Travelers Companies Files Q2 2024 10-Q Report

TL;DR

**TRV Q2 10-Q FILED: Financials for the period ending June 30, 2024 are now public.**

AI Summary

The Travelers Companies, Inc. filed its 10-Q for the period ending June 30, 2024. The filing covers the second quarter and first half of the fiscal year. Key financial data and business segments are detailed within the report, which is a standard regulatory filing for public companies.

Why It Matters

This filing provides investors and analysts with crucial financial performance data for The Travelers Companies, Inc. during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing, not indicating any immediate or unusual risks.

Key Players & Entities

• TRAVELERS COMPANIES, INC. (company) — Filer of the 10-Q report
• 20240630 (date) — End of the reporting period
• 20240719 (date) — Date the filing was made

FAQ

Filing Documents

• trv-20240630.htm (10-Q) — 2653KB
• trv-6302024xex31110q.htm (EX-31.1) — 11KB
• trv-6302024xex31210q.htm (EX-31.2) — 11KB
• trv-6302024xex32110q.htm (EX-32.1) — 5KB
• trv-6302024xex32210q.htm (EX-32.2) — 5KB
• 0000086312-24-000051.txt ( ) — 12175KB
• trv-20240630.xsd (EX-101.SCH) — 52KB
• trv-20240630_cal.xml (EX-101.CAL) — 91KB
• trv-20240630_def.xml (EX-101.DEF) — 209KB
• trv-20240630_lab.xml (EX-101.LAB) — 690KB
• trv-20240630_pre.xml (EX-101.PRE) — 463KB
• trv-20240630_htm.xml (XML) — 2827KB

— Financial Information

Part I — Financial Information

Financial Statements

Item 1. Financial Statements: Consolidated Statement of Income (Loss) (Unaudited) — Three and Six Months Ended June 30, 2024 and 2023 3 Consolidated Statement of Comprehensive Income (Loss) (Unaudited) — Three and Six Months Ended June 30, 2024 and 2023 4 Consolidated Balance Sheet — June 30, 2024 (Unaudited) and December 31, 2023 5 Consolidated Statement of Changes in Shareholders' Equity (Unaudited) — Three and Six Months Ended June 30, 2024 and 2023 6 Consolidated Statement of Cash Flows (Unaudited) — Six Months Ended June 30, 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 33

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 66

Controls and Procedures

Item 4. Controls and Procedures 66

— Other Information

Part II — Other Information

Legal Proceedings

Item 1. Legal Proceedings 67

Risk Factors

Item 1A. Risk Factors 67

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 67

Other Information

Item 5. Other Information 68

Exhibits

Item 6. Exhibits 68

SIGNATURES

SIGNATURES 69 2 PART 1 — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (LOSS) (Unaudited) (in millions, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenues Premiums $ 10,243 $ 9,216 $ 20,369 $ 18,070 Net investment income 885 712 1,731 1,375 Fee income 115 106 224 212 Net realized investment losses ( 65 ) ( 35 ) ( 30 ) ( 29 ) Other revenues 105 99 217 174 Total revenues 11,283 10,098 22,511 19,802 Claims and expenses Claims and claim adjustment expenses 7,373 7,227 14,029 13,186 Amortization of deferred acquisition costs 1,678 1,519 3,376 2,981 General and administrative expenses 1,478 1,308 2,884 2,575 Interest expense 98 92 196 180 Total claims and expenses 10,627 10,146 20,485 18,922 Income (loss) before income taxes 656 ( 48 ) 2,026 880 Income tax expense (benefit) 122 ( 34 ) 369 ( 81 ) Net income (loss) $ 534 $ ( 14 ) $ 1,657 $ 961 Net income (loss) per share Basic $ 2.32 $ ( 0.07 ) $ 7.19 $ 4.14 Diluted $ 2.29 $ ( 0.07 ) $ 7.09 $ 4.09 Weighted average number of common shares outstanding Basic 228.6 229.7 228.8 230.6 Diluted 231.5 229.7 231.8 233.3 Cash dividends declared per common share $ 1.05 $ 1.00 $ 2.05 $ 1.93 The accompanying notes are an integral part of the consolidated financial statements. 3 THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (in millions) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income (loss) $ 534 $ ( 14 ) $ 1,657 $ 961 Other comprehensive income (loss): Changes in net unrealized gains (losses) on investment securities: Having no credit losses recognized in the consolidated statement of income (loss) ( 324 ) ( 903 ) ( 1,076 ) 405 Having credit losses recognized in the consolidated statement of income (loss) 1 — 3 — Net changes in benefit plan assets and obligations ( 2 ) ( 4 ) ( 3 ) ( 7 ) Net c

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 (loss) and total assets by reportable business segments: (For the three months ended June 30, in millions) Business Insurance Bond & Specialty Insurance Personal Insurance Total Reportable Segments 2024 Premiums $ 5,168 $ 977 $ 4,098 $ 10,243 Net investment income 632 94 159 885 Fee income 105 — 10 115 Other revenues 77 6 22 105 Total segment revenues (1) $ 5,982 $ 1,077 $ 4,289 $ 11,348 Segment income (loss) (1) $ 656 $ 170 $ ( 153 ) $ 673 2023 Premiums $ 4,644 $ 911 $ 3,661 $ 9,216 Net investment income 509 78 125 712 Fee income 98 — 8 106 Other revenues 67 7 25 99 Total segment revenues (1) $ 5,318 $ 996 $ 3,819 $ 10,133 Segment income (loss) (1) $ 402 $ 230 $ ( 538 ) $ 94 ________________________________________________________ (1) Segment revenues for reportable business segments exclude net realized investment gains (losses) and revenues included in "interest expense and other." Segment income (loss) for reportable business segments excludes the after-tax impact of net realized investment gains (losses) and income (loss) from "interest expense and other." (For the six months ended June 30, in millions) Business Insurance Bond & Specialty Insurance Personal Insurance Total Reportable Segments 2024 Premiums $ 10,328 $ 1,933 $ 8,108 $ 20,369 Net investment income 1,241 184 306 1,731 Fee income 206 — 18 224 Other revenues 154 15 48 217 Total segment revenues (1) $ 11,929 $ 2,132 $ 8,480 $ 22,541 Segment income (1) $ 1,420 $ 365 $ 67 $ 1,852 2023 Premiums $ 9,121 $ 1,786 $ 7,163 $ 18,070 Net investment income 982 151 242 1,375 Fee income 197 — 15 212 Other revenues 114 12 48 174 Total segment revenues (1) $ 10,414 $ 1,949 $ 7,468 $ 19,831 Segment income (loss) (1) $ 1,158 $ 437 $ ( 455 ) $ 1,140 ____________________________________________

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued Business Segment Reconciliations Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Revenue reconciliation Earned premiums Business Insurance: Domestic: Workers' compensation $ 864 $ 858 $ 1,744 $ 1,708 Commercial automobile 874 798 1,734 1,559 Commercial property 894 760 1,767 1,469 General liability 845 748 1,692 1,508 Commercial multi-peril 1,246 1,145 2,516 2,245 Other 13 16 30 34 Total Domestic 4,736 4,325 9,483 8,523 International 432 319 845 598 Total Business Insurance 5,168 4,644 10,328 9,121 Bond & Specialty Insurance: Domestic: Fidelity and surety 350 325 690 631 General liability 437 406 863 804 Other 58 57 114 111 Total Domestic 845 788 1,667 1,546 International 132 123 266 240 Total Bond & Specialty Insurance 977 911 1,933 1,786 Personal Insurance: Domestic: Automobile 1,919 1,688 3,793 3,312 Homeowners and Other 2,014 1,814 3,986 3,538 Total Domestic 3,933 3,502 7,779 6,850 International 165 159 329 313 Total Personal Insurance 4,098 3,661 8,108 7,163 Total earned premiums 10,243 9,216 20,369 18,070 Net investment income 885 712 1,731 1,375 Fee income 115 106 224 212 Other revenues 105 99 217 174 Total segment revenues 11,348 10,133 22,541 19,831 Net realized investment losses ( 65 ) ( 35 ) ( 30 ) ( 29 ) Total revenues $ 11,283 $ 10,098 $ 22,511 $ 19,802 Income reconciliation, net of tax Total segment income $ 673 $ 94 $ 1,852 $ 1,140 Interest Expense and Other (1) ( 88 ) ( 79 ) ( 171 ) ( 155 ) Core income 585 15 1,681 985 Net realized investment losses ( 51 ) ( 29 ) ( 24 ) ( 24 ) Net income (loss) $ 534 $ ( 14 ) $ 1,657 $ 961 _________________________________________________________ (1) The primary component of Interest Expense and Other was after-tax interest expense of $ 78 million and $ 72 million for the three months ended June 30, 2024 and 2023, respectively,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued (in millions) June 30, 2024 December 31, 2023 Asset reconciliation Business Insurance $ 95,686 $ 93,565 Bond & Specialty Insurance 12,243 11,478 Personal Insurance 20,404 20,072 Total assets by reportable segment 128,333 125,115 Other assets (1) 982 863 Total consolidated assets $ 129,315 $ 125,978 _________________________________________________________ (1) The primary components of other assets at both June 30, 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 June 30, 2024, in millions) Gains Losses U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ 6,183 $ — $ — $ 243 $ 5,940 Obligations of U.S. states, municipalities and political subdivisions: Local general obligation 18,280 — 29 1,619 16,690 Revenue 9,216 — 21 736 8,501 Pre-refunded 977 — 2 4 975 Total obligations of U.S. states, municipalities and political subdivisions 29,639 — 54 2,437 27,256 Debt securities issued by foreign governments 907 — — 27 880 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 10,412 — 51 262 10,201 Corporate and all other bonds 37,090 1 76 2,254 34,911 Total $ 84,231 $ 1 $ 181 $ 5,223 $ 79,188 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 $ 975 million and $ 966 million at June 30, 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 $ 1.25 billion and $ 3.12 billion during the six months ended June 30, 2024 and 2023, respectively. Gross gains of $ 2 million and $ 19 million and gross losses of $ 41 million and $ 51 million were realized on those sales during the six months ended June 30, 2024 and 2023, respectively. Included in realized losses for the six months ended June 30, 2024 and 2023, are $ 33 million and $ 0 million , respectively, of losses resulting from the early redemption of fixed maturities by the issuer prior to the bonds' ma

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 June 30, 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 June 30, 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 $ 1,695 $ 8 $ 4,048 $ 235 $ 5,743 $ 243 Obligations of U.S. states, municipalities and political subdivisions 7,190 92 16,298 2,345 23,488 2,437 Debt securities issued by foreign governments 193 1 590 26 783 27 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 4,009 43 2,332 219 6,341 262 Corporate and all other bonds 4,390 45 25,047 2,209 29,437 2,254 Total $ 17,477 $ 189 $ 48,315 $ 5,034 $ 65,792 $ 5,223 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 governm

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 June 30, 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 June 30, 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 139 234 — 744 1,117 Debt securities issued by foreign governments — — — — — Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 18 44 — — 62 Corporate and all other bonds 13 29 3 18 63 Total $ 170 $ 307 $ 3 $ 762 $ 1,242 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. governm

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