01—Abstract
Summary
Summary of the 10-K filed February 16, 2017. Cited figures are marked; the original filing is the authoritative source.
Travelers Companies, Inc. (TRV) reported solid financial performance for the fiscal year ended December 31, 2016.
The company generated total revenues of $27.6 billiona, with net earned premiums of $24.5 billion. Net income for the year was $3.01 billion, or $10.28 per diluted share, reflecting a decrease from the prior year primarily due to higher catastrophe losses and lower underwriting margins, partially offset by favorable prior year reserve development and lower net investment income. The combined ratio improved slightly to 92.0%, indicating a continued focus on underwriting discipline.
The company maintained a strong balance sheet with total investments of $70.5 billionb and total assets of $100.2 billion. Shareholder returns were supported by $2.47 billion in common share repurchases and $757 million in dividends paid.
02—Key points
Key Highlights
- Total revenues reached $27.6 billion, with net earned premiums of $24.5 billion.
- Net income was $3.01 billion, or $10.28 per diluted share.
- Catastrophe losses amounted to $877 million (pre-tax), impacting underwriting results.
- Net favorable prior year reserve development was $771 million (pre-tax), providing a positive offset to current year results.
- The combined ratio improved to 92.0% from 94.3% in the Business and International segment, and 88.3% overall, indicating improved underwriting efficiency.
- Net investment income was $2.30 billion, reflecting a slight decrease due to lower reinvestment rates.
- The company returned significant capital to shareholders through $2.47 billion in share repurchases and $757 million in dividends.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 16, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $27.63B$26.82B | +3.0% |
| SG&A Expenses | $4.15B$4.09B | +1.5% |
| Interest Expense | $363.00M$373.00M | −2.7% |
| Net Income | $3.01B$3.44B | −12.4% |
| EPS (Basic) | $10.39$10.99 | −5.5% |
| EPS (Diluted) | $10.28$10.88 | −5.5% |
| Shares Outstanding (Basic) | 288.10M310.60M | −7.2% |
| Shares Outstanding (Diluted) | 291.00M313.90M | −7.3% |
05—Questions
Frequently Asked Questions
What was Travelers' net income and earnings per share for fiscal year 2016?
For the fiscal year ended December 31, 2016, Travelers reported a net income of $3.01 billion, or $10.39 per basic share and $10.28 per diluted share.
How did catastrophe losses impact Travelers' results in 2016?
Catastrophe losses totaled $877 million (pre-tax) for the year ended December 31, 2016, which negatively impacted the company's underwriting results, contributing 3.6 points to the combined ratio.
What is the breakdown of Travelers' business segments, and how did they perform in 2016?
Travelers operates through three reportable segments: Business and International Insurance, Bond & Specialty Insurance, and Personal Insurance. Business and International Insurance generated $2.05 billion in operating income, Bond & Specialty Insurance reported $653 million in operating income, and Personal Insurance had $510 million in operating income. Overall net income decreased by 12% year-over-year due to higher catastrophe losses and lower underwriting margins, partially offset by favorable reserve development and lower investment income.
How did Travelers manage its capital and return value to shareholders in 2016?
The company demonstrated a strong capital position and returned value to shareholders by repurchasing approximately $2.47 billion of its common stock and paying $757 million in dividends during 2016.
06—Continue