Banking, finance, and taxes

Why Travelers Growth in Q2 Still Disappoints

Chris Lange

Published: July 23, 2019 9:40 am

Last Updated: January 30, 2020 6:16 pm

Travelers Companies Inc. (NYSE: TRV) released its second-quarter financial results before the markets opened on Tuesday. The company said that it had $2.02 in earnings per share (EPS) and $7.45 billion in revenue, while consensus estimates had called for $2.29 in EPS and $7.43 billion in revenue. The same period of last year reportedly had $1.81 in EPS and $7.13 billion in revenue.

During the latest quarter, Travelers posted record net written premiums of $7.450 billion, up 4%, reflecting growth in all segments. Renewal premium change in Business Insurance was 6.7%, the highest level since 2014.

Book value per share was up 12% to $97.26 from year-end 2018, and adjusted book value per share was up 3% at $90.05.

Travelers did not release any guidance with its report. However, consensus estimates are calling for $2.47 in EPS and $7.36 billion in revenue for the third quarter.

Alan Schnitzer, board chair and chief executive, commented:

The increase in earnings was driven by the successful execution of our strategy to profitably grow our top line and thoughtfully manage our expenses, along with strong performance from our investment portfolio, partially offset by lower favorable prior year reserve development. While catastrophe losses were lower than in the prior year quarter, all-in weather losses were modestly higher, due to higher non-catastrophe weather-related losses which adversely impacted the underlying combined ratio of 94.9% by nearly two points compared to the prior year quarter.

Shares of Travelers traded down fractionally early Tuesday, at $149.14 in a 52-week range of $111.08 to $155.09. The consensus price target is $151.94.

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