Travelers’ Q3 Earnings Beat On Strong Underwriting

New York based The Travelers Companies, Inc. (TRV – Analyst Report) is one of the leading writer of auto and homeowners’ insurance through independent agents as well as writer of commercial U.S. property-casualty insurance.

Travelers’ impressive inorganic growth story bodes well for long-term growth. While its prudent acquisitions help to expand in the attractive and growing market place outside the United States as well, the same bear testimony of its solid capital and liquid position.

Travelers’ focus on reducing operating expenses and acquisition costs in order to improve underwriting margins bodes well for to have more competitively priced product in its portfolio.

Cost reduction plans are expected to enhance the company’s savings as well.

However, a soft interest rate environment dampened investment results.

Travelers has beaten estimates thrice in the last four quarters, making for an average surprise of just about 17.9%.

Currently, Travelers has a Zacks Rank #1 (Strong Buy), but that could definitely change following its earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Bottom Line Surpassed Expectation

Travelers beat on earnings. Our consensus called for EPS of $2.21 per share, and the company reported EPS of $2.93 per share. The solid performance was driven by study underwriting performance as well as higher net favorable prior year reserve development.

Revenues Beat

Revenues of $6.8 billion outperformed the Zacks Consensus Estimate of $6.6 billion.

Key Stats to Note

  • Net written premiums of $6.2 billion, up 3% year over year.
  • Underwriting gains improved 34.6% to $759 million.
  • Combined ratio improved 310 basis points to 86.9%.
  • Adjusted book value per share improved 4.7% to $74.35 as on Sep 30, 2015.
  • Returned $939 million in capital to shareholders.
  • Get the latest research report on TRV – FREE

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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