Travelers Core Earnings Hit $9.18 A Share As A $295 Million Asbestos Charge Sits Inside Reserve Gains
Third-quarter net income rose to $1.917 billion as reserve releases and record investment income outweighed heavier catastrophe losses.
Travelers earned $1.917 billion, or $9.04 per diluted share, in the third quarter, up from $1.888 billion, or $8.24, a year earlier, according to the earnings release attached to an 8-K filed Friday. Core income, which strips out investment gains and losses, was $1.947 billion, or $9.18 per share, against $1.867 billion, or $8.14.
What drove the quarter
The company said core income rose mainly on higher favorable prior-year reserve development and higher net investment income, partly offset by higher catastrophe losses. Favorable reserve development was $234 million pre-tax, versus $22 million a year earlier.
Catastrophe losses were $538 million pre-tax, versus $402 million, and the company attributed them mainly to severe wind and hail storms in multiple states. Net investment income was a record $1.098 billion pre-tax, up 6%, on a higher yield and more invested assets.
The combined ratio, where a figure under 100% means an underwriting profit, improved to 86.8% from 87.3%. The underlying ratio, which excludes reserve development and catastrophes, edged up to 84.1% from 83.9%.
Chairman and CEO Alan Schnitzer called it "another in a run of successful quarters."
The catch: asbestos and Personal Insurance
Reserve development in Business Insurance was net favorable at $41 million, versus $125 million unfavorable a year earlier. That figure includes a $295 million addition to asbestos reserves, which offset better-than-expected loss experience in all major product lines.
Personal Insurance is where the pressure showed. Segment income fell to $706 million from $807 million, mainly on catastrophe losses of $380 million versus $263 million. Net written premiums fell 7% to $4.403 billion. Excluding $167 million of Canadian premiums in the prior-year quarter, from operations Travelers divested in the first quarter of 2026, the decline was 3%. Domestic automobile premiums fell 8% to $1.892 billion.
Business Insurance premiums rose 3% to $5.868 billion, or 4% excluding Canada. Bond & Specialty premiums rose 12% to $1.209 billion.
Balance sheet and capital returned
Net unrealized investment losses reached $8.049 billion pre-tax at September 30, versus $1.862 billion at year-end 2025, driven by higher interest rates. Book value per share fell 6% from year-end to $141.48, while adjusted book value per share, which excludes those losses, rose 9% to $172.47.
Travelers repurchased 4.0 million shares for $1.508 billion, an average of $376.00, and had $2.415 billion of buyback capacity left. Its board declared a $1.25 quarterly dividend, payable December 31, 2026, to holders of record on December 10.
Management discussed the results on a webcast at 9:00 a.m. ET Friday.
The debt-to-capital ratio stood at 25.3%, or 21.7% excluding the unrealized losses, inside the company's 15% to 25% target range only on the latter measure.
Sources
- 8-K Filing — TRAVELERS COMPANIES, INC. (TRV) — SEC EDGAR
- Exhibit a991pressrelease93026.htm — TRAVELERS COMPANIES, INC. 8-K exhibit — SEC EDGAR
- Exhibit a992finsupp93026.htm — TRAVELERS COMPANIES, INC. 8-K exhibit — SEC EDGAR
