TRAVELERS COMPANIES, INC. Q4 FY2024 earnings call

• Strong full-year core income up 64% to over $5 billion, core ROE 17.2%. Fourth quarter core income $2.1 billion, record. Net earned premiums up 9%, combined ratio 83.2%.
• Investments after tax net investment income up 21% to $3 billion. Net written premiums grew 8% to over $43 billion full-year, 7% in Q4.
• Strategic innovation priorities: extending risk expertise, customer experiences, productivity/efficiency. Technology investments over $1.5 billion, strategic tech investment approaching half in 2024.
• Underwriting income tripled over 8 years to $4.5 billion after tax in 2024

Business Insurance

• Fourth quarter segment income nearly $1.2 billion, up ~25% from prior year quarter. Net written premiums grew 8% to $5.4 billion in Q4. Renewal premium change was 9.6%, retention 85%. Underlying combined ratio 86.2%. Full-year segment income over $3.3 billion, underlying combined ratio 88.1%, net written premiums over $22 billion.

Bond & Specialty Insurance

• Fourth quarter segment income $228 million, combined ratio 82.7%. Net written premiums grew 7% to $1.1 billion. Surety business grew 19%. Full-year record net written premiums in surety and management liability.

Personal Insurance

• Fourth quarter segment income $798 million, combined ratio 80.7%. Net written premiums grew 7% in Q4 and 8% for the year to nearly $17.2 billion. Auto combined ratio 94.2%, underlying 96.3% improved 6.4 points. Homeowners and Other combined ratio 67.8%, improved 3 points

• Expected after-tax net investment income for 2025 ~$3 billion, first quarter $710 million, fourth quarter $790 million.
• Catastrophe reinsurance renewal for 2025 increased coverage, casualty reinsurance program enhanced.
• 2025 pre-tax catastrophe plan 6.9 combined ratio points. Share repurchase authorization remaining ~$5 billion

• California wildfires impact on first quarter earnings, uncertainty around severity and timing of claims.
• Tort environment affecting insurance markets in some states.
• Potential impact of tariffs on Auto business

Q: Robert Cox asked about pricing renewal rate change and impacts of cats like Milton and California fires A: Greg Toczydlowski said pricing was very stable; Dan Frey said Milton was ~$60 million, Helene caused PYD change, California fires will impact first quarter but details still uncertain Q: Gregory Peters asked about Select retention and retention ratios in Business Insurance A: Dan Frey said Select retention drop was due to non-renewals in certain geographies and industry classes due to regulatory price issues; retention ratios reflect mix of price and intentional re-underwriting Q: Mike Zaremski asked about reserve releases in Commercial and workers' comp pricing A: Dan Frey said favorability in Business Insurance PYD was mainly from workers' comp, which is a favorable story; Alan Schnitzer said workers' comp pricing was largely stable with pure renewal rate change slightly negative but exposure making it slightly positive Q: David Motemaden asked about Business Insurance underlying loss ratio and reinsurance protection A: Dan Frey said underlying loss ratio benefit was from earned pricing, no unusual non-recurring items; Alan Schnitzer said reinsurance changes were ordinary course, making risk-reward decisions based on business and reinsurance market Q: Brian Meredith asked about BI margins and tort environment A: Alan Schnitzer said BI margins were terrific, market felt stable, but wouldn't forecast margin direction; Alan also discussed tort environment being front and center, with some states taking action or having favorable legislation developments Q: Wes Carmichael asked about 2025 catastrophe plan and reserve development in BI A: Alan Schnitzer said 6.9 points cat plan was based on methodology and judgment, not assuming high watermark is new normal; Dan Frey said workers' comp favorable development in Q4 was ~$250 million Q: Alex Scott asked about Personal lines business and California wildfires impact on Homeowners A: Michael Klein said Personal lines underlying results in Homeowners were faster than expected but focus remained on improving profitability; Alan Schnitzer said no specific color on California wildfires exposure beyond managing exposure in wildfire prone areas Q: Elyse Greenspan asked about BI underlying loss ratio change and California fires market share/reinsurance A: Dan Frey said BI underlying loss ratio change was due to normal puts and takes, not abnormal; Alan Schnitzer said market share estimate was blunt instrument due to uncertain insured losses and outdated market share data; Dan Frey said 2025 cat treaty is aggregate cover with $100 million per event deductible Q: Yaron Kinar asked about California wildfires impact on Home/Property appetite and Auto tariffs A: Alan Schnitzer said would wait to see market reaction to wildfires before decisions; Michael Klein said Personal Auto was growing, appetite considered prospective rate adequacy and would react to tariffs if implemented Q: Michael Phillips asked about Commercial Auto growth, rate vs PIF, and loss trends A: Greg Toczydlowski said Commercial Auto top line growth was from renewal premium change, mainly rate and exposure; no details on loss trend provided