The Travelers Companies, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income for the quarter ended September 30, 2026, was $1.917 billion ($9.04 per diluted share), compared to $1.888 billion ($8.24 per diluted share) in the prior year quarter.
• Core income for the quarter was $1.947 billion ($9.18 per diluted share), an increase of 4% from $1.867 billion ($8.14 per diluted share) in the prior year quarter.
• Year-to-date net income was $5.836 billion ($27.05 per diluted share), a 54% increase from $3.792 billion ($16.45 per diluted share) in the prior year period.
• Year-to-date core income was $5.803 billion ($26.90 per diluted share), a 52% increase from $3.814 billion ($16.54 per diluted share) in the prior year period.
• Consolidated combined ratio was 86.8% for the quarter (improved 0.5 points from 87.3% in the prior year) and 86.3% year-to-date (improved 6.9 points from 93.2% in the prior year).
• Underlying combined ratio was 84.1% for the quarter (up 0.2 points from 83.9%) and 84.5% year-to-date (up 0.1 points from 84.4%).
• Underwriting income was $1.432 billion pre-tax for the quarter and $4.343 billion pre-tax year-to-date.
• Net favorable prior year reserve development totaled $234 million pre-tax for the quarter and $1.225 billion pre-tax year-to-date.
• Net investment income was $1.098 billion pre-tax ($908 million after-tax) for the quarter, a 6% increase from the prior year quarter, and $3.176 billion pre-tax ($2.624 billion after-tax) year-to-date, a 9% increase.
• Net realized investment losses were $34 million pre-tax ($30 million after-tax) for the quarter, compared to gains of $27 million pre-tax ($21 million after-tax) in the prior year quarter.
• Return on equity was 24.7% for the quarter and 24.3% year-to-date.
• Core return on equity was 22.1% for the quarter and 22.3% year-to-date.
• Shareholders' equity was $28.995 billion as of September 30, 2026, a 12% decrease from year-end 2025, primarily due to higher net unrealized investment losses and capital returns.
• Book value per share was $141.48 as of September 30, 2026, a 6% decrease from year-end 2025.
• Adjusted book value per share was $172.47 as of September 30, 2026, a 9% increase from year-end 2025.
• Net written premiums were $11.480 billion for the quarter (flat vs. prior year) and $33.347 billion year-to-date (down 1% vs. prior year). Excluding the impact of the Canadian business divestiture, net written premiums increased 2% in both periods.

Guidance and Future Outlook

• Management expressed confidence heading into 2027 and beyond, citing strong momentum and advances on the innovation agenda.
• The company stated it is well-positioned to finish the year strong based on strong underwriting and investment results through the first nine months.

Business Segments and Product Lines

• Business Insurance:
  • Segment income was $1.036 billion for the quarter (up $129 million) and $3.073 billion year-to-date (up $670 million).
  • Net written premiums were $5.868 billion for the quarter (up 3%, or 4% excluding Canadian divestiture) and $17.638 billion year-to-date (up 3%, or 4% excluding Canadian divestiture).
  • Combined ratio was 90.9% for the quarter and 90.5% year-to-date.
  • Renewal premium change was 4.1% overall, 5.4% in Middle Market, and 7.8% in small commercial Select. Excluding Property, renewal premium change was 7.0%.
  • New business was a record $699 million for the quarter, up 4% from the prior year.
  • Retention remained strong at 86%.
• Bond & Specialty Insurance:
  • Segment income was $309 million for the quarter (up $59 million) and $797 million year-to-date (up $83 million).
  • Net written premiums were $1.209 billion for the quarter (up 12%, or 13% excluding Canadian divestiture) and $3.512 billion year-to-date (up 11%, or 12% excluding Canadian divestiture).
  • Combined ratio was 77.3% for the quarter and 81.0% year-to-date.
  • Management Liability renewal premium change improved to 3.8% with retention at 89%.
  • Surety net written premiums grew 21%.
  • New business in the segment was up 18% for the quarter.
• Personal Insurance:
  • Segment income was $706 million for the quarter (down $101 million) and $2.237 billion year-to-date (up $1.270 billion).
  • Net written premiums were $4.403 billion for the quarter (down 7%, or 3% excluding Canadian divestiture) and $12.197 billion year-to-date (down 8%, or 4% excluding Canadian divestiture).
  • Combined ratio was 83.5% for the quarter and 82.0% year-to-date.
  • Underlying combined ratio improved 1.0 points to 76.7% for the quarter, driven by improvement in Automobile.

Market and Competitive Landscape

• Catastrophe losses for the quarter were driven by severe wind and hail storms in multiple states.
• Year-to-date catastrophe losses included severe wind and hail storms and winter storms in the first six months of 2026, in addition to third-quarter events.
• The company noted intense competition in attracting and retaining employees and managing a changing distribution landscape.

Risks and Challenges

• High levels of catastrophe losses remain a risk.
• Actual claims may exceed reserves, or loss costs may not be fully offset by price increases due to inflation and tariffs.
• Continued exposure to asbestos claims and mass tort claims.
• Investment portfolio is subject to credit and interest rate risk, with potential for material realized or unrealized losses.
• Risks associated with geopolitical environments, including the war with Iran, and potential cyber attacks.
• Regulatory changes and compliance controls.

Management Commentary and Tone

• Alan Schnitzer, Chairman and CEO, described the results as "excellent" and noted a "run of successful quarters."
• Management highlighted "very strong underwriting performance across all three segments" and a "record result from our investment portfolio."
• Schnitzer stated that "profitability was excellent on both a reported and underlying basis."
• Management expressed "real confidence heading into 2027 and beyond" due to momentum and innovation agenda advances.

Other Key Points

• Total capital returned to shareholders in the quarter was $1.769 billion, including $1.508 billion in share repurchases.
• The company repurchased 4.0 million shares at an average price of $376.00 per share during the quarter.
• $2.415 billion of capacity remained under share repurchase authorizations as of September 30, 2026.
• The Board declared a regular quarterly dividend of $1.25 per share, payable December 31, 2026.
• Statutory capital and surplus was $31.596 billion as of September 30, 2026.
• The debt-to-capital ratio was 25.3% as of September 30, 2026, and 21.7% excluding after-tax net unrealized investment losses, within the target range of 15% to 25%.
• Net unrealized investment losses included in shareholders' equity were $8.049 billion pre-tax ($6.352 billion after-tax) as of September 30, 2026, compared to $1.862 billion pre-tax ($1.478 billion after-tax) at year-end 2025, driven by higher interest rates.
• The company divested its Canadian operations in the first quarter of 2026, impacting comparative premium figures.