The Travelers Companies CEO Alan Schnitzer reassured analysts that the insurer “has lots of levers” it can pull to keep improving margins and profitability, even though its combined ratio ticked higher in Q2.
Travelers noted a combined ratio for the 2019 second quarter of 98.4, a jump of 0.3 points due to a higher underlying combined ratio and lower net favorable prior year reserve development. The jump came in part from higher non-catastrophe weather-related losses and lower net favorable prior year reserve development, according to the insurer, even as net income soared 6 percent to $557 million.
Schnitzer told analysts during the company’s Q2 investor call on July 23 that it remains on track with a program that has included price increases and better productivity and efficiency through investments in technology and “workflow enhancements.” The combined ratio increase won’t affect that trajectory, he added.
“There are a lot of levers we have to pull to manage overall margins and profitability, including price terms and conditions, and we are working on all of those things relentlessly in the market every day,” Schnitzer said during the call. “That will impact premium we put on the books and that will also add in over time.”
At the same time, Schnitzer noted that workers compensation is one area of the business that “continued to be negative in the quarter,” though he added that this comes in part from “competitive sensitivity.”