The Travelers Companies, Inc. has reported a net income of $1.626 billion for the fourth quarter of 2023. This substantial increase of $807 million from the same period in 2022 is attributed to higher core income, although it was partially offset by net realized investment losses compared to gains in 2022.
Core income for the quarter reached $1.633 billion, a significant rise from $810 million in the previous year. Travelers explained that the surge in core income was primarily due to a higher underlying underwriting gain, along with lower catastrophe losses and increased net investment income.
Despite net realized investment losses of $11 million pre-tax ($7 million after-tax) in Q4, compared to gains of $7 million pre-tax ($9 million after-tax) in the prior year quarter, Travelers saw a noteworthy improvement in net written premiums, reaching a staggering $9.994 billion, a 13% increase from the previous year.
The company reported a combined ratio of 85.8% for the fourth quarter of 2023, a considerable improvement from 94.5% in the same period of 2022. Catastrophe losses, net of reinsurance, contributed just 1.2 percentage points to the Q4 combined ratio, compared to 5.2 percentage points in 2022.
Alan Schnitzer, Chairman and CEO, expressed satisfaction with the exceptional fourth-quarter results, highlighting record highs in core income, earnings per share, and return on equity. He emphasized that each business segment contributed to the improvement, with a record underlying underwriting income driven by increased net earned premiums and an underlying combined ratio at a record 85.9%.
For the full year 2023, Travelers reported a $149 million increase in net income to $2.991 billion, supported by higher core income and reduced net realized investment losses. Core income for the full year also increased by $74 million to $3.072 billion, primarily due to a higher underlying underwriting gain and increased net investment income.
The company reported a combined ratio of 97.0% for 2023, compared with 95.6% in the previous year. This includes a 2.4 percentage point rise in the contribution of catastrophe losses, net of reinsurance, to 7.9 percentage points.
Looking ahead, Schnitzer expressed confidence in the excellent shape of the business fundamentals. He highlighted growth in Business Insurance, strong margins in Bond & Specialty business, improved profitability in Personal Insurance, and strategic investments for future growth.
Travelers also provided an update on its 1.1 2024 reinsurance renewal, revealing a 76% increase in the size of its core corporate catastrophe excess-of-loss reinsurance to $3.525 billion.
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