New York based The Travelers Companies, Inc. (TRV - Analyst Report) is one of the leading writer of auto and homeowners’ insurance through independent agents as well as writer of commercial U.S. property-casualty insurance.
Travelers’ focus on reducing operating expenses and acquisition costs in order to improve underwriting margins bodes well for to have more competitively priced product in its portfolio. As such Quantum 2.0 is on track to be a success story. Also, its acquisitions are helping it to grow inorganically. Cost reduction plans are expected to enhance the company’s savings as well.
However, a soft interest rate environment dampened investment results.
Travelers has beaten estimates thrice in the last four quarters, making for an average surprise of just over 14.4%.
Currently, Travelers has a Zacks Rank #3 (Hold), but that could definitely change following its earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Bottom Line Surpassed Expectation
Travelers beat on earnings. Our consensus called for EPS of $2.12 per share, and the company reported EPS of $2.52 per share. The solid performance was driven by study underwriting performance across all the segments.
Revenues Beat
Revenues of $6.7 billion outperformed the Zacks Consensus Estimate of $6.6 billion.
Key Stats to Note
· Net written premiums of $6.2 billion were almost flat year over year.
· Underwriting gains nearly doubled to $511 million.
· Combined ratio improved 430 basis points to 90.8%.
· Adjusted book value per share improved 5% to $73.09 as on Jun 30, 2015.
· Returned $995 million in capital to shareholders.
Update: See more detailed analysis here.
