Travelers Cos. Inc. Friday reported fourth-quarter net income soared 98% to $1.63 billion, as lower catastrophe losses, price increases and higher investment income boosted its performance.

Speaking on an earnings call with analysts, Travelers Chairman and CEO Alan Schnitzer said the pricing environment remains strong and broad-based.

“Even with another quarter of very strong pricing, retention remains at historical highs,” he said.

Net written premium increased 13% to $9.99 billion in the quarter, and net investment income rose 24% to $778 million, largely driven by strong returns from its growing fixed-income portfolio, Travelers said in its earnings statement.

Pre-tax catastrophe losses for the quarter were $125 million, largely from wind and hailstorms in multiple states and a winter storm. That was down from $459 million in the year-earlier period.

The insurer’s combined ratio improved to 85.8%, from 94.5% in the same quarter of 2022.

All three of the insurer’s segments – business insurance, bond and specialty insurance, and personal insurance – contributed to underwriting gains, Mr. Schnitzer said.

Business insurance, Traveler’s main commercial lines business, reported net written premiums of $5.02 billion, up 14% compared with the same period in 2022. Renewal premium change in the segment remained high at 11.8%, while retention also remained high at 87%, Mr. Schnitzer said.

“The combination of strong pricing and retention reflects deliberate execution on our part and a disciplined marketplace,” Mr. Schnitzer said.

Business insurance generated $672 million of new business in the quarter, which was $180 million, or about 20%, higher than the prior-year quarter, he said.

During the quarter “meaningful” renewal rate increases were achieved on all lines other than workers compensation, Greg Toczydlowski, president of business insurance, said on the call. Property, umbrella and auto lines led the way, he said.

In bond and specialty insurance net written premiums increased by 7% to $989 million, while personal insurance was up 13% at $3.99 billion.

For the full year, Travelers reported net income of $2.99 billion, up 5% from 2022; net written premium of $40.2 billion, up 14%; and a combined ratio of 97%, a deterioration from 95.6% due to higher catastrophe losses. Net investment income of $2.92 billion pre-tax was up 14%.

On the analysts call, Travelers said it has increased the total amount of coverage on its catastrophe excess of loss reinsurance treaty for this year, placing coverage for $3.5 billion of the $4.5 billion layer excess of a $3.5 billion attachment point.

Travelers said it closed its previously announced acquisition of cyber managing general underwriter Corvus Insurance Holdings Inc. earlier this month, which will be reflected in its new business and production results over the course of the year.

In light of continued strong pricing and terms in the excess and surplus lines and reinsurance markets, Travelers said it has also renewed its 20% quota share agreement with Fidelis Insurance Holdings Ltd., a Bermuda-based specialty insurer and reinsurer in which it took a minority stake in 2021.

“The written premium volume, which will be included as part of international within the business insurance segments, is not expected to be material, but should have a modestly favorable impact on the underlying combined ratio for 2024,” Travelers Chief Financial Officer Dan Frey said on the call.

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