Travelers beats estimates but shares slip on catastrophe losses

Investing.com -- The Travelers Companies, Inc. (NYSE: TRV) reported its third-quarter results before the open on Friday, sending shares down around 4.4% premarket.

Adjusted earnings per share of $9.18 surpassed the analyst consensus of $7.25, while revenue of $12.41 billion exceeded estimates of $11.31 billion. Revenue was essentially flat compared to the prior-year quarter.

The insurer posted net income of $1.917 billion, or $9.04 per diluted share, up from $1.888 billion, or $8.24 per diluted share, in the third quarter of 2025. Core income rose to $1.947 billion from $1.867 billion YoY, driven by higher net favorable prior-year reserve development and increased net investment income, partially offset by higher catastrophe losses of $538 million pre-tax compared to $402 million in the prior-year quarter.

"We are pleased to report excellent third quarter results," said Alan Schnitzer, Chairman and Chief Executive Officer. "It was another in a run of successful quarters, with very strong underwriting performance across all three segments and a record result from our investment portfolio."

The company reported a consolidated combined ratio of 86.8%, improving from 87.3% in the prior-year quarter, while the underlying combined ratio was 84.1%. Net favorable prior-year reserve development totaled $234 million pre-tax across all three segments, though this included a $295 million addition to asbestos reserves.

Net written premiums reached $11.480 billion, essentially flat YoY. Excluding the impact of divested Canadian operations, premiums grew 2%. Business Insurance premiums increased 4% on an adjusted basis to $5.868 billion, while Bond & Specialty Insurance grew 12% to $1.209 billion. Personal Insurance premiums declined 7% to $4.403 billion, or 3% excluding the Canadian divestiture.

Net investment income hit a record $1.098 billion pre-tax, up 6% from the prior-year quarter, benefiting from higher yields and growth in average invested assets.