Travelers (NYSE: TRV) reported Q3 EPS of $2.54, $0.28 better than the analyst estimate of $2.26. Revenue for the quarter came in at $7.72 billion versus the consensus estimate of $7 billion.

• Third quarter net income of $709 million and core income of $687 million.
• Catastrophe losses of $264 million pre-tax decreased from $700 million pre-tax in the prior year quarter.
• Consolidated combined ratio of 96.6%; underlying combined ratio of 93.0%.
• Net written premiums of $7.062 billion, up 6% from the prior year quarter, reflecting growth in all segments.
• Total capital returned to shareholders of $607 million in the quarter, including $400 million of share repurchases. Year-to-date total capital returned to shareholders of $1.764 billion, including $1.151 billion of share repurchases.
• Book value per share of $84.82, down 3% from year-end 2017, due to the impact of higher interest rates on net unrealized investment gains/(losses). Adjusted book value per share of $86.51, up 4% from year-end 2017.
• Board of Directors declared quarterly dividend per share of $0.77.

“We are pleased to report strong third quarter results, including core income of $687 million and core return on equity of 12%,” said Alan Schnitzer, Chairman and Chief Executive Officer. “Our combined ratio improved from the prior year quarter to 96.6%, and we delivered a solid underlying combined ratio of 93.0%. Net earned premiums increased by 6% to a record $6.9 billion, which, together with our strategic focus on productivity and efficiency, resulted in an expense ratio of 29.7%, a terrific result. Net investment income of $646 million pre-tax was very strong, increasing by 10% over the prior year quarter due to higher returns in both our fixed income and private equity portfolios. In terms of capital management, we returned $607 million of excess capital to our shareholders this quarter, including $400 million through share repurchases, bringing total capital returned to shareholders year to date to approximately $1.8 billion.

“We remain very pleased with the execution of our marketplace strategies, as evidenced by a 6% increase in net written premiums to $7.1 billion. In Business Insurance, net written premiums were up 6%, benefiting from the ongoing roll out of our business centers and investments in technology and workflow, combined with strong execution by our domestic field organization. We again generated strong renewal premium change of 5.1%, while maintaining historically high retention of 86% and growing new business by 7%. In Bond & Specialty Insurance, net written premiums increased by 5%, with strong production in both our Management Liability and Surety businesses. In Personal Insurance, net written premium growth was strong at 6%, led by successful execution on our pricing strategy in Agency Automobile, which delivered renewal premium change of 8% as well as continued policies in-force growth in our leading Agency Homeowners business.

“We continue to make meaningful progress on our innovation agenda to extend our lead in risk expertise, provide great experiences for our customers, agents and brokers, and improve productivity and efficiency. In Personal Insurance, we teamed up with Amazon to launch an industry-first digital storefront. This initiative is designed to create new opportunities for us and our agents to attract and serve customers and help them take a more proactive approach to home safety in an increasingly digital world. In Business Insurance, we made a majority investment in Zensurance, a Toronto-based digital provider of online insurance solutions for small businesses, a natural fit with our Simply Business team. In Claim, we invested in Kittyhawk, the market leader in enterprise drone operations software, further enhancing our position as an industry leader in the use of drone technology, including to settle claims more quickly and efficiently. We are excited about these and other initiatives we have underway, which, along with our long-standing competitive advantages, position us well to continue to deliver industry-leading returns over time.”

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