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Jun 30, 2020
Travelers Q2 2020 Earnings Report
Reported a net loss and core loss per diluted share for the second quarter of 2020.
Key Takeaways
Travelers reported a net loss of $40 million and a core loss of $50 million for Q2 2020, primarily due to higher catastrophe losses, lower net investment income, and lower net favorable prior year reserve development, partially offset by a higher underlying underwriting gain.
Second quarter net loss of $40 million and core loss of $50 million.
Catastrophe losses of $854 million pre-tax, compared to $367 million pre-tax in the prior year quarter.
Net investment income of $268 million pre-tax, compared to $648 million pre-tax in the prior year quarter.
Consolidated combined ratio of 103.7%; underlying combined ratio improved 3.5 points to a strong 91.4%.
Travelers
Travelers
Travelers Revenue by Segment
Revenue by Segment
Business Insurance Revenue
CapyFin.comBond & Specialty Revenue
CapyFin.comPersonal Insurance Revenue
CapyFin.com Forward Guidance
The Company expects to recognize in the third quarter of 2020 favorable prior year reserve development of approximately $400 million, pre-tax and net of expenses and reinsurance, related to the 2017 and 2018 wildfires in California.
Positive Outlook
- Expects to recognize approximately $400 million pre-tax related to PG&E subrogation recoveries in Q3 2020.
- In Business Insurance, achieved renewal rate change of 7.4%, nearly 4 points higher than the prior year quarter and its highest level since 2013.
- In Bond & Specialty Insurance, net written premiums increased by 3% as our domestic management liability business achieved renewal premium change of 7.8%, including record renewal rate change, while retention remained strong.
- In Personal Insurance, excluding the auto premium refunds, net written premiums increased by 6%, driven by strong retention and new business in both Agency Auto and Agency Homeowners.
- In our Agency Homeowners business, renewal premium change remained very strong at 7.7%.
Challenges Ahead
- Second quarter net loss of $40 million and core loss of $50 million.
- Catastrophe losses of $854 million pre-tax, compared to $367 million pre-tax in the prior year quarter.
- Net investment income of $268 million pre-tax, compared to $648 million pre-tax in the prior year quarter.
- Consolidated combined ratio of 103.7%
- Net written premiums of $7.346 billion, down 1% compared to the prior year quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income