New York, NY – The Travelers Companies, Inc. recently reported a net loss of $14 million, or $0.07 per diluted share, for the quarter ended June 30, 2023, compared to net income of $551 million, or $2.27 per diluted share, in the prior year quarter. Core income in the current quarter was $15 million, or $0.06 per diluted share, compared to $625 million, or $2.57 per diluted share, in the prior year quarter.
Core income decreased primarily due to higher catastrophe losses. The underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses) was higher, while net favorable prior year reserve development was lower. Net realized investment losses in the current quarter were $35 million pre-tax ($29 million after-tax), compared to $95 million pre-tax ($74 million after-tax) in the prior year quarter. Per diluted share amounts benefited from the impact of share repurchases.
“This quarter we reported strong underlying results and investment returns, as well as net favorable prior year reserve development, which were essentially offset by an historic level of industry-wide catastrophe losses,” said Alan Schnitzer, Chairman and Chief Executive Officer. “The fact that we were able to generate positive core income notwithstanding $1.5 billion of pre-tax catastrophe losses reflects the strength of our franchise and the resiliency of our underlying business model.
“We are very pleased with the underlying fundamentals of our business. Pre-tax underlying underwriting income of $781 million for the quarter was up 38% over the prior year quarter, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio which improved by 1.7 points to an excellent 91.1%. Earned premiums were higher in all three of our business segments. The underlying combined ratio in our Business Insurance segment improved by three points to an excellent 89.4%; the underlying combined ratio in our Bond & Specialty Insurance business was higher but still strong at 87.8%; and the underlying combined ratio in Personal Insurance improved by two points to 94.1%. Our high-quality investment portfolio continued to perform well, generating after-tax net investment income of $594 million. As a reflection of our confidence in our business, we returned $633 million of excess capital to our shareholders this quarter, including $400 million of share repurchases.
“Excellent marketplace execution across all three segments delivered growth of $1.3 billion, or 14%, in net written premiums to a record $10.3 billion. In Business Insurance, we grew net written premiums by 18%. Renewal premium change in the segment was a record high at 12.8%, driven by renewal rate change which accelerated 2.5 points sequentially to 7.2%, while retention remained very strong at 88%. New business increased 36% led by the property line. In Bond & Specialty Insurance, record net written premiums were about even with the prior year quarter. Given the attractive returns, we are very pleased with the strong production results in both of our commercial business segments. In Personal Insurance, 13% top-line growth was driven by higher pricing. Renewal premium change was 19.2% in our Homeowners and Other business and increased to a record high 16.1% in our Auto business.
“We are very confident in the outlook for our business. We have terrific underlying fundamentals in our commercial businesses, improving underlying results in our personal insurance business and steadily rising investment returns in our fixed income portfolio. Across the organization, we are leveraging our scale, expertise and proven track record of execution to invest in exciting new capabilities to advance our ambitious innovation agenda. With that momentum and the best talent in the industry, we are well positioned to continue to deliver industry-leading returns and shareholder value over time.”
The complete results release is available here: Travelers Second Quarter 20234 and Year-to-Date Results