The Travelers Companies (NYSE:TRV) reported third-quarter earnings on Thursday that significantly beat analyst expectations, but its stock fell 3.51% in pre-market trading as investors reacted to higher asbestos-related charges.
The insurer posted adjusted earnings of $8.14 per share, well above the $6.15 consensus estimate. Revenue came in at $12.47 billion, topping forecasts of $11.75 billion. The company’s consolidated combined ratio improved 5.9 points year over year to an impressive 87.3%, reflecting a strong underwriting performance.
The quarterly results were supported by a sharp decline in catastrophe losses — $402 million pre-tax compared to $939 million a year earlier — and a 15% increase in after-tax net investment income to $850 million. However, Travelers also booked a $277 million asbestos-related charge stemming from its annual review, which contributed to unfavorable prior-year reserve development in its Business Insurance segment.
“We are very pleased to report another quarter of excellent results,” said Alan Schnitzer, Chairman and Chief Executive Officer. “We earned core income of $1.9 billion, or $8.14 per diluted share, generating core return on equity of 22.6%.”
Net written premiums rose 1% to $11.47 billion, with Business Insurance up 3% to $5.67 billion. The company’s underlying combined ratio — which strips out catastrophes and reserve development — improved 1.7 points to 83.9%.
During the quarter, Travelers returned nearly $900 million to shareholders, including $628 million in share buybacks. Book value per share climbed 16% year over year to $141.72.
Despite its strong financial performance, the asbestos charge raised concerns about potential long-term impacts, weighing on the stock even as core results exceeded expectations.
Travelers Companies stock price
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