Earnings Review and Free Research Report: Travelers Cos. Posted Record Net Premium Written; Exceeded Revenue Expectations

Research Desk Line-up: Everest Re Group Post Earnings Coverage

LONDON, UK / ACCESSWIRE / July 26, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on The Travelers Cos, Inc. (NYSE: TRV) ("TRV"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=TRV, following the Company's release of its second quarter fiscal 2017 earnings results on July 20, 2017. The leading writer of auto and homeowners' insurance recorded a 6% gain in revenue on a y-o-y basis, while net investment income grew 9%. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Property & Casualty Insurance industry. Pro-TD has currently selected Everest Re Group, Ltd (NYSE: RE) for due-diligence and potential coverage as the Company reported on July 24, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on Everest Re Group when we publish it.

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Earnings Reviewed

For the quarter ended June 30, 2017, TRV posted record net written premiums of $6.64 billion up 5% on a y-o-y basis, reflecting growth in all segments. The Company recorded total revenues of $7.18 billion, up 6% compared to revenue of $6.79 billion in the prior year's corresponding quarter. TRV's revenue numbers exceeded analysts' estimates of $6.9 billion

For Q2 2017, TRV reported net income of $595 million, or $2.11 per diluted share, compared to $664 million, or $2.24 per diluted share, in Q2 2016. The Company's core income in the reported quarter totaled $543 million, or $1.92 per diluted share, compared to $649 million, or $2.20 per diluted share, in the prior year's same quarter due to lower net favorable prior year's reserve development, higher catastrophe losses, and a lower underlying underwriting gain. TRV's core earnings numbers fell short of Wall Street's expectations of $2.07.

Underwriting results

During Q2 2017, TRV's combined ratio of 96.7% increased 3.6 points due to lower net favorable prior year's reserve development, a higher underlying combined ratio, and higher catastrophe losses. The Company's underlying combined ratio of 93.5% increased 1.2 points, primarily driven by the timing impact of higher loss estimates in personal auto bodily injury liability coverage and normal quarterly variability in non-catastrophe weather-related losses.

TRV's net investment income was $598 million pre-tax, increasing 9% on the back of higher private equity returns, but partially offset by fixed income returns decline due to lower reinvestment rates available in the market.

Segment Results

For Q2 2017, TRV's Business Insurance segment's net written premiums were $3.54 billion, increasing 2% compared to $3.47 billion in Q2 2016. Net written premiums benefited from continued strong retention and improved renewal premium change. Business Insurance segment's income totaled $429 million after-tax, an increase of $28 million compared to the segment's income of $401 million in Q2 2016, primarily driven by higher net investment income and a slightly higher underlying underwriting gain.

During the reported quarter, the segment's combined ratio of 96.5% was consistent on a y-o-y basis, while underlying combined ratio of 94.8% improved 0.5 points due to a lower expense ratio.

For Q2 2017, TRV's Bond & Specialty Insurance segment recorded net written premiums of $598 million, up 5% on a y-o-y basis, driven by strong retentions and higher renewal premium change in the Domestic business as well as increases in management liability in the United Kingdom and contract surety in Canada. Bond & Specialty Insurance's segment's income was $163 million after-tax, reflecting a drop of $52 million, due to lower net favorable prior year's reserve development. The division's combined ratio of 68.7% increased 14.2 points due to lower net favorable prior year's reserve development, which was partially offset by a lower underlying combined ratio and lower catastrophe losses.

TRV's Personal Insurance segment had recorded net written premiums of $2.50 billion in Q2 2017, growing 8% compared to $2.30 billion in Q2 2016. The segment's Agency Automobile net written premiums grew 14% on a y-o-y basis. Agency Homeowners & Other net written premiums grew 4%, with an increase in policies in force of 4% on a y-o-y basis.

For Q2 2017, Personal Insurance segment's income of $12 million after-tax compared to $95 million in Q2 2016, the decline was primarily driven by a lower underlying underwriting gain and higher catastrophe losses.

Personal Insurance segment's combined ratio of 104.1% increased 6.3 points due to a higher underlying combined ratio, higher catastrophe losses, and no net prior year's reserve development compared to net favorable prior year's reserve development in Q2 2016. The underlying combined ratio of 94.5% increased 4.3 points.

Shareholders' Equity

At the end of Q2 2017, TRV's shareholders' equity of $23.86 billion increased 3% from the end of FY16. The Company's pre-tax net unrealized investment gains were $1.59 billion compared to $1.11 billion pre-tax at year-end 2016. TRV's book value per share totaled $86.46 and adjusted book value per share grew $82.71, reflecting a gain of 4% and 3%, respectively, from year-end 2016.

During Q2 2017, TRV repurchased 3.8 million shares at an average price of $123.04 per share for a total cost of $475 million. Capacity remaining under the existing share repurchase authorization was $5.23 billion at the end of the quarter. At the end of Q2 2017, the Company's statutory capital and surplus were $20.61 billion and the ratio of debt-to-capital was 22.5%. The ratio of debt-to-capital, excluding after-tax net unrealized investment gains, was 23.3%, which was within the Company's target range of 15% to 25%.

On July 20, 2017, TRV's Board of Directors declared a quarterly dividend of $0.72 per share. This dividend is payable on September 29, 2017, to shareholders of record as of the close of business on September 08, 2017.

Stock Performance

At the closing bell, on Tuesday, July 25, 2017, Travelers Cos.' stock slightly climbed 0.85%, ending the trading session at $127.46. A total volume of 1.57 million shares has exchanged hands, which was higher than the 3-month average volume of 1.37 million shares. The Company's stock price advanced 5.06% in the last three months, 9.09% in the past six months, and 8.52% in the previous twelve months. Moreover, the stock gained 4.12% since the start of the year. The stock is trading at a PE ratio of 12.70 and has a dividend yield of 2.26%. The stock currently has a market cap of $35.45 billion.

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