Travelers Reports a $807 Million Increase in Q4 Net Income, Reaching $1.6 Billion

The Travelers Companies, Inc. has announced a net income of $1.626 billion for the fourth quarter of 2023, a substantial increase of $807 million compared to the same period in 2022. This growth was primarily attributed to higher core income, although it was partially offset by net realized investment losses, as opposed to gains experienced in the fourth quarter of 2022.

Core income for the quarter reached $1.633 billion, a significant rise from $810 million in the prior year quarter. Travelers attributes this increase to a higher underlying underwriting gain, lower catastrophe losses, and higher net investment income.

However, the fourth quarter also saw net realized investment losses of $11 million pre-tax ($7 million after-tax), in contrast to net realized investment gains of $7 million pre-tax ($9 million after-tax) in the same period of 2022.

Net written premiums for Travelers in Q4 improved, reaching $9.994 billion, indicating a notable 13% increase from the previous year.

The overall performance of Travelers for the fourth quarter of 2023 is reflected in a combined ratio of 85.8%, a significant improvement from the 94.5% reported for the same period in 2022. Catastrophe losses, net of reinsurance, contributed just 1.2 percentage points to the Q4 combined ratio, compared to 5.2 percentage points in 2022.

Alan Schnitzer, Chairman and Chief Executive Officer, expressed satisfaction with the exceptional results, highlighting record highs in core income, earnings per share, and return on equity for the quarter. The company delivered a full-year core income of $3.1 billion, achieving a core return on equity of 11.5%.

For the entire year of 2023, Travelers reported a $149 million increase in net income to $2.991 billion. This improvement was supported by higher core income and lower net realized investment losses. Core income for the full year also rose by $74 million to $3.072 billion, primarily due to a higher underlying underwriting gain and increased net investment income.

Looking ahead, Schnitzer expressed confidence in the company's position for 2024 and beyond, citing strong fundamentals across its business segments. The strategic investments made in the business, along with robust cash flows, contribute to Travelers' positive outlook and confidence in future performance. Additionally, Travelers provided an update on its 2024 reinsurance renewal, revealing a 76% increase in the size of its core corporate catastrophe excess-of-loss reinsurance to $3.525 billion.

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