Travelers Companies, Inc 10-Q for FY2024 Q1

Travelers Companies, Inc. (TRV)

10-Q 2024-04-17 For: 2024-03-31

Added on April 09, 2026

About this 10-Q

Travelers Companies, Inc filed this 10-Q on April 17, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.23B; up 15.7% from $9.7B a year earlier
Net income: $1.12B; up 15.2% from net income of $975M a year earlier
Diluted EPS: $4.80; up 16.2% from $4.13 a year earlier

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Minnesota						41-0518860
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page
	Part I — Financial Information

Item 1.	Financial Statements:

	Consolidated Statement of Income (Unaudited) — Three Months Ended March 31, 2024 and 2023	3

	Consolidated Statement of Comprehensive Income (Loss) (Unaudited) — Three Months Ended March 31, 2024 and 2023	4

	Consolidated Balance Sheet — March 31, 2024 (Unaudited) and December 31, 2023	5

	Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) — Three Months Ended March 31, 2024 and 2023	6

	Consolidated Statement of Cash Flows (Unaudited) — Three Months Ended March 31, 2024 and 2023	7

	Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57

Item 4.	Controls and Procedures	57

	Part II — Other Information

Item 1.	Legal Proceedings	58

Item 1A.	Risk Factors	58

Item 2.	Unregistered Sales of Equity Securitie s and Use of Proceeds	58

Item 5.	Other Information	59

Item 6.	Exhibits	59

	SIGNATURES	60


	Three Months Ended March 31,
	2024		2023
Revenues
Premiums	$	10,126	$	8,854
Net investment income	846		663
Fee income	109		106
Net realized investment gains	35		6
Other revenues	112		75
Total revenues	11,228		9,704
Claims and expenses
Claims and claim adjustment expenses	6,656		5,959
Amortization of deferred acquisition costs	1,698		1,462
General and administrative expenses	1,406		1,267
Interest expense	98		88
Total claims and expenses	9,858		8,776
Income before income taxes	1,370		928
Income tax expense (benefit)	247		(47)
Net income	$	1,123	$	975
Net income per share
Basic	$	4.87	$	4.18
Diluted	$	4.80	$	4.13
Weighted average number of common shares outstanding
Basic	229.0		231.7
Diluted	232.0		234.4

Cash dividends declared per common share	$	1.00	$	0.93


	Three Months Ended March 31,
	2024		2023
Net income	$	1,123	$	975
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investment securities:
Having no credit losses recognized in the consolidated statement of income	(752)		1,308
Having credit losses recognized in the consolidated statement of income	2		—
Net changes in benefit plan assets and obligations	(1)		(3)
Net changes in unrealized foreign currency translation	(71)		37
Other comprehensive income (loss) before income taxes	(822)		1,342
Income tax expense (benefit)	(162)		283
Other comprehensive income (loss), net of taxes	(660)		1,059
Comprehensive income	$	463	$	2,034


	March 31, 2024		December 31, 2023
	(Unaudited)
Assets
Fixed maturities, available for sale, at fair value (amortized cost $82,712 and $81,781; allowance for expected credit losses of $3 and $5)	$	77,991	$	77,807
Equity securities, at fair value (cost $557 and $553)	689		608
Real estate investments	958		959
Short-term securities	4,682		5,137
Other investments	4,337		4,299
Total investments	88,657		88,810
Cash	667		650
Investment income accrued	648		688
Premiums receivable (net of allowance for expected credit losses of $68 and $69)	10,829		10,282
Reinsurance recoverables (net of allowance for estimated uncollectible reinsurance of $117 and $118)	8,100		8,143
Ceded unearned premiums	1,535		1,150
Deferred acquisition costs	3,380		3,306
Deferred taxes	1,639		1,504
Contractholder receivables (net of allowance for expected credit losses of $19 and $20)	3,266		3,249
Goodwill	4,251		3,976
Other intangible assets	376		277
Other assets	4,062		3,943
Total assets	$	127,410	$	125,978
Liabilities
Claims and claim adjustment expense reserves	$	62,487	$	61,627
Unearned premium reserves	21,307		20,872
Contractholder payables	3,285		3,269
Payables for reinsurance premiums	887		518
Debt	8,032		8,031
Other liabilities	6,390		6,740
Total liabilities	102,388		101,057
Shareholders’ equity
Common stock (1,750.0 shares authorized; 229.0 and 228.2 shares issued and outstanding)	25,163		24,906
Retained earnings	46,483		45,591
Accumulated other comprehensive loss	(5,131)		(4,471)
Treasury stock, at cost (561.0 and 559.2 shares)	(41,493)		(41,105)
Total shareholders’ equity	25,022		24,921
Total liabilities and shareholders’ equity	$	127,410	$	125,978


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities
Net income	$	1,123	$	975
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized investment gains	(35)		(6)
Depreciation and amortization	196		204
Deferred federal income tax expense	42		32
Amortization of deferred acquisition costs	1,698		1,462
Equity in income from other investments	(68)		(30)
Premiums receivable	(557)		(557)
Reinsurance recoverables	33		(24)
Deferred acquisition costs	(1,776)		(1,629)
Claims and claim adjustment expense reserves	928		381
Unearned premium reserves	457		893
Other	(583)		(689)
Net cash provided by operating activities	1,458		1,012
Cash flows from investing activities
Proceeds from maturities of fixed maturities	1,709		1,538
Proceeds from sales of investments:
Fixed maturities	942		2,364
Equity securities	21		28

Other investments	55		64
Purchases of investments:
Fixed maturities	(3,738)		(4,335)
Equity securities	(26)		(34)
Real estate investments	(13)		(14)
Other investments	(90)		(139)
Net sales of short-term securities	454		228
Securities transactions in the course of settlement	111		(35)
Acquisition, net of cash acquired	(381)		—
Other	(81)		(120)
Net cash used in investing activities	(1,037)		(455)
Cash flows from financing activities
Treasury stock acquired — share repurchase authorizations	(250)		(398)
Treasury stock acquired — net employee share-based compensation	(110)		(62)
Dividends paid to shareholders	(229)		(215)


Issuance of common stock — employee share options	190		82
Net cash used in financing activities	(399)		(593)
Effect of exchange rate changes on cash	(5)		4
Net increase (decrease) in cash	17		(32)
Cash at beginning of year	650		799
Cash at end of period	$	667	$	767
Supplemental disclosure of cash flow information
Income taxes paid (received)	$	24	$	(16)
Interest paid	$	60	$	60
Supplemental disclosure of noncash financing activities
Issuance of common stock — net share settlement of employee options	$	28	$	—


(For the three months ended March 31, in millions)	Business Insurance		Bond & Specialty Insurance		Personal Insurance		Total Reportable Segments
2024
Premiums	$	5,160	$	956	$	4,010	$	10,126
Net investment income	609		90		147		846
Fee income	101		—		8		109
Other revenues	77		9		26		112
Total segment revenues (1)	$	5,947	$	1,055	$	4,191	$	11,193
Segment income (1)	$	764	$	195	$	220	$	1,179

2023
Premiums	$	4,477	$	875	$	3,502	$	8,854
Net investment income	473		73		117		663
Fee income	99		—		7		106
Other revenues	47		5		23		75
Total segment revenues (1)	$	5,096	$	953	$	3,649	$	9,698
Segment income (1)	$	756	$	207	$	83	$	1,046


	Three Months Ended March 31,
(in millions)	2024		2023
Revenue reconciliation
Earned premiums
Business Insurance:
Domestic:
Workers’ compensation	$	880	$	850
Commercial automobile	860		761
Commercial property	873		709
General liability	847		760
Commercial multi-peril	1,270		1,100
Other	17		18
Total Domestic	4,747		4,198
International	413		279
Total Business Insurance	5,160		4,477
Bond & Specialty Insurance:
Domestic:
Fidelity and surety	340		306
General liability	426		398
Other	56		54
Total Domestic	822		758
International	134		117
Total Bond & Specialty Insurance	956		875
Personal Insurance:
Domestic:
Automobile	1,874		1,624
Homeowners and Other	1,972		1,724
Total Domestic	3,846		3,348
International	164		154
Total Personal Insurance	4,010		3,502
Total earned premiums	10,126		8,854
Net investment income	846		663
Fee income	109		106
Other revenues	112		75
Total segment revenues	11,193		9,698

Net realized investment gains	35		6
Total revenues	$	11,228	$	9,704
Income reconciliation, net of tax
Total segment income	$	1,179	$	1,046
Interest Expense and Other (1)	(83)		(76)
Core income	1,096		970
Net realized investment gains	27		5

Net income	$	1,123	$	975


	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized				Fair Value
(at March 31, 2024, in millions)					Gains		Losses
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	6,489	$	—	$	1	$	250	$	6,240
Obligations of U.S. states, municipalities and political subdivisions:
Local general obligation	18,138		—		41		1,455		16,724
Revenue	9,419		—		27		700		8,746
State general obligation	1,156		—		3		67		1,092
Pre-refunded	952		—		2		4		950
Total obligations of U.S. states, municipalities and political subdivisions	29,665		—		73		2,226		27,512
Debt securities issued by foreign governments	970		—		1		32		939
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	9,076		—		68		224		8,920
Corporate and all other bonds	36,512		3		103		2,232		34,380
Total	$	82,712	$	3	$	246	$	4,964	$	77,991



(at March 31, 2024, in millions)	Cost		Gross Gains		Gross Losses		Fair Value
Common stock	$	512	$	142	$	13	$	641
Non-redeemable preferred stock	45		3		—		48
Total	$	557	$	145	$	13	$	689


(at December 31, 2023, in millions)	Cost		Gross Gains		Gross Losses		Fair Value
Common stock	$	508	$	93	$	41	$	560
Non-redeemable preferred stock	45		3		—		48
Total	$	553	$	96	$	41	$	608


	Less than 12 months				12 months or longer				Total
(at March 31, 2024, in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	2,866	$	17	$	2,869	$	233	$	5,735	$	250
Obligations of U.S. states, municipalities and political subdivisions	6,958		67		15,198		2,159		22,156		2,226
Debt securities issued by foreign governments	134		1		696		31		830		32
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	3,106		29		1,689		195		4,795		224
Corporate and all other bonds	2,957		28		25,668		2,204		28,625		2,232
Total	$	16,021	$	142	$	46,120	$	4,822	$	62,141	$	4,964


	Period For Which Fair Value is Less Than 80% of Amortized Cost
(at March 31, 2024, in millions)	3 months or less		Greater than 3 months, 6 months or less		Greater than 6 months, 12 months or less		Greater than 12 months		Total
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	—	$	—	$	—	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	224		—		8		708		940
Debt securities issued by foreign governments	—		—		—		—		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	44		—		—		—		44
Corporate and all other bonds	41		2		1		23		67
Total	$	309	$	2	$	9	$	731	$	1,051


	Fixed Maturities
	Corporate and All Other Bonds
	At and For the Three Months Ended
(in millions)	March 31, 2024		March 31, 2023

Balance, beginning of period	$	5	$	3
Additions for expected credit losses on securities where no credit losses were previously recognized	3		—
Additions for expected credit losses on securities where credit losses were previously recognized	—		1
Reductions due to sales/defaults of credit-impaired securities	(5)		—
Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell	—		—
Balance, end of period	$	3	$	4


(at March 31, 2024, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related (1)	$	186	$	63	$	123
Contract-based (2)	204		194		10
Marketing-related (3)	18		1		17
Total subject to amortization	408		258		150
Not subject to amortization	226		—		226
Total	$	634	$	258	$	376


(at December 31, 2023, in millions)	Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Customer-related	$	100	$	59	$	41
Contract-based (2)	204		194		10
Total subject to amortization	304		253		51
Not subject to amortization	226		—		226
Total	$	530	$	253	$	277


(at March 31, 2024, in millions)	Total		Level 1		Level 2		Level 3
Invested assets:
Fixed maturities
U.S. Treasury securities and obligations of U.S. government and government agencies and authorities	$	6,240	$	6,240	$	—	$	—
Obligations of U.S. states, municipalities and political subdivisions	27,512		—		27,512		—
Debt securities issued by foreign governments	939		—		939		—
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities	8,920		—		8,899		21
Corporate and all other bonds	34,380		—		34,125		255
Total fixed maturities	77,991		6,240		71,475		276
Equity securities
Common stock	641		634		—		7
Non-redeemable preferred stock	48		15		3		30
Total equity securities	689		649		3		37
Other investments	18		18		—		—
Total	$	78,698	$	6,907	$	71,478	$	313


(at March 31, 2024, in millions)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets
Short-term securities	$	4,682	$	4,682	$	999	$	3,634	$	49
Financial liabilities
Debt	$	7,932	$	7,406	$	—	$	7,406	$	—
Commercial paper	100		100		—		100		—


	At and For the Three Months Ended March 31, 2024				At and For the Three Months Ended March 31, 2023
(in millions)	Premiums Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses		Premiums Receivable, Net of Allowance for Expected Credit Losses		Allowance for Expected Credit Losses

Balance, beginning of period	$	10,282	$	69	$	8,922	$	77

Current period change for expected credit losses			12				10
Write-offs of uncollectible premiums receivable			13				10
Balance, end of period	$	10,829	$	68	$	9,483	$	77


	Changes in Net Unrealized Gains (Losses) on Investment Securities
(in millions)	Having No Credit Losses Recognized in the Consolidated Statement of Income		Having Credit Losses Recognized in the Consolidated Statement of Income		Net Benefit Plan Assets and Obligations Recognized in Shareholders’ Equity		Net Unrealized Foreign Currency Translation		Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2023	$	(3,309)	$	180	$	(458)	$	(884)	$	(4,471)
Other comprehensive income (loss) (OCI) before reclassifications, net of tax	(626)		2		—		(67)		(691)
Amounts reclassified from AOCI, net of tax	32		—		(1)		—		31
Net OCI, current period	(594)		2		(1)		(67)		(660)
Balance, March 31, 2024	$	(3,903)	$	182	$	(459)	$	(951)	$	(5,131)


	Three Months Ended March 31,
(in millions, except per share amounts)	2024		2023
Basic and Diluted
Net income, as reported	$	1,123	$	975
Participating share-based awards — allocated income	(8)		(7)
Net income available to common shareholders — basic and diluted	$	1,115	$	968
Common Shares
Basic
Weighted average shares outstanding	229.0		231.7
Diluted
Weighted average shares outstanding	229.0		231.7
Weighted average effects of dilutive securities — stock options and performance shares	3.0		2.7
Total	232.0		234.4
Net Income per Common Share
Basic	$	4.87	$	4.18
Diluted	$	4.80	$	4.13


Stock Options	Number	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining	Aggregate Intrinsic Value ($ in millions)
Vested at end of period (1)	6,832,710	$	146.39	6.0 years	$	572
Exercisable at end of period	5,162,950	$	132.57	5.1 years	$	504


	Pension Plans				Postretirement Benefit Plans
(for the three months ended March 31, in millions)	2024		2023		2024		2023
Net Periodic Benefit Cost (Benefit):
Service cost	$	29	$	27	$	—	$	—
Non-service cost (benefit):
Interest cost on benefit obligation	43		44		1		1
Expected return on plan assets	(75)		(78)		—		—

Amortization of unrecognized:
Prior service benefit	—		—		(1)		(1)
Net actuarial (gain) loss	2		—		(2)		(2)
Total non-service cost (benefit)	(30)		(34)		(2)		(2)
Net periodic benefit cost (benefit)	$	(1)	$	(7)	$	(2)	$	(2)


	Three Months Ended March 31,
(in millions, except ratio and per share amounts)	2024			2023
Revenues
Premiums	$	10,126		$	8,854
Net investment income	846			663
Fee income	109			106
Net realized investment gains	35			6
Other revenues	112			75
Total revenues	11,228			9,704
Claims and expenses
Claims and claim adjustment expenses	6,656			5,959
Amortization of deferred acquisition costs	1,698			1,462
General and administrative expenses	1,406			1,267
Interest expense	98			88
Total claims and expenses	9,858			8,776
Income before income taxes	1,370			928
Income tax expense (benefit)	247			(47)
Net income	$	1,123		$	975
Net income per share
Basic	$	4.87		$	4.18
Diluted	$	4.80		$	4.13
Combined ratio
Loss and loss adjustment expense ratio	65.2		%	66.7		%
Underwriting expense ratio	28.7			28.7
Combined ratio	93.9		%	95.4		%


	Three Months Ended March 31,
(dollars in millions)	2024			2023
Average investments (1)	$	94,677		$	88,740
Pre-tax net investment income	846			663
After-tax net investment income	698			557
Average pre-tax yield (2)	3.6		%	3.0		%
Average after-tax yield (2)	2.9		%	2.5		%


	Losses Incurred/Unfavorable (Favorable) Prior Year Reserve Development
	Three Months Ended March 31,
			Estimated Ultimate Losses
(in millions, pre-tax and net of reinsurance) (1)	2024	2023		March 31, 2024	December 31, 2023









































2022
PCS Serial Number:
33 — Severe wind and hail storms	1	(7)		139	138
35 — Severe wind and hail storms	2	(2)		186	184
43 — Severe wind and hail storms	1	(10)		117	116
61 — Hurricane Ian	(2)	(53)		149	151
73 — Winter storm	5	143		675	670
2023
PCS Serial Number:
25 — Severe wind and hail storms	(2)	148		151	153
32 — Severe wind and hail storms	1	119		141	140
33 — Severe wind and hail storms	—	n/a		199	199
35 — Severe wind and hail storms	(2)	n/a		138	140
38 — Severe wind and hail storms	—	n/a		110	110
42 — Severe wind and hail storms	9	n/a		142	133
48 — Severe wind and hail storms	—	n/a		150	150
49 — Severe wind and hail storms	(1)	n/a		132	133
51 — Severe wind and hail storms	—	n/a		265	265
63 — Severe wind and hail storms	—	n/a		125	125
75 — Severe wind and hail storms	1	n/a		191	190
2024
PCS Serial Number:
26 — Severe wind and hail storms	259	n/a		259	n/a


	Gross Written Premiums
	Three Months Ended March 31,
(in millions)	2024		2023
Business Insurance	$	6,383	$	5,828
Bond & Specialty Insurance	1,076		1,010
Personal Insurance	3,851		3,509
Total	$	11,310	$	10,347


	Net Written Premiums
	Three Months Ended March 31,
(in millions)	2024		2023
Business Insurance	$	5,596	$	5,157
Bond & Specialty Insurance	943		886
Personal Insurance	3,643		3,353
Total	$	10,182	$	9,396


(at and for the three months ended March 31, in millions)	2024		2023
Beginning reserves:
Gross	$	1,768	$	1,674
Ceded	(390)		(369)
Net	1,378		1,305
Incurred losses and loss expenses:
Gross	—		—
Ceded	—		—
Net	—		—
Paid loss and loss expenses:
Gross	82		54
Ceded	(8)		(21)
Net	74		33
Foreign exchange and other:
Gross	—		—
Ceded	—		—
Net	—		—
Ending reserves:
Gross	1,686		1,620
Ceded	(382)		(348)
Net	$	1,304	$	1,272


Period Beginning	Period Ending	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
January 1, 2024	January 31, 2024	201,899	$	211.66	201,441	$	5,997
February 1, 2024	February 29, 2024	1,185,953	$	216.50	549,741	$	5,878
March 1, 2024	March 31, 2024	403,089	$	220.85	399,331	$	5,790
Total		1,790,941	$	216.93	1,150,513	$	5,790


Exhibit Number						Description of Exhibit

3.1						Amended and Restated Articles of Incorporation of The Travelers Companies, Inc., as amended and restated May 23, 2013, were filed as Exhibit 3.1 to the Company’s current report on Form 8-K filed on May 24, 2013, and are incorporated herein by reference.

3.2						Bylaws of The Travelers Companies, Inc. as Amended and Restated December 7, 2022, were filed as Exhibit 3.2 to the Company’s current report on Form 8-K filed on December 12, 2022, and are incorporated herein by reference.



31.1†						Certification of Alan D. Schnitzer, Chairman and Chief Executive Officer of the Company, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2†						Certification of Daniel S. Frey, Executive Vice President and Chief Financial Officer of the Company, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†						Certification of Alan D. Schnitzer, Chairman and Chief Executive Officer of the Company, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2†						Certification of Daniel S. Frey, Executive Vice President and Chief Financial Officer of the Company, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101.1†						The following information from The Travelers Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 formatted in Inline XBRL: (i) Consolidated Statement of Income for the three months ended March 31, 2024 and 2023; (ii) Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023; (iii) Consolidated Balance Sheet at March 31, 2024 and December 31, 2023; (iv) Consolidated Statement of Changes in Shareholders’ Equity for the three months ended March 31, 2024 and 2023; (v) Consolidated Statement of Cash Flows for the three months ended March 31, 2024 and 2023; (vi) Notes to Consolidated Financial Statements; and (vii) the cover page.

104.1						Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1).


		THE TRAVELERS COMPANIES, INC.
		(Registrant)

Date: April 17, 2024	By	/S/ CHRISTINE K. KALLA
		Christine K. Kalla Executive Vice President and General Counsel (Authorized Signatory)

Date: April 17, 2024	By	/S/ PAUL E. MUNSON
		Paul E. Munson Senior Vice President and Corporate Controller (Principal Accounting Officer)