TRAVELERS COMPANIES INC
For the period ended Dec 31, 2024. Filed Feb 13, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 13, 2025
TRV$395.20-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0000086312-24-000012
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0000086312-25-000012
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 591 previous paragraphs and 584 current paragraphs.
417 unchanged; 143 reworded; 23 added; 27 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 36 previous and 36 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•Catastrophe losses of $3.34 billion ($2.63 billion after-tax)
Current report
•Combined ratio of 92.5%
Current report
•Net investment income of $3.59 billion ($2.95 billion after-tax)
Current report
•Net realized investment losses of $30 million ($26 million after-tax)
Current report
•Operating cash flows of $9.07 billion
Current report
•Total assets of $133.19 billion
Current report
•Shareholders’ equity of $27.86 billion
Current report
•Net unrealized investment losses of $4.61 billion ($3.64 billion after-tax)
Current report
•Holding company liquidity of $1.80 billion
Current report
Catastrophes can be caused by various natural events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, wildfires, severe winter weather, floods, tsunamis, volcanic eruptions and other naturally-occurring events, such as solar flares. Catastrophes can also be man-made, such as terrorist attacks and other destructive acts, including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure. The effects of catastrophes are included in net income (loss) and core income (loss) and claims and claim adjustment expense reserves upon occurrence. A catastrophe may also result in the payment of reinsurance reinstatement premiums and assessments from various pools and associations.
Current report
Interest expense in 2024 and 2023 was $392 million and $376 million, respectively.
Current report
Claims and claim adjustment expenses in 2024 were $13.68 billion, $983 million or 8% higher than in 2023, primarily reflecting the impacts of (i) higher business volumes, (ii) loss cost trends, (iii) higher other losses and (iv) higher catastrophe losses, partially offset by (v) net favorable prior year reserve development compared to net unfavorable prior year reserve development in 2023.
Current report
Amortization of deferred acquisition costs in 2024 was $3.59 billion, $415 million or 13% higher than in 2023, generally consistent with the increase in earned premiums.
Current report
Gross and net written premiums in 2024 increased by 9% and 8%, respectively, over 2023.
Current report
International. Net written premiums of $1.94 billion in 2024 increased by 10% over 2023.
Current report
Amortization of deferred acquisition costs in 2024 was $756 million, $83 million or 12% higher than in 2023, generally consistent with the increase in earned premiums.
Current report
International. Net written premiums of $506 million in 2024 decreased by 6% from 2023, driven by decreases in the United Kingdom and broader Europe, partially offset by increases in Canada.
Current report
Amortization of deferred acquisition costs in 2024 was $2.63 billion, $249 million or 10% higher than in 2023, generally consistent with the increase in earned premiums.
Current report
Income Tax Expense (Benefit)
Current report
Gross and net written premiums in 2024 both increased by 8% over 2023.
Current report
International net written premiums of $694 million in 2024 increased by 7% over 2023, driven by increases in the automobile and homeowners and other product lines, partially offset by the impact of changes in foreign currency exchange rates.
Current report
•the continued application of more stringent cleanup standards on existing and emerging contaminants;
Current report
Beginning in early January 2025, there were a series of severe wildfires that impacted the Pacific Palisades neighborhood and Eaton Canyon area in Southern California. The Company’s preliminary pre-tax estimate of catastrophe losses from these wildfires, including assessments from the California FAIR Plan, and net of estimated recoveries from reinsurance, is $1.7 billion. The catastrophe losses from these wildfires will be reflected in the Company’s first quarter 2025 earnings.
Removed paragraphs (27)
Previous report
•Catastrophe losses of $2.99 billion ($2.36 billion after-tax)
Previous report
•Combined ratio of 97.0%
Previous report
•Net investment income of $2.92 billion ($2.44 billion after-tax)
Previous report
•Net realized investment losses of $105 million ($81 million after-tax)
Previous report
•Operating cash flows of $7.71 billion
Previous report
•Total assets of $125.98 billion
Previous report
•Shareholders’ equity of $24.92 billion
Previous report
•Holding company liquidity of $1.54 billion
Previous report
Factors contributing to net favorable prior year reserve development during the years ended December 31, 2023, 2022 and 2021 are discussed in more detail in note 8 of the notes to the consolidated financial statements.
Previous report
•for which the Company’s estimates of its ultimate losses before reinsurance and taxes exceed a pre-established dollar threshold.
Previous report
Interest expense in 2023 and 2022 was $376 million and $351 million, respectively.
Previous report
Factors contributing to net prior year reserve development during the years ended December 31, 2023, 2022 and 2021 are discussed in more detail in note 8 of the notes to the consolidated financial statements.
Previous report
Amortization of deferred acquisition costs in 2023 was $3.17 billion, $385 million or 14% higher than in 2022, generally consistent with the increase in earned premiums.
Previous report
Gross and net written premiums in 2023 both increased by 16% over 2022.
Previous report
International. Net written premiums of $1.77 billion in 2023 increased by 66% over 2022, and included the impact of the Company’s quota share reinsurance agreement with subsidiaries of Fidelis Insurance Holding Limited (Fidelis) effective January 1, 2023.
Previous report
Claims and claim adjustment expenses in 2023 were $1.49 billion, $107 million or 8% higher than in 2022, primarily reflecting the impacts of (i) higher business volumes, (ii) losses from a small number of surety accounts and (iii) loss activity related to the disruption in the banking sector, partially offset by (iv) higher net favorable prior year reserve development.
Previous report
Factors contributing to net prior year reserve development during the years ended December 31, 2023, 2022 and 2021 are discussed in more detail in note 8 of the notes to the consolidated financial statements.
Previous report
Amortization of deferred acquisition costs in 2023 was $673 million, $48 million or 8% higher than in 2022, generally consistent with the increase in earned premiums.
Previous report
International. Net written premiums of $539 million in 2023 were comparable with 2022.
Previous report
Factors contributing to net favorable prior year reserve development during the years ended December 31, 2023 and 2021 are discussed in more detail in note 8 of the notes to the consolidated financial statements. Net favorable prior year reserve development was not significant for the year ended December 31, 2022.
Previous report
Amortization of deferred acquisition costs in 2023 was $2.38 billion, $278 million or 13% higher than in 2022, generally consistent with the increase in earned premiums.
Previous report
Income Tax Benefit
Previous report
Gross and net written premiums in 2023 increased by 14% and 13%, respectively, over 2022.
Previous report
International net written premiums of $650 million in 2023 were comparable with 2022.
Previous report
Net asbestos paid loss and loss expenses in 2023, 2022 and 2021 were $212 million, $245 million and $221 million, respectively. Approximately 1%, 2% and 9% of total net paid losses in 2023, 2022 and 2021, respectively, related to policyholders with whom the Company entered into settlement agreements that limit those policyholders’ ability to present future claims to the Company.
Previous report
Net reinsurance recoverables at December 31, 2023 increased by $80 million over December 31, 2022, primarily reflecting the impacts of catastrophe losses in 2023, partially offset by cash collections in 2023.
Previous report
•the impact of a U.S. government shutdown; and
Reworded paragraphs (143)
Previous wording
•Net income of $2.99 billion, or $12.93 per share basic and $12.79 per share diluted
Current wording
•Net income of $5.00 billion, or $21.76 per share basic and $21.47 per share diluted
Previous wording
•Net earned premiums of $37.76 billion
Current wording
•Net earned premiums of $41.94 billion
Previous wording
•Net favorable prior year reserve development of $143 million ($113 million after-tax)
Current wording
•Net favorable prior year reserve development of $709 million ($559 million after-tax)
Previous wording
•Total investments of $88.81 billion; fixed maturities and short-term securities comprised 93% of total investments
Current wording
•Total investments of $94.22 billion; fixed maturities and short-term securities comprised 94% of total investments
Previous wording
•Total debt of $8.03 billion, resulting in a debt-to-total capital ratio of 24.4% (22.3% excluding net unrealized investment losses, net of tax, included in shareholders’ equity)
Current wording
•Total debt of $8.03 billion, resulting in a debt-to-total capital ratio of 22.4% (20.3% excluding net unrealized investment losses, net of tax, included in shareholders’ equity)
Previous wording
•Total capital returned to shareholders of $1.94 billion, comprising $1.03 billion of share repurchases and $915 million of dividends
Current wording
•Total capital returned to shareholders of $2.11 billion, comprising $1.15 billion of share repurchases and $962 million of dividends
Previous wording
•Book value per common share of $109.19
Current wording
•Book value per common share of $122.97
Previous wording
Diluted net income per share of $12.79 in 2023 increased by 9% over diluted net income per share of $11.77 in 2022. Net income of $2.99 billion in 2023 increased by 5% over net income of $2.84 billion in 2022. The increase in diluted net income per share reflected the impact of share repurchases in recent periods. The increase in income before income taxes primarily reflected the pre-tax impacts of (i) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”), (ii) higher net investment income and (iii) lower net realized investment losses, partially offset by (iv) higher catastrophe losses and (v) lower net favorable prior year reserve development. Catastrophe losses in 2023 and 2022 were $2.99 billion and $1.88 billion, respectively. Net favorable prior year reserve development in 2023 and 2022 was $143 million and $649 million, respectively. The higher underlying underwriting margins in 2023 were driven by Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance. Income tax expense in 2023 was lower than in 2022, primarily reflecting a one-time tax benefit of $211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item, partially offset by a $47 million reduction in income tax expense in the first quarter of 2022 as a result of the resolution of prior year tax matters and the impact of the increase in income before income taxes.
Current wording
Diluted net income per share of $21.47 in 2024 increased by 68% over diluted net income per share of $12.79 in 2023. Net income of $5.00 billion in 2024 increased by 67% over net income of $2.99 billion in 2023. The higher rate of increase in diluted net income per share reflected the impact of share repurchases in recent periods. The increase in income before income taxes primarily reflected the pre-tax impacts of (i) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”), (ii) higher net investment income, (iii) higher net favorable prior year reserve development and (iv) lower net realized investment losses, partially offset by (v) higher catastrophe losses. Net favorable prior year reserve development in 2024 and 2023 was $709 million and $143 million, respectively. Catastrophe losses in 2024 and 2023 were $3.34 billion and $2.99 billion, respectively. The higher underlying underwriting margins in 2024 were driven by Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance. Income tax expense in 2024 was higher than in 2023, primarily reflecting the impact of the increase in income before income taxes, partially offset by a one-time tax benefit of $211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.
Previous wording
The Company has insurance operations in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyd’s, as well as in Brazil and Colombia through joint ventures. Because these operations are conducted in local currencies other than the U.S. dollar, the Company is subject to changes in foreign currency exchange rates. For the years ended December 31, 2023 and 2022, changes in foreign currency exchange rates impacted reported line items in the statement of income by insignificant amounts. The impact of these changes was not material to the Company’s net income or segment income (loss) for the periods reported.
Current wording
The Company has insurance operations in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyd’s, as well as in Brazil through a joint venture. Because these operations are conducted in local currencies other than the U.S. dollar, the Company is subject to changes in foreign currency exchange rates. For the years ended December 31, 2024 and 2023, changes in foreign currency exchange rates impacted reported line items in the statement of income by insignificant amounts. The impact of these changes was not material to the Company’s net income or segment income (loss) for the periods reported.
Previous wording
Earned premiums in 2023 were $37.76 billion, $4.00 billion or 12% higher than in 2022. In Business Insurance, earned premiums in 2023 increased by 12% over 2022. In Bond & Specialty Insurance, earned premiums in 2023 increased by 7% over 2022. In Personal Insurance, earned premiums in 2023 increased by 13% over 2022. Factors contributing to the change in earned premiums in each segment in 2023 as compared with 2022 are discussed in more detail in the segment discussions that follow.
Current wording
Earned premiums in 2024 were $41.94 billion, $4.18 billion or 11% higher than in 2023. In Business Insurance, earned premiums in 2024 increased by 11% over 2023. In Bond & Specialty Insurance, earned premiums in 2024 increased by 8% over 2023. In Personal Insurance, earned premiums in 2024 increased by 11% over 2023. Factors contributing to the change in earned premiums in each segment in 2024 as compared with 2023 are discussed in more detail in the segment discussions that follow.
Previous wording
Net investment income in 2023 was $2.92 billion, $360 million or 14% higher than in 2022. Net investment income from fixed maturity investments in 2023 was $2.47 billion, $359 million higher than in 2022. The increase primarily resulted from higher long-term average yields and a higher average level of fixed maturity investments. Net investment income from short-term securities in 2023 was $241 million, $168 million higher than in 2022. The increase primarily resulted from higher short-term average yields. The Company’s remaining investment portfolios had net investment income of $253 million in 2023, $166 million lower than in 2022, primarily reflecting lower real estate and private equity partnership returns. Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period. Accordingly, net investment income from these other investments is generally reflected in the Company’s financial statements on a quarter lag basis.
Current wording
Net investment income in 2024 was $3.59 billion, $668 million or 23% higher than in 2023. Net investment income from fixed maturity investments in 2024 was $2.95 billion, $476 million higher than in 2023. The increase primarily resulted from higher long-term average yields and a higher average level of fixed maturity investments. Net investment income from short-term securities in 2024 was $280 million, $39 million higher than in 2023. The increase primarily resulted from a higher level of short-term investments and higher short-term average yields. The Company’s remaining investment portfolios had net investment income of $409 million in 2024, $156 million higher than in 2023, primarily reflecting higher private equity partnership returns. Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period. Accordingly, net investment income from these other investments is generally reflected in the Company’s financial statements on a quarter lag basis.
Previous wording
Fee income in 2023 was $433 million, $21 million higher than in 2022. The National Accounts market in Business Insurance is the primary source of the Company’s fee-based business and is discussed in the Business Insurance segment discussion that follows.
Current wording
Fee income in 2024 was $473 million, $40 million higher than in 2023. The National Accounts market in Business Insurance is the primary source of the Company’s fee-based business and is discussed in the Business Insurance segment discussion that follows.
Previous wording
Net realized investment gains on equity securities still held of $16 million in 2023 were driven by the impact of changes in fair value attributable to favorable equity markets, partially offset by a net unfavorable change in fair value on an individual security held in the Company’s portfolio. Net realized investment losses on equity securities still held of $61 million in 2022 were driven by the impact of changes in fair value attributable to unfavorable equity markets.
Current wording
Net realized investment gains on equity securities still held of $89 million in 2024 were driven by the impact of changes in fair value attributable to favorable equity markets. Net realized investment gains on equity securities still held of $16 million in 2023 were driven by the impact of changes in fair value attributable to favorable equity markets, partially offset by a net unfavorable change in fair value on an individual security held in the Company’s portfolio.
Previous wording
Other net realized investment losses in 2023 included $93 million of net realized investment losses related to fixed maturity investments, $7 million of net realized investment losses related to equity securities sold and $9 million of net realized investment losses related to other investments. Other net realized investment losses in 2022 included $72 million of net realized investment losses related to fixed maturity investments, $8 million of net realized investment losses related to equity securities sold and $25 million of net realized investment losses related to other investments.
Current wording
Other net realized investment losses in 2024 included $126 million of net realized investment losses related to fixed maturity investments and $10 million of net realized investment losses related to other investments, partially offset by $17 million of net realized investment gains related to real estate sales and $10 million of net realized investment gains related to equity securities sold. Other net realized investment losses in 2023 included $93 million of net realized investment losses related to fixed maturity investments, $7 million of net realized investment losses related to equity securities sold and $9 million of net realized investment losses related to other investments.
Previous wording
Other revenues in 2023 were $353 million, $2 million higher than 2022. Other revenues include revenues from Simply Business, installment premium charges and other policyholder service charges.
Current wording
Other revenues in 2024 were $449 million, $96 million higher than 2023. Other revenues include revenues from Simply Business, installment premium charges and other policyholder service charges.
Previous wording
Claims and claim adjustment expenses in 2023 were $26.22 billion, $3.36 billion or 15% higher than 2022, primarily reflecting the impacts of (i) higher business volumes, (ii) higher catastrophe losses, (iii) lower net favorable prior year reserve development, (iv) higher losses in the automobile product line in Personal Insurance, (v) losses from a small number of surety accounts in Bond & Specialty Insurance and (vi) loss activity related to the disruption in the banking sector in Bond & Specialty Insurance, partially offset by (vii) a lower level of property losses in Business Insurance and (viii) lower losses in the homeowners and other product line in Personal Insurance. Catastrophes in 2023 primarily resulted from numerous severe wind and hail storms in multiple states. Catastrophes in 2022 primarily resulted from a significant winter storm that impacted most of the U.S. and parts of Canada and Hurricanes Ian and Fiona, as well as severe wind and hail storms in several regions of the United States.
Current wording
Claims and claim adjustment expenses in 2024 were $27.06 billion, $844 million or 3% higher than 2023, primarily reflecting the impacts of (i) higher business volumes in all three segments, (ii) loss cost trends in Business Insurance and Bond & Specialty Insurance, (iii) higher catastrophe losses in all three segments and (iv) higher other losses in Business Insurance, partially offset by (v) lower physical damage losses in the automobile product line and lower non-weather and non-catastrophe weather-related losses in the homeowners and other product line in Personal Insurance, (vi) higher net favorable prior year reserve development, including net favorable prior year development compared to net unfavorable development in 2023 in Business Insurance and higher net favorable prior year reserve development in Personal Insurance, partially offset by lower net favorable prior year reserve development in Bond & Specialty Insurance and (vii) the comparison to an elevated level of losses in 2023 from both a small number of surety accounts and loss activity related to the disruption in the banking sector in Bond & Specialty Insurance. Catastrophes in 2024 primarily resulted from Hurricane Helene and numerous severe wind and hail storms in multiple states. Catastrophes in 2023 primarily resulted from numerous severe wind and hail storms in multiple states.
Previous wording
•that is designated a catastrophe by internationally recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada; and
Current wording
The Company defines a catastrophe as a severe loss event designated, or reasonably expected by the Company to be designated, a catastrophe by one or more industry recognized organizations that track and report on insured losses resulting from catastrophic events, such as Property Claim Services (PCS) for events in the United States and Canada.
Previous wording
The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is exceeded and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company. Additionally, an aggregate threshold is applied for International business across all reportable segments. The threshold for 2023 ranged from approximately $20 million to $30 million of losses before reinsurance and taxes.
Current wording
The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level. If a threshold for one segment or a combination thereof is reached and the other segments have losses from the same event, losses from the event are identified as catastrophe losses in the segment results and for the consolidated results of the Company. Additionally, an aggregate threshold is applied for International business across all reportable segments. The threshold for 2024 ranged from approximately $20 million to $30 million of losses before reinsurance and taxes.
Previous wording
(1) Amounts are reported pre-tax and net of recoveries under all applicable reinsurance treaties, except for the Company’s 2022 and 2021 Underlying Property Aggregate Catastrophe Excess-of-Loss Treaties. Those treaties covered the accumulation of certain property losses arising from one or multiple occurrences (both catastrophe and non-catastrophe events) for the period January 1, 2022 through and including December 31, 2022 and the period January 1, 2021 through and including December 31, 2021. As a result, the benefit from the 2022 and 2021 treaties are not included in the table as the allocation of the treaties’ benefit to each identified catastrophe changes each time there are additional events or changes in estimated losses from any covered event.
Current wording
(1) Amounts are reported pre-tax and net of recoveries under all applicable reinsurance treaties, except for the Company’s 2022 Underlying Property Aggregate Catastrophe Excess-of-Loss Treaties. That treaty covered the accumulation of certain property losses arising from one or multiple occurrences (both catastrophe and non-catastrophe events) for the period January 1, 2022 through and including December 31, 2022. As a result, the benefit from that treaty is not included in the table above as the allocation of the treaty’s benefit to each identified catastrophe changes each time there are additional events or changes in estimated losses from any covered event.
Previous wording
Amortization of deferred acquisition costs in 2023 was $6.23 billion, $711 million or 13% higher than in 2022. The increase in 2023 was generally consistent with the increase in earned premiums. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.
Current wording
Amortization of deferred acquisition costs in 2024 was $6.97 billion, $747 million or 12% higher than in 2023. The increase in 2024 was generally consistent with the increase in earned premiums. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.
Previous wording
General and administrative expenses in 2023 were $5.18 billion, $366 million or 8% higher than in 2022, primarily reflecting the impact of costs associated with higher business volumes. General and administrative expenses are discussed in more detail in the segment discussions that follow.
Current wording
General and administrative expenses in 2024 were $5.82 billion, $643 million or 12% higher than in 2023, primarily reflecting the impact of costs associated with higher business volumes. General and administrative expenses are discussed in more detail in the segment discussions that follow.
Previous wording
Income tax expense in 2023 was $380 million, $132 million or 26% lower than in 2022, primarily reflecting the one-time tax benefit of $211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item, partially offset by the $47 million reduction in income tax expense in the first quarter of 2022 as a result of the resolution of prior year tax matters and the impact of the $17 million increase in income before income taxes in 2023.
Current wording
Income tax expense in 2024 was $1.18 billion, $801 million or 211% higher than in 2023, primarily reflecting the impact of the $2.81 billion increase in income before income taxes in 2024 and the one-time tax benefit of $211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.
Previous wording
The Company’s effective tax rate was 11% and 15% in 2023 and 2022, respectively. The effective tax rate in 2023 was reduced by the impact of the one-time tax benefit discussed above, and the effective tax rate in 2022 was reduced by the impact of the resolution of prior year tax matters discussed above. The effective tax rates in both years reflected the impact of tax-exempt investment income on the calculation of the Company’s income tax provision.
Current wording
The Company’s effective tax rate was 19% and 11% in 2024 and 2023, respectively. The effective tax rate in 2023 was reduced by the impact of the one-time tax benefit discussed above. The effective tax rates in both years reflected the impact of tax-exempt investment income on the calculation of the Company’s income tax provision.
Previous wording
The combined ratio of 97.0% in 2023 was 1.4 points higher than the combined ratio of 95.6% in 2022. The loss and loss adjustment expense ratio of 68.9% in 2023 was 1.8 points higher than the loss and loss adjustment expense ratio of 67.1% in 2022. The underwriting expense ratio of 28.1% in 2023 was 0.4 points lower than the underwriting expense ratio of 28.5% in 2022.
Current wording
The combined ratio of 92.5% in 2024 was 4.5 points lower than the combined ratio of 97.0% in 2023. The loss and loss adjustment expense ratio of 64.0% in 2024 was 4.9 points lower than the loss and loss adjustment expense ratio of 68.9% in 2023. The underwriting expense ratio of 28.5% in 2024 was 0.4 points higher than the underwriting expense ratio of 28.1% in 2023.
Previous wording
Catastrophe losses in 2023 and 2022 accounted for 7.9 points and 5.5 points, respectively, of the combined ratio. Net favorable prior year reserve development in 2023 and 2022 provided 0.4 points and 1.9 points of benefit, respectively, to the combined ratio. The combined ratio excluding prior year reserve development and catastrophe losses (“underlying combined ratio”) in 2023 was 2.5 points lower than the 2022 ratio on the same basis, primarily reflecting the impacts of (i) the benefit of earned pricing, (ii) a lower level of property losses in Business Insurance and (iii) lower losses in the homeowners and other product line in Personal Insurance, partially offset by (iv) losses from a small number of surety accounts in Bond & Specialty Insurance, (v) loss activity related to the disruption in the banking sector in Bond & Specialty Insurance and (vi) higher losses in the automobile product line in Personal Insurance.
Current wording
Catastrophe losses in 2024 and 2023 accounted for 8.0 points and 7.9 points, respectively, of the combined ratio. Net favorable prior year reserve development in 2024 and 2023 provided 1.7 points and 0.4 points of benefit, respectively, to the combined ratio. The combined ratio excluding prior year reserve development and catastrophe losses (“underlying combined ratio”) in 2024 was 3.3 points lower than the 2023 ratio on the same basis, primarily reflecting the impacts of (i) the benefit of earned pricing in Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance, (ii) lower physical damage losses in the automobile product line and lower non-weather and non-catastrophe weather-related losses in the homeowners and other product line in Personal Insurance and (iii) the comparison to an elevated level of losses in 2023 from both a small number of surety accounts and loss activity related to the disruption in the banking sector in Bond & Specialty Insurance, partially offset by (iv) higher other losses in Business Insurance.
Previous wording
Gross and net written premiums in 2023 both increased by 13% over 2022. Factors contributing to the changes in gross and net written premiums in each segment are discussed in more detail in the segment discussions that follow.
Current wording
Gross and net written premiums in 2024 both increased by 8% over 2023. Factors contributing to the changes in gross and net written premiums in each segment are discussed in more detail in the segment discussions that follow.
Previous wording
Segment income in 2023 was $2.58 billion, $52 million or 2% higher than segment income of $2.53 billion in 2022. The decrease in segment income before income taxes primarily reflected the pre-tax impacts of (i) net unfavorable prior year reserve development compared to net favorable prior year reserve development in 2022 and (ii) higher catastrophe losses, partially offset by (iii) higher underlying underwriting margins and (iv) higher net investment income. Net unfavorable prior year reserve development in 2023 was $289 million. Net favorable prior year reserve development in 2022 was $381 million. Catastrophe losses in 2023 and 2022 were $838 million and $654 million, respectively. The higher underlying underwriting margins primarily reflected the impacts of (i) higher business volumes, (ii) the benefit of earned pricing and (iii) a lower level of property losses, partially offset by (iv) higher general and administrative expenses. Income tax expense in 2023 was lower than in 2022, primarily reflecting a one-time tax benefit of $171 million in the first quarter of 2023 and the impact of the decrease in segment income before income taxes.
Current wording
Segment income in 2024 was $3.31 billion, $723 million or 28% higher than segment income of $2.58 billion in 2023. The increase in segment income before income taxes primarily reflected the pre-tax impacts of (i) higher net investment income, (ii) higher underlying underwriting margins and (iii) net favorable prior year reserve development compared to net unfavorable prior year reserve development in 2023, partially offset by (iv) higher catastrophe losses. Net favorable prior year reserve development in 2024 was $90 million. Net unfavorable prior year reserve development in 2023 was $289 million. Catastrophe losses in 2024 and 2023 were $1.03 billion and $838 million, respectively. The higher underlying underwriting margins primarily reflected the impacts of (i) higher business volumes and (ii) the benefit of earned pricing, partially offset by (iii) higher other losses and (iv) higher general and administrative expenses. Income tax expense in 2024 was higher than in 2023, primarily reflecting the impact of the increase in segment income before income taxes and a one-time tax benefit of $171 million in the first quarter of 2023.
Previous wording
Earned premiums in 2023 were $19.14 billion, $2.05 billion or 12% higher than in 2022, primarily reflecting the increase in net written premiums over the preceding twelve months.
Current wording
Earned premiums in 2024 were $21.35 billion, $2.20 billion or 11% higher than in 2023, primarily reflecting the increase in net written premiums over the preceding twelve months.
Previous wording
Net investment income in 2023 was $2.09 billion, $221 million or 12% higher than in 2022. Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion for a description of the factors contributing to the increase in the Company’s consolidated net investment income in 2023 compared with 2022. In addition, refer to note 2 of the notes to the consolidated financial statements for a discussion of the Company’s net investment income allocation methodology.
Current wording
Net investment income in 2024 was $2.56 billion, $475 million or 23% higher than in 2023. Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion for a description of the factors contributing to the increase in the Company’s consolidated net investment income in 2024 compared with 2023. In addition, refer to note 2 of the notes to the consolidated financial statements for a discussion of the Company’s net investment income allocation methodology.
Previous wording
National Accounts is the primary source of fee income due to revenue from its large deductible policies and service businesses, which include risk management, claims administration, loss control and risk management information services provided to third parties, as well as policy issuance and claims management services to workers’ compensation residual market pools. Fee income in 2023 was $400 million, $18 million or 5% higher than in 2022, primarily reflecting higher claim volume under administration associated with large deductible policies and the service business, partially offset by lower serviced premium volume from the workers’ compensation residual market pool.
Current wording
National Accounts is the primary source of fee income due to revenue from its large deductible policies and service businesses, which include risk management, claims administration, loss control and risk management information services provided to third parties, as well as policy issuance and claims management services to workers’ compensation residual market pools. Fee income in 2024 was $430 million, $30 million or 8% higher than in 2023, primarily reflecting higher claim volume under administration associated with large deductible policies and the service business.
Previous wording
Other revenues in 2023 were $232 million, $16 million or 6% lower than in 2022, primarily reflecting the receipt of a surplus distribution from a state workers’ compensation fund in 2022. Other revenues also included revenues from Simply Business, installment premium charges and other policyholder service charges.
Current wording
Other revenues in 2024 were $322 million, $90 million or 39% higher than in 2023, driven by growth in Simply Business. Other revenues also include installment premium charges and other policyholder service charges.
Previous wording
General and administrative expenses in 2023 were $3.04 billion, $214 million or 8% higher than in 2022. The increase in 2023 was primarily in support of business growth.
Current wording
General and administrative expenses in 2024 were $3.30 billion, $262 million or 9% higher than in 2023. The increase in 2024 was primarily in support of business growth.
Previous wording
Income tax expense in 2023 was $368 million, $168 million or 31% lower than in 2022, primarily reflecting the one-time tax benefit of $171 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item and the impact of the $116 million decrease in segment income before income taxes in 2023, partially offset by a $3 million reduction in income tax expense in the first quarter of 2022 as a result of the resolution of prior year tax matters.
Current wording
Income tax expense in 2024 was $781 million, $413 million or 112% higher than in 2023, primarily reflecting the impact of the $1.14 billion increase in segment income before income taxes in 2024 and the one-time tax benefit of $171 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.
Previous wording
The combined ratio of 94.7% in 2023 was 2.2 points higher than the combined ratio of 92.5% in 2022. The loss and loss adjustment expense ratio of 65.3% in 2023 was 2.5 points higher than the loss and loss adjustment expense ratio of 62.8% in 2022. The underwriting expense ratio of 29.4% in 2023 was 0.3 points lower than the underwriting expense ratio of 29.7% in 2022.
Current wording
The combined ratio of 92.5% in 2024 was 2.2 points lower than the combined ratio of 94.7% in 2023. The loss and loss adjustment expense ratio of 63.1% in 2024 was 2.2 points lower than the loss and loss adjustment expense ratio of 65.3% in 2023. The underwriting expense ratio of 29.4% in 2024 was comparable with the underwriting expense ratio in 2023.
Previous wording
Catastrophe losses in 2023 and 2022 accounted for 4.3 points and 3.8 points, respectively, of the combined ratio. Net unfavorable prior year reserve development in 2023 accounted for 1.5 points of the combined ratio. Net favorable prior year reserve development in 2022 provided 2.2 points of benefit to the combined ratio. The underlying combined ratio in 2023 was 2.0 points lower than the 2022 ratio on the same basis, primarily reflecting the impacts of (i) the benefit of earned pricing and (ii) a lower level of property losses.
Current wording
Catastrophe losses in 2024 and 2023 accounted for 4.8 points and 4.3 points, respectively, of the combined ratio. Net favorable prior year reserve development in 2024 provided 0.4 points of benefit to the combined ratio. Net unfavorable prior year reserve development in 2023 accounted for 1.5 points of the combined ratio. The underlying combined ratio in 2024 was 0.8 points lower than the 2023 ratio on the same basis, primarily reflecting the impact of the benefit of earned pricing, partially offset by higher other losses.
Previous wording
Select Accounts. Net written premiums of $3.48 billion in 2023 increased by 12% over 2022. Retention rates remained strong in 2023 and increased over 2022. Renewal premium changes in 2023 remained positive and were slightly higher than in 2022. New business premiums in 2023 increased over 2022.
Current wording
Select Accounts. Net written premiums of $3.73 billion in 2024 increased by 7% over 2023. Retention rates remained strong in 2024 but decreased from 2023. Renewal premium changes in 2024 remained positive and were higher than in 2023. New business premiums in 2024 increased over 2023.
Previous wording
Middle Market. Net written premiums of $11.05 billion in 2023 increased by 11% over 2022. Retention rates remained strong in 2023 and increased slightly over 2022. Renewal premium changes in 2023 remained positive and were higher than in 2022. New business premiums in 2023 increased over 2022.
Current wording
Middle Market. Net written premiums of $12.02 billion in 2024 increased by 9% over 2023. Retention rates remained strong in 2024 but decreased slightly from 2023. Renewal premium changes in 2024 remained positive and were higher than in 2023. New business premiums in 2024 were comparable with 2023.
Previous wording
National Accounts. Net written premiums of $1.14 billion in 2023 increased by 5% over 2022. Retention rates remained strong in 2023 and increased over 2022. Renewal premium changes in 2023 remained positive but were lower than in 2022. New business premiums in 2023 increased over 2022.
Current wording
National Accounts. Net written premiums of $1.26 billion in 2024 increased by 11% over 2023. Retention rates remained strong in 2024 and were comparable with 2023. Renewal premium changes in 2024 remained positive and were comparable with 2023. New business premiums in 2024 increased over 2023.
Previous wording
National Property and Other. Net written premiums of $3.01 billion in 2023 increased by 22% over 2022. Retention rates remained strong in 2023 and increased over 2022. Renewal premium changes in 2023 remained positive and were higher than in 2022. New business premiums in 2023 increased over 2022.
Current wording
National Property and Other. Net written premiums of $3.13 billion in 2024 increased by 4% over 2023. Retention rates remained strong in 2024 but decreased from 2023. Renewal premium changes in 2024 remained positive but were lower than in 2023. New business premiums in 2024 increased over 2023.
Previous wording
Segment income in 2023 was $942 million, $34 million or 4% higher than segment income of $908 million in 2022. The increase in segment income before income taxes primarily reflected the pre-tax impacts of (i) higher net investment income and (ii) higher net favorable prior year reserve development, partially offset by (iii) lower underlying underwriting margins. Net favorable prior year reserve development in 2023 and 2022 was $285 million and $222 million, respectively. Catastrophe losses in 2023 and 2022 were $37 million and $25 million, respectively. The lower underlying underwriting margins primarily reflected the impacts of (i) higher general and administrative expenses, (ii) losses from a small number of surety accounts and (iii) loss activity related to the disruption in the banking sector, partially offset by (iv) higher business volumes. Income tax expense in 2023 was higher than in 2022, primarily reflecting a $24 million reduction in income tax expense in the first quarter of 2022 as a result of the resolution of prior year tax matters and the impact of the increase in segment income before income taxes, partially offset by a one-time tax benefit of $9 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.
Current wording
Segment income in 2024 was $815 million, $127 million or 13% lower than segment income of $942 million in 2023. The decrease in segment income before income taxes primarily reflected the pre-tax impacts of (i) lower net favorable prior year reserve development and (ii) lower underlying underwriting margins, partially offset by (iii) higher net investment income. Net favorable prior year reserve development in 2024 and 2023 was $129 million and $285 million, respectively. Catastrophe losses in 2024 and 2023 were $51 million and $37 million, respectively. The lower underlying underwriting margins primarily reflected (i) higher general and administrative expenses and (ii) the impact of earned pricing, partially offset by (iii) higher business volumes and (iv) the comparison to an elevated level of losses in 2023 from both a small number of surety accounts and loss activity related to the disruption in the banking sector. Income tax expense in 2024 was lower than in 2023, primarily reflecting the impact of the decrease in segment income before income taxes, partially offset by a one-time tax benefit of $9 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During the third quarter of 2024, the Company completed its annual in-depth asbestos claim review. While the latest available government data continue to reflect a declining trend in deaths caused by mesothelioma, the number of policyholders with open asbestos claims was relatively flat compared to 2023. Net asbestos paid loss and loss adjustment expenses in 2024, 2023 and 2022 were $282 million, $212 million and $245 million, respectively. Payments on behalf of these policyholders continue to be influenced by the factors described above, including an increase in severity for certain policyholders and a high level of litigation activity in a limited number of jurisdictions where individuals alleging serious asbestos-related injury, primarily mesothelioma, continue to target defendants who were not traditionally sued and/or primary targets of asbestos litigation. The completion of the analyses described above and the annual review in the third quarters of 2024, 2023 and 2022 resulted in $242 million, $284 million and $212 million increases, respectively, to the Company’s net asbestos reserves. In each year, the reserve increases were primarily driven by increases in the Company’s estimate of projected settlement and defense costs related to a broad number of policyholders. The increase in the estimate of projected settlement and defense costs primarily resulted from payment trends that continue to be higher than previously anticipated due to the continued high level of mesothelioma claim filings and the impact of the current litigation environment surrounding those claims discussed above. The 2023 charge also included an additional increase to strengthen the Company’s carried reserve position relative to the range of reasonable estimates.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
•Net unrealized investment losses of $3.97 billion ($3.13 billion after-tax)
Previous report — wording carried elsewhere
The Company defines a “catastrophe” as an event:
Previous report — wording carried elsewhere
Additionally, a portion of the asbestos reserves relates to assumed reinsurance contracts primarily consisting of reinsurance of excess coverage, including various pool participations.
Previous report — wording carried elsewhere
In the third quarter of 2023, the Company completed its annual in-depth asbestos claim review, including a review of policyholders with open claims and litigation cases for potential product and “non-product” liability. The number of policyholders with open asbestos claims was relatively flat compared to 2022, while net asbestos payments were slightly lower than 2022. Payments on behalf of these policyholders continue to be influenced by an increase in severity for certain policyholders and a high level of litigation activity in a limited number of jurisdictions where individuals alleging serious asbestos-related injury, primarily mesothelioma, continue to target defendants who were not traditionally primary targets of asbestos litigation.