ||
Other investments |
|
415 |
|
|
|
349 |
|
|
| ||
Total other investments |
|
3,490 |
|
|
|
3,447 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Total investments |
|
$ |
72,470 |
|
|
|
$ |
70,470 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net unrealized investment gains, net of tax, included in shareholders equity |
|
$ |
2,341 |
|
|
|
$ |
1,289 |
|
|
|
|
|
| |
(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, |
| ||
|
|
2016 |
|
2015 |
| ||
Fixed maturities |
|
|
|
|
| ||
U.S. Treasury securities and obligations of U.S. Government corporations and agencies |
|
$ |
2,073 |
|
$ |
2,194 |
|
Obligations of states and political subdivisions: |
|
|
|
|
| ||
Pre-refunded |
|
5,724 |
|
6,060 |
| ||
All other |
|
27,908 |
|
25,351 |
| ||
Total |
|
33,632 |
|
31,411 |
| ||
Debt securities issued by foreign governments |
|
1,801 |
|
1,873 |
| ||
Mortgage-backed securities - principally obligations of U.S. Government agencies |
|
1,833 |
|
1,981 |
| ||
Corporates (including redeemable preferreds) |
|
23,972 |
|
23,199 |
| ||
Total fixed maturities |
|
$ |
63,311 |
|
$ |
60,658 |
|
Fixed Maturities
Quality Characteristics (1)
|
|
June 30, 2016 |
| |||
|
|
Amount |
|
% of Total |
| |
Quality Ratings |
|
|
|
|
| |
Aaa |
|
$ |
26,123 |
|
41.3 |
% |
Aa |
|
19,193 |
|
30.3 |
| |
A |
|
9,130 |
|
14.4 |
| |
Baa |
|
7,099 |
|
11.2 |
| |
Total investment grade |
|
61,545 |
|
97.2 |
| |
Ba |
|
1,036 |
|
1.7 |
| |
B |
|
457 |
|
0.7 |
| |
Caa and lower |
|
273 |
|
0.4 |
| |
Total below investment grade |
|
1,766 |
|
2.8 |
| |
Total fixed maturities |
|
$ |
63,311 |
|
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
$ |
531 |
|
$ |
526 |
|
$ |
516 |
|
$ |
518 |
|
$ |
503 |
|
$ |
497 |
|
$ |
1,057 |
|
$ |
1,000 |
|
Short-term securities |
|
2 |
|
3 |
|
3 |
|
4 |
|
6 |
|
7 |
|
5 |
|
13 |
| ||||||||
Other |
|
69 |
|
113 |
|
105 |
|
30 |
|
44 |
|
53 |
|
182 |
|
97 |
| ||||||||
|
|
602 |
|
642 |
|
624 |
|
552 |
|
553 |
|
557 |
|
1,244 |
|
1,110 |
| ||||||||
Investment expenses |
|
10 |
|
10 |
|
10 |
|
11 |
|
9 |
|
8 |
|
20 |
|
17 |
| ||||||||
Net investment income, pre-tax |
|
592 |
|
632 |
|
614 |
|
541 |
|
544 |
|
549 |
|
1,224 |
|
1,093 |
| ||||||||
Income taxes |
|
114 |
|
129 |
|
130 |
|
101 |
|
105 |
|
107 |
|
243 |
|
212 |
| ||||||||
Net investment income, after-tax |
|
$ |
478 |
|
$ |
503 |
|
$ |
484 |
|
$ |
440 |
|
$ |
439 |
|
$ |
442 |
|
$ |
981 |
|
$ |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effective tax rate |
|
19.3 |
% |
20.5 |
% |
21.1 |
% |
18.7 |
% |
19.3 |
% |
19.4 |
% |
19.9 |
% |
19.3 |
% | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average invested assets (1) |
|
$ |
70,722 |
|
$ |
70,291 |
|
$ |
70,569 |
|
$ |
70,756 |
|
$ |
69,926 |
|
$ |
70,033 |
|
$ |
70,548 |
|
$ |
69,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Average yield pre-tax (1) |
|
3.3 |
% |
3.6 |
% |
3.5 |
% |
3.1 |
% |
3.1 |
% |
3.1 |
% |
3.5 |
% |
3.1 |
% | ||||||||
Average yield after-tax |
|
2.7 |
% |
2.9 |
% |
2.7 |
% |
2.5 |
% |
2.5 |
% |
2.5 |
% |
2.8 |
% |
2.5 |
% |
(1) Excludes net unrealized investment gains, and is adjusted for cash, receivables for investment sales, payables on investment purchases and accrued investment income.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| |||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| |||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net realized investment gains (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Fixed maturities |
|
$ |
17 |
|
$ |
14 |
|
$ |
30 |
|
$ |
7 |
|
$ |
4 |
|
$ |
21 |
|
$ |
31 |
|
$ |
25 |
| |
Equity securities |
|
|
|
(1 |
) |
(10 |
) |
(20 |
) |
(5 |
) |
2 |
|
(1 |
) |
(3 |
) | |||||||||
Other (1) |
|
(7 |
) |
(3 |
) |
(5 |
) |
(19 |
) |
(8 |
) |
(4 |
) |
(10 |
) |
(12 |
) | |||||||||
Realized investment gains (losses) before tax |
|
10 |
|
10 |
|
15 |
|
(32 |
) |
(9 |
) |
19 |
|
20 |
|
10 |
| |||||||||
Related taxes |
|
4 |
|
4 |
|
5 |
|
(12 |
) |
(2 |
) |
4 |
|
8 |
|
2 |
| |||||||||
Net realized investment gains (losses) |
|
$ |
6 |
|
$ |
6 |
|
$ |
10 |
|
$ |
(20 |
) |
$ |
(7 |
) |
$ |
15 |
|
$ |
12 |
|
$ |
8 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Gross investment gains (1) |
|
$ |
71 |
|
$ |
102 |
|
$ |
108 |
|
$ |
96 |
|
$ |
120 |
|
$ |
150 |
|
$ |
173 |
|
$ |
270 |
| |
Gross investment losses before impairments (1) |
|
(58 |
) |
(86 |
) |
(79 |
) |
(99 |
) |
(111 |
) |
(127 |
) |
(144 |
) |
(238 |
) | |||||||||
Net investment gains (losses) before impairments |
|
13 |
|
16 |
|
29 |
|
(3 |
) |
9 |
|
23 |
|
29 |
|
32 |
| |||||||||
Other-than-temporary impairment losses |
|
(3 |
) |
(6 |
) |
(14 |
) |
(29 |
) |
(18 |
) |
(4 |
) |
(9 |
) |
(22 |
) | |||||||||
Net realized investment gains (losses) before tax |
|
10 |
|
10 |
|
15 |
|
(32 |
) |
(9 |
) |
19 |
|
20 |
|
10 |
| |||||||||
Related taxes |
|
4 |
|
4 |
|
5 |
|
(12 |
) |
(2 |
) |
4 |
|
8 |
|
2 |
| |||||||||
Net realized investment gains (losses) |
|
$ |
6 |
|
$ |
6 |
|
$ |
10 |
|
$ |
(20 |
) |
$ |
(7 |
) |
$ |
15 |
|
$ |
12 |
|
$ |
8 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
|
|
|
| |||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net unrealized investment gains, net of tax, by asset type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Fixed maturities |
|
$ |
2,853 |
|
$ |
1,830 |
|
$ |
1,983 |
|
$ |
1,780 |
|
$ |
2,495 |
|
$ |
3,336 |
|
|
|
|
| |||
Equity securities & other |
|
319 |
|
274 |
|
183 |
|
194 |
|
198 |
|
249 |
|
|
|
|
| |||||||||
Unrealized investment gains before tax |
|
3,172 |
|
2,104 |
|
2,166 |
|
1,974 |
|
2,693 |
|
3,585 |
|
|
|
|
| |||||||||
Related taxes |
|
1,096 |
|
728 |
|
752 |
|
685 |
|
934 |
|
1,244 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance, end of period |
|
$ |
2,076 |
|
$ |
1,376 |
|
$ |
1,414 |
|
$ |
1,289 |
|
$ |
1,759 |
|
$ |
2,341 |
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| ||||||||||||||||||||||||||
(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 |
|
$ |
44 |
|
$ |
56 |
|
$ |
47 |
|
$ |
44 |
|
$ |
30 |
|
$ |
31 |
|
$ |
100 |
|
$ |
61 |
|
|
Gross investment Treasury future losses |
|
$ |
54 |
|
$ |
47 |
|
$ |
61 |
|
$ |
34 |
|
$ |
49 |
|
$ |
42 |
|
$ |
101 |
|
$ |
91 |
|
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. |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2016 |
|
2015 |
| ||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses |
|
$ |
3,530 |
|
$ |
3,848 |
|
Allowance for uncollectible reinsurance |
|
(151 |
) |
(157 |
) | ||
Net reinsurance recoverables (i) |
|
3,379 |
|
3,691 |
| ||
Mandatory pools and associations (ii) |
|
2,026 |
|
2,015 |
| ||
Structured settlements (iii) |
|
3,198 |
|
3,204 |
| ||
Total reinsurance recoverables |
|
$ |
8,603 |
|
$ |
8,910 |
|
(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 |
|
2016 |
| |
Swiss Re Group |
|
A+ second highest of 16 ratings |
|
$ |
420 |
|
Munich Re Group |
|
A+ second highest of 16 ratings |
|
385 |
| |
Berkshire Hathaway |
|
A++ highest of 16 ratings |
|
226 |
| |
Sompo Japan Nipponkoa Group |
|
A+ second highest of 16 ratings |
|
223 |
| |
XL Capital Group |
|
A third highest of 16 ratings |
|
149 |
| |
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, 2016, after deducting mandatory pools and associations and structured settlement balances, $2.7 billion, or 80%, were rated by A.M. Best Company. Of the total rated by A.M. Best Company, 99% were rated A- or better. The remaining 20% of net recoverables from reinsurers were comprised of the following: 5% related to the Companys participation in voluntary pools, 12% related to recoverables from captive insurance companies and 3% were balances from other companies not rated by A.M. Best Company. In addition, $1.1 billion of the net recoverables were collateralized by letters of credit, funds held or trust agreements at June 30, 2016.
(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 |
|
2016 |
| |
Fidelity and Guaranty Life (1) |
|
B++ fifth highest of 16 ratings |
|
$ |
892 |
|
Metlife (2) |
|
A+ second highest of 16 ratings |
|
398 |
| |
Genworth Financial Group |
|
B++ fifth highest of 16 ratings |
|
379 |
| |
John Hancock Group |
|
A+ second highest of 16 ratings |
|
302 |
| |
Symetra Financial Corporation |
|
A third highest of 16 ratings |
|
271 |
| |
|
(1) Fidelity and Guaranty Life (FGL) has entered into a definitive merger agreement with Anbang Insurance Group Co., Ltd. whereby Anbang will acquire all of the outstanding shares of FGL. Regulatory approvals are still in progress. A.M. Bests ratings of FGL were placed under review with developing implications following the announcement of the merger agreement. The Company does not have any structured settlements with Anbang.
(2) MetLife Inc. has announced a plan to pursue the separation of a substantial portion of its U.S. Retail segment. MetLife is currently evaluating structural alternatives for such a separation, including a public offering of shares in an independent, publicly-traded company, a spin-off, or a sale. A.M. Bests ratings of MetLife Inc. and its subsidiaries were placed under review with developing implications following the announcement of this plan.
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
Statutory Reserves for Losses and Loss Adjustment Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Business and International Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
34,568 |
|
$ |
33,924 |
|
$ |
33,905 |
|
$ |
33,856 |
|
$ |
33,669 |
|
$ |
34,002 |
|
$ |
34,568 |
|
$ |
33,669 |
|
Incurred |
|
2,216 |
|
2,187 |
|
2,182 |
|
2,073 |
|
2,252 |
|
2,334 |
|
4,403 |
|
4,586 |
| ||||||||
Paid |
|
(2,616 |
) |
(2,291 |
) |
(2,075 |
) |
(2,173 |
) |
(2,020 |
) |
(2,642 |
) |
(4,907 |
) |
(4,662 |
) | ||||||||
Foreign exchange and other |
|
(244 |
) |
85 |
|
(156 |
) |
(87 |
) |
101 |
|
(62 |
) |
(159 |
) |
39 |
| ||||||||
End of period |
|
$ |
33,924 |
|
$ |
33,905 |
|
$ |
33,856 |
|
$ |
33,669 |
|
$ |
34,002 |
|
$ |
33,632 |
|
$ |
33,905 |
|
$ |
33,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bond & Specialty Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
3,239 |
|
$ |
3,228 |
|
$ |
3,212 |
|
$ |
3,142 |
|
$ |
3,030 |
|
$ |
3,020 |
|
$ |
3,239 |
|
$ |
3,030 |
|
Incurred |
|
189 |
|
191 |
|
111 |
|
143 |
|
162 |
|
78 |
|
380 |
|
240 |
| ||||||||
Paid |
|
(200 |
) |
(207 |
) |
(181 |
) |
(255 |
) |
(172 |
) |
(168 |
) |
(407 |
) |
(340 |
) | ||||||||
Foreign exchange and other |
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
(3 |
) | ||||||||
End of period |
|
$ |
3,228 |
|
$ |
3,212 |
|
$ |
3,142 |
|
$ |
3,030 |
|
$ |
3,020 |
|
$ |
2,927 |
|
$ |
3,212 |
|
$ |
2,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Personal Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
3,200 |
|
$ |
3,144 |
|
$ |
3,156 |
|
$ |
3,093 |
|
$ |
3,083 |
|
$ |
3,202 |
|
$ |
3,200 |
|
$ |
3,083 |
|
Incurred |
|
974 |
|
1,117 |
|
1,040 |
|
1,091 |
|
1,249 |
|
1,297 |
|
2,091 |
|
2,546 |
| ||||||||
Paid |
|
(1,030 |
) |
(1,105 |
) |
(1,103 |
) |
(1,101 |
) |
(1,130 |
) |
(1,261 |
) |
(2,135 |
) |
(2,391 |
) | ||||||||
End of period |
|
$ |
3,144 |
|
$ |
3,156 |
|
$ |
3,093 |
|
$ |
3,083 |
|
$ |
3,202 |
|
$ |
3,238 |
|
$ |
3,156 |
|
$ |
3,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning of period |
|
$ |
41,007 |
|
$ |
40,296 |
|
$ |
40,273 |
|
$ |
40,091 |
|
$ |
39,782 |
|
$ |
40,224 |
|
$ |
41,007 |
|
$ |
39,782 |
|
Incurred |
|
3,379 |
|
3,495 |
|
3,333 |
|
3,307 |
|
3,663 |
|
3,709 |
|
6,874 |
|
7,372 |
| ||||||||
Paid |
|
(3,846 |
) |
(3,603 |
) |
(3,359 |
) |
(3,529 |
) |
(3,322 |
) |
(4,071 |
) |
(7,449 |
) |
(7,393 |
) | ||||||||
Foreign exchange and other |
|
(244 |
) |
85 |
|
(156 |
) |
(87 |
) |
101 |
|
(65 |
) |
(159 |
) |
36 |
| ||||||||
End of period |
|
$ |
40,296 |
|
$ |
40,273 |
|
$ |
40,091 |
|
$ |
39,782 |
|
$ |
40,224 |
|
$ |
39,797 |
|
$ |
40,273 |
|
$ |
39,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Prior Year Reserve Development: Unfavorable (Favorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Business and International Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Asbestos |
|
$ |
|
|
$ |
|
|
$ |
224 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Environmental |
|
|
|
72 |
|
|
|
|
|
|
|
82 |
|
72 |
|
82 |
| ||||||||
All other |
|
(77 |
) |
(175 |
) |
(273 |
) |
(176 |
) |
(93 |
) |
(220 |
) |
(252 |
) |
(313 |
) | ||||||||
Total Business and International Insurance (1) |
|
(77 |
) |
(103 |
) |
(49 |
) |
(176 |
) |
(93 |
) |
(138 |
) |
(180 |
) |
(231 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Bond & Specialty Insurance |
|
(35 |
) |
(40 |
) |
(103 |
) |
(80 |
) |
(60 |
) |
(150 |
) |
(75 |
) |
(210 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Personal Insurance |
|
(131 |
) |
(64 |
) |
(47 |
) |
(36 |
) |
(27 |
) |
|
|
(195 |
) |
(27 |
) | ||||||||
Total |
|
$ |
(243 |
) |
$ |
(207 |
) |
$ |
(199 |
) |
$ |
(292 |
) |
$ |
(180 |
) |
$ |
(288 |
) |
$ |
(450 |
) |
$ |
(468 |
) |
(1) Excludes accretion of discount.
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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Asbestos reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
2,520 |
|
$ |
1,959 |
|
$ |
1,856 |
|
$ |
2,086 |
|
$ |
1,989 |
|
$ |
1,937 |
|
$ |
2,520 |
|
$ |
1,989 |
|
Ceded |
|
(163 |
) |
(123 |
) |
(122 |
) |
(190 |
) |
(179 |
) |
(164 |
) |
(163 |
) |
(179 |
) | ||||||||
Net |
|
2,357 |
|
1,836 |
|
1,734 |
|
1,896 |
|
1,810 |
|
1,773 |
|
2,357 |
|
1,810 |
| ||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
|
|
313 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ceded |
|
|
|
|
|
(89 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||
Paid loss and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
560 |
|
104 |
|
83 |
|
96 |
|
52 |
|
619 |
|
664 |
|
671 |
| ||||||||
Ceded |
|
(40 |
) |
(1 |
) |
(22 |
) |
(10 |
) |
(15 |
) |
(81 |
) |
(41 |
) |
(96 |
) | ||||||||
Foreign exchange and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
(1 |
) |
1 |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) | ||||||||
Ceded |
|
|
|
|
|
(1 |
) |
1 |
|
|
|
|
|
|
|
|
| ||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
1,959 |
|
1,856 |
|
2,086 |
|
1,989 |
|
1,937 |
|
1,317 |
|
1,856 |
|
1,317 |
| ||||||||
Ceded |
|
(123 |
) |
(122 |
) |
(190 |
) |
(179 |
) |
(164 |
) |
(83 |
) |
(122 |
) |
(83 |
) | ||||||||
Net |
|
$ |
1,836 |
|
$ |
1,734 |
|
$ |
1,896 |
|
$ |
1,810 |
|
$ |
1,773 |
|
$ |
1,234 |
|
$ |
1,734 |
|
$ |
1,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Environmental reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
$ |
353 |
|
$ |
341 |
|
$ |
406 |
|
$ |
393 |
|
$ |
375 |
|
$ |
366 |
|
$ |
353 |
|
$ |
375 |
|
Ceded |
|
(7 |
) |
(6 |
) |
(15 |
) |
(15 |
) |
(14 |
) |
(14 |
) |
(7 |
) |
(14 |
) | ||||||||
Net |
|
346 |
|
335 |
|
391 |
|
378 |
|
361 |
|
352 |
|
346 |
|
361 |
| ||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
|
|
81 |
|
|
|
|
|
|
|
87 |
|
81 |
|
87 |
| ||||||||
Ceded |
|
|
|
(9 |
) |
|
|
|
|
|
|
(5 |
) |
(9 |
) |
(5 |
) | ||||||||
Paid loss and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
11 |
|
15 |
|
13 |
|
17 |
|
10 |
|
14 |
|
26 |
|
24 |
| ||||||||
Ceded |
|
(1 |
) |
|
|
|
|
|
|
|
|
(1 |
) |
(1 |
) |
(1 |
) | ||||||||
Foreign exchange and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
(1 |
) |
(1 |
) |
|
|
(1 |
) |
1 |
|
|
|
(2 |
) |
1 |
| ||||||||
Ceded |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
| ||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gross |
|
341 |
|
406 |
|
393 |
|
375 |
|
366 |
|
439 |
|
406 |
|
439 |
| ||||||||
Ceded |
|
(6 |
) |
(15 |
) |
(15 |
) |
(14 |
) |
(14 |
) |
(18 |
) |
(15 |
) |
(18 |
) | ||||||||
Net |
|
$ |
335 |
|
$ |
391 |
|
$ |
378 |
|
$ |
361 |
|
$ |
352 |
|
$ |
421 |
|
$ |
391 |
|
$ |
421 |
|
See Glossary of Financial Measures and Description of Reportable Business Segments on page 35.
The Travelers Companies, Inc. |
|
|
|
June 30, |
|
December 31, |
| ||
|
|
2016 |
|
2015 |
| ||
Debt |
|
|
|
|
| ||
|
|
|
|
|
| ||
Short-term debt |
|
|
|
|
| ||
Commercial paper |
|
$ |
100 |
|
$ |
100 |
|
6.25% Senior notes due June 20, 2016 |
|
|
|
400 |
| ||
Total short-term debt |
|
100 |
|
500 |
| ||
|
|
|
|
|
| ||
Long-term debt |
|
|
|
|
| ||
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 |
| ||
4.30% Senior notes due August 25, 2045 (1) |
|
400 |
|
400 |
| ||
8.50% Junior subordinated debentures due December 15, 2045 |
|
56 |
|
56 |
| ||
3.75% Senior notes due May 15, 2046 (1) |
|
500 |
|
|
| ||
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 |
|
6,361 |
|
5,861 |
| ||
Unamortized fair value adjustment |
|
48 |
|
49 |
| ||
Unamortized debt issuance costs |
|
(73 |
) |
(66 |
) | ||
|
|
6,336 |
|
5,844 |
| ||
Total debt |
|
6,436 |
|
6,344 |
| ||
|
|
|
|
|
| ||
Common equity (excluding net unrealized investment gains, net of tax) |
|
22,373 |
|
22,309 |
| ||
|
|
|
|
|
| ||
Total capital (excluding net unrealized investment gains, net of tax) |
|
$ |
28,809 |
|
$ |
28,653 |
|
|
|
|
|
|
| ||
Total debt to capital (excluding net unrealized investment gains, net of tax) |
|
22.3 |
% |
22.1 |
% |
(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, |
| ||
|
|
2016 (1) |
|
2015 |
| ||
|
|
|
|
|
| ||
Statutory capital and surplus |
|
$ |
20,634 |
|
$ |
20,567 |
|
|
|
|
|
|
| ||
GAAP adjustments |
|
|
|
|
| ||
|
|
|
|
|
| ||
Goodwill and intangible assets |
|
3,697 |
|
3,687 |
| ||
|
|
|
|
|
| ||
Investments |
|
3,811 |
|
2,258 |
| ||
|
|
|
|
|
| ||
Noninsurance companies |
|
(4,647 |
) |
(4,688 |
) | ||
|
|
|
|
|
| ||
Deferred acquisition costs |
|
1,954 |
|
1,849 |
| ||
|
|
|
|
|
| ||
Deferred federal income tax |
|
(1,886 |
) |
(1,269 |
) | ||
|
|
|
|
|
| ||
Current federal income tax |
|
(21 |
) |
(23 |
) | ||
|
|
|
|
|
| ||
Reinsurance recoverables |
|
109 |
|
109 |
| ||
|
|
|
|
|
| ||
Furniture, equipment & software |
|
678 |
|
672 |
| ||
|
|
|
|
|
| ||
Agents balances |
|
167 |
|
153 |
| ||
|
|
|
|
|
| ||
Other |
|
218 |
|
283 |
| ||
|
|
|
|
|
| ||
Total GAAP adjustments |
|
4,080 |
|
3,031 |
| ||
|
|
|
|
|
| ||
GAAP shareholders equity |
|
$ |
24,714 |
|
$ |
23,598 |
|
(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 |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income |
|
$ |
833 |
|
$ |
812 |
|
$ |
928 |
|
$ |
866 |
|
$ |
691 |
|
$ |
664 |
|
$ |
1,645 |
|
$ |
1,355 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net realized investment (gains) losses |
|
(10 |
) |
(10 |
) |
(15 |
) |
32 |
|
9 |
|
(19 |
) |
(20 |
) |
(10 |
) | ||||||||
Depreciation and amortization |
|
225 |
|
204 |
|
191 |
|
198 |
|
213 |
|
200 |
|
429 |
|
413 |
| ||||||||
Deferred federal income tax expense |
|
133 |
|
9 |
|
(37 |
) |
12 |
|
105 |
|
(30 |
) |
142 |
|
75 |
| ||||||||
Amortization of deferred acquisition costs |
|
963 |
|
963 |
|
987 |
|
972 |
|
971 |
|
989 |
|
1,926 |
|
1,960 |
| ||||||||
Equity in income from other investments |
|
(43 |
) |
(91 |
) |
(80 |
) |
(4 |
) |
(17 |
) |
(27 |
) |
(134 |
) |
(44 |
) | ||||||||
Premiums receivable |
|
(258 |
) |
(228 |
) |
186 |
|
115 |
|
(393 |
) |
(174 |
) |
(486 |
) |
(567 |
) | ||||||||
Reinsurance recoverables |
|
69 |
|
194 |
|
(16 |
) |
25 |
|
126 |
|
190 |
|
263 |
|
316 |
| ||||||||
Deferred acquisition costs |
|
(987 |
) |
(1,004 |
) |
(1,007 |
) |
(922 |
) |
(1,014 |
) |
(1,048 |
) |
(1,991 |
) |
(2,062 |
) | ||||||||
Claims and claim adjustment expense reserves |
|
(561 |
) |
(265 |
) |
(48 |
) |
(201 |
) |
226 |
|
(613 |
) |
(826 |
) |
(387 |
) | ||||||||
Unearned premium reserves |
|
185 |
|
177 |
|
180 |
|
(294 |
) |
328 |
|
203 |
|
362 |
|
531 |
| ||||||||
Other |
|
(350 |
) |
(85 |
) |
530 |
|
(39 |
) |
(395 |
) |
108 |
|
(435 |
) |
(287 |
) | ||||||||
Net cash provided by operating activities |
|
199 |
|
676 |
|
1,799 |
|
760 |
|
850 |
|
443 |
|
875 |
|
1,293 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Proceeds from maturities of fixed maturities |
|
2,830 |
|
2,484 |
|
3,491 |
|
2,311 |
|
1,748 |
|
2,025 |
|
5,314 |
|
3,773 |
| ||||||||
Proceeds from sales of investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
906 |
|
320 |
|
329 |
|
395 |
|
421 |
|
318 |
|
1,226 |
|
739 |
| ||||||||
Equity securities |
|
11 |
|
17 |
|
10 |
|
21 |
|
14 |
|
24 |
|
28 |
|
38 |
| ||||||||
Real estate investments |
|
7 |
|
3 |
|
5 |
|
16 |
|
69 |
|
|
|
10 |
|
69 |
| ||||||||
Other investments |
|
146 |
|
208 |
|
151 |
|
208 |
|
186 |
|
157 |
|
354 |
|
343 |
| ||||||||
Purchases of investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Fixed maturities |
|
(3,325 |
) |
(2,914 |
) |
(3,733 |
) |
(2,118 |
) |
(2,700 |
) |
(3,005 |
) |
(6,239 |
) |
(5,705 |
) | ||||||||
Equity securities |
|
(8 |
) |
(14 |
) |
(9 |
) |
(18 |
) |
(12 |
) |
(14 |
) |
(22 |
) |
(26 |
) | ||||||||
Real estate investments |
|
(6 |
) |
(63 |
) |
(47 |
) |
(7 |
) |
(7 |
) |
(13 |
) |
(69 |
) |
(20 |
) | ||||||||
Other investments |
|
(168 |
) |
(107 |
) |
(114 |
) |
(145 |
) |
(162 |
) |
(128 |
) |
(275 |
) |
(290 |
) | ||||||||
Net sales (purchases) of short-term securities |
|
(134 |
) |
567 |
|
(1,215 |
) |
456 |
|
85 |
|
596 |
|
433 |
|
681 |
| ||||||||
Securities transactions in course of settlement |
|
305 |
|
(122 |
) |
(80 |
) |
(216 |
) |
291 |
|
170 |
|
183 |
|
461 |
| ||||||||
Acquisitions, net of cash acquired |
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
| ||||||||
Other |
|
(90 |
) |
(88 |
) |
(44 |
) |
(82 |
) |
(79 |
) |
(75 |
) |
(178 |
) |
(154 |
) | ||||||||
Net cash provided by (used in) investing activities |
|
474 |
|
291 |
|
(1,256 |
) |
808 |
|
(146 |
) |
55 |
|
765 |
|
(91 |
) | ||||||||
The Travelers Companies, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
| ||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
2Q |
|
2Q |
| ||||||||
|
|
2015 |
|
2015 |
|
2015 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
2016 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Treasury stock acquired - share repurchase authorization |
|
(600 |
) |
(800 |
) |
(750 |
) |
(1,000 |
) |
(550 |
) |
(550 |
) |
(1,400 |
) |
(1,100 |
) | ||||||||
Treasury stock acquired - net employee share-based compensation |
|
(71 |
) |
(1 |
) |
(1 |
) |
(1 |
) |
(59 |
) |
|
|
(72 |
) |
(59 |
) | ||||||||
Dividends paid to shareholders |
|
(177 |
) |
(192 |
) |
(188 |
) |
(182 |
) |
(180 |
) |
(195 |
) |
(369 |
) |
(375 |
) | ||||||||
Payment of debt |
|
|
|
|
|
|
|
(400 |
) |
|
|
(400 |
) |
|
|
(400 |
) | ||||||||
Issuance of debt |
|
|
|
|
|
392 |
|
|
|
|
|
491 |
|
|
|
491 |
| ||||||||
Issuance of common stock - employee share options |
|
90 |
|
27 |
|
25 |
|
41 |
|
64 |
|
65 |
|
117 |
|
129 |
| ||||||||
Excess tax benefits from share-based payment arrangements (1) |
|
27 |
|
4 |
|
11 |
|
13 |
|
|
|
|
|
31 |
|
|
| ||||||||
Net cash used in financing activities |
|
(731 |
) |
(962 |
) |
(511 |
) |
(1,529 |
) |
(725 |
) |
(589 |
) |
(1,693 |
) |
(1,314 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Effect of exchange rate changes on cash |
|
(8 |
) |
4 |
|
(5 |
) |
(3 |
) |
2 |
|
(5 |
) |
(4 |
) |
(3 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net increase (decrease) in cash |
|
(66 |
) |
9 |
|
27 |
|
36 |
|
(19 |
) |
(96 |
) |
(57 |
) |
(115 |
) | ||||||||
Cash at beginning of period |
|
374 |
|
308 |
|
317 |
|
344 |
|
380 |
|
361 |
|
374 |
|
380 |
| ||||||||
Cash at end of period |
|
$ |
308 |
|
$ |
317 |
|
$ |
344 |
|
$ |
380 |
|
$ |
361 |
|
$ |
265 |
|
$ |
317 |
|
$ |
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Income taxes paid |
|
$ |
126 |
|
$ |
471 |
|
$ |
285 |
|
$ |
325 |
|
$ |
63 |
|
$ |
404 |
|
$ |
597 |
|
$ |
467 |
|
Interest paid |
|
$ |
34 |
|
$ |
149 |
|
$ |
34 |
|
$ |
148 |
|
$ |
42 |
|
$ |
138 |
|
$ |
183 |
|
$ |
180 |
|
(1) In connection with the Companys adoption of the new accounting standard related to Improvements to Employee Share-Based Payment Accounting in the first quarter of 2016, cash flows related to taxes on share-based payments are included in net income as an operating activity rather than being reported separately as a financing activity.
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 (a) the sum of total adjusted shareholders equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
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 and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil 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, and Excess Casualty; National Accounts; First Party including National Property, Inland Marine, Ocean Marine and Boiler & Machinery; Specialized Distribution including Northland, National Programs, and Agribusiness; and International. As of January 1, 2016, Global Partner Services, which had previously been included in Middle Market, is now being included in International. Financial data for all periods presented has been restated to be consistent with the 2016 presentation. 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, and cyber risk 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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