Early Access

10-QPeriod: Q2 FY2008

TRAVELERS COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2008

Filed July 23, 2008For Securities:TRV

Summary

The Travelers Companies, Inc. (TRV) reported net income of $942 million ($1.54 per diluted share) for the second quarter of 2008, a decrease from $1.25 billion ($1.86 per diluted share) in the same period last year. This decline was primarily attributed to higher catastrophe losses, increased large property losses, reduced net investment income, and competitive pricing pressures impacting underwriting results. Despite these challenges, the company benefited from significant favorable prior year reserve development, which amounted to $526 million before tax. Financially, the company maintained a strong balance sheet with total assets of $113.63 billion and shareholders' equity of $25.92 billion. Travelers also continued its share repurchase program, buying back 15.3 million shares for approximately $750 million during the quarter, with $4.18 billion remaining authorized capacity. The company's investment portfolio remains high-quality, with 94% in fixed maturities and short-term securities, though net investment income saw a notable decrease driven by lower returns from non-fixed maturity investments and declining short-term interest rates.

Financial Highlights

21 data points
Beta

Revenue

$6.29B

Net Income

$942.00M

0.1% Net Margin

EPS (Diluted)

$1.54

Cash & Equivalents

$329.00M

Free Cash Flow

$1.63B

Financial Statements
Beta
Revenue$6.29B
Interest Expense$91.00M
Net Income$942.00M
EPS (Basic)$1.56
EPS (Diluted)$1.54
Shares Outstanding (Basic)598.20M
Shares Outstanding (Diluted)607.90M

Key Highlights

  • 1Net income for Q2 2008 was $942 million, or $1.54 per diluted share, down from $1.25 billion, or $1.86 per diluted share, in Q2 2007.
  • 2Favorable prior year reserve development significantly boosted results, totaling $526 million pre-tax for the quarter.
  • 3Catastrophe losses increased substantially to $356 million pre-tax, compared to $40 million in the prior year's second quarter.
  • 4Net investment income decreased by 21% to $778 million pre-tax, mainly due to lower returns from real estate and private equity investments.
  • 5The company repurchased approximately $750 million of its common stock in the quarter, reflecting a continued commitment to capital return.
  • 6The GAAP combined ratio improved slightly to 89.3% from 87.8% in the prior year's second quarter, largely due to favorable reserve development.
  • 7Earned premiums remained relatively stable, increasing by less than 1% to $5.36 billion.

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