The Travelers Companies, Inc.
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Item 1. BUSINESS
The Travelers Companies, Inc. (together with its consolidated subsidiaries, the Company) is a holding company principally engaged, through its subsidiaries, in providing a wide range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The Company is incorporated as a general business corporation under the laws of the State of Minnesota and is one of the oldest insurance organizations in the United States, dating back to 1853. The principal executive offices of the Company are located at 485 Lexington Avenue, New York, New York 10017, and its telephone number is (917) 778-6000. The Company also maintains executive offices in Hartford, Connecticut and St. Paul, Minnesota. The term “TRV” in this document refers to The Travelers Companies, Inc., the parent holding company excluding subsidiaries.
PROPERTY AND CASUALTY INSURANCE OPERATIONS
The property and casualty insurance industry is highly competitive in the areas of price, service, product offerings, agent and broker relationships and other methods of distribution. Distribution methods include the use of local and national independent agents and brokers, agency aggregators and carrier-based agencies, as well as direct to consumer, affinity and other partner platforms. According to A.M. Best, there are approximately 1,100 property and casualty groups in the United States, comprising approximately 2,600 property and casualty companies. Of those groups, the top 150 accounted for approximately 94% of the consolidated industry’s total net written premiums in 2024. The Company competes with both foreign and domestic insurers. In addition, some property and casualty insurers writing commercial lines of business, including the Company, offer products for alternative forms of risk protection in addition to traditional insurance products. These products include large deductible programs and various forms of self-insurance, some of which utilize captive insurance companies and risk retention groups. The Company’s competitive position in the marketplace is based on many factors, including the following:
•ability to profitably price business, retain existing customers and obtain new business;
•premiums charged, contract terms and conditions, products and services offered (including the ability to design customized programs);
•agent, broker and policyholder relationships;
•ability to keep pace relative to competitors with changes in technology and information systems, including artificial intelligence;
•ability to use data and analytics to make decisions;
•speed of claims payment;
•ability to provide a positive customer experience;
•ability to provide products and services in a cost effective manner;
•ability to provide new products and services to meet changing customer needs;
•ability to adapt to changes in business models, technology, customer preferences or regulation impacting the markets in which the Company operates;
•perceived overall financial strength and corresponding ratings assigned by independent rating agencies;
•ability to recruit and retain qualified employees;
•geographic scope of business; and
•local presence.
In addition, the marketplace is affected by the available capacity of the insurance industry, as measured by statutory capital and surplus, and the availability of reinsurance from both traditional sources, such as reinsurance companies and capital markets (through catastrophe bonds), and non-traditional sources, such as hedge funds and pension plans. Industry capacity as measured by statutory capital and surplus expands and contracts primarily in conjunction with profit levels generated by the industry, less amounts returned to shareholders through dividends and share repurchases. Capital raised by debt and equity offerings may also increase statutory capital and surplus.
On May 27, 2025, the Company entered into an agreement to sell its Canadian personal insurance business and the majority of its Canadian commercial insurance business to Definity Financial Corporation for approximately US$2.4 billion. The assets and liabilities of the Canadian personal insurance business and the majority of its Canadian commercial insurance business have been classified as held for sale in the consolidated balance sheet as of December 31, 2025. The Company retained its surety business in Canada. The sale closed on January 2, 2026. See note 1 of the notes to the consolidated financial statements.
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Pricing and Underwriting
Pricing of the Company’s property and casualty insurance products is generally developed based upon an estimation of expected losses, the expenses associated with producing, issuing and servicing business and managing claims, the time value of money related to the expected loss and expense cash flows, and a reasonable profit margin that considers the capital needed to support the Company’s business. The Company has a disciplined approach to underwriting and risk management that emphasizes product returns and profitable growth over time rather than premium volume or market share. The Company’s insurance subsidiaries are subject to state laws and regulations regarding rate and policy form approvals. The applicable state laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. The Company’s ability to increase rates and the relative timing of the process are dependent upon each respective state’s requirements, as well as the competitive market environment.
Geographic Distribution
The following table shows the geographic distribution of the Company’s consolidated direct written premiums for the year ended December 31, 2025.
| Location | % of Total | ||||||
| Domestic: | |||||||
| California | 10.6 | % | |||||
Texas (1) | 8.3 | ||||||
| New York | 8.3 | ||||||
| Pennsylvania | 4.2 | ||||||
| Florida | 4.1 | ||||||
| Illinois | 3.8 | ||||||
| New Jersey | 3.7 | ||||||
| Georgia | 3.7 | ||||||
| Massachusetts | 3.3 | ||||||
All other domestic (2) | 45.2 | ||||||
| Total Domestic | 95.2 | ||||||
| International: | |||||||
| Canada | 2.5 | ||||||
| All other international | 2.3 | ||||||
| Total International | 4.8 | ||||||
| Consolidated total | 100.0 | % | |||||
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(1)The percentage for Texas includes business written by the Company through a fronting agreement with another insurer.
(2)No other single state accounted for 3.0% or more of the Company’s consolidated direct written premiums written in 2025.
Catastrophe Exposure
The Company’s property and casualty insurance operations expose it to claims arising out of catastrophes. The Company uses various analyses and methods, including proprietary and third-party modeling processes, to monitor and analyze underwriting risks of business in natural catastrophe-prone areas and target risk areas for conventional terrorist attacks (defined as attacks other than nuclear, biological, chemical or radiological events). The Company relies, in part, upon these analyses to make underwriting decisions designed to manage its exposure on catastrophe-exposed business. For example, as a result of these analyses, the Company has at various times limited the writing of new property and homeowners business in some markets and has selectively taken underwriting actions on new and existing business. These underwriting actions on new and existing business include tightening underwriting standards, selective price increases and changes to policy terms specific to hurricane-, tornado-, wind-, wildfire- and hail-prone areas. See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophe Modeling” and “—Changing Climate Conditions.” The Company also utilizes reinsurance to manage its aggregate exposures to catastrophes. See “—Reinsurance.”
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BUSINESS INSURANCE
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of the Company’s financial condition and results of operations.
FINANCIAL HIGHLIGHTS
2026 Second Quarter Consolidated Results of Operations
•Net income of $2.21 billion, or $10.41 per share basic and $10.26 per share diluted
•Net earned premiums of $10.75 billion
•Catastrophe losses of $518 million ($410 million after-tax)
•Net favorable prior year reserve development of $578 million ($456 million after-tax)
•Combined ratio of 83.6%
•Net investment income of $1.07 billion ($883 million after-tax)
•Net realized investment gains of $60 million ($48 million after-tax)
•Operating cash flows of $1.92 billion
2026 Second Quarter Consolidated Financial Condition
•Total investments of $103.18 billion; fixed maturities and short-term securities comprised 94% of total investments
•Total assets of $143.58 billion
•Total debt of $9.07 billion, resulting in a debt-to-total capital ratio of 21.5% (20.5% excluding net unrealized investment losses, net of tax)
•Total capital returned to shareholders of $1.58 billion, comprising $1.31 billion of share repurchases and $266 million of dividends
•Shareholders’ equity of $33.12 billion
•Net unrealized investment losses of $2.48 billion ($1.96 billion after-tax)
•Book value per common share of $158.81
•Holding company liquidity of $2.51 billion
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
CONSOLIDATED OVERVIEW
Consolidated Results of Operations
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| (in millions, except ratio and per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Premiums | $ | 10,753 | $ | 10,921 | $ | 21,358 | $ | 21,631 | ||||||||||||||||
| Net investment income | 1,070 | 942 | 2,078 | 1,872 | ||||||||||||||||||||
| Fee income | 126 | 124 | 247 | 243 | ||||||||||||||||||||
| Net realized investment gains (losses) | 60 | 6 | 109 | (55) | ||||||||||||||||||||
| Other revenues | 144 | 123 | 285 | 235 | ||||||||||||||||||||
| Total revenues | 12,153 | 12,116 | 24,077 | 23,926 | ||||||||||||||||||||
| Claims and expenses | ||||||||||||||||||||||||
| Claims and claim adjustment expenses | 5,922 | 6,789 | 12,304 | 14,795 | ||||||||||||||||||||
| Amortization of deferred acquisition costs | 1,786 | 1,802 | 3,552 | 3,580 | ||||||||||||||||||||
| General and administrative expenses | 1,565 | 1,545 | 3,106 | 3,004 | ||||||||||||||||||||
| Interest expense | 113 | 99 | 229 | 198 | ||||||||||||||||||||
| Total claims and expenses | 9,386 | 10,235 | 19,191 | 21,577 | ||||||||||||||||||||
| Income before income taxes | 2,767 | 1,881 | 4,886 | 2,349 | ||||||||||||||||||||
| Income tax expense | 559 | 372 | 967 | 445 | ||||||||||||||||||||
| Net income | $ | 2,208 | $ | 1,509 | $ | 3,919 | $ | 1,904 | ||||||||||||||||
| Net income per share | ||||||||||||||||||||||||
| Basic | $ | 10.41 | $ | 6.63 | $ | 18.28 | $ | 8.35 | ||||||||||||||||
| Diluted | $ | 10.26 | $ | 6.53 | $ | 18.01 | $ | 8.23 | ||||||||||||||||
| Combined ratio | ||||||||||||||||||||||||
| Loss and loss adjustment expense ratio | 54.6 | % | 61.7 | % | 57.1 | % | 67.9 | % | ||||||||||||||||
| Underwriting expense ratio | 29.0 | 28.6 | 29.0 | 28.4 | ||||||||||||||||||||
| Combined ratio | 83.6 | % | 90.3 | % | 86.1 | % | 96.3 | % | ||||||||||||||||
The following discussions of the Company’s net income and segment income are presented on an after-tax basis. Discussions of the components of net income and segment income are presented on a pre-tax basis, unless otherwise noted. Discussions of net income per common share are presented on a diluted basis.
Overview
Diluted net income per share of $10.26 in the second quarter of 2026 increased by 57% over diluted net income per share of $6.53 in the same period of 2025. Net income of $2.21 billion in the second quarter of 2026 increased by 46% over net income of $1.51 billion in the same period of 2025. 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 in the second quarter of 2026 primarily reflected the pre-tax impacts of (i) lower catastrophe losses, (ii) higher net favorable prior year reserve development, (iii) higher net investment income, (iv) higher net realized investment gains and (v) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”). Catastrophe losses in the second quarters of 2026 and 2025 were $518 million and $927 million, respectively. Net favorable prior year reserve development in the second quarters of 2026 and 2025 was $578 million and $315 million, respectively. The higher underlying underwriting margins in the second quarter of 2026 were driven by Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance. Income tax expense in the second quarter of 2026 was higher than in the same period of 2025, primarily reflecting the impact of the increase in income before income taxes.
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
Diluted net income per share of $18.01 in the first six months of 2026 increased by 119% over diluted net income per share of $8.23 in the same period of 2025. Net income of $3.92 billion in the first six months of 2026 increased by 106% over net income of $1.90 billion in the same period of 2025. 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) lower catastrophe losses, (ii) higher net favorable prior year reserve development, (iii) higher net investment income and (iv) net realized investment gains compared to net realized investment losses in the same period of 2025, partially offset by (v) lower underlying underwriting margins. Catastrophe losses in the first six months of 2026 and 2025 were $1.28 billion and $3.19 billion, respectively. Net favorable prior year reserve development in the first six months of 2026 and 2025 was $991 million and $693 million, respectively. The lower underlying underwriting margins in the first six months of 2026 were driven by Business Insurance and Bond & Specialty Insurance, partially offset by Personal Insurance. Income tax expense in the first six months of 2026 was higher than in the same period of 2025, primarily reflecting the impact of the increase in income before income taxes.
The Company has insurance operations in the United Kingdom, the Republic of Ireland, Canada 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 three months and six months ended June 30, 2026 and 2025, 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 for the periods reported.
Revenues
Earned Premiums
Earned premiums in the second quarter of 2026 were $10.75 billion, $168 million or 2% lower than in the same period of 2025. Earned premiums in the second quarter of 2025 included $266 million related to the Canadian operations divested by the Company in the first quarter of 2026. Earned premiums in the first six months of 2026 were $21.36 billion, $273 million or 1% lower than in the same period of 2025. Earned premiums in the first six months of 2025 included $524 million related to the Canadian operations divested by the Company in the first quarter of 2026. In Business Insurance, earned premiums in the second quarter and first six months of 2026 were comparable with the same periods of 2025. In Bond & Specialty Insurance, earned premiums in the second quarter and first six months of 2026 both increased by 3% over the same periods of 2025. In Personal Insurance, earned premiums in the second quarter and first six months of 2026 decreased by 5% and 4%, respectively, from the same periods of 2025. Factors contributing to the changes in earned premiums in each segment are discussed in more detail in the segment discussions that follow.
Net Investment Income
The following table sets forth information regarding the Company’s investments.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| (dollars in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Average investments (1) | $ | 107,067 | $ | 102,173 | $ | 106,843 | $ | 101,634 | ||||||||||||||||
| Pre-tax net investment income | 1,070 | 942 | 2,078 | 1,872 | ||||||||||||||||||||
| After-tax net investment income | 883 | 774 | 1,716 | 1,537 | ||||||||||||||||||||
Average pre-tax yield (2) | 4.0 | % | 3.7 | % | 3.9 | % | 3.7 | % | ||||||||||||||||
Average after-tax yield (2) | 3.3 | % | 3.0 | % | 3.2 | % | 3.0 | % | ||||||||||||||||
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(1)Excludes net unrealized investment gains and losses and reflects cash, receivables for investment sales, payables on investment purchases and accrued investment income.
(2)Excludes net realized and net unrealized investment gains and losses.
Net investment income in the second quarter of 2026 was $1.07 billion, $128 million or 14% higher than in the same period of 2025. Net investment income in the first six months of 2026 was $2.08 billion, $206 million or 11% higher than in the same period of 2025. Net investment income from fixed maturity investments in the second quarter and first six months of 2026 was $930 million and $1.83 billion, respectively, $97 million and $184 million higher, respectively, than in the same periods of 2025. The increases in both periods of 2026 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 the second quarter of 2026 was $53 million, $2 million lower than in the same period of 2025, driven by lower short-term average yields. Net investment income from
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
short-term securities in the first six months of 2026 was $128 million, $16 million higher than in the same period of 2025, driven by a higher average level of short-term securities, partially offset by lower short-term average yields. The Company’s remaining investment portfolios had net investment income of $100 million and $147 million, respectively, in the second quarter and first six months of 2026, $33 million and $4 million higher, respectively, than in the same period of 2025. The increases in both periods of 2026 primarily reflected 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.
Fee Income
Fee income in the second quarter of 2026 was $126 million, $2 million higher than in the same period of 2025. Fee income in the first six months of 2026 was $247 million, $4 million higher than in the same period of 2025. 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.
Net Realized Investment Gains (Losses)
The following table sets forth information regarding the Company’s net realized investment gains (losses).
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Impairment gains (losses): | ||||||||||||||||||||||||
| Fixed maturities | $ | (9) | $ | — | $ | (12) | $ | (2) | ||||||||||||||||
| Net realized investment gains (losses) on equity securities still held | 81 | 23 | 76 | 1 | ||||||||||||||||||||
| Other net realized investment gains (losses), including from sales | (12) | (17) | 45 | (54) | ||||||||||||||||||||
| Total | $ | 60 | $ | 6 | $ | 109 | $ | (55) | ||||||||||||||||
Net realized investment gains on equity securities still held of $81 million and $76 million in the second quarter and first six months of 2026, respectively, 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 $23 million in the second quarter of 2025 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 $1 million in the first six months of 2025 were driven by the impact of changes in fair value attributable to favorable equity markets, largely offset by a net unfavorable change in fair value on an individual security held in the Company’s portfolio.
Other net realized investment gains in the first six months of 2026 were driven by net realized investment gains related to the Canadian operations divested by the Company in the first quarter of 2026, partially offset by net realized investment losses related to fixed maturity investments.
Other Revenues
Other revenues in the second quarter of 2026 were $144 million, $21 million higher than in the same period of 2025. Other revenues in the first six months of 2026 were $285 million, $50 million higher than in the same period of 2025. Other revenues include revenues from Simply Business, installment premium charges and other policyholder service charges.
Claims and Expenses
Claims and Claim Adjustment Expenses
Claims and claim adjustment expenses in the second quarter of 2026 were $5.92 billion, $867 million or 13% lower than in the same period of 2025, driven by Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance. Claims and claim adjustment expenses in the second quarter of 2025 included $180 million related to the Canadian operations divested by the Company in the first quarter of 2026. Catastrophe losses in the second quarters of both 2026 and 2025 primarily resulted from severe wind and hail storms in multiple states.
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
Claims and claim adjustment expenses in the first six months of 2026 were $12.30 billion, $2.49 billion or 17% lower than in the same period of 2025, driven by Personal Insurance and Business Insurance, partially offset by Bond & Specialty Insurance. Claims and claim adjustment expenses in the first six months of 2025 included $362 million related to the Canadian operations divested by the Company in the first quarter of 2026. Catastrophe losses in the first six months of 2026 included the second quarter events described above, as well as severe wind and hail storms and winter storms in multiple states in the first three months of 2026. Catastrophe losses in the first six months of 2025 included the second quarter events described above, as well as the January 2025 California wildfires and severe wind and hail storms in multiple states in the first three months of 2025. Factors contributing to the changes in claims and claim adjustment expenses in each segment are discussed in more detail in the segment discussions that follow.
Factors contributing to net favorable prior year reserve development during the second quarters and first six months of 2026 and 2025 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.
Significant Catastrophe Losses
The following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in the three months and six months ended June 30, 2026 and 2025, the amount of net unfavorable (favorable) prior year reserve development recognized in the three months and six months ended June 30, 2026 and 2025 for significant catastrophes that occurred in 2025 and 2024, and the estimate of ultimate losses for those catastrophes at June 30, 2026 and December 31, 2025. For purposes of the table, a significant catastrophe is an event for which the Company estimates its ultimate losses will be $100 million or more after reinsurance and before taxes. The Company’s threshold for disclosing catastrophes is primarily determined at the reportable segment level and for 2026 ranged from $20 million to $30 million of losses before reinsurance and taxes. For the Company’s definition of a catastrophe, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations— Consolidated Overview” in the Company’s 2025 Annual Report.
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
| Losses Incurred/Unfavorable (Favorable) Prior Year Reserve Development | ||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| Estimated Ultimate Losses | ||||||||||||||||||||||||||||||||||||
| (in millions, pre-tax and net of reinsurance) | 2026 | 2025 | 2026 | 2025 | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||||||
| PCS Serial Number: | ||||||||||||||||||||||||||||||||||||
| 26 — Severe wind and hail storms | (4) | (3) | (6) | (5) | 245 | 251 | ||||||||||||||||||||||||||||||
| 39 — Severe wind and hail storms | (4) | (6) | (6) | (8) | 237 | 243 | ||||||||||||||||||||||||||||||
| 42 — Severe wind and hail storms | 2 | (7) | 1 | (10) | 150 | 149 | ||||||||||||||||||||||||||||||
| 44 — Severe wind and hail storms | — | (1) | — | — | 170 | 170 | ||||||||||||||||||||||||||||||
| 45 — Severe wind and hail storms | (2) | 6 | (1) | 9 | 173 | 174 | ||||||||||||||||||||||||||||||
| 46 — Severe wind and hail storms | 1 | 8 | 4 | 9 | 195 | 191 | ||||||||||||||||||||||||||||||
| 61 — Severe wind and hail storms | — | (9) | (2) | (10) | 125 | 127 | ||||||||||||||||||||||||||||||
| 77 — Hurricane Helene | (2) | (19) | (11) | (48) | 654 | 665 | ||||||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||||||
| PCS Serial Number: | ||||||||||||||||||||||||||||||||||||
| 11 — California wildfire – Palisades fire | (16) | (5) | (89) | 1,334 | 1,255 | 1,344 | ||||||||||||||||||||||||||||||
| 12 — California wildfire – Eaton fire | — | (1) | (43) | 391 | 334 | 377 | ||||||||||||||||||||||||||||||
| 24 — Severe wind and hail storms | (4) | 23 | (4) | 338 | 333 | 337 | ||||||||||||||||||||||||||||||
| 29 — Severe wind and hail storms | (4) | 142 | (4) | 142 | 133 | 137 | ||||||||||||||||||||||||||||||
| 37 — Severe wind and hail storms | (2) | 222 | (2) | 222 | 225 | 227 | ||||||||||||||||||||||||||||||
| 39 — Severe wind and hail storms | (7) | 93 | (7) | 93 | 94 | 101 | ||||||||||||||||||||||||||||||
| 43 — Severe wind and hail storms | (4) | 75 | (9) | 75 | 88 | 97 | ||||||||||||||||||||||||||||||
| 45 — Severe wind and hail storms | (6) | 127 | (11) | 127 | 96 | 107 | ||||||||||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||||||||||||
| PCS Serial Number: | ||||||||||||||||||||||||||||||||||||
| 13 — Severe winter storm | (11) | n/a | 188 | n/a | 188 | n/a | ||||||||||||||||||||||||||||||
| 24 — Severe wind and hail storms | 21 | n/a | 247 | n/a | 247 | n/a | ||||||||||||||||||||||||||||||
| 33 — Severe wind and hail storms | 142 | n/a | 142 | n/a | 142 | n/a | ||||||||||||||||||||||||||||||
| 36 — Severe wind and hail storms | 225 | n/a | 225 | n/a | 225 | n/a | ||||||||||||||||||||||||||||||
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n/a: not applicable.
Amortization of Deferred Acquisition Costs
Amortization of deferred acquisition costs in the second quarter of 2026 was $1.79 billion, $16 million or 1% lower than in the same period of 2025. Amortization of deferred acquisition costs in the first six months of 2026 was $3.55 billion, $28 million or 1% lower than in the same period of 2025. The decreases in both periods were generally consistent with the decreases in earned premiums. Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.
General and Administrative Expenses
General and administrative expenses in the second quarter of 2026 were $1.57 billion, $20 million or 1% higher than in the same period of 2025. General and administrative expenses in the first six months of 2026 were $3.11 billion, $102 million or 3% higher than in the same period of 2025. The increases in both periods of 2026 primarily reflected normal quarter-to-quarter variability. General and administrative expenses are discussed in more detail in the segment discussions that follow.
Interest Expense
Interest expense in the second quarter and first six months of 2026 was $113 million and $229 million, respectively, compared with $99 million and $198 million, respectively, in the same periods of 2025.
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THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS, Continued
Income Tax Expense
Income tax expense in the second quarter of 2026 was $559 million, $187 million or 50% higher than in the same period of 2025, primarily reflecting the impact of the $886 million increase in income before income taxes in the second quarter of 2026. Income tax expense in the first six months of 2026 was $967 million, $522 million or 117% higher than in the same period of 2025, primarily reflecting the impact of the $2.54 billion increase in income before income taxes in the first six months of 2026.
The Company’s effective tax rate was 20% in both the second quarters of 2026 and 2025. The Company’s effective tax rate was 20% and 19% in the first six months of 2026 and 2025, respectively. The effective tax rate for all periods reflected the impact of tax-exempt investment income on the calculation of the Company’s income tax provision.
Combined Ratio
The combined ratio of 83.6% in the second quarter of 2026 was 6.7 points lower than the combined ratio of 90.3% in the same period of 2025. The loss and loss adjustment expense ratio of 54.6% in the second quarter of 2026 was 7.1 points lower than the loss and loss adjustment expense ratio of 61.7% in the same period of 2025. The underwriting expense ratio of 29.0% in the second quarter of 2026 was 0.4 points higher than the underwriting expense ratio of 28.6% in the same period of 2025.
Catastrophe losses in the second quarters of 2026 and 2025 accounted for 4.9 points and 8.5 points, respectively, of the combined ratio. Net favorable prior year reserve development in the second quarters of 2026 and 2025 provided 5.4 points and 2.9 points of benefit, respectively, to the combined ratio. The combined ratio excluding prior year reserve development and catastrophe losses (“underlying combined ratio”) in the second quarter of 2026 was 0.6 points lower than the 2025 ratio on the same basis, primarily reflecting the impact of lower losses in Personal Insurance.
The combined ratio of 86.1% in the first six months of 2026 was 10.2 points lower than the combined ratio of 96.3% in the same period of 2025. The loss and loss adjustment expense ratio of 57.1% for the first six months of 2026 was 10.8 points lower than the loss and loss adjustment expense ratio of 67.9% in the same period of 2025. The underwriting expense ratio of 29.0% for the first six months of 2026 was 0.6 points higher than the underwriting expense ratio of 28.4% in the same period of 2025. The Company expects the full year 2026 expense ratio to be approximately 28.5%.
Catastrophe losses in the first six months of 2026 and 2025 accounted for 6.0 points and 14.8 points, respectively, of the combined ratio. Net favorable prior year reserve development in the first six months of 2026 and 2025 provided 4.6 points and 3.2 points of benefit, respectively, to the combined ratio. The underlying combined ratio in the first six months of 2026 was comparable with the 2025 ratio on the same basis.
The combined ratio continues to be impacted by the tort environment, including more aggressive attorney involvement in insurance claims.
Written Premiums
Consolidated gross and net written premiums were as follows:
| Gross Written Premiums | |||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-22 | Toczydlowski Gregory C | EVP & President, Business Ins. | Sell | -34,771 ×2 | $403.89 | -$14,043,788 |
| 2026-10-22 | Klenk Jeffrey P. | EVP & Pres., Bond & Spec. Ins. | Sell | -9,016 | $405.57 | -$3,656,619 |
| 2026-10-22 | Rowland David Donnay | EVP & Co-Chief Invest. Officer | Sell | -5,000 | $405.62 | -$2,028,103 |
| 2026-10-21 | Schnitzer Alan D | Chairman and CEO | Sell | -88,900 ×5 | $396.77 | -$35,273,172 |
| 2026-10-21 | OLIVO MARIA | EVP, ERM & Chief Risk Officer | Sell | -15,100 | $398.44 | -$6,016,506 |
| 2026-10-20 | Klein Michael Frederick | EVP & President, Personal Ins. | Sell | -7,500 ×2 | $392.79 | -$2,945,933 |
| 2026-08-28 | OLIVO MARIA | EVP, ERM & Chief Risk Officer | Sell | -6,000 | $369.86 | -$2,219,145 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-02-11 10-K expected by 2027-02-27 (in 106 days)
- ~2027-04-16 10-Q expected by 2027-05-09 (in 170 days)
- ~2027-07-17 10-Q expected by 2027-08-09 (in 262 days)
- ~2027-10-16 10-Q expected by 2027-11-08 (in 353 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-16 10-Q Quarterly Report
- 2026-10-16 8-K Earnings Release; Financial Statements and Exhibits
- 2026-08-07 8-K Officer/Director Change
- 2026-07-24 8-K Other Events; Financial Statements and Exhibits
- 2026-07-22 424B3 Prospectus
- 2026-07-17 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-17 10-Q Quarterly Report
- 2026-07-17 S-8 Employee Benefit Plan Registration
- 2026-05-22 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-05-21 8-K Other Events; Financial Statements and Exhibits
- 2026-04-16 10-Q Quarterly Report
- 2026-04-16 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-07 DEF 14A Proxy Statement
- 2026-02-17 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-12 10-K Annual Report