In Q1 2024, Travelers saw its net income surge to US$1.123 billion, marking a substantial increase from the $975 million reported in Q1 2023. Core income also experienced growth, reaching $1.096 billion compared to $970 million in the corresponding quarter of the previous year.
The rise in core income is attributed primarily to increased net investment income and a higher underlying underwriting gain, partially offset by elevated catastrophe losses. Notably, the underlying underwriting gain surpassed the previous year’s quarter, even though it included a one-time tax benefit of $211 million.
Net realized investment gains for the current quarter stood at $35 million pre-tax ($27 million after-tax), a significant uptick from the $6 million pre-tax ($5 million after-tax) recorded in Q1 2023.
Q1 2024 witnessed an increase in catastrophe losses, totaling $712 million pre-tax, compared to $535 million pre-tax in the prior year quarter. These losses predominantly stemmed from severe wind and hail storms in the central and eastern regions of the United States, according to Travelers.
Despite the elevated level of catastrophe losses, Travelers’ combined ratio improved by 1.5 points to 93.9%. This improvement was driven by a better underlying combined ratio, although it was partially offset by higher catastrophe losses and lower net favorable prior year reserve development.
In the Business Insurance segment, Travelers reported an income increase to $764 million after-tax, primarily attributed to higher net investment income. The combined ratio improved to 93.3%, with underlying combined ratio showing strength at 89.2%.
Bond & Specialty Insurance segment reported an income decrease to $195 million after-tax, mainly due to lower net favorable prior year reserve development. However, combined ratio improved to 84.5% and underlying combined ratio to 86.5%.
Travelers Personal Insurance segment witnessed an income increase to $220 million after-tax, driven by a higher underlying underwriting gain and increased net favorable prior year reserve development. The combined ratio improved to 96.9%, with underlying combined ratio standing at 86.1%.
Overall, Travelers reported a significant increase in net written premiums to $10.18 million in Q1 2024, reflecting strong performance across its various segments and signaling a promising start to the year.
Alan Schnitzer, Chairman and Chief Executive Officer, commented, saying: “The year is off to a terrific start with strong profitability and production in all three segments, as well as higher investment income. In short, we’re firing on all cylinders. We also continue to invest in important strategic initiatives.
He added: “We have demonstrated success in executing our innovation strategy, which has contributed to superior returns with industry-low volatility, growth in our premium base and higher adjusted book value per share. With this momentum and the best talent in the industry, we remain well positioned for success this year and beyond.
