Travelers Reports a Strong Q4 as Net Income Surges by $807 Million to $1.6 Billion

 

In the fourth quarter of 2023, The Travelers Companies, Inc. reported a net income of $1.626 billion, marking a significant increase of $807 million from the same period in 2022. This surge was primarily driven by higher core income, even though there were net realized investment losses compared to gains in 2022.

Core income for the quarter reached $1.633 billion, compared to $810 million in the previous year. The boost in core income was attributed to a higher underlying underwriting gain, lower catastrophe losses, and increased net investment income.

Despite net realized investment losses of $11 million pre-tax in Q4, compared to gains of $7 million pre-tax in the prior year, Travelers demonstrated improvement. Net written premiums rose to $9.994 billion, a remarkable 13% increase from the previous year.

The fourth quarter of 2023 also saw a combined ratio of 85.8%, a notable improvement from 94.5% in 2022. Catastrophe losses, net of reinsurance, contributed just 1.2 percentage points to the Q4 combined ratio, down from 5.2 percentage points in 2022.

Alan Schnitzer, Chairman and CEO, expressed satisfaction with the exceptional results, emphasizing record highs in core income, earnings per share, and return on equity. He highlighted the achievements across business segments, including a record underlying underwriting income.

For the full year 2023, Travelers reported a $149 million increase in net income to $2.991 billion. Core income for the year also rose to $3.072 billion, driven by a higher underlying underwriting gain and increased net investment income.

The overall combined ratio for 2023 was 97.0%, up from 95.6% in the previous year. Catastrophe losses contributed 7.9 percentage points to the combined ratio, marking a 2.4 percentage point increase.

Looking ahead, Schnitzer expressed confidence in the company's strong fundamentals, growth in Business Insurance, and positive outlook for Personal Insurance profitability. The strategic acquisition of Corvus and continued strategic investments position Travelers for success in 2024 and beyond.

As part of its update, Travelers increased the size of its core corporate catastrophe excess-of-loss reinsurance by 76% to $3.525 billion for the 2024 renewal.

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