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Fortune 500

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<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Financial performance for the 160-year-old insurance holding company mostly held steady in 2020: Revenue inched up 1.3% for the year, and net income—at just shy of $2.7 billion—rose 2.9%. But that was enough to move Travelers up eight spots on the Fortune 500. The company extended its Stay-at-Home Auto Premium Credit Program last year, giving its U.S. personal auto insurance customers a 15% credit on premiums in April, May, and June. The company also accelerated commission payments to eligible agents and brokers, assisting them by putting more cash in their pockets during a difficult time.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:248,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:255}">Financial performance for the 160-year-old insurance holding company mostly held steady in 2020: Revenue inched up 1.3% for the year, and net income—at just shy of $2.7 billion—rose 2.9%. But that was enough to move Travelers up 14 spots on the Global 500. The company extended its Stay-at-Home Auto Premium Credit Program last year, giving its U.S. personal auto insurance customers a 15% credit on premiums in April, May, and June. The company also accelerated commission payments to eligible agents and brokers, assisting them by putting more cash in their pockets during a difficult time.</span>

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-98-Travelers

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Financial performance for the 160-year-old insurance holding company mostly held steady in 2020: Revenue inched up 1.3% for the year, and net income—at just shy of $2.7 billion—rose 2.9%. But that was enough to move Travelers up eight spots on the Fortune 500. The company extended its Stay-at-Home Auto Premium Credit Program last year, giving its U.S. personal auto insurance customers a 15% credit on premiums in April, May, and June. The company also accelerated commission payments to eligible agents and brokers, assisting them by putting more cash in their pockets during a difficult time.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:248,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:255}">Financial performance for the 160-year-old insurance holding company mostly held steady in 2020: Revenue inched up 1.3% for the year, and net income—at just shy of $2.7 billion—rose 2.9%. But that was enough to move Travelers up eight spots on the Fortune 500. The company extended its Stay-at-Home Auto Premium Credit Program last year, giving its U.S. personal auto insurance customers a 15% credit on premiums in April, May, and June. The company also accelerated commission payments to eligible agents and brokers, assisting them by putting more cash in their pockets during a difficult time.</span>

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-399-Travelers

The insurance holding company, which has been around more than 160 years, provides a wide range of commercial and personal property and casualty insurance products. The company's revenues have been impacted by COVID-19, but it says those loses have been somewhat mitigated by decreases in auto and other types of claims.

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F500-2020-106-Travelers

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 1853, the Travelers Companies is an insurance provider that operates through three main segments: business insurance, bond and specialty insurance, and personal insurance. The business, bond, and specialty insurance services are primarily distributed through independent agencies and brokers, focusing on risk management solutions for businesses. The personal insurance segment focuses on automobiles and homeowners.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q1 2025

Q4 2024

Travelers (TRV): Company Profile, Stock Price, News, Rankings

legacy

Travelers

travelers

Good morning, ladies and gentlemen. Welcome to the 4th quarter results teleconference for travelers. We ask that you hold all questions until the completion of formal remarks, at which time you will be given instructions for the question and answer session. As a reminder, this conference is being recorded on January 22, 2025. At this time, I would like to turn the conference over to Ms.

Abby Goldstein, Senior Vice President of Investor Relations. Ms. Goldstein, you may begin.

Thank you. Good morning and welcome to Travelers' discussion of our Q4 2024 results. We released our press release, financial supplement and webcast presentation earlier this morning. All of these materials can be found on our website at travelers.com under the Investors section. Speaking today will be Alan Schnitzer, Chairman and CEO Dan Frey, Chief Financial Officer and our 3 segment presidents, Greg Chislowski of Business Insurance Jeff Klank of Bond and Specialty Insurance and Michael Klein of Personal Insurance.

They will discuss the financial results of our business and the current market environment. They will refer to the webcast presentation as they go through prepared remarks and then we will take your questions. Before I turn the call over to Alan, I'd like to draw your attention to the explanatory note included at the end of the webcast presentation. Our presentation today includes forward looking statements. The company cautions investors that any forward looking statement involves risks and uncertainties and is not a guarantee of future performance.

Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors. These factors are described in forward looking statements in our earnings press release and in our most recent 10 Q and 10 ks filed with the SEC. We do not undertake any obligation to update forward looking statements. Also in our remarks or responses to questions, we may mention some non GAAP financial measures. Reconciliations are included in our recent earnings press release, financial supplement and other materials available in the Investors section on our website.

And now I'd like to turn the call over to Alan Schnitzer.

Thank you, Abby. Good morning, everyone, and thank you for joining us today. Before we begin, I want to take a moment to acknowledge the tragic wildfires that have devastated communities across Los Angeles. Our hearts go out to everyone affected, those who've lost their homes, their businesses and most tragically, their loved ones. At times like these, words alone are, of course, not enough.

As a company rooted in the communities we serve, we will be there for our customers and neighbors to support them as they recover and rebuild. We've assessed impacted areas through aerial imagery and made live contact with a substantial majority of our customers with claims, enabling us to expedite claim payments. In addition, our expert claim team is on the ground. We're grateful for their efforts. We also have mobile claim offices positioned in the area where customers can file a claim in person or receive an advanced claim payment.

And we look forward to working with policymakers in California to make sure the state has a resilient insurance market going forward. Now let me turn to our Q4 and full year 2024 results. We're very pleased to report that for the full year, core income was up 64% to

$5,000,000,000 or $21.58 per diluted share, generating core return on equity of 17.2%. These results were driven by strong fundamentals, growth in earned premiums, excellent underwriting profitability and a higher level of net investment income. That combination makes for a powerful earnings engine and that momentum is at our backs as we enter 2025.

We are very pleased to have generated exceptional top and bottom line results. Core income for the quarter of $2,100,000,000 was a record. Net earned premiums increased 9 percent to $10,900,000,000 and the combined ratio improved 2.6 points to 83.2%. The improvement in the combined ratio was driven by very strong underlying profitability and higher net favorable prior year reserve development. The underwriting margins were strong in all three segments.

The combined ratio in Business Insurance improved by more than 1 point to an excellent 85.2%. The combined ratio in our Bond and Specialty business was a very strong 82.7%. And the combined ratio in Personal Insurance improved more than 6 points to an exceptional 80.7%. These terrific segment results led to a reported consolidated combined ratio that improved 2.6 points to 83.2 percent. Turning to investments.

After tax net investment income for the full year was up 21 percent to $3,000,000,000 driven by strong and reliable returns from our growing fixed income portfolio and higher returns from our non fixed income portfolio. These results together with our strong balance sheet enabled us to grow adjusted book value per share by 13% during the year to $139.04 after making important investments in our business and returning more than $2,000,000,000 of excess capital to shareholders. Turning to the top line. To continued terrific marketplace execution across all three segments. We grew net written premiums during the year by 8%

$43,000,000,000 and in the quarter by 7% to $10,700,000,000 The strong value proposition that we offer to our customers and distribution partners along with outstanding execution by our colleagues in the field contributed to our top line success. In Business Insurance, we grew net written premiums in the quarter by 8% to $5,400,000,000 Renewal premium change in the segment remained very strong at 9.6%, including renewal rate change of 6.9%. Retention also remained strong at 85%. The combination of strong pricing and excellent retention reflects our deliberate and granular execution in a generally disciplined marketplace. In Bond and Specialty Insurance, we grew net written premiums by 7% to $1,100,000,000 with excellent retention of 88% in our high quality management liability business.

In our market leading surety business, we grew net written premiums by 19%. We are very pleased to have generated terrific production results across our commercial segments where margins continue to be attractive. That includes our E and S offerings where we grew net written premiums by 13% in 2024. In Personal Insurance, we grew net written premiums in the quarter by 7% to $4,300,000,000 driven by continued strong renewal premium change, particularly in our homeowners business. As we wrap up the year, I'd like to take a few minutes to reflect on our 2024 results and put them into an overtime context.

As we've shared, we are and have been focusing our investments on 3 strategic innovation priorities: 1st, extending our advantage and risk expertise second, providing great experiences for our customers, distribution partners and employees and third, optimizing productivity and efficiency. These investments are designed in large part to position us to grow over time at leading returns. The successful execution of that strategy has been an important contributor to our strong results, providing us with the financial resources that enable us to continue investing at scale, which we believe will increasingly be a differentiator in this industry. It's a virtuous cycle. The data on slide 19 of the webcast presentation illustrate the significant acceleration of our performance since we launched this strategy.

We've grown our net written premiums over the past 8 years by more than 70% to over $43,000,000,000 At the same time, we've improved our underlying combined ratio by nearly 7 points. High quality growth with strong underwriting profitability is a noteworthy achievement in this industry. In lines of business with returns that meet our objectives, growth over time has generally come from a combination of price increases and growth in customers. In lines where the emphasis has been on improving returns, premium growth has been driven by higher pricing. In addition, our growth has largely been organic from products in which we have deep expertise, the distribution partners with whom we have long standing relationships and in geographies where we have a thorough understanding of the regulatory environment and other market dynamics.

In other words, a relatively low risk growth strategy. Through our focus on productivity and efficiency, we've also meaningfully improved our operating leverage over this time. We've allocated some of that benefit to investments in strategic priorities. As you can see on slide 21, since 2017, we've more than doubled our investments in strategic technology initiatives. Over that same period, we've carefully managed growth in routine but necessary technology expenditures.

In other words, over an 8 year period, we simultaneously and meaningfully increased our technology spend and improved the strategic mix of that spend. In 2017, our strategic investments represented about a third of our tech spend. In 2024, our strategic tech investment approached nearly half of our overall tech spend of more than $1,500,000,000 At the same time, our efforts to improve operating leverage also enable us to lower our expense ratio by more than 3 points or about 10%. The flexibility that operating leverage gives us to allocate the benefit between investment opportunities and the bottom line is a valuable competitive advantage. Turning to underwriting.

The tremendous strength and relative predictability of our underlying underwriting income has increasingly contributed to our bottom line. Our underlying underwriting income has more than tripled over the last 8 years, reaching $4,500,000,000 after tax in 2024. This level of underlying underwriting income positions us to deliver strong income and returns even with the level of outsized natural catastrophes we in the industry experienced in 2024. Our growth in underwriting income also contributes to the increase in our cash flow from operations, which was $9,100,000,000 in 2024, our highest level ever and nearly $4,000,000,000 more than it was just 5 years ago. Our strong operating cash flow is important.

It gives us the ability to make strategic investments in our business, return excess capital to shareholders and grow our investment portfolio. Our investment portfolio, which we grew to almost $100,000,000,000 at year end, positions us to continue generating a higher level of predictable and reliable net investment income. In summary, we're capitalizing on the successful execution and effective strategy. Our strong results and financial position enable us to be there when our customers need us most as our friends and neighbors in Los Angeles do right now. The significant momentum we have built gives us great confidence in our ability to continue serving our customers and distribution partners while delivering for our shareholders.

In other words, we remain very confident in the outlook for Travelers. And with that, I'm pleased to turn the call over to Dan. Thank you, Alex.

Core income for the Q4 was $2,100,000,000 and core return on equity was 27.7%, bringing the full year core income to $5,000,000,000 and full year core ROE to 17.2%. We once again generated record levels of earned premium this quarter and we're very pleased with both the total combined ratio of 83.2% and the underlying combined ratio of 84%. The value of premium growth at strong underlying margins is evidenced by the quarter's underlying underwriting income of $1,400,000,000 after tax, bringing the year to date figure to $4,500,000,000 That's our first time ever above $4,000,000,000 and an increase of nearly 40% from last year's then record level. The reported and underlying combined ratios for both the quarter and the full year were very strong in all three segments. The expense ratio for the Q4 came in at 28.2%, once again reflecting the benefits of our focus on productivity and efficiency coupled with strong top line growth.

Full year expense ratio of 28.5 percent was in line with our expectations and our guidance throughout the year, even as the excellent loss ratio resulted in higher supplemental commission expense. Looking ahead to 2025, we're comfortable with the annual expense ratio at this level for now as the strength of the underlying loss ratio provides continued opportunity to make meaningful investments in both people and technology that we believe will broaden and deepen our competitive advantages well into the future. Catastrophe losses in the 4th quarter were a modest $175,000,000 pretax, including a net increase of a little more than $100,000,000 related to reestimation of prior quarter cats. Turning to prior year reserve development. We had total net favorable development of $262,000,000 pretax with all three segments contributing.

In Business Insurance, net favorable PYD of $147,000,000 was driven by favorability in workers' comp that was partially offset by adverse development in abuse and molestation exposure in our runoff book. In Bond and Specialty, net favorable PYD of $45,000,000 was driven by better than expected results in Fidelity and Surety. Personal Insurance had $70,000,000 of net favorable PYD with favorability in both Auto and Home. After tax net investment income of $785,000,000 was up 22% from the prior year quarter. Fixed maturity NII was again higher than the prior year quarter, reflecting both the benefit of higher yields and the significant growth in our portfolio of invested assets, which, as Alan mentioned, is approaching the $100,000,000,000 mark.

Returns in the nonfixed income portfolio were also higher than in the prior year quarter. In terms of our outlook for fixed income NII for 2025, including earnings from short term securities, we expect approximately $3,000,000,000 after tax, beginning with $710,000,000 in the 1st quarter and growing to $790,000,000 in the 4th quarter. Page 22 of the webcast presentation provides information about our January 1 catastrophe reinsurance renewal. Our long standing cat Our long standing cat XOL treaty

continues to provide coverage for both single cat

events and the aggregation of losses from multiple cat events, and we have increased the amount of total coverage for 2025. The per occurrence loss deductible is unchanged at $100,000,000 and we've placed coverage for $3,700,000,000 of the $4,000,000,000 layer above the $4,000,000,000 attachment point. We're pleased to have added $150,000,000 of coverage while reducing the total amount of ceded premium for this treaty. Also as part of our January 1 renewals, we enhanced our casualty reinsurance program for 2025. Thanks to the reinsurance market's receptivity to our casualty book, we were able to purchase more coverage at a lower attachment point on a roughly margin neutral basis.

I point this out to make you aware that the incremental ceded premium related to the additional coverage will impact the growth rate of consolidated net written premium for full year 2025 by a little less than 0.5 point. Because the written ceded premium impact all hits business insurance in the Q1, the impact on net written premium growth in Q1 for the BI segment will be about 4 points or about 2 points on a consolidated basis. And while we're talking about the 2025 year, on a financial modeling note, as you can see on Slide 23 of the webcast presentation, our pretax catastrophe plan for 2025 is 6.9 combined ratio points. Slide 23 also provides a summary of the seasonality of our cat losses over the prior decade. As shown in the data, 2nd quarter has regularly and noticeably been our largest cat quarter.

We've provided this view of historical data in our year end packages for a few years now, but we thought it might also be helpful to share our plan view for the coming year by quarter, so you'll find that here as well. Obviously, the 2025 plan figures were put together without knowledge of the January wildfires in California. As you know, the California wildfires that began earlier this month are going to be a material event for the industry and will have a material impact on our Q1 earnings. Because the event is so recent and to some degree still ongoing, we'd like to take more time to refine our analysis before providing an estimate. Also of interest for 2025, we continue to value our relationship with Fidelis and are pleased to have renewed the 20% quota share with them.

The renewal includes the same loss ratio cap we had in place for both 2023 2024. Turning to capital management. Operating cash flows for the quarter of $2,100,000,000 were again very strong, and we ended the quarter with holding company liquidity of approximately $1,800,000,000 For the full year, we generated our best ever level of operating cash flow at $9,100,000,000 Interest rates increased during the quarter. And as a result, our net unrealized investment loss increased from $2,100,000,000 after tax at September 30, dollars 3,600,000,000 after tax at year end. Adjusted book value per share, which excludes net unrealized investment gains and losses, was $139.04 at year end, up 13% from a year ago.

We returned $494,000,000 of capital to our shareholders this quarter, comprising share repurchases of $252,000,000 and dividends of $242,000,000 We have approximately $5,000,000,000 of capacity remaining under the share repurchase authorization from our Board of Directors. Recapping our results for 2024. Core income was just over $5,000,000,000 and core ROE was 17.2%. We delivered our highest ever levels of written premium, underwriting income, net investment income, core income and cash flow from operations. In addition, we ended the year with our all time high in adjusted book value per share and with our largest investment portfolio ever.

In short, we're extremely well positioned for 2025 and beyond. And with that, I'll turn the call over to Greg for a discussion of Business Insurance.

Thanks, Dan. Business Insurance had another strong quarter rounding out a terrific year in terms of financial results, execution in the marketplace and progress on our strategic initiatives. Segment income for the quarter was nearly $1,200,000,000 our highest quarter ever and up about 25% from the prior year quarter, which was our previous quarterly high. The improvement from the prior year was broad based, driven by higher net investment income, higher underlying underwriting income and higher favorable prior year reserve development. The all in combined ratio of 85.2% was a great result.

We're once again particularly pleased with our exceptional underlying combined ratio of 86.2%, an all time quarterly best. The underlying loss ratio improved by more than 0.5 point from the prior year driven by the benefit of earned pricing. The expense ratio remained excellent at 28.8%. Turning to the top line. We grew net written premiums by 8% to an all time 4th quarter high of more than $5,400,000,000 Pricing remained strong with renewal premium change of 9.6% driven by renewal rate change of 6.9%.

Retention remained excellent at 85 percent. And new business of $641,000,000 was the 2nd highest 4th quarter result ever, 2nd only to last year's record 4th quarter. We're pleased with these production results and our ability to sustain strong levels of pricing, reflecting the relative return profiles and environmental trends for each line. Renewal rate increases in umbrella and auto were both well into double digits and both up sequentially from the 3rd quarter. Rate increases in CMP and GL remained strong and generally in line with 3rd quarter levels, while the rate increases in property were less than Q3.

More specifically on property rate, the moderation continues to be driven by our national property book, where returns are very strong after several years of compounding rate and improvements in terms and conditions. Across the book, even with these sustained strong pricing levels, retention remained excellent, as I mentioned earlier, reflecting our strong value proposition and the marketplace's acknowledgment of environmental trends and uncertainty. As for the individual businesses, in select, renewal premium change remained strong at 12%, up about 1 point from the Q4 of last year. Renewal rate change of 5.6% ticked up from the 3rd quarter and was up more than 1.5% from the prior year quarter. As we expected, retention moderated as we continue to intentionally optimize our CMT risk return profile in a couple of targeted geographies.

New business was healthy and near historical highs. Overall, we remain pleased with the granular pricing and underwriting execution driving profitable growth in Select. The mix we are achieving through these actions positions us for long term success. In middle market, renewal premium change was close to 10% with renewal rate change of 7.8%, about flat with the 3rd quarter and up about 1 point from the prior year quarter. The rate increases remain broad based as we achieved positive rate change on almost 80% of our middle market accounts.

And the execution was once again excellent with meaningful spread from our best performing accounts to our lower performing accounts. Lastly, new business of $357,000,000 was our highest ever 4th quarter and we're pleased with the risk selection and strength of pricing on the accounts we added to the portfolio. As we close out 2024, let me provide a little color on full year results before turning the call over to Jeff. Segment income of more than $3,300,000,000 the underlying combined ratio of 88.1% and top line of more than $22,000,000,000 were all record results. As for production, renewal premium change and retention both remained historically high, while new business premiums reached an all time best.

These results are a direct reflection of our strong value proposition as well as the successful execution of our thoughtful and deliberate strategies. And while delivering these exceptional financial and production results, I'm also extremely pleased with our field's execution and our broader team's dedication to delivering new tools, insights and product enhancements. We've strengthened our competitive advantages in several key areas. Among other achievements, we have developed more granular and predictive price to risk models, enhanced submission insights based on quality and appetite, leveraged more segmented and responsive loss analytics methodologies and integrated a customer relationship platform with our cutting edge underwriting workstation. Our financial and operational performance this year was terrific and our continued focus and investment in strategic capabilities positions us extremely well for long term profitable growth.

We're proud of these results and the best in class team that produced them. With that, I'll turn the call over to Jeff.

Thanks, Greg. Bond and Specialty ended the year with another strong quarter on both the top and bottom lines. We generated segment income of $228,000,000 an excellent combined ratio of 82.7 percent and a strong 86.8% underlying combined ratio in the quarter. Turning to the top line. We're pleased that we grew net written premiums by 7% in the quarter.

In our high quality domestic management liability business, we delivered very strong retention of 88%. We're pleased that Corbus transition from an MGA to writing on our high quality paper drove higher retention relative to Corbus historical experience. Management liability renewal premium change was positive and improved a point from the Q3 and new business was consistent with the very strong Q4 of 2023. Turning to our market leading surety business. We grew net written premiums by an outstanding 19% from prior year quarter.

This growth reflects a robust construction environment, continued strong demand for our surety products and services and outstanding execution by our team in growing

So we're pleased to have once again delivered strong top and bottom line results this quarter in Bond and Specialty Insurance, capping off a year during which we delivered record levels of net written premiums in both our surety and management liability businesses. We're also pleased to have delivered excellent returns while making significant strategic investments in our business, including enhancing our cyber capabilities, upgrading our management liability technology platform and optimizing segmentation and productivity through advanced analytics and AI. And now I'll turn the call over to Michael.

Thanks, Jeff, and good morning, everyone. I'm very pleased to share that Personal Insurance delivered segment income of $798,000,000 and a combined ratio of 80.7 percent for the Q4 of 2024. Both results outpaced last year's strong Q4 result. For the full year, PI delivered record segment income of $1,250,000,000 and a combined ratio of 94.4%, reflecting substantial improvement in the fundamentals of our business. Net written premiums grew 7% in the quarter and 8% for the year, bringing full year net written premium to a record of nearly $17,200,000,000 In Automobile, the 4th quarter combined ratio was 94.2%.

The underlying combined ratio of 96.3% improved 6.4 points compared to the prior year. This improvement was primarily driven by the benefit of higher earned pricing, lower losses resulting from favorable frequency across a number of coverages and sustained moderation in physical damage severity trends. This quarter's underlying results included a 1.5. Benefit from the favorable re estimation of prior quarters in the current year. For the full year 2024, the auto combined ratio of 95% was a considerable improvement compared to the prior year, reflecting the success of our disciplined approach to execution.

With another quarter of sustained profitability, we remain focused on growing the auto book. In Homeowners and Other, the 4th quarter combined ratio of 67.8% improved 3 points compared to the prior year as an improved underlying combined ratio was partially offset by the impact from higher catastrophes. The underlying combined ratio improved 4.3 points, primarily driven by favorable non weather losses relative to the prior year and the continued benefit of earned pricing. This quarter's underlying results included a 2 point benefit from the favorable re estimation of prior quarters in the current year. Stepping back, the 2024 full year property combined ratio of 93.9 percent was a strong calendar year result.

That said, we have more work to do to improve accident year profitability and consistently deliver target returns over time. Our production results reflect our continued focus on generating growth in auto while improving profitability in property through the execution of a granular state by state strategy. In domestic automobile, retention remained consistent while renewal premium change of 10.2% continued to moderate as intended, reflective of auto profitability. We're pleased to note that auto new business premium increased relative to the prior year quarter, driven by growth in new policies and new business premiums in states that are not constrained by our property actions. In domestic homeowners and other, retention rose slightly to 86% and renewal premium change of 14.1% remains strong and consistent with recent quarters.

In 2025, we expect renewal premium change to increase to the high teens as we continue to seek rate increases and further increase insured values to ensure they remain aligned with replacement costs. The slight decline in homeowners policies in force continues to reflect our deliberate efforts to improve profitability and thoughtfully deploy our property capacity. To recap, in 2024, we delivered record net written premiums and segment income. The substantial year over year improvement reflects the success of the significant actions we've taken to improve the fundamentals of the business as well as the moderation of underlying loss trends. At the same time, we continue to invest in and deliver capabilities that will support the profitable growth of our business.

Examples include the re platforming of our specialty products, continued advancement of our IntelliDrive telematics offering, further evolution of our AI enabled aerial imagery capabilities and modernization of our infrastructure. I couldn't be more proud of our team or more grateful to our distribution partners for their hard work and dedication in the face of an environment that continues to test and challenge us and our industry. In particular, I'd like to recognize our claim team who as we speak are on the ground in California supporting our customers in their time of need. With that, I'll turn the call back over to Abi.

Thanks, Michael. We are ready to open up for questions now.

Thank you. We will now begin the question and answer you. We'll go first to Robert Cox at Goldman Sachs.

Hi, thanks for taking my question. Maybe just first on pricing. I was hoping you could kind of unpack the renewal rate change a little bit and what you saw over the quarter that might have been indicative of a trend into 2025, whether it's by account size or product. Just curious what changed in the context of the overall stable figure for Business Insurance?

Robert, this is Greg. Given the headline numbers, you can see there isn't meaningful change between the pricing. And so again, our very granular local execution, we continue to look at on account by account basis, and we haven't seen any meaningful shift other than the color that I gave you in the prepared comments. So very stable.

it. And then maybe just as a follow-up on cats. Obviously, a number of large events here. I was hoping you could just walk us through what you booked for Milton, if that $100,000,000 increase in current year cats was all related to Helene. And then not necessarily a quantitative question, but ultimately like the impacts that you expect might come out of the California fires?

Hey, Rob, it's Dan. So I'll start with the PYD. So no big events in the quarter as you can see by no new events. You'll be able to see when the cake comes out in the table. Milton was around $60,000,000 for us, a little less than the preliminary range we had provided on the Q3 earnings call.

A number of prior quarter cats had adjustments to them. That's typical. That change that you referenced from my prepared remarks was driven by Helene. Not surprising, not concerning, right? That was a big event in the last 5 days of the quarter.

And with sort of an unusual pattern as it had sort of did more damage in Georgia and the Carolinas than it did in Florida. So when you get a big event at the end of the quarter, you're trying to say, I have other similar historical events that I can model out how claims are going to come in and then what the severity of different types of claims is going to be. You just didn't have a lot of comparables in terms of Helane. So not really surprising to see a move there. In terms of California, look, as we said in our remarks, it's going to be a big event for the industry.

We think it will have an impact on our Q1 earnings for sure. But to the degree that it's still very early and it's still really ongoing in some cases, it's just too soon for us to provide a number at this point.

We'll move next to Gregory Peters at Raymond James.

Good morning, everyone. I guess, for the first question, kind of building on the last answer. In your prepared remarks, Greg, you talked about the select retention dropping down a little bit due in part to some changes in your CMP profile. If you could give us some little color on that. And maybe as we look at business insurance, give us some perspective on the retention ratios as it relates to loss business that you're losing on price versus intentional reunderwriting?

Yes, Greg, let me take those two pieces first. The Select one starts there. You get into a little bit of competitive sensitive information if I give you the exact specifics of what geographies and industry classes that we're non renewing, but let me give you a little color over the top. We would only do non renewals when we can't get the right price to risk through the regulatory process. So you can think about severe convective storm.

That's a recent peril that continues to be more severe. We've isolated a couple of spots where we've needed non renewal components of the small commercial book, but that gives you a little bit of the flavor of what's driving that. We think we bottomed out on those non renewals of Select. So at that 80% retention, that's kind of the expectation that we have given that we are through the for us to those renewals in the back half of 2025, we would see some improvement there. So that's really the driver of what's driving the slight deterioration in retention across Business Insurance.

Great. And then I guess, as a follow-up, and I've asked this question of you before, Alan. But looking at Slide 21, which is your technology investments, not really you provide us this chart, don't really put some numbers in there. And we hear you in various comments, dribble out commentary about where you're making investments in technology. But I thought maybe you could spend a minute and give us some more granular details on what's going on there because it seems like it's a pretty important initiative for the company.

Yes. Thanks, Greg, and good morning. In terms of numbers, we don't put numbers on that scale, but we have shared that the overall tech spends over $1,500,000,000 last year. And I think we shared that in the prior year. And if I had to give you a broad brush response to where is it, I would say broadly speaking, but not exclusively, but broadly speaking, we're digitizing the value chain.

And so that's digitizing the customer journey. It's modernizing the foundation. It's advanced analytics. It's automation. It's faster speed to market, getting the right price on the risk, those sorts of things.

But at the enterprise level, we're also investing in talent and AI and third party data, product development. The business units and segments are busy at work investing in new products, partner integration, better front end for customers, things like that.

We'll go next to Mike Zaremski at BMO Capital Markets.

First question on the reserve releases in commercial. Most releases we've seen in a couple of years, good to see. Any I heard that we heard the prepared remarks, the high level prepared remarks, but anything you'd want to call out is kind of a notable true up or I guess this level of releases would have kind of implied at the IBNR you guys have added in recent years more so than your peers kind of is helping?

Sure, Mike. It's Dan. So just to come back to the remarks specific to Business Insurance, the main driver of the favorability was workers' comp. Workers' comp has been, as you all well know, a very favorable story for a long time now. It's sort of just a question of how much is it from quarter to quarter depending on the way data developments and changes in frequency and severity.

We've said it before and I'll just say it again, we don't really think of PYD as a run rate of any sort. So I expect that number to be different from quarter to quarter. That was the big piece of good news in the quarter. The only noteworthy piece of unfavorable development in the quarter, as I mentioned on the call, was strengthening in the runoff book for abuse and molestation. There are always other puts and takes in the quarter, but nothing of any significance are worth calling out.

Okay. Great. And I guess my follow-up, I'll stick to workers' comp. And you may have answered this in Rob's question, but in the prepared remarks, I don't think you mentioned kind of any pricing changes quarter over quarter or trends on workers' comp. So is it just fair to assume given the workers' comp pricing still a bit negative on real pricing?

I would say, Mike, I would describe it as largely stable. The pure renewal rate change is a little bit negative and with exposure you get to something a little bit positive. And there's always some fluctuations quarter to quarter, but I think stable is for the way I'd describe it.

We'll go next to David Motomaden at Evercore ISI.

Hey, thanks. Good morning. I had a question just on the Business Insurance underlying loss ratio. Greg, I heard you call out just earned rate coming in. I guess, I'm wondering, is there anything else in that 57.3% that's not sustainable or favorable mix or anything like that that's flattering the result?

David, it's Dan. I'll take that. So I guess the answer is not really. When we have something that we think you need to sort of call out as non recurring, we try to do it in prepared remarks. You heard Michael reference current year prior quarter adjustments benefiting the Q4 in auto and home.

We didn't call anything out in BI because we didn't really think there was anything unusual to call out. So the benefit in the quarter is earn price, really terrific underlying at 57.4%. And even within that, we did choose to add a little bit of IBNR to the casualty line, again reflecting uncertainty in that line, not a big move. So a pretty clean jump off point and really driven by benefit from pricing.

Got it. Thank you. And then maybe just on that point, just adding more IBNR to some of those casualty lines and then maybe just looping in the decision to increase the reinsurance protection on the casualty book. Could you just walk through sort of the thought process of getting the reinsurance? And is it just sort of I mean, you guys are it seems like you guys are reacting sooner than many in the industry.

And is that just sort of added protection as you lean into growth? Or I'd be interested in sort of the thought process there.

David, let me start and then I'll turn it over to Dan if I leave anything out. I would say the changes we made, we made because we could. And every renewal of every reinsurance treaty, we take a look at our business, we take a look at the reinsurance marketplace and make the best risk reward decisions we could make. And so what we were able to achieve for the price we were able to achieve it, we thought made a lot of sense. But I would describe ordinary course process and a terrific result.

We'll go next to Brian Meredith at UBS Financial.

Yes. Thank you. I'm just curious looking at the BI results, the underlying combined ratio is as good as it's been in 20 years. I'm just curious, in your thoughts, are we kind of sitting here at peak margins? Is there more room for improvement?

How should we kind of think about the margin to return you're joining in the business, which are record?

Well, thanks for that, Brian. They are terrific margins and we're very pleased with these margins. I'm not going to forecast the margins for you. But what I'll tell you is we love the business that we're putting on the books and we love the pricing, we love the stability in the marketplace, we love the retention that we're seeing. And these you take a look at this RPC, which is near double digits, that's it's about the highest it's ever been over a long period of time.

the outlook. But I'm going to stop short of telling you what the direction is going to be.

little bit as a follow-up that I'm curious your comments and thoughts on the Tort environment right now. Always appreciate your comments on it. Anything that you're seeing or happening that maybe points to some improvement potentially going forward or vice versa?

Yes. The TORCH environment is it's definitely continues to be front and center and front of mind for us. It's an environmental issue that we're all facing. From a public policy perspective, the insurance industry might be the tip of the spear, but this is really an industry for businesses and consumers. And I think there's a growing recognition of that.

It also has contributed to some very difficult insurance markets in a few states and we've seen a couple of states take action to respond to that. And in a couple of other states, we've had some favorable development in terms of some legislation around 3rd party litigation financing disclosure, which we think is positive and hope is a trend. So, it continues to be front and center for us and we continue to try to get at it.

We'll move next to Wes Carmichael with Autonomous Research.

Travelers (TRV) Q4 2024 Earnings Call Transcript

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