Travelers Q4’22 conference call

Travelers hosted its Q4 2022 earnings call on Jan 24, 2023. The highlights:

• Over 30,000 colleagues
• Delivered net written premium growth of 10% for the quarter – $8.8 billion – with all 3 segments contributing
• Core income for the quarter was $810 million or $3.40 per diluted share, generating core return on equity of 12.3%
• Realized best ever underlying combined ratio in Business Insurance
• Over the past 5 years, Travelers has meaningfully increased its overall technology spend and improved the mix of its technology spend, increasing its spending on strategic initiatives by nearly 70%, while holding routine but necessary expenditures about flat
• Over the last 10 years – in 5 of those years, Personal Insurance outperformed business insurance and vice versa while Bond & Specialty business delivered spectacular results in every one of those years
• “We feel very good about our concentration in North America, the largest, most advanced and most stable economy in the world” – CEO Alan Schnitzer
• Business Insurance had another strong quarter – segment income for the quarter was $725 million with an all-in combined ratio of 89.5%
• New business was up 6% from the prior year quarter, driven primarily by BOP 2.0 product as well as growth in other lines
• Continued to roll out its BOP 2.0 product, which is now live in 46 states
• Launched new commercial auto product in a handful of states
• In middle market business – “we advanced our capabilities around digitizing the underwriting transaction for our agents and brokers”
• In small commercial – “we launched our new front-end rate quote and issue interface platform to make it faster and easier for our agents to write business with us, all while maintaining the underwriting discipline and specialization behind the scenes”
• In Personal Insurance – the fourth quarter loss of $61 million and a combined ratio of 105.3% were negatively impacted by the weather event in late December as well as elevated underlying loss activity in both auto and home insurance
• On [US] home insurance –  achieved renewal premium change of 14.5% in the fourth quarter, retention remained strong at 84%