Summary of Travelers’ Q1 2021 earnings call
The call took place on Tuesday, April 20, 2021
- During the quarter, grew net written premiums by 2% to $7.5 billion. In Business Insurance, renewal premium change increased to 9.2%, 4 points higher than the prior year quarter.
- In workers’ compensation, pure renewal rate change was slightly negative but continued on an improving trend.
- Net written premiums in Business Insurance were down a little bit year-over-year, driven overwhelmingly by the workers’ comp product line, primarily reflecting the impact of the pandemic on payrolls as we’re comparing a pandemic-impacted quarter in the current year to a largely pre-pandemic quarter in the prior year.
- Bond & Specialty Insurance net written premiums increased by 9%, driven by renewal premium change of nearly 11% in management liability business.
- Personal Insurance – net written premiums increased by nearly 7%, driven by renewal premium change of almost 8% in homeowners business, and strong retention and new business in both auto and home.
- New business for both auto and home combined was up 17% compared to the prior-year quarter, which is the ninth consecutive quarter of double-digit growth in new business.
- Took decisive action in anticipation of weather volatility; added experts in data science, meteorology, geophysics, and environmental engineering, among others, to CAT management organization. Also established dedicated teams for each catastrophe peril with the goal of developing scientific and underwriting expertise. Incorporated the results into product development, risk selection, pricing, capital allocation, and claim response. In terms of claim – developed geospatial tools, artificial intelligence, and analytic models to facilitate a more effective tailored deployment of claim resources.
- Core income for the first quarter was $699 million, up from $676 million in the prior-year quarter, and core return on equity was 11.1%.
- New business of $95 million was down $24 million from the prior year quarter, also driven by a focus on improving profitability.
- Redesigned BOP 2.0 small commercial product includes fast, easy quoting experience. During the last 3 months, rolled out the new product in an additional 7 states, bringing the cumulative total to 30 states, representing approximately 60% of CMP new business premium. “We are encouraged with our agents’ adoption of the new product as both flow and new business premium are meaningfully improved as compared to the legacy BOP product.”
- Middle Market – renewal rate change at 9.1%, up almost 3 points from the first quarter of 2020, while retention remained at 86%.
- “And I would say about Simply Business, it continues to be a medium-term initiative that we feel urgent about. We’re not going to break it out more than that, but we are investing in it.” “So far, the small commercial market hasn’t really adopted a direct approach to buying the product other than at the very micro end. But we’re not betting that’s going to stay the same, and we’re investing in capabilities to make sure that we’re prepared to address that market as it matures.” (- CEO Alan Schnitzer)
Get Coverager to your inboxA really good email covering top news.