NEW YORK - The Travelers Companies, Inc. (NYSE:TRV) reported third quarter earnings that significantly exceeded analyst expectations, sending shares up over 7% in early trading on Thursday.
The insurance giant posted core earnings of $5.24 per share, handily beating the consensus estimate of $3.66. Revenue also topped forecasts, coming in at $11.9 billion versus expectations of $11.46 billion.
Travelers saw strong results across all of its business segments. The combined ratio, a key measure of underwriting profitability, improved 7.8 points year-over-year to 93.2%. This was driven by an 11.5 point improvement in the underlying combined ratio to an excellent 85.6%.
"We are pleased to report excellent results for the quarter, with both underwriting and investment income contributing meaningfully to our strong performance," said Alan Schnitzer, Chairman and CEO.
Net written premiums grew 8% to a record $11.3 billion, reflecting strong renewal premium increases and retention across Travelers' business lines. The company's investment portfolio generated $742 million in after-tax net investment income, up 16% from the prior year quarter.
Catastrophe losses totaled $939 million pre-tax, compared to $850 million in Q3 2022. The company also reported $126 million in net favorable prior year reserve development.
Travelers ended the quarter with book value per share of $122.00, up 39% year-over-year. The company returned $496 million to shareholders through dividends and share repurchases during Q3.
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