New York, NY – The Travelers Companies, Inc. recently reported net income of $551 million, or $2.27 per diluted share, for the quarter ended June 30, 2022, compared to $934 million, or $3.66 per diluted share, in the prior year quarter. Core income in the current quarter was $625 million, or $2.57 per diluted share, compared to $879 million, or $3.45 per diluted share, in the prior year quarter.
Core income decreased primarily due to higher catastrophe losses, lower net investment income and a lower underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), partially offset by higher net favorable prior year reserve development. Core income in the prior year quarter benefited from a low level of catastrophe losses and very strong net investment income driven by record returns in the alternative investment portfolio. Net realized investment losses in the current quarter were $95 million pre-tax ($74 million after-tax), compared to net realized investment gains of $61 million pre-tax ($47 million after-tax) in the prior year quarter. Net realized investment gains (losses) for both quarters were primarily driven by mark-to-market impacts on the Company’s equity investments. Per diluted share amounts benefited from the impact of share repurchases.
“We are pleased to report very strong second quarter 2022 results, with both underwriting and investment income contributing meaningfully to our performance,” said Alan Schnitzer, Chairman and Chief Executive Officer. “Core income for the quarter was $625 million, or $2.57 per diluted share, generating core return on equity of 9.3%. These results benefited from record net earned premiums of $8.3 billion, which were 9% higher than in the prior year period, and a solid underlying combined ratio of 92.8%. Underwriting income in our commercial business segments was particularly strong. Our high-quality investment portfolio generated after-tax net investment income of $595 million. These results, along with our strong balance sheet, enabled us to return $725 million of excess capital to our shareholders this quarter, including $500 million of share repurchases.
“Our best-in-class marketplace execution produced 11% growth in net written premiums this quarter to a record $9 billion, with each of our three segments growing double digits. In Business Insurance, net written premiums grew by 10%. Renewal premium change was historically high at 10.3% and included renewal rate change of 4.9%, both higher compared to the first quarter of 2022. Retention remained very strong at 86%. In Bond & Specialty Insurance, net written premiums increased by 13%, driven by excellent production results in both our surety and management liability businesses. In Personal Insurance, renewal premium change was meaningfully higher both year over year and sequentially in both Auto and Homeowners, driving net written premium growth of 12%.
“Building on our excellent results in the first half of the year, we are confident about our outlook. Benefiting from the investments we have made and continue to make as part of our Perform and Transform call to action, guided by our decades of experience successfully executing in a variety of macro-economic conditions and supported by an outlook for improving fixed income returns, we remain well positioned to deliver industry-leading returns and shareholder value over time.”
The complete results release is available here: Travelers Second Quarter 2022 Results