The Travelers Companies, Inc. Q1 FY2026 earnings call

• Company reported core income of $1.7 billion, $7.71 per diluted share, core return on equity 19.7%. Trailing 12-month core ROE 22.7%. • Underwriting income pre-tax $1.2 billion, investment portfolio net investment income after tax increased 9% to $833 million. • Returned over $2.2 billion of excess capital to shareholders, including $2 billion share repurchases. • Board declared 14% increase in quarterly cash dividend to $1.25 per diluted share, 22 consecutive years of dividend increases. • Disciplined marketplace execution across segments led to net written premiums of $10.3 billion. • Discussed strategic initiatives like technology investment, Travelers Leadership Conference with distribution partners.

Business Insurance: Net written premiums reached $5.8 billion. Domestic net written premiums excluding property line grew 6%. Renewal premium change was 5.8%, retention increased to 86%, new business was a record $775 million. Bond and Specialty Insurance: Net written premiums grew 7% to $1.1 billion. Management liability business renewal premium change ticked up, surety business net written premiums grew 14%. Personal Insurance: Net written premiums were $3.5 billion. Completion of Canadian operations sale impacted net written premiums. Automobile and homeowners business had strong retention and renewal premium change performance.

• After-tax net investment income expected: second quarter ~$810 million, third quarter ~$840 million, fourth quarter ~$870 million. • Adjusted book value per share was 16% higher than a year ago. • Board declared 14% increase in quarterly cash dividend. • Approximately $5.2 billion remaining under prior board authorizations for share repurchases.

• AI exclusions from policy terms risk. • Litigation abuse and tort reform related risks in various states. • Uncertainty in loss development, especially in liability lines with IBNR and non-CAT property losses uncertainty. • Potential impact of AI on distribution channels, including broker negotiating power and small commercial shift.

Q: Gregory Peters from Raymond James asked about how technology investment is affecting the company's culture.

A: Greg responded that innovation is a long-honed strategy, shaping a culture with skills in picking right initiatives, assessing performance, managing change, and communicating during change.

Q: David Momaden with Evercore inquired about RRC in Select business and underlying loss ratio in BI.

A: For Select, RPC was strong with 9% and good retention, Dan talked about underlying profitability in BI and the inclusion of uncertainty provision in loss picks for casualty lines again in 2026.

Q: Rob Cox with Goldman Sachs asked about AI exclusions from policy terms and tort reform.

A: Greg said they're watching AI exclusions closely, Rob Klink discussed tort reform efforts state by state and looking at dynamics in each state.

Q: Andrew Anderson with Jefferies asked about workers' comp in BI and surety growth relative to credit quality.

A: Greg mentioned workers' comp is a great business, Jeff Klink talked about surety growth being broad-based and high credit quality of the book.

Q: Josh Shanker with Bank of America asked about expense ratio drivers and personal lines business churn vs new.

A: Dan explained expense ratio variability by quarter, Michael said the business churning out is less high quality than new business added with better profile characteristics.

Q: Yaron Canar with Mizuho asked about renewal pricing in BI and AI impact on commercial lines distribution.

A: Greg talked about granular account-by-account execution in BI, Greg also discussed Gen AI in independent agent channel and that small commercial gravitating to larger brokers could be positive for Travelers.

Q: Elise Greenspan with Wells Fargo asked about M&A and personal lines margins given gas prices and supply chain.

A: Dan said they're always interested in M&A, Michael discussed gas prices needing sustained elevation to impact miles driven and supply chain being speculative.

Q: Mike Zeromski with BMO asked about home insurance pricing and commercial lines loss cost trend.

A: Michael explained home pricing moving to mid-single digits due to rate adequacy and loss trend assumptions, Dan talked about business insurance reserve development and loss trend not having a sea change, also noting loss picks reflect their view on loss trend.

Q: Pablo from J.P. Morgan asked about impact of Canada sale on premiums and AI exposures in cyber.

A: Dan said the Canada sale impact on expenses not significantly changing profitability profile, Jeff talked about AI being an underwriting consideration in cyber risk management.