TRAVELERS COMPANIES, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Summary

Travelers Companies, Inc. reported a strong first quarter for 2022, with net income increasing by 39% year-over-year to $1.02 billion, translating to diluted earnings per share of $4.15, a 45% increase. This growth was driven by a significant reduction in catastrophe losses compared to the prior year period and a substantial improvement in the combined ratio to 91.3% from 96.6% in Q1 2021. Earned premiums also saw a healthy 9% increase across all segments, indicating robust business growth. While net investment income saw a decrease due to lower returns from certain investment portfolios, the core insurance operations demonstrated strong performance. The company continued its commitment to shareholder returns, repurchasing $500 million in common stock and increasing its quarterly dividend by 6% to $0.93 per share. Despite market volatility and economic uncertainties, Travelers maintained a solid capital position, with a debt-to-total capital ratio of 22.2%.

Key Highlights

• 1Net income surged 39% to $1.02 billion in Q1 2022, with diluted EPS up 45% to $4.15.
• 2Earned premiums grew 9% year-over-year to $8.01 billion, signaling strong underlying business growth.
• 3The combined ratio improved significantly to 91.3% from 96.6% in the prior year, driven by lower catastrophe losses and improved underwriting margins.
• 4Catastrophe losses decreased substantially to $160 million from $835 million in Q1 2021.
• 5Shareholders received $773 million in capital returns, including $500 million in share repurchases and a 6% increase in the quarterly dividend.
• 6The company maintained a strong balance sheet with total investments of $83.66 billion and a debt-to-total capital ratio of 22.2%.
• 7Despite a decline in net investment income, particularly from private equity partnerships, core insurance operations showed resilience and growth.

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