Travelers posts record net written premiums in 2018

US insurer Travelers posted record net written premiums and a big jump in profits in 2018 despite several costly catastrophes during the year.

The company made a net profit of $2.5 billion in the year, a 23 percent increase on the year before. Its combined ratio for the period was 96.9 percent, an improvement of 1 percent on 2017. Its profit was boosted partly by lower corporation tax rates in the US.

Travelers’ net written premiums for the year reached $27.7 billion, a 6 percent improvement on the year before and a record for the company.

Alan Schnitzer, chairman and chief executive of Travelers, said: “For the full year, we were pleased to have achieved record net written premiums of $27.7 billion and core income of $2.4 billion that generated core ROE of 10.7 percent despite an elevated level of $1.4 billion of after-tax catastrophe losses.

“These results demonstrate the strength of our franchise. We continue to pursue our ambitious innovation agenda and identify opportunities to leverage our long-standing competitive advantages in a rapidly changing world.

“For example, we recently announced an agreement to become the exclusive provider of US auto insurance claim management for Lyft. Our significant competitive advantages, including a strong balance sheet, superior talent and leading position with agents and brokers, together with our capital management strategy and the strategic initiatives we have underway, position us well to continue to deliver shareholder value over time.”

Schnitzer continued: “We remain very pleased with our performance in the market, as net written premiums increased by 4 percent to $6.7 billion, with each of our business segments contributing. Net written premiums in Business Insurance increased by 3 percent, benefiting from renewal premium change of nearly 5 percent and continued historically high levels of retention. In our Middle Market business, renewal premium change increased over the prior year and was stable sequentially with retention at a fourth quarter record of 88 percent.

“In Bond & Specialty Insurance, net written premiums increased by 8 percent, with strong production in both our Management Liability and Surety businesses. In Personal Insurance, net written premiums increased by 5 percent. In Agency Auto, net written premiums increased by 5 percent, with strong retention and renewal premium change that continued to moderate, consistent with our objective of balancing growth and profitability. In our leading Agency Homeowners business, net written premiums increased by 6 percent, with strong retention and pricing up nearly a point over the prior year quarter.”

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