NEW YORK - The Travelers Companies, Inc. (NYSE: NYSE:TRV) reported a notable earnings beat for the second quarter of 2024, with a net income per diluted share of $2.29, surpassing the analyst consensus estimate of $2.25.
Despite a challenging quarter that included a record level of severe convective storms across the United States, the company's revenue reached $11.28 billion, slightly below the consensus estimate of $11.35 billion.
Travelers' stock edged up 1.92% following the earnings release. The earnings beat is attributed to a combination of net favorable prior year reserve development and higher net investment income, which helped offset significant catastrophe losses.
The company's consolidated combined ratio improved by 6.3 points from the prior year quarter to 100.2%. Catastrophe losses totaled $1.509 billion pre-tax, which was slightly higher than the $1.481 billion pre-tax in the prior year quarter. However, the underlying combined ratio saw an improvement of 3.4 points from the prior year quarter to an impressive 87.7%.
Travelers reported record net written premiums of $11.115 billion, an 8% increase from the same quarter last year, with growth observed across all three segments. Net investment income also saw a significant increase of 24% pre-tax over the prior year quarter, primarily driven by strong fixed income returns and growth in fixed maturity investments.
Alan Schnitzer, Chairman and Chief Executive Officer, commented on the results, "Core income of $585 million, or $2.51 per diluted share, benefited from excellent underlying results, favorable net prior year reserve development, and higher investment income." He also highlighted the company's strong marketplace execution and growth in net written premiums.
Travelers' book value per share stood at $109.08, marking a 14% increase over June 30, 2023, while the adjusted book value per share rose by 10% to $126.52. The Board of Directors declared a regular cash dividend of $1.05 per share, further underscoring the company's financial strength.
Looking ahead, Travelers remains confident in the outlook for its business, citing strong premium growth, excellent underlying underwriting profitability, and steadily rising investment returns in its growing fixed income portfolio.
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