Travelers Companies, Inc. Files 10-Q for Period Ending March 31, 2024

Ticker: TRV · Form: 10-Q · Filed: Apr 17, 2024 · CIK: 86312

Sentiment: neutral

Topics: 10-Q, Travelers Companies, Financial Report, Quarterly Earnings, Insurance

TL;DR

<b>Travelers Companies, Inc. filed its quarterly report (10-Q) for the period ending March 31, 2024.</b>

AI Summary

TRAVELERS COMPANIES, INC. (TRV) filed a Quarterly Report (10-Q) with the SEC on April 17, 2024. Filing is a 10-Q for Travelers Companies, Inc. for the period ending March 31, 2024. The company's Central Index Key is 0000086312. The filing is submitted under the 1934 Act with SEC file number 001-10898. The business address is 385 Washington St, Saint Paul, MN 55102. The mail address is 485 Lexington Avenue, New York, NY 10017-2630.

Why It Matters

For investors and stakeholders tracking TRAVELERS COMPANIES, INC., this filing contains several important signals. This 10-Q filing provides a detailed update on the company's financial performance and operational status for the first quarter of 2024. Investors and analysts can use this report to assess Travelers' financial health, identify trends, and make informed investment decisions.

Risk Assessment

Risk Level: low — TRAVELERS COMPANIES, INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain unusual or high-risk information, indicating a low level of immediate risk from this document.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to understand Travelers' Q1 2024 results and outlook.

Key Numbers

Key Players & Entities

FAQ

When did TRAVELERS COMPANIES, INC. file this 10-Q?

TRAVELERS COMPANIES, INC. filed this Quarterly Report (10-Q) with the SEC on April 17, 2024.

What is a 10-Q filing?

A 10-Q is a quarterly financial report with unaudited financials, management discussion, and interim business updates. This particular 10-Q was filed by TRAVELERS COMPANIES, INC. (TRV).

Where can I read the original 10-Q filing from TRAVELERS COMPANIES, INC.?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by TRAVELERS COMPANIES, INC..

What are the key takeaways from TRAVELERS COMPANIES, INC.'s 10-Q?

TRAVELERS COMPANIES, INC. filed this 10-Q on April 17, 2024. Key takeaways: Filing is a 10-Q for Travelers Companies, Inc. for the period ending March 31, 2024.. The company's Central Index Key is 0000086312.. The filing is submitted under the 1934 Act with SEC file number 001-10898..

Is TRAVELERS COMPANIES, INC. a risky investment based on this filing?

Based on this 10-Q, TRAVELERS COMPANIES, INC. presents a relatively low-risk profile. The filing is a standard quarterly report (10-Q) and does not contain unusual or high-risk information, indicating a low level of immediate risk from this document.

What should investors do after reading TRAVELERS COMPANIES, INC.'s 10-Q?

Review the detailed financial statements and segment performance within the 10-Q to understand Travelers' Q1 2024 results and outlook. The overall sentiment from this filing is neutral.

How does TRAVELERS COMPANIES, INC. compare to its industry peers?

Travelers Companies, Inc. operates in the insurance industry, specifically focusing on property and casualty insurance.

Are there regulatory concerns for TRAVELERS COMPANIES, INC.?

This filing is made in accordance with the Securities Exchange Act of 1934, requiring public companies to submit regular financial reports.

Industry Context

Travelers Companies, Inc. operates in the insurance industry, specifically focusing on property and casualty insurance.

Regulatory Implications

This filing is made in accordance with the Securities Exchange Act of 1934, requiring public companies to submit regular financial reports.

What Investors Should Do

  1. Analyze the financial statements for Q1 2024 to understand revenue, net income, and other key financial metrics.
  2. Review any disclosures regarding business segments or significant operational changes.
  3. Compare Q1 2024 performance to prior periods to identify trends and assess growth.

Key Dates

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year 2024, following the 2023 annual report (10-K).

Filing Stats: 4,645 words · 19 min read · ~15 pages · Grade level 15.3 · Accepted 2024-04-17 08:00:40

Filing Documents

— Financial Information

Part I — Financial Information

Financial Statements

Item 1. Financial Statements: Consolidated Statement of Income (Unaudited) — Three Months Ended March 31, 2024 and 2023 3 Consolidated Statement of Comprehensive Income (Loss) (Unaudited) — Three Months Ended March 31, 2024 and 2023 4 Consolidated Balance Sheet — March 31, 2024 (Unaudited) and December 31, 2023 5 Consolidated Statement of Changes in Shareholders' Equity (Unaudited) — Three Months Ended March 31, 2024 and 2023 6 Consolidated Statement of Cash Flows (Unaudited) — Three Months Ended March 31, 2024 and 2023 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 29

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 57

Controls and Procedures

Item 4. Controls and Procedures 57

— Other Information

Part II — Other Information

Legal Proceedings

Item 1. Legal Proceedings 58

Risk Factors

Item 1A. Risk Factors 58

Unregistered Sales of Equity Securitie s and Use of Proceeds

Item 2. Unregistered Sales of Equity Securitie s and Use of Proceeds 58

Other Information

Item 5. Other Information 59

Exhibits

Item 6. Exhibits 59

SIGNATURES

SIGNATURES 60 2 PART 1 — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited) (in millions, except per share amounts) Three Months Ended March 31, 2024 2023 Revenues Premiums $ 10,126 $ 8,854 Net investment income 846 663 Fee income 109 106 Net realized investment gains 35 6 Other revenues 112 75 Total revenues 11,228 9,704 Claims and expenses Claims and claim adjustment expenses 6,656 5,959 Amortization of deferred acquisition costs 1,698 1,462 General and administrative expenses 1,406 1,267 Interest expense 98 88 Total claims and expenses 9,858 8,776 Income before income taxes 1,370 928 Income tax expense (benefit) 247 ( 47 ) Net income $ 1,123 $ 975 Net income per share Basic $ 4.87 $ 4.18 Diluted $ 4.80 $ 4.13 Weighted average number of common shares outstanding Basic 229.0 231.7 Diluted 232.0 234.4 Cash dividends declared per common share $ 1.00 $ 0.93 The accompanying notes are an integral part of the consolidated financial statements. 3 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (in millions) Three Months Ended March 31, 2024 2023 Net income $ 1,123 $ 975 Other comprehensive income (loss): Changes in net unrealized gains (losses) on investment securities: Having no credit losses recognized in the consolidated statement of income ( 752 ) 1,308 Having credit losses recognized in the consolidated statement of income 2 — Net changes in benefit plan assets and obligations ( 1 ) ( 3 ) Net changes in unrealized foreign currency translation ( 71 ) 37 Other comprehensive income (loss) before income taxes ( 822 ) 1,342 Income tax expense (benefit) ( 162 ) 283 Other comprehensive income (loss), net of taxes ( 660 ) 1,059 Comprehensive income $ 463 $ 2,034 The accompanying notes are an integral part of the consolidated financial statements. 4 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES Basis of Presentation The interim consolidated financial statements include the accounts of The Travelers Companies, Inc. (together with its subsidiaries, the Company). These financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP) and are unaudited. In the opinion of the Company's management, all adjustments necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. All material intercompany transactions and balances have been eliminated. The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Company's consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the Company's 2023 Annual Report). The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period. Actual results could differ from those estimates. To the extent that the Company changes its accounting for, or presentation of, items in the financial statements, the presentation of such amounts in prior periods is changed to conform to the current period presentation, if appropriate, and disclosed, if material. On January 2, 2024, the Company completed its previously announced acquisition of all issued and outstanding shares of Corvus Insurance Holdings, Inc. (Corvus), a cyber insurance m

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued The following tables summarize the components of the Company's revenues, income and total assets by reportable business segments: (For the three months ended March 31, in millions) Business Insurance Bond & Specialty Insurance Personal Insurance Total Reportable Segments 2024 Premiums $ 5,160 $ 956 $ 4,010 $ 10,126 Net investment income 609 90 147 846 Fee income 101 — 8 109 Other revenues 77 9 26 112 Total segment revenues (1) $ 5,947 $ 1,055 $ 4,191 $ 11,193 Segment income (1) $ 764 $ 195 $ 220 $ 1,179 2023 Premiums $ 4,477 $ 875 $ 3,502 $ 8,854 Net investment income 473 73 117 663 Fee income 99 — 7 106 Other revenues 47 5 23 75 Total segment revenues (1) $ 5,096 $ 953 $ 3,649 $ 9,698 Segment income (1) $ 756 $ 207 $ 83 $ 1,046 ________________________________________________________ (1) Segment revenues for reportable business segments exclude net realized investment gains (losses) and revenues included in "interest expense and other." Segment income for reportable business segments excludes the after-tax impact of net realized investment gains (losses) and income (loss) from "interest expense and other." 9 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued Business Segment Reconciliations Three Months Ended March 31, (in millions) 2024 2023 Revenue reconciliation Earned premiums Business Insurance: Domestic: Workers' compensation $ 880 $ 850 Commercial automobile 860 761 Commercial property 873 709 General liability 847 760 Commercial multi-peril 1,270 1,100 Other 17 18 Total Domestic 4,747 4,198 International 413 279 Total Business Insurance 5,160 4,477 Bond & Specialty Insurance: Domestic: Fidelity and surety 340 306 General liability 426 398 Other 56 54 Total Domestic 822 758 International 134 117 Total Bond & Specialty Insurance 956 875 Personal Insurance: Domestic: Automobile 1,874 1,624 Homeowners and Other 1,972 1,724 Total Domestic 3,846 3,348 International 164 154 Total Personal Insurance 4,010 3,502 Total earned premiums 10,126 8,854 Net investment income 846 663 Fee income 109 106 Other revenues 112 75 Total segment revenues 11,193 9,698 Net realized investment gains 35 6 Total revenues $ 11,228 $ 9,704 Income reconciliation, net of tax Total segment income $ 1,179 $ 1,046 Interest Expense and Other (1) ( 83 ) ( 76 ) Core income 1,096 970 Net realized investment gains 27 5 Net income $ 1,123 $ 975 _________________________________________________________ (1) The primary component of Interest Expense and Other was after-tax interest expense of $ 77 million and $ 70 million for the three months ended March 31, 2024 and 2023, respectively. 10 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued (in millions) March 31, 2024 December 31, 2023 Asset reconciliation Business Insurance $ 94,393 $ 93,565 Bond & Specialty Insurance 12,136 11,478 Personal Insurance 20,003 20,072 Total assets by reportable segment 126,532 125,115 Other assets (1) 878 863 Total consolidated assets $ 127,410 $ 125,978 _________________________________________________________ (1) The primary components of other assets at both March 31, 2024 and December 31, 2023 were the over-funded benefit plan assets related to the Company's qualified domestic pension plan and other intangible assets. 3. INVESTMENTS Fixed Maturities The amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows: Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Fair Value (at March 31, 2024, in millions) Gains Losses U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ 6,489 $ — $ 1 $ 250 $ 6,240 Obligations of U.S. states, municipalities and political subdivisions: Local general obligation 18,138 — 41 1,455 16,724 Revenue 9,419 — 27 700 8,746 Pre-refunded 952 — 2 4 950 Total obligations of U.S. states, municipalities and political subdivisions 29,665 — 73 2,226 27,512 Debt securities issued by foreign governments 970 — 1 32 939 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 9,076 — 68 224 8,920 Corporate and all other bonds 36,512 3 103 2,232 34,380 Total $ 82,712 $ 3 $ 246 $ 4,964 $ 77,991 11 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 3. INVESTMENTS, Continued Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Fair Value (at December 31, 2023, in millions) Gains Losses U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ 6,591 $ — $ 8 $ 231 $ 6,368 Obligations of U.S. states, municipalities and political subdivisions: Local general obligation 18,374 — 90 1,265 17,199 Revenue 9,748 — 52 616 9,184 Pre-refunded 963 — 5 2 966 Total obligations of U.S. states, municipalities and political subdivisions 30,294 — 154 1,942 28,506 Debt securities issued by foreign governments 1,035 — 2 31 1,006 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 7,874 — 120 176 7,818 Corporate and all other bonds 35,987 5 187 2,060 34,109 Total $ 81,781 $ 5 $ 471 $ 4,440 $ 77,807 Pre-refunded bonds of $ 950 million and $ 966 million at March 31, 2024 and December 31, 2023, respectively, were bonds for which U.S. states or municipalities have established irrevocable trusts that are almost exclusively comprised of U.S. Treasury securities and obligations of U.S. government and government agencies and authorities. These trusts were created to fund the payment of principal and interest due under the bonds. Proceeds from the sales of fixed maturities classified as available for sale were $ 942 million and $ 2.36 billion during the three months ended March 31, 2024 and 2023, respectively. Gross gains of $ 2 million and $ 17 million and gross losses of $ 39 million and $ 27 million were realized on those sales during the three months ended March 31, 2024 and 2023, respectively. Equity Securities The cost and fair value of investments in equity securities were as follows: (at March 31, 2024, in millions) Cost Gross Gains Gross Losses Fair Value Common stock $ 512 $ 142 $ 13 $ 641 Non-redeema

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 3. INVESTMENTS, Continued Unrealized Investment Losses The following tables summarize, for all fixed maturities classified as available for sale in an unrealized loss position at March 31, 2024 and December 31, 2023, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of the notes to the consolidated financial statements in the Company's 2023 Annual Report. The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in note 1 of the notes to the consolidated financial statements in the Company's 2023 Annual Report to determine whether a credit loss impairment exists. Less than 12 months 12 months or longer Total (at March 31, 2024, in millions) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ 2,866 $ 17 $ 2,869 $ 233 $ 5,735 $ 250 Obligations of U.S. states, municipalities and political subdivisions 6,958 67 15,198 2,159 22,156 2,226 Debt securities issued by foreign governments 134 1 696 31 830 32 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 3,106 29 1,689 195 4,795 224 Corporate and all other bonds 2,957 28 25,668 2,204 28,625 2,232 Total $ 16,021 $ 142 $ 46,120 $ 4,822 $ 62,141 $ 4,964 Less than 12 months 12 months or longer Total (at December 31, 2023, in millions) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities U.S. Treasury securities and obligations of U.S. government and gove

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 3. INVESTMENTS, Continued The following tables summarize, for all fixed maturities reported at fair value for which fair value was less than 80% of amortized cost at March 31, 2024 and December 31, 2023, the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20% of amortized cost: Period For Which Fair Value is Less Than 80% of Amortized Cost (at March 31, 2024, in millions) 3 months or less Greater than 3 months, 6 months or less Greater than 6 months, 12 months or less Greater than 12 months Total Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ — $ — $ — $ — $ — Obligations of U.S. states, municipalities and political subdivisions 224 — 8 708 940 Debt securities issued by foreign governments — — — — — Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 44 — — — 44 Corporate and all other bonds 41 2 1 23 67 Total $ 309 $ 2 $ 9 $ 731 $ 1,051 Period For Which Fair Value is Less Than 80% of Amortized Cost (at December 31, 2023, in millions) 3 months or less Greater than 3 months, 6 months or less Greater than 6 months, 12 months or less Greater than 12 months Total Fixed maturities U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ — $ — $ — $ — $ — Obligations of U.S. states, municipalities and political subdivisions — 2 31 642 675 Debt securities issued by foreign governments — — — — — Mortgage-backed securities, collateralized mortgage obligations and pass-through securities — — — — — Corporate and all other bonds 1 3 22 25 51 Total $ 1 $ 5 $ 53 $ 667 $ 726 Increases in interest rates resulted in the gross unrealized investment losses disclosed in the tables above; however, the net unrealized loss is considered temporary in n

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 3. INVESTMENTS, Continued Impairment Charges The following table presents changes in the allowance for expected credit losses on fixed maturities classified as available for sale for the category of Corporate and All Other Bonds (no other categories of fixed maturities currently have an allowance for expected credit losses): Fixed Maturities Corporate and All Other Bonds At and For the Three Months Ended (in millions) March 31, 2024 March 31, 2023 Balance, beginning of period $ 5 $ 3 Additions for expected credit losses on securities where no credit losses were previously recognized 3 — Additions for expected credit losses on securities where credit losses were previously recognized — 1 Reductions due to sales/defaults of credit-impaired securities ( 5 ) — Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell — — Balance, end of period $ 3 $ 4 Total net impairment charges, including credit impairments, reported in net realized investment gains in the consolidated statement of income, were $ 3 million and $ 1 million for the three months ended March 31, 2024 and 2023, respectively. Credit losses related to the fixed maturity portfolio for both the three months ended March 31, 2024 and 2023 represented less than 1 % of the fixed maturity portfolio on a pre-tax basis and less than 1 % of shareholders' equity on an after-tax basis. Other Investments Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period. Accordingly, net investment income from these other investments is generally reflected in the Company's financial statements on a quarter lag basis. 4. FAIR VALUE MEASUREMENTS The

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