Travelers Companies Q3 2024 10-Q Filing

TL;DR

**TRV Q3 10-Q FILED: Financials for 9 months ending Sep 30, 2024, now public.**

AI Summary

Travelers Companies, Inc. filed its 10-Q for the period ending September 30, 2024. The filing covers the third quarter and the first nine months of the fiscal year. Key financial data and business segment information are presented, reflecting the company's performance in the property and casualty insurance sector.

Why It Matters

This filing provides investors and analysts with a detailed look at Travelers' financial health and operational performance during the third quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing financial updates, not indicating immediate new risks.

Key Numbers

• 2024 Q3 — Reporting Period (Covers the third quarter of 2024)
• 2024-09-30 — Period End Date (The end date for the financial reporting period)
• 2024-01-01 — Period Start Date (The start date for the nine-month financial reporting period)

Key Players & Entities

• TRAVELERS COMPANIES, INC. (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241017 (date) — Filing date

FAQ

Filing Documents

• trv-20240930.htm (10-Q) — 2667KB
• trv-9302024xex31110q.htm (EX-31.1) — 11KB
• trv-9302024xex31210q.htm (EX-31.2) — 11KB
• trv-9302024xex32110q.htm (EX-32.1) — 5KB
• trv-9302024xex32210q.htm (EX-32.2) — 5KB
• 0000086312-24-000059.txt ( ) — 12227KB
• trv-20240930.xsd (EX-101.SCH) — 51KB
• trv-20240930_cal.xml (EX-101.CAL) — 91KB
• trv-20240930_def.xml (EX-101.DEF) — 212KB
• trv-20240930_lab.xml (EX-101.LAB) — 692KB
• trv-20240930_pre.xml (EX-101.PRE) — 465KB
• trv-20240930_htm.xml (XML) — 2843KB

— Financial Information

Part I — Financial Information

Financial Statements

Item 1. Financial Statements: Consolidated Statement of Income (Unaudited) — Three and Nine Months Ended September 30, 2024 and 2023 3 Consolidated Statement of Comprehensive Income (Loss) (Unaudited) — Three and Nine Months Ended September 30, 2024 and 2023 4 Consolidated Balance Sheet — September 30, 2024 (Unaudited) and December 31, 2023 5 Consolidated Statement of Changes in Shareholders' Equity (Unaudited) — Three and Nine Months Ended September 30, 2024 and 2023 6 Consolidated Statement of Cash Flows (Unaudited) — Nine Months Ended September 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 (Unaudited) (in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues Premiums $ 10,704 $ 9,718 $ 31,073 $ 27,788 Net investment income 904 769 2,635 2,144 Fee income 121 112 345 324 Net realized investment gains (losses) 55 ( 65 ) 25 ( 94 ) Other revenues 120 101 337 275 Total revenues 11,904 10,635 34,415 30,437 Claims and expenses Claims and claim adjustment expenses 6,996 7,149 21,025 20,335 Amortization of deferred acquisition costs 1,790 1,604 5,166 4,585 General and administrative expenses 1,460 1,312 4,344 3,887 Interest expense 98 98 294 278 Total claims and expenses 10,344 10,163 30,829 29,085 Income before income taxes 1,560 472 3,586 1,352 Income tax expense (benefit) 300 68 669 ( 13 ) Net income $ 1,260 $ 404 $ 2,917 $ 1,365 Net income per share Basic $ 5.50 $ 1.75 $ 12.68 $ 5.89 Diluted $ 5.42 $ 1.74 $ 12.51 $ 5.83 Weighted average number of common shares outstanding Basic 227.4 228.8 228.3 230.0 Diluted 230.6 231.1 231.3 232.5 Cash dividends declared per common share $ 1.05 $ 1.00 $ 3.10 $ 2.93 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income $ 1,260 $ 404 $ 2,917 $ 1,365 Other comprehensive income (loss): Changes in net unrealized gains (losses) on investment securities: Having no credit losses recognized in the consolidated statement of income 2,370 ( 2,391 ) 1,294 ( 1,986 ) Having credit losses recognized in the consolidated statement of income 1 — 4 — Net changes in benefit plan assets and obligations ( 1 ) ( 3 ) ( 4 ) ( 10 ) Net changes in unrealized foreign 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 September 30, in millions) Business Insurance Bond & Specialty Insurance Personal Insurance Total Reportable Segments 2024 Premiums $ 5,474 $ 1,009 $ 4,221 $ 10,704 Net investment income 642 101 161 904 Fee income 109 — 12 121 Other revenues 89 7 24 120 Total segment revenues (1) $ 6,314 $ 1,117 $ 4,418 $ 11,849 Segment income (1) $ 698 $ 222 $ 384 $ 1,304 2023 Premiums $ 4,956 $ 935 $ 3,827 $ 9,718 Net investment income 551 86 132 769 Fee income 102 — 10 112 Other revenues 71 6 24 101 Total segment revenues (1) $ 5,680 $ 1,027 $ 3,993 $ 10,700 Segment income (loss) (1) $ 468 $ 265 $ ( 193 ) $ 540 ________________________________________________________ (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 nine months ended September 30, in millions) Business Insurance Bond & Specialty Insurance Personal Insurance Total Reportable Segments 2024 Premiums $ 15,802 $ 2,942 $ 12,329 $ 31,073 Net investment income 1,883 285 467 2,635 Fee income 315 — 30 345 Other revenues 243 22 72 337 Total segment revenues (1) $ 18,243 $ 3,249 $ 12,898 $ 34,390 Segment income (1) $ 2,118 $ 587 $ 451 $ 3,156 2023 Premiums $ 14,077 $ 2,721 $ 10,990 $ 27,788 Net investment income 1,533 237 374 2,144 Fee income 299 — 25 324 Other revenues 185 18 72 275 Total segment revenues (1) $ 16,094 $ 2,976 $ 11,461 $ 30,531 Segment income (loss) (1) $ 1,626 $ 702 $ ( 648 ) $ 1,680 _________________________

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued Business Segment Reconciliations Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Revenue reconciliation Earned premiums Business Insurance: Domestic: Workers' compensation $ 858 $ 876 $ 2,602 $ 2,584 Commercial automobile 915 816 2,649 2,375 Commercial property 915 828 2,682 2,297 General liability 871 804 2,563 2,312 Commercial multi-peril 1,374 1,211 3,890 3,456 Other 21 21 51 55 Total Domestic 4,954 4,556 14,437 13,079 International 520 400 1,365 998 Total Business Insurance 5,474 4,956 15,802 14,077 Bond & Specialty Insurance: Domestic: Fidelity and surety 359 333 1,049 964 General liability 454 414 1,317 1,218 Other 58 57 172 168 Total Domestic 871 804 2,538 2,350 International 138 131 404 371 Total Bond & Specialty Insurance 1,009 935 2,942 2,721 Personal Insurance: Domestic: Automobile 1,973 1,772 5,766 5,084 Homeowners and Other 2,083 1,896 6,069 5,434 Total Domestic 4,056 3,668 11,835 10,518 International 165 159 494 472 Total Personal Insurance 4,221 3,827 12,329 10,990 Total earned premiums 10,704 9,718 31,073 27,788 Net investment income 904 769 2,635 2,144 Fee income 121 112 345 324 Other revenues 120 101 337 275 Total segment revenues 11,849 10,700 34,390 30,531 Net realized investment gains (losses) 55 ( 65 ) 25 ( 94 ) Total revenues $ 11,904 $ 10,635 $ 34,415 $ 30,437 Income reconciliation, net of tax Total segment income $ 1,304 $ 540 $ 3,156 $ 1,680 Interest Expense and Other (1) ( 86 ) ( 86 ) ( 257 ) ( 241 ) Core income 1,218 454 2,899 1,439 Net realized investment gains (losses) 42 ( 50 ) 18 ( 74 ) Net income $ 1,260 $ 404 $ 2,917 $ 1,365 _________________________________________________________ (1) The primary component of Interest Expense and Other was after-tax interest expense of $ 77 million and $ 78 million for the three months ended Septem

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued 2. SEGMENT INFORMATION, Continued (in millions) September 30, 2024 December 31, 2023 Asset reconciliation Business Insurance $ 99,192 $ 93,565 Bond & Specialty Insurance 13,060 11,478 Personal Insurance 21,430 20,072 Total assets by reportable segment 133,682 125,115 Other assets (1) 906 863 Total consolidated assets $ 134,588 $ 125,978 _________________________________________________________ (1) The primary components of other assets at both September 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 September 30, 2024, in millions) Gains Losses U.S. Treasury securities and obligations of U.S. government and government agencies and authorities $ 6,048 $ — $ 13 $ 136 $ 5,925 Obligations of U.S. states, municipalities and political subdivisions: Local general obligation 18,482 — 100 1,159 17,423 Revenue 9,244 — 59 544 8,759 Pre-refunded 832 — 4 1 835 Total obligations of U.S. states, municipalities and political subdivisions 29,683 — 171 1,758 28,096 Debt securities issued by foreign governments 949 — 8 15 942 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 11,880 — 253 134 11,999 Corporate and all other bonds 38,097 — 348 1,422 37,023 Total $ 86,657 $ — $ 793 $ 3,465 $ 83,985 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 $ 835 million and $ 966 million at September 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 $ 1.48 billion and $ 4.62 billion during the nine months ended September 30, 2024 and 2023, respectively. Gross gains of $ 2 million and $ 26 million and gross losses of $ 57 million and $ 93 million were realized on those sales during the nine months ended September 30, 2024 and 2023, respectively. Included in net realized investment gains (losses) for the nine months ended September 30, 2024 and 2023 were $ 34 million and $ 0 million , respectively, of losses resulting from the early redemption of fixed m

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 September 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 September 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 $ 105 $ — $ 3,052 $ 136 $ 3,157 $ 136 Obligations of U.S. states, municipalities and political subdivisions 1,771 8 15,819 1,750 17,590 1,758 Debt securities issued by foreign governments 13 — 539 15 552 15 Mortgage-backed securities, collateralized mortgage obligations and pass-through securities 523 3 1,527 131 2,050 134 Corporate and all other bonds 927 5 23,413 1,417 24,340 1,422 Total $ 3,339 $ 16 $ 44,350 $ 3,449 $ 47,689 $ 3,465 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 governmen

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 September 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 September 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 — — 48 581 629 Debt securities issued by foreign governments — — — — — Mortgage-backed securities, collateralized mortgage obligations and pass-through securities — — — — — Corporate and all other bonds — — 2 3 5 Total $ — $ — $ 50 $ 584 $ 634 Period For Which Fair Value is Less Than 80% of Amortized Cost (at December 3

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