Q4 snap: good result, premium growth strong
TRV delivered another good quality result. The 50% upside relative to consensus was due to much lower catastrophes than feared (some write-backs from the Q3 hurricanes), faster premium growth and favourable reserve development. At an underlying level we calculate a more modest (but good quality) 5-6% beat. The positives include strong premium growth, good cost control, lower catastrophes than expected and higher investment earnings. The main negative was a higher underlying combined ratio of 92.4% (above consensus of 90.7%), although we calculate that 90bp of this is due to a single international surety loss. Commercial rate increases of 1.4% were a good tick up from the +0.7% reported in Q3 but remain below loss cost trends of 3-4%.Travelers Companies is a holding company. Through its subsidiaries, the company is engaged in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The company's segments include: Business Insurance, which provides property and casualty insurance and insurance-related services; Bond and Specialty Insurance, which provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services, and certain specialty insurance products; and Personal Insurance, which writes property and casualty insurance covering individuals' personal risks.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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