Travelers’ Cat Losses Plunge, Combined Ratio Improves for Q4

The Travelers Companies, Inc. enjoyed a large drop in catastrophe losses, improved combined ratio and rise in net income during a 2019 fourth quarter generally filled with improvements.

Pre-tax catastrophe losses came in at $85 million during Q4, compared to $610 million over the same period a year ago.

Net income reached $873 million, or $3.35 per diluted share for the quarter, versus $621 million, or $2.32 per diluted share in the 2018 fourth quarter. On top of that, the combined ratio came in at 92.4, improved over the 97.5 combined ratio from Q4 2018.

Alan Schnitzer, Travelers’ chairman and CEO, said in prepared remarks that lower catastrophe losses helped fuel the company’s strong results, along with “the continued successful execution of our strategy to grow the top line at attractive returns while improving operating leverage.”

Other result highlights:

• Q4 net written premiums surpassed $7 billion, up 6 percent compared to the year before. Similarly, full year net written premiums of $29.2 billion reflect a 5 percent increase over the previous year. In both cases the numbers reflect growth in all segments, Travelers said.
• Business insurance renewal premiums in Q4 grew 7.8 percent, a number Travelers said was the highest since 2013.
• 2019 fourth quarter net investment income came in at $616 million, down from $630 million the year before. For the year, net investment income of $2.5 billion was on par with 2018.
• Business Insurance experienced net unfavorable prior year reserve development at travelers. But Personal Insurance and Bond & Specialty Insurance booked net favorable prior year reserve development.
• During Q4, Travelers repurchased 2.9 million shares, costing $376 million.

Source: Travelers