Travelers ups premium take by 7% in 2021 to $32bn; personal lines outpace commercial

US property/casualty insurer  Travelers increased net written premiums by 7% in 2022 to just shy of $32 billion on its way to delivering $3.66 billion in group annual net income, financial statements from the group showed Thursday.

Top line growth proved most prominent in personal lines where claims nonetheless ate away at underwriting earnings. Business lines lagged on revenue growth as rate gains slowed, but with losses sufficiently contained to just secure the group an annual gain of underwriting earnings, the report indicated.

That full-year tally follows a 10% Q4 gain in net written premiums that led to $1.33 billion in quarterly net income, fractionally above the prior year take.

“Our best-in-class marketplace execution enabled us to grow net written premiums by 10% this quarter to $8 billion, with each of our three segments contributing," CEO Alan Schnitzer (pictured) was quoted saying.

The group combined ratio is down 0.5 points to 94.5% for the full-year, representing a decline in the expense ratio against a flat loss ratio at 65.1%.

Nat cat events delivered 6.0 points of the FY2021 combined ratio, chiefly events already reported for the first nine months. Q4 nat cat accounted for only 0.5 points to combined ratio, the second lowest rate over the past ten years despite headline tornado and wildfire threats, presentation data showed.

Catastrophe losses in the fourth quarter, primarily December tornados in Kentucky, windstorms and the Colorado wildfire, were reduced by $255 million of recoveries in Traveler's underlying property aggregate catastrophe excess-of-loss reinsurance, management said.

In business insurance, the 4% net written premium growth was written almost exclusively on a 5% gain in the US middle-market and flattish results for select and national accounts.

Rate growth at renewal in domestic business insurance slipped for the fourth consecutive quarter, including a 3.8 point decline in the core middle-market segment to 5.1% growth (in exposure-adjusted terms).

Claims in the segment proved innocuous, helping to lop 4.6 percentage points off the full-year combined ratio to 95.7% and putting the segment back to an underwriting gain from prior year difficulties.

Catastrophe, net of reinsurance, took $793 million in the business segment, up from $645 million in the 2020. An adjusted combined ratio for the segment fell a milder 3.8 points to 91.7%.

In personal lines, net written premiums grew 10% for the full-year, including 12% for homeowner's and other ahead of 9% growth for automotive.

The segment combined ratio rose 6.8 points to 96.5% (after a 7 point gain in Q4), chiefly as driver's returned to the roads to slash underwriting earnings in the segment.

Restating premiums to the gross written measure, for which Travelers does not give the segment data, the top line grew 7.8% for the year to $34.24 billion, notes to the earnings report indicated.

Travelers is the industry earnings bellwether as the first major primary carrier to release earnings each quarter.

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