TRV - Earnings call transcript Q1 2021 | The Travelers Companies, Inc.

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Operator

Thank you for standing by. Welcome to the Travelers First Quarter 2021 Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions]. Please be advised that Today's conference is being recorded Tuesday, April 20 2021. Instructions]. [Operator you. Thank to Senior like conference to over I'd President hand of Goldstein, Vice Investor Abby now the Relations. Ms. Goldstein, please go ahead.

Abbe Goldstein

Thank Travelers discussion results. and this morning. welcome first presentation and morning, press XXXX supplement our We you. quarter released earlier financial webcast of Good our release, to

All materials found can on travelers.com website at of the investors these under section. be our

& Personal Greg Speaking Specialty Kunkel and and Insurance. our Officer; Frey, take presentation Chief today will Financial Klein Tom Michael be, will and remarks Insurance; Alan They to They our will prepared discuss segment the we Insurance; Schnitzer, webcast financial the Toczydlowski Presidents, will of questions. results of Chairman of as the Business environment. through then Bond and business they go CEO; Dan current of market and refer three

turn the included explanatory the like presentation. to attention Alan, of webcast over note your draw call the I to Before would to at end the I

measures. Schnitzer. the call section in like our turn financial the includes statement or I our performance. today to may non-GAAP presentation now, responses of forward-looking do filed future materially to investors our we Actual materials company are and cautions not in not guarantee is mention those the Alan We our from risks Our and differ involves website. any in would and statements. a SEC. implied some Also, in described remarks XX-K The and forward-looking other earnings available results update statements. in recent to a press on that with statements due and the statements undertake included These any XX-Q forward-looking factors obligation the may or expressed are variety of Investors supplements earnings under questions, release press our most forward-looking release, financial Reconciliations to to recent over in factors. forward-looking uncertainties And

Alan Schnitzer

thank morning, everyone, you, Good us and you joining Thank for Abby. today.

of share, very both million strong income underlying for catastrophe year higher prior favorable quarter year up ever very income. investment levels A well quarter. income diluted net $X.XX first of from highest was level prior quarter the quarter Despite or and to per losses. core report, We reserve underwriting first as higher core our the pleased development $XXX as are of income, driven level by

All points in nearly underwriting billion excellent record of XX% offset of which more the and driven to of the at an level improved quarter, net combined losses. than which to in premiums prior than pre-tax earned million two $X.X ratio an XX.X%. catastrophe an almost year increase was higher by Underlying $XXX income underlying

are points, three three underlying loss from margins. exceeded higher We business earned particularly our strong Personal On in the which the improved and fundamentals that by included Insurance, and both again more Insurance, pleased segments. premiums underlying benefit pricing with of strong In trend. Specialty the earned the Business continued all Insurance ratio cost combined of than benefited

results together perform million These investments, to investment up the our continue portfolio $XXX net investment the income of XX% high per excess returning X% prior balance to capital us by past our our value investments over strong with adjusted business to sheet making book after enabled year from quarter, well, to after-tax Turning shareholders. grow and year, generating for quality the in quarter. important share

position, I'm business. repurchases. shareholders, strong that marking $X.XX Directors per quarterly In cash financial a years of returned share, dividend recognition confidence increases, X% compound the in growth to period. the our excess Board in pleased to of increase rate with of to over that share consecutive XXth of capital our we of dividend our including annual declared of X% During million $XXX quarter million our $XXX share

$X authorized additional also billion share an repurchases. Board of Our

execution of we production, pleased to the with marketplace Turning remain our strategies.

by premiums to written we X% During billion. net $X.X the quarter grew

X.X%. Our prior renewal once than premium again level XXXX In strong increased our Business Insurance, premium to of in year renewal highest quarter. three change higher segments. four change growth the points retention and Its premium each reflects since and

strong. comp driven other business recent above retention near written change insurance time was every of on includes an in in were or impact remains bit change the premium down comp rate for premiums but Workers reflecting the was little the change, product pure workers renewal the highs. on line, negative, compensation, payrolls. premium improving product trend. year-over-year, Net rate Both were renewal overwhelmingly record by slightly of number continued positive exposure change, renewal a While primarily line, a in which first Workers annual quarters. pandemic

a comparing business, pre net prior quarter Insurance premium year. the the Bond pandemic pandemic quarter to we're written current X%. by largely XX% Specialty liability while in increased in premiums year, by change Driven management impacted & nearly As remained in renewal our with written of Overall a continued for pricing trends. be cost strong. the pricing while continue estimated rational above impacting be industry. have Across businesses, the to our levels pricing given returns commercial well favorable, improved, environment the headwinds to near and record loss and continues levels margins retention

outpace pricing for some expect to loss We time. trend continue to

home. premium Personal to Insurance, in our and in business strong nearly change business, retention of driven by quarter. Turning Net new X%, was premiums by production written the homeowners almost in excellent auto increased both in renewal X%

XX% business to the growth combined demonstrating was auto of digit in customer new prior double distribution the our quarter compared and consecutive which for of up ongoing success and New home business, year initiatives. is both product, ninth the quarter,

severity recent and highlight management of I'd weather, of Before I winter the in of terms take including strategic frequency exposure. the to catastrophe turn severe recent to a Dan, call minute in like the the over done work we've elevated our years, given the catastrophes and

and of decisive years volatility. our generally anticipation we addressing ago in Some number assessing of whether trends when with rapidly, approach took of action continued recognizing, consistent

for among organization. Cat Our engineering, efforts started experts geophysics, talent. in Management an others, with our We meteorology, and got science, environmental data

developing each goal expertise. underwriting We with and scientific also industry teams for dedicated established catastrophe leading of the peril,

This We of point have down such supplement refined to our have sophisticated into development, the density, standard pricing, we gives models, view. complex response. characteristics, capital a intelligence integrated proprietary models are of as vendor also other product conditions. decisions geospatial cat effective This allocation the and that more experts own satisfying us about claim risk more efficient in data have granular scientists selection, and to They're enabled proprietary and peril-by-peril and has route for results location segmentation. with have into our tailored enhancing view incorporating our our The insights incorporated claim developed level. resources. our brush These to variables resulted product cat parcel tree experience to into of deployment us risk, incorporated response, variables risk and developed and for we a tools, us. sale, customers artificial selection and facilitate at claim inform use more analytic outcome developed the terms and algorithms Those a intelligence a our

Taken together these our efforts more have to manage to enabled effectively exposure us catastrophes.

always us an to there's potential to exposure have for event. outsized While the

the property five losses domestic share has past industry the that. Over losses compared total years, significantly, to catastrophe declined P&C our years catastrophe prior five to of relative the for property to

Advancing also losses property market risk reward the past been us. for catastrophe our and our underwriting ongoing is effort cat five understanding than have Our share. of meaningfully years of over an the corresponding lower

other expense we we've a strategic investments importantly, footnote, made our improved business and in these As our while ratio. but

So this sum deliver expertise the underwriting up, in winter our to strength to investment enabled notwithstanding the strong and severe of us profitability quarter, weather.

the pleased to As the with start particularly year. of for all three segments. We're off a terrific strong our result, a fundamentals in we're underlying business

execution, of turn are analytics, the as pleased strong opportunities with strategy, call talent to well to that proven record us that, track the advantage, confidence over capitalize to give leading And recovers. Our economy I'm Dan. positioned on we

Dan Frey

resulted primarily much largely underwriting offset net a Core prior prior level net return from million the $XXX favorable and income in first improved quarter Alan. of equity on you, Increase XX.X%. million, core increased catastrophe investment was core results higher by year income Thank level reserve was higher from the income, year quarter, for in $XXX underlying a up and development, losses. of

first million year's first results to pre-tax high losses, $XXX first and quarter all-time cat cats million quarter compared include our an quarter. last $XXX for the Our of an increase

from This storms, number the and Prior development, February reserve shortly, of year for $XXX $XXX quarter. million in was net winter favorable a which other which pre-tax quarter million detail more impacted Texas the states. include cats provide I'll

we ratio, offset in weather favorable which points our Our relatively by in decline yields. portfolio personal impact the by in resulted will than improved pre-tax to of underlying commercial After-tax XXXX expected earned per combined X.X XX% of underwriting million and non-cat quarter loss including $XXX year's loss fourth exceeding non-fixed earnings businesses, investment after-tax. income quarter, partially million income income XX.X%. weather auto. benign in gain income with improvements from earnings be comparison of were to of higher Consistent returns increased $XXX year by the improvement non-cat the premium These the first year our in partially from prior fixed short by million cost year in $XXX term prior and our higher underlying the underlying continued to The XX% net an on conditions million, last more the combined impacts $XXX levels between ago the a continue expect from quarter. reflecting pricing of was in comments as higher ratio were offset quarter this continued of earned fixed securities, trends that XX-K, call from the typical remainder for our NII, and the in largely to and quarter year

the a benefit in related benefit remainder Turning net $XX of development, in recorded California settlement to pre-tax of XXXX. included the Southern $XX fire total Woolsey personal million the Edison insurance, with of recorded with subrogation million that in a prior from million was year insurance. business to $XXX favorability reserves quarter

PYD than insurance better net Beyond offset driven experience than favorable losses favorable loss than expected some PYD by the environmental In in losses adverse Specialty, for In better comp, net results in by benefit, Bond book. surety development both exposures expected subrogation workers insurance in and partially runoff PYD property expected and business auto on personal book. net recent was and reflected was our better by driven in years. accident favorable for coming that

catastrophe accumulated coverage of XOL underlying aggregate providing billion. of losses retention. for we call, Regarding have $X.X Reinsurance, the quarter above March $XXX Treaty of XXXX, retention renewed qualifying discussed $XXX of toward XX, aggregate million as our of aggregate million million aggregate our Through during $XXX part results fourth property we losses

operating and company or were the quarter ended better holding billion. Turning $X.X again than flows cash of we with very for of were levels, the All ratios strong. our approximately capital quarter management, capital $X.X to at billion target liquidity

end year during losses, at Our investment net after-tax gain X% interest as from gains XX, excludes which $X.X at a rates dividends unrealized Adjusted of million. billion was year our the of rose $XXX.XX up from and in share, decreased shareholders book We’ve $XXX after-tax to quarter. ago. unrealized at share billion to and $X.X year returned March of end per X% comprising value investment quarter million capital from $XXX up quarter, million repurchases this $XXX end,

quarters reflecting I'll Board as activity, Following for that, the turn business, dividend quarterly under Insurance. to authorized authorized to its a increase Greg repurchases. appropriate to call authorized management And remaining the a million of flexibility share Alan $X.XX In over $X we in our our billion provide order program. in repurchase discussion the and an $XXX capital share also the this per repurchase have And Business little previously share. mentioned, Board an than confidence with for more additional

Greg Toczydlowski

more took The higher pandemic. with two a that less the produced net XX% segment million points, cost the the comparison reserve year Business XX.X%, prior of of net particularly driven underlying catastrophe We're higher Insurance losses. reflects year from first the little pleased first pricing ratio of XXXX in increase improved $XXX by quarter, exceeded combined offset development trends. income, income underwriting investment also which for income, Dan. levels in quarter to improvement Thanks, over the related underlying to points we resulted a by charge quarter of favorable the than prior loss earned X.X the net [ph] than which that to

return Net compensation to rate the premiums the net premiums pandemic to of in the impact down line, payrolls. retention, a written the workers from exposure reflecting of X% as customer’s top line to net trend higher an strong due were written premium Turning in result renewal growth, in written lower our a product on for benefited improving change their outlook businesses. positive primarily

first the exceeding of strong significantly remained change rate improving is points of retention quarter remained Written X.X renewal been pricing up some the at production, now at for has domestic loss trend, to X.X%, time high last Turning from our book. and while year, XX%. margins

in that we a pleased quality to class and execute by we to Importantly, seek in granularly basis, and execution. high have deliberately believe class exceptionally account we of an mind, business on maintain high book our continue by with retention. With we remain account

As for quarter XXXX. up individual XX% execution three businesses, change first in returns improve segments of in rate pursue almost deliberate business. the increased renewal the we Retention as from X.X%, of to reflects Select, points of this certain

segmented mentioned result. I underneath execution As aggregate the we're above, pleased the with

driven disciplined focus improving of quarter, business around $XX million from the as selection, and $XX million by we also risk underwriting our year New pricing. remain was down prior on profitability

business, to the us commitment growth this in which doing product Importantly, we and profitable of invest long-term down in have our ease business. for position development well not slowed

As redesigned commercial experience. BOP fast, which a leading our product, we've small an X.X example, includes in segmentation completely easy highlighted industry previous and quarters, quoting

C&P as as three X.X% retains almost the business new renewal the new points compared with the business agents states, of last while both and strong improved approximately product we states, at seven XX%. high market, premium was flow cumulative rolled of our the new premium. retention XX% new XXXX, at representing In During product. the BOP up meaningfully product first months, encouraged legacy are to middle We're of an quarter remained from to XX out adoption total bringing our the in additional three

rate positive of point a quarter XX% first of XX from last accounts than on year. achieved our the more quarter, we this Additionally, increase

growth. To pleased margins book, for by invest to with up, business I'll continue returns New further underlying million, driven $XX the execution call thresholds. long-term business sum turn improving geographies are in was our and units that, down the certain over With Todd. business the profitable meeting in we're and where the not we to our

Tom Kunkel

premiums. of and Bond the driven underlying of cat solid and an headwinds posted Specialty increase the was COVID-XX. Elevated returns from prior million, quarter, the year primarily to weather event offset XX% strong & $XXX higher expense losses the and XX.X% underlying by quarter, Earned Greg. due were that reflecting higher The margin impact ongoing business largely Thanks, development. underwriting prior other volumes. growth offset loss cost by trends pricing the of combined X.X activity. to COVID-XX favorable by exceeded improved Segment Texas year ratio, reserved related income despite improved a by ratio improved largely an earned an in of loss was

results the economic recent surety XX% that for reflecting net submissions COVID-XX disciplined this elevated our quarters, to were decreased commercial change risk business, premium pleased needed management with execution Turning underwriting of activity pursue demand rate top liability quote These of largely and management in up, production new Decreased to environment. liability are quality while $X our Management XX%. levels in successful strong production. while was grew production. strong premiums surety the by business Consistent to new strong quarter, bonds our retention demonstrate historic the strategies In X% offset quarter remained maintain construction underwriting our in the of down. primarily were high maintaining the renewal portfolio. strong a discipline million, the nearly retention was line, for where impacts near due liability reflecting highs we written primarily while

current discuss Specialty I'll And So, despite it strong, turn challenges were Personal now Insurance. Bond in over to results to & Michael, the again the environment.

Michael Klein

profitability ratio Insurance primarily year And XX.X% higher of combined million catastrophe a favorable XXXX X%. Personal income On Tom. higher from was rose two and premiums the prior in the an Segment due net combined $XXX grew development. you, good losses, strong growth. partially The points written reserve year offset about to morning, by of levels quarter, ratio net XX.X%. began strong prior was and Thank basis, underlying everyone. with

in of the This of of results, very have combined Automobile to relative product actively line to results better Woolsey to product the the first comprises wildfire mentioned. statistical alternative by them provides combined increases our the reserve prior more as quarter These partially with certain of of profitability. quarter state the driven for direct-to-consumer International. benefits the line from as homeowners eased of than quarter. strong presentation offset from is of to prior to storm and year to increased favorable to pre XXXX. losses, primarily quarter. elevated quarter, ratio net that and with points our me weather, relate ratio and begun turn were comparison levels you ratio, and the mild of improvement The The by up. the of Along specific losses the toward activity winter of to in year the net combined back the first that which prior volumes XX.X% point restrictions freeze presentation to automobile an heating five other development, reserved four is effects sources. which higher February prior of five balance said, increase about current points and remind than have a underlying data, fewer We're nine the That miles picking into with more pandemic, a In we development, comprehensive trends homeowners continue of include by of product miles points XX up frequency resulting higher points results. prior business points, points fire lower weather events winter underlying coming year use another decisions, and over year that economic winter I XX.X% points improvement compared eight results quarter. other, extreme pandemic unusually pricing XX most an and XX Before lines, and subrogation ongoing due financial monitoring let and driven. the points Driven ratio reflect updated incorporating see we of delivered namely to included view new of moving Dan and an a claim two many combined often we have the due and catastrophe

premium automobile production, auto. change XX% strong to in in experience loss consistent flat domestic growth while X% about pricing with written XX%. to premiums align Turning remained grew was our business, with new retention our with Renewal plan net at

We very ongoing balanced which growth X% our growth attractive Homeowners and with in year-over-year of with delivered strong are resulted quarter in at pleased execution force another line, this net policies premium has returns. XX%. in written other

New change and prior was remained premium XX% business XX% from was quarter, the retention renewal up year at strong X.X%.

mentioned, home auto for we business double digit nine across the new each have Alan of achieved growth and past quarters. As

investments Our X.X, initiatives, driven and a is ongoing IntelliDrive, success relationships. combination Quantum new business and and strategic expanded partnerships and including of new by distribution Home

continue our of digital In quarter, in new expanded to and over include more acquisition and customers independent I'll And the that, of the to addition states. positioned off into agencies to that rollout who our to improving closing delivering rollout and and back digital great discount our states application, capabilities, self enhance InsuraMatch, leverage are in capabilities deliver well our capabilities examples turn partners, to new telematics for mobile continue new agents call our profitable strong Canada the continuing digital IntelliDrive With expanding to value of expands our start year results deliver version further to we're quote eight paperless, the the on with of digital adding and capabilities roll MyTravelers applications. our Recent to additional customers. our summary, further a we to mobile growth. for nine eyes the serve service distribution In customers customer Abbe. of to out the proposal auto

Abbe Goldstein

Q&A. Thanks, up Michael. We're for ready to open

Operator

[Operator Instructions] your line Michael is Phillips with Morgan Stanley, open.

Michael Phillips

morning good and Thanks, everybody.

how continue rest to continue kind better of impact think growth year your pricing and to maybe renewal get the want to take guess the think pricing. for price loss Insurance, rise, of Business continued outpace about we the and of we I in Alan, comments that, -- the deceleration the premium on, on change you question First guess a maybe trends. your I on renewal to how given expect versus should should year that exposure as about

about So think how the Business can we maybe for RPC Insurance?

Alan Schnitzer

but hopefully thanks couple make change, a the We are that Michael, for question. price giving of Good on stopped outlook morning, I'll responsive. comments

sequential in We quarters are now think year-over-year in one, improvement all prices. prior made rate compounding and several this to Insurance into three years anyway, Business price. I record The

the pretty are that's as improving. of progress, consequences change and price that, overall said drivers environmental But are good still relevant. having So

we’ll looking all on particular down rational, So, that a that we rate in expect pure to But a variables continue but into the for that pricing we all margins go number focus pretty it's be it's going rate predict rate at adequacy. prices the I of granular levels all matter, pretty account needed. to what relative that that's lot or always of try to in and we're think we're for lines there's underneath that account takes expanding sideways. what provide. at don't we to while. overall again, because execution results that Whether And up, that, hard the headline

level, pricing the favorable pricing, for are we and environment expect So in we time. some we this to about all-time highs near continue great -- continue feel to

Michael Phillips

or Alan. authorization. in the of guess interest I if then we over of signify switch one interest Anything that Okay, lack could on any scale read to any thanks, M&A? kind would more large through that there

Alan Schnitzer

take that. you Dan,

Dan Frey

$XXX of that’s did Michael, the million repurchase. share math remaining by I it’s this under repurchases the down first all, year, authorization did we in the we we were the Dan. No simply time signal quarter the gave to of you at

was get the at, to buyback history XX XX over sort this Board level down look this an years, of the do authorizes we that. time to you or last and our If every the just additional timing

Michael Phillips

guys. you, Thank perfect. Okay,

Dan Frey

you. Thank

Operator

Ryan open. your Autonomous Tunis Research, is with line

Ryan Tunis

morning. thanks. Hey, Good

closer we needing a renewing? feel still of needing at accounts at a eight-four positive for, are are look of getting say one accounts to rate increases, were that that seeing get eight-four to adequate the Just much to that [ph] a rate, it look the that accounts across if on just some is trying and more with majority following If are kind product we we at rate rate to up lot renewals, is and that book you're all? some the of of vast not safe on

Greg Toczydlowski

merit, we've pricing the shared Good is that morning, Yes, absolutely retaining at the account change, in more underwriters vast portfolio. This change with we of said, rate are consecutive as are we adequate. of book our Ryan. getting and up Alan to and think empower a with Greg. nine local -- terrific becoming you rate across the rate certain some are accounts in every reminders majority look And on own pockets, quarters past, of a really they've doing just been single knell course, with we job continuing the based its our to get as and year-over-year

Ryan Tunis

larger current on I think Alan, update Again around M&A past, for I haven't your it. Got guess, for any looking the done I guess, thinking in you deals. there, an strategy

simply the M&A think, about are appetite? about remember, think, less scale, been are might you a one how have I was, How which business you I thinking bill. I than maybe last thinking

Alan Schnitzer

change thought in it. say Yes, to not we're question Ryan, and approach I There's behind M&A not and understand the interested. process that's no our that to probably the that

we didn't often the to done say time, transaction we've out say that's not of thinking and are the all looking there. that not evaluating But do. And deals best and we some should them. and opportunities strategically expect the shareholders often what's thinking about we're that deals about we Our

in there things through all would have and have deal ago, to times want be and as we years changed. same important our the you conditions of you does as volatility? under detailed given and them. doesn't and I the a do we've might us. mean, frankly, analysis do But shareholder and we a on improve all markets do would benefit? five we'd us, the hopefully hasn't and we lens we're or reduce whether granularly so terms or So it or strategic would said the long-term And from the would we are ago, answer a year attracted essentially, other many that profile, view I out course, that's the And value not return for what use to lens And create expect would as that it some that

Ryan Tunis

Thank you,

Alan Schnitzer

you. Thank

Operator

Motemaden Evercore with is ISI, line David open. your

David Motemaden

guess that had that good thinking question underneath that in I'm COVID Was any if there I guys -- morning. benefit I should ratio for Hi, loss in a underlying Business Greg. of there was had wondering you just Insurance. sort be about? we

Dan Frey

be impact really the of spike even have we That's able in was new, anymore. year and feasible, COVID Hey, into immediately looking take it's our of last we environment been David, the to apparent one Last it economy in year to results. when Dan emerged, fabric Frey, did what were combined way I'll that for overall It's was And that at quarter. to as the that, woven do because related we thought we've this of pre in COVID to interest a specifically not something ratio. quarter it's year, now. it about idea. think qualitatively, feel chose what Having that. we in the going reasons COVID it impact out, doesn't COVID COVID, you of everything with back living we said versus the was of an some to that, leave underlying have sort the pretty

modest. of get was, was we Michael talk pretty think There things again, the and to frequency. offset, and And COVID modest. probably largely losses more didn't impact offset like than specific driven non-COVID because heard some it Insurance by we'd on about COVID very a in related comp, not say charges miles related benefits direct workers You slightly if BI level but of Business mention in

David Motemaden

a calculate improvement around it, That's loss on maybe the have underlying ratio It BI continue that points XXX to have over change this the And feels more increasing Got quarter. you I -- that little But that, see fourth at been two bit points basis guys rate. than that. you'd at great. increased if would could gotten in at amount thought like expansion look better me two there improve to the have to the I quarter. that margin from of an to renewal I I in then under great of of would helpful. quarters, a improvement six -- points just five rate follow-up when Obviously last

some going of help could me the pieces margin think you maybe forward? about improvement think about just So we as moving here,

Dan Frey

Sure, Dan David. again. Its

I over see business you from coming insurance for through. think trend what's several earning the last the seen numbers align versus way if in that factor we've quarters, with what through results written just its rate we

we moves That's XX you into little of as less expansion, is difference. point trend, points, when five math if the a did points expansion. and Because not say a slowly, rate points loss theoretically of that's eight got consider, moves we the points seeing margin It point, over other say, of a of if rate steadily just thing at it's translate that trend. improvement the simple margin versus level ratio sort are percentage a of is, increasing a within mind three of level last tenths its into time. not, in we But versus two it increasing changes versus it's and trend. terms of earned a points rate it of a you loss steadily three of ratio keep than I'd in to translates increase see year, So rate impact

as very being of So higher we'd through two that and to aren't increase expecting number maybe be. thought right, where margin here slightly rates to we is expansion, close the from points

David Motemaden

you. thank Great,

Operator

Josh America, line Bank with Shanker open. is of your

Josh Shanker

everyone. get some left questions I that hope Yes, few on. field can good A out I morning, of information

As the you I player channel sense not fold restated and that a and going the folded to more to makes will homeowners say interest to in segment the Travelers run, just important we long that it's forward, in? it expect P&L should in be really or personal your that the market, direct consumer business personal guess segments. What a and does direct line Travelers as about to auto consumer into in

Michael Klein

the line on or that and the results the that that to the of in the on very of in financial and that to make P&L an moved sense. it growth the say Not production can in it our it us, a it of was it's the gave Sure, that anything direct for restatement in about the thought north was of an business to advertising, statistics much, And segment would Josh, enough show business got consumer, didn't it I side example, restatement see. important we the big the to that doesn't Michael. that to commitment was drive of it P&L, it business, up still needle included breakout statistics, numbers $XXX make capability when important frankly, and part million one in. should consumer, you of worth domestic it’s where want of we direct we're production still fully the to you the in last other, leaving specifically, the of but it investments say year. that in portion that the be then of say so the Frankly, you, a do we marketing end the investing see we for those as point revenue way

continue I test And importance say a essentially would I So both to our emphasis. if would, and segment that and of an as a business to in doesn't capability. and anything, and build us indicate say change reinforces to I it business as build would place learn the a

Josh Shanker

from about And how how be few over to big years that then when two, the big you forward your agency numbers. one, going does similarly, we is quote think are a in taking direct is how should of But nothing business, going consumer and manner a Travelers is it, book? the different materially two parts; next business sort the directed loss ratio need simply to I in it's from think

Dan Frey

Josh [Indiscernible]. that You’re talking about simply in business,

Josh Shanker

Yes, absolutely.

Alan Schnitzer

that in not behind it. Just business, market a intermediary as the we're there, we're reminder the

it are So it, a initiative very we up we continues wouldn't to break more investing say simply we that. it profitability of us. is business, the But we're And medium than about about, term a for not important in capability it that. to be I on that feel comment going would urgent

really buying the make Greg, not But And market same. matures. a other to than commercial very betting address in the to adopted to that that anything? to that's we're end. far, micro sure capabilities we're hasn't approach prepared as small So at direct the stay going product the it investing we're market

Greg Toczydlowski

is invested some a United infrastructure UK, that to some going you that just we that on premium geographies. more Alan but the in but thrust color we've articulated, a in time. States of value the still in But is to capture give take little Just that believe of the

Alan Schnitzer

Not Greg. revenue, premiums. the of Thrust through coming

Greg Toczydlowski

Correct.

Josh Shanker

Well for thank answers. you. Thank the you

Alan Schnitzer

Josh. Thanks,

Operator

Elyse is Greenspan your with open. Wells line Fargo,

Elyse Greenspan

Business My going morning. Good back the first is discussion. thanks. on, Hi, question Insurance to

to guys that kind case a guess rate, balance you sounds across year, commentary? based of guys negative. you would And through businesses then like of With that's I should kind respect thinking in we be stable stable that off the for that your I year, kind this expect are of feels just more about to that looking something guess or sounds would like some the it with of inflect it XXXX? workers we perhaps hoping So confirm, this slightly comp,

Alan Schnitzer

we of go actually of about we a continue to than we to outlook didn't view margin other terms feel give be and view pricing. expected outlook what forward direction that great on trying this for very expansion. levels We're away achieved say rate, quarter the Elyse, to about we get given to in feel contribute pricing prognosticating. at to We of from will to and just continue a good

workers quarter and comp. close quarters to in the both way. we're bottom We a We in terms it progress making and pretty turning recent in that around terms said feels feel saw In to we continue of that of like in for quarters, to pure really the customer’s time think our is exposure which over but last as was quarters. few confidence. negative a Premium speaks rate, in several I said, first steady was change, the we slightly which positive including a improvement

good So thing. that was a really

is COVID, guess would to what that's we so workers Elyse around that. I don't term before making turns a it's sign, that's of profitability is is, experience what been I So continue point, that making at little and would out moving hits expected we're going we're cautious bit bounces bottom very of of line pricing towards north. and result the and see we bottom inflecting I a in the about we forward. about the the say again, so think that we the data -- not what the other bad far, least and share But maybe bit the bottom it comp least we the there hitting the little positive. this, I positively, a instead -- and it's being but it at a is reflective which think to And impact strong. that a far, could better that likely than turn

Elyse Greenspan

my And you discussion. second great. volatility said, considered on were the add the Alan, the to think I the Okay, going company. then fast with to not M&A of guys wanting you question, deals caveat of

you on where are offering? potential that through on add to business lines M&A? transactions want to are us higher might up about the help think there you from as you certain on transactions evaluate think potential business you just As Can list

Alan Schnitzer

lens exactly of we from the of I the might capabilities, And business, products, compete the scales, we the Having think for for. sorts can think the is might about that, we of there breadth to circumstance we missing about we various be said, the could think our that some contribute acquisition geography, great. one for them we in are volatility when I them question virtues and reducing portfolio our said guess that or can and things attractive of portfolio, of we one keep are look of opportunities as feel our mean, was, could be for comment successfully. we your three us. prongs there's going we be another about what way very about an to There's I and of our some them some could businesses, we think to all of depth guess opportunity nothing

opportunities. this So hard we're what what capabilities, but we're Again, to looking for. potentially say, gee, for. looking some it's me is for no gaps in That's

Elyse Greenspan

thanks the Okay, color. for

Alan Schnitzer

Thanks, Elyse.

Operator

Credit Suisse. Mike Zaremski, with

line Your is open.

Mike Zaremski

[Ph], good Business Maybe Craig sticking morning. Insurance. with a

world kind give to commercial nuggets frequency So good kind commercial a than you've you news sense, the tail kind maybe of a kind the you other in seeing you don't of loss normal near think of lines, near lot severity you of us on the tail probably zoom benefit guys trending tail has for normal kind you You the about a of long color you us in are back some And kind digital But in comps want curious the I than benefit. longer a I expected. to gave trends of of might recent give little there lines benefit term. age, kind long age? of more or us in term if of slight been even could of take seeing better Workers loss know or maybe lines? courts gotten terms have the some been trend, said, can

Dan Frey

Mike Sure, its Dan.

a couple that of take parts. in I'll maybe So

quote the sort activity. of question in On that

from to data to see we We courts continues. quotes the the in that in talked year, definitely that continue the last time there. long what a other slow. uses terms settlements probably the be of a were and say, think change there's active and been through, pretty on have it Let’s in about be a fact for work I backlog while we'll I And could that less take think to

changed. we've and that is reserve adequacy year of what assume in to So view has really nothing accident, our both done current terms of accident prior

we're to going not tell So react that the to a you little really might things favorable, that. data look bit

we've the those things once even get in is we're going and Our cost Loss of will out social settle inflation, trend assumption that seen to last second at we about, the quarter normal, all it before. ultimately, things is elevated see these talked what levels that, trends levels. back the at do year, to and rate of reflection that in ultimately, the then

the to where emerged, degree driven verity in we're is reserve And away. the still that pursue really So, a to and of lot not that year rate we that year, that's Business themselves about we favorability degree going we a continuing a pressure you one some prior view frequency that think the are. going but to take to Insurance, us is the and losses some that that's perspective, reasons last development and from not we year, favorability see this simply talked of severity that had the

Mike Zaremski

versus That's expiring us And update money the in the on on the for follow-up fixed if Dan, probably can portfolio income approximate very my portfolio investment Curious helpful. you new is portfolio. yields yield.

believe So gap that pickup to a trying there's going overcome? you to still in there's guys there I are rates. a interest

Dan Frey

there still gap. a is Mike, Yes,

it -- talking around NII closer was. XXX points, basis a our just enough were than still we just quarter, negative. being quarterly it’s portfolio gave environment, basis fixed points, it that but Last about a is that slowly gap the less in you maybe basis. XX maybe that million didn't a income it's go when factored little a it's a view over we reminder, So current turns because even we or XXX actually range And the to forward $XX change, on now, of

new only modestly. what's a gap, yield but of portfolio. out very still below Still very, maturing the money moved to it So the needle,

Mike Zaremski

Thank you,

Operator

UBS. with Meredith Brian

Your open. is line

Brian Meredith

A Yes, of thank here. ones quick you. just couple

I'm curious, workers First, could just comment you on compensation insurance.

positive a to have benefit margins? that start payrolls see should we As increasing here, on

Greg Toczydlowski

was a And Hey, Greg. said, quarter, The going we on is we the saw long-term. is where solution economy. go workers that Brian, exposure up. And to This RPC Alan good shared with are we on don't yes. an comp basis, that as have that of we is, this you answer obviously short broad project But morning.

new sales hopefully that in with and we'll and And side, of see the some we'll So corrects economy also. mostly employees certainly as receipts GL from payroll, on increase shares. positive see and the improves,

Brian Meredith

favorably margins, in not topline. impacts Which Right. just

Greg Toczydlowski

be to coming which for workers, comp, itself, Yes, you two through could to an Margins -- more one Brian. margin in not the expected really of related that, exposure there's of benefit pieces what and risk, see degree up, can a effectively the of more rate, that's collect for you set exposure premium behave historically that's go we when have that. the same to like and portion that we get wages

higher payroll a with additional bit brings degree that to added of exposure, little the it's that are both workers wages well. to bring it So the as risk, higher being

Dan Frey

volumes leverage. which regardless those expense as comes get from, some of obviously, of it go up, And you

Brian Meredith

underwriting the to just I the on then a saw sense. in Worker's be there can Business from little what's understand CMP are bit some portfolio on other of at are are any point? just I recharge there your perhaps And there growth activity? of where Insurance. purely also to down. on related focus line? Makes going initiatives now right going you're pressuring things that continue stuff to that that comp, kind premium And programs in are Is that economic calling that place potentially Or top kind to

Greg Toczydlowski

Yes, Brian, this is Greg. that. Really its in drivers two

increasing been prove RPC points you mentioned comments. We've of to the can that my five book prepared that see the first and one, five I quarters. with the really over The profitability last in trying

driver. also feeling volume But would agents overall, flow a COVID from from that's is But secondary of the that's down so submissions we driver. impact, I still in our the say and the are also. terms primary And

Brian Meredith

Great, you. thank

Operator

with Goldman Kinar Sachs. Yaron

Your open. is line

Yaron Kinar

remain Can that you personal flatter? in aren't expense Good uptick about considering morning, ratio, where the investing? if a bit maybe is lines. would everybody. quite you it a question bit are in talk first My the premiums up that for Where

Michael Klein

investment investments costs and report business commissions in the increase change, pay is good really make volume efficiency and uptick really, in to feel wouldn't expense business. ratio, We volume continue this our a ordering. in think, about quarter the slightly, I Sure, one expense is Particularly the attention the level too the still but in much we the Michael. related the to driver do of expenses expense in business. the And related just was ratio the costs

Yaron Kinar

to Specialty. read & comment with Bond in you'd thought more dynamics question all-time the due the to Could have the trying curious management you I have to highs. new discipline, second effect with my maybe then I'm about talk just that, And business opportunities business. that Okay. are I about would write even liability new just that discipline. declined was rates near there?

Michael Klein

the that we been new when economically of speaking, can the think business risks. situation The lines actually, some of more you write, create Sure. we've flow through is

like liability, So public think been in think things place company, employment have of practices D&O. for that of trends some about the

of going coming So where really in. time, things sense this on that to makes feel you're there selecting. are risk our quite number prudent new it at comfortable be really in And point actually with a businesses we the about

Yaron Kinar

the Appreciate it. responses. Thank Got you.

Michael Klein

you. Thank

Operator

with Benguigui Tracy Barclays.

open. is line Your

Tracy Benguigui

Is workers first on business Thank one. just your you. up renews that there on comp realized rates. wanted on quarter in BI one I I mix, to seasonality follow

impacting quarter story wondering I'm just for your if this that be wage versus So might last.

Michael Klein

in amount. little but a bit quarter meaningful There's a comp workers not typically, more this

Tracy Benguigui

Boy we of [ph] strength of talk on limitation but that's our at beyond York. light fact bill, wondering we cases, Scout in reserve And victim the a New also past New sheet Okay. you reform and attention. that saw you getting just then In states the more about introducing research, lot commented the York, feel Association XX about potentially higher broadly reviver how you this child than in

Dan Frey

Dan. its Tracy,

we I charge we very first XXXX. took think stuff. to York, Remember, Child New in quarter the related were tackle our to of Victims Act early

been market, ahead we've So abuse, the CVA pretty exposures. very think, far of molestation cognizant of I type and

we're exposures exposures. Scouts, our with reflected potential what speed developments the reserves. cognizant to but across And to staying are We like mean Boy be continue those only where news not may in are, with we how things very developments, up imagine, as comfortable you the very of and for quite latest our would those on and state, stories

Tracy Benguigui

you settlement I enter a one into competitor? also be your just willing If Scouts, to Boy to similar could sneak in. the Would of on

Dan Frey

specific I comment on matter. any think will

Tracy Benguigui

thank you. Okay,

Operator

with KBW. Shields Meyer

Your line is open.

Meyer Shields

Thanks, [Indiscernible]. of that category your play comments other Great. are in mentioned, the the within Tom, losses segment I guess, you at

Tom Kunkel

I sorry, the hear the last question. couldn't part of I'm

Meyer Shields

I am Specialty. were ratio sorry. out in underlying Bond I talking about hope & you you what loss the could flesh

were what mentioned not about something you sure referring You I'm other losses, to? but

Tom Kunkel

Yes.

So some last the losses first elevated versus other losses, we are COVID having the quarter year.

issues. various a things mix And as as well things, And it. have then miscellaneous like piece significant of you so that's typically

we those claims was this our a numbers this it little generally bit, actually cyber in but some particular a had COVID so quarter And variety case, hit other and of and things.

Meyer Shields

that's about you that been news more rebates. Michael, can. How And about know for data looking think Okay, I I possibly helpful. then California's and if there's some question Insurance Commissioner, for for Travelers? more

Michael Klein

question. Sure, relief. rate examine I Meyer, that and And would of is levels certainly, of states to say one continue California good premium number a

First across contact remain to respond and closely to state we're working regulators country in with and foremost and requests continue information. the for

mentioned balancing before, it it the California filed For be decreases onset to and the we've the most part, country. level one happen experience pandemic, about been the our approach those. in to now across of through actually woodlots to but rate XX of rate since has manage doesn't states I've of

to, speaking, recall to we later policyholders, provided an premium to XXXX, working and responsive in information level to dialogue half would California refund contact may in request broadly with cetera. again Insurance, adjustments, But You conversation in with are in be for partly for remaining requests ongoing of actually of et Department the additional response of and State say California I including the California. or

So manage just the situation. and monitor continue to we

Meyer Shields

Okay, Understood. much. so Thank you

Operator

the closing back Goldstein call for to Q&A my turn time This pleasure finishes now session. the to the It allotted over for is Abbe comments.

Abbe Goldstein

Investor you great Thank time. to reach morning. out We have you. And Relations. a your if joining for always, there's Thank all And appreciate us day. really this any as follow-up,

Operator

quarter This your concludes conference the XXXX results participation. first you Travelers We for thank call.

now disconnect. You may

The Travelers Companies, Inc. (TRV) 20 Apr 212021 Q1 Earnings call transcript