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Travelers Posts Third Quarter Earnings Beat on Record Net Written Premiums

Travelers Companies posts third-quarter earnings that exceed analysts’ forecasts as a drop in what it calls ‘catastrophic losses’ offsets record net written premiums.

Travelers Companies  (TRV) - Get Free Report on Tuesday reported third-quarter earnings that rang in above analysts’ forecasts as a drop in what it calls ‘catastrophic losses’ related to natural disasters like fires and hurricanes offset record net written premiums.

The New York-based property casualty insurer said it earned $662 million, or $2.62 a share, down from $827 million, or $3.23 a share, a year ago. Analysts polled by FactSet had been expecting per-share earnings of $1.88 a share.

Revenue came in at $8.8 billion, below the $8.3 billion posted a year ago though also above analysts’ forecasts of $8.2 billion. Net written premiums were $8.32 billion vs. $7.77 billion in the third quarter of 2020.

Catastrophic events including storms and other natural disasters were partially responsible for the lower year-on-year numbers, Travelers said, though that was partially offset by higher net investment income and a higher underlying underwriting gain. 

The company clocked “catastrophe” losses of $501 million pre-tax compared to $397 million pre-tax in the prior year quarter. Offsetting that was a record $8.32 billion in net written premiums, which was up 7% from the previous year quarter.

“These results, together with our strong balance sheet, enabled us to return $821 million of excess capital to shareholders this quarter, including $601 million of share repurchases,' CEO Alan Schnitzer said in a statement, noting that "below-market-share losses" from Hurricane Ida were a direct result of the company's focus on streaming its operations and becoming more efficient. 

Meantime, the company’s board said it approved a quarterly cash dividend of 88 cents a share. It also said it repurchased 3.8 million shares during the third quarter at an average price of $155.56 a share for a total of $601 million. 

At the end of the quarter, statutory capital and surplus was $22.9 billion, and the ratio of debt-to-capital was 20.4%. 

Shares of Travelers were up 2.63% at $156.90 in premarket trading.