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The Travelers Companies Inc (TRV)
NYSE:TRV
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Travelers Companies
(NYSE:TRV)
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Rating:76Outperform
Price Target:
$308.00
▲(4.33% Upside)
The score is driven primarily by solid fundamentals (profitability, conservative leverage, strong operating cash flow) and supportive valuation (low P/E), reinforced by a constructive earnings-call outlook and continued capital returns. Offsetting these positives are weaker near-term technical signals and uncertainty created by reported 2025 financial data gaps (zeros in key margin/ROE/FCF fields).
Positive Factors
Operating Cash Flow Strength
Sustained, rising operating cash flow provides durable funding for underwriting, claims, investment allocations and shareholder returns. Strong cash conversion supports balance-sheet resilience and strategic flexibility through economic cycles over the next several months.
Conservative Balance Sheet
Low leverage versus equity gives capacity to absorb underwriting volatility, fund catastrophe loads, and access debt markets for smoothing capital. Conservative capital structure underpins long-term solvency and supports ongoing underwriting and investment activities.
Underwriting Performance and Margin Improvement
Consistent underwriting profitability and multi-quarter combined-ratio improvement reflect disciplined pricing, portfolio actions, and scale advantages. Durable underwriting gains improve earnings quality and reduce reliance on investment returns for operating profitability.
Negative Factors
Higher Catastrophe Load / Reinsurance Proximity
Lowered XOL attachment and a heavier 2026 catastrophe plan increase retained catastrophe exposure and earnings volatility. Over ensuing months this raises capital strain risk and could pressure underwriting margins if losses materialize near the new attachment level.
Casualty / Long-Tail Reserve Uncertainty
Repeated uncertainty provisions signal lingering reserve and tort risk in long-tail casualty lines. Such reserve volatility can produce unpredictable reserve development, affecting capital, ROE and underwriting results across multiple quarters.
Flat Expense Ratio Despite Tech Investments
A stable expense ratio near 28.5% implies technology and AI initiatives have yet to produce meaningful structural cost savings. If expense efficiency does not materialize, margin expansion from underwriting and investments may be limited over the medium term.
Travelers Companies (TRV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.85B
Dividend Yield1.49%
Average Volume (3M)1.39M
Price to Earnings (P/E)10.5
Beta (1Y)0.41
Revenue Growth6.75%
EPS Growth30.83%
CountryUS
Employees34,000
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)11.13
Shares Outstanding223,063,420
10 Day Avg. Volume1,852,897
30 Day Avg. Volume1,394,071
Financial Highlights & Ratios
PEG Ratio0.37
Price to Book (P/B)1.98
Price to Sales (P/S)1.33
P/FCF Ratio0.00
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue1.54
Enterprise Value/Gross Profit4.18
Enterprise Value/Ebitda8.47
Forecast
1Y Price Target
$303.31Price Target Upside2.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)27.11
Revenue Forecast (FY)$45.48B
Travelers Companies Business Overview & Revenue Model
Company DescriptionThe Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance. The Business Insurance segment offers workers' compensation, commercial automobile and property, general liability, commercial multi-peril, employers' liability, public and product liability, professional indemnity, marine, aviation, onshore and offshore energy, construction, terrorism, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve mid-sized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial trucking industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents, and program managers. The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty coverages and related risk management services through independent agencies and brokers. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals through independent agencies and brokers. The Travelers Companies, Inc. was founded in 1853 and is based in New York, New York.
How the Company Makes MoneyTravelers generates revenue primarily through the collection of premiums from its insurance policies. The company underwrites a diverse portfolio of insurance products, which allows it to spread risk across different categories and geographical areas. A significant portion of its revenue comes from business insurance, which includes coverage for commercial property, liability, and workers' compensation. Additionally, Travelers earns investment income from its substantial portfolio of invested assets, which includes bonds and equities. The company also benefits from partnerships with independent agents and brokers, enhancing its distribution channels and customer reach. Overall, the combination of premium income and investment returns constitutes the core of Travelers' revenue model.
Travelers Companies Earnings Call Summary
Earnings Call Date:Jan 21, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call highlighted a very strong quarter and year driven by robust underwriting income, improving combined ratios, rising investment income, substantial capital returns, record premium volumes in several lines, and significant progress deploying AI and technology that is already producing efficiency gains. Challenges include continued pressure and rebalancing in large-account property, a higher planned catastrophe load for 2026, ongoing casualty/tort reserve uncertainty, a flat near-term expense ratio despite tech investments, and some moderation in pricing momentum. On balance the positive operational and financial results, scale, strong capital returns, and measurable benefits from AI materially outweigh the noted headwinds.Q4-2025 Updates
Positive Updates
Strong quarterly and full-year profitability
Q4 core income of $2.5B ($11.13 per diluted share) producing a core ROE of 29.6%; full-year core income of $6.3B and full-year core ROE of 19.4%.
Underwriting income and improved margins
Underwriting income (pretax) of $2.2B in Q4, up 21% year-over-year; underlying combined ratio improved nearly 2 points to 82.2% (fifth consecutive quarter below 85%).
Investment income growth and larger portfolio
After-tax net investment income of $867M in Q4, up 10% YoY; investment portfolio grew by about $7.5B in 2025 to $106B; management outlook for fixed income NII of approximately $3.3B after tax in 2026.
Strong capital returns to shareholders
Returned $1.9B of capital to shareholders in Q4, including $1.65B of share repurchases and $244M dividends; indicated continued buyback activity with ~$1.8B expected in Q1 2026.
Top-line premium growth and segment scale
Consolidated Q4 net written premiums of $10.9B (Business Insurance $5.5B, Bond & Specialty $1.1B, Personal Insurance $4.2B); full-year Personal Insurance NWP reached a record $17.4B (up 2% YoY).
Business Insurance execution
Business Insurance Q4 net written premiums reached >$5.5B; renewal premium change (RPC) 6.1% in the segment and ~8% excluding property; retention 85%; new business $675M (up 6% YoY) with middle market new business up 11% to $395M.
Bond & Specialty profitable growth
Bond & Specialty Q4 net written premiums grew 4% to $1.1B with segment combined ratio ~83% and retention of 87%; surety growth noted and successful integration/use of Corvus capabilities for cyber services.
Personal Insurance strong underlying performance
Personal Insurance Q4 segment income >$1B and combined ratio of 74%; Q4 homeowners combined ratio 60.3% (improved 7.5 points YoY); full-year Personal Insurance combined ratio improved to 89.5%.
Operational scale and catastrophe response
Handled ~1.5M claims in 2025 and paid >$23B in claim payments; met objective of closing 90% of catastrophe claims within 30 days.
Technology and AI adoption delivering tangible gains
Large-scale AI deployment: ~20,000 employees regularly using AI tools; dozens of generative AI tools in production; >50% of claims are eligible for straight-through processing with ~66% customer adoption; claims call-center population down ~33%; partnership with Anthropic to empower 10,000 engineers/data scientists; AI-driven initiatives reduced submission intake from hours to minutes and cut renewal handle time >30% in trial deployments.
Negative Updates
Decline in national property premiums and large-account property dynamics
National property premium declined, described as a large-account dynamic; Business Insurance property line depressed overall segment growth and contributed to deceleration in renewal premium change vs. prior quarter.
Property combined ratio and portfolio actions
Full-year property combined ratio noted at 93%; company reduced property policies in force by ~10%, primarily in high-cat geographies, which constrained property growth and caused property PIF to trail auto.
Higher planned catastrophe load for 2026
Management indicated the 2026 catastrophe plan (in combined-ratio points) is higher than both the five- and ten-year averages and the XOL attachment was lowered from $4B to $3B, increasing proximity to reinsurance layers (though ceded premium impact described as modest).
Continued casualty / long-tail uncertainty
Company elected to include an uncertainty provision in casualty loss picks again for 2025 and plans to include it for 2026, reflecting ongoing reserve and tort/litigation-cost uncertainty in long-tail casualty lines.
Expense ratio expected to remain flat near-term
Expense ratio was 28.4% in Q4 and full-year 28.5%; management expects expense ratio around 28.5% in 2026, indicating no near-term structural decline despite technology investments.
Tariff and tort environment risks
Management flagged ongoing uncertainty from potential tariff impacts and a challenging tort environment in certain states—both represent downside risk and were described as areas to monitor despite current provisions.
Bond & Specialty new business normalization
Q4 new business in Bond & Specialty was lower year-over-year as Corvus acquisition production transitioned to renewals, causing some near-term new business comparability headwind.
Moderation in pricing momentum
Renewal premium change ex-property in Business Insurance decelerated slightly (from ~9% last quarter to just over 8% this quarter), and management acknowledged some slowing in pricing momentum across lines.
Company Guidance
Management's 2026 guidance emphasized steady operating leverage and capital returns: they expect an expense ratio of about 28.5% in 2026, fixed‑income net investment income of roughly $3.3 billion after tax (with ~ $800 million in Q1 ramping to ~ $870 million in Q4), and share repurchases of about $1.8 billion in Q1 (previously targeting roughly $1.6 billion for 2026 including ~$700 million from the Canada sale); they also plan to issue debt annually going forward to smooth the debt capital ratio. On reinsurance, the CAT XOL attachment was lowered to $3.0 billion from $4.0 billion (per‑occurrence deductible unchanged at $100 million) while renewing a 20% Fidelis quota share and noting the 2026 cat plan (slide 23) is higher than 5‑ and 10‑year averages (slide detail ~7.8%); the investment portfolio is ~ $106 billion with new‑money rates ~70 bps above embedded yield, adjusted book value per share (ex‑unrealized) was $158.1 (up 14% YoY), and capital deployment will remain balanced against underwriting and strategic technology investment.Travelers Companies Financial Statement Overview
Summary
Strong multi-year revenue growth and improved profitability into 2024, with conservative leverage and rising operating cash flow. The main constraint is 2025 data quality (multiple margin/ROE/FCF fields reported as 0), which reduces confidence in the latest-year trend and cash conversion despite otherwise strong operating metrics.Income Statement
Revenue shows a steady multi-year climb (2020–2024) and earnings improved materially into 2024, with net margin around 10.8% and operating profitability strengthening versus 2022–2023. 2025 annual data shows another step-up in EBIT and net income, but several margin fields are reported as 0, limiting comparability and confidence in margin trend analysis for that period. Overall, profitability and growth look solid, with the main weakness being data quality gaps in the latest year’s margin metrics.82
Very Positive
Balance Sheet
Leverage looks conservative for the business: debt-to-equity is consistently around ~0.22–0.34 across 2020–2025, and equity remains sizeable relative to debt. Total assets and equity trend upward over time, supporting balance-sheet stability. A key drawback is that 2025 return on equity is reported as 0 (likely missing/invalid), which reduces visibility into the most recent capital efficiency despite strong earnings growth.78
Positive
Cash Flow
Operating cash flow is consistently strong and rising (about $6.5B in 2020 to ~$9.1B in 2024 and ~$10.6B in 2025), which supports earnings quality. In 2021–2024, free cash flow tracks operating cash flow and fully covers net income (free cash flow to net income shown as 1.0). The main weakness is 2025 free cash flow reported as 0 with -100% growth and related ratio fields shown as 0, which appears inconsistent with strong operating cash flow and creates uncertainty around true cash generation in the latest period.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 48.83B | 46.43B | 41.37B | 36.90B | 34.82B |
| Gross Profit | 21.61B | 12.40B | 8.93B | 8.53B | 9.47B |
| EBITDA | 8.90B | 7.29B | 4.47B | 4.53B | 5.67B |
| Net Income | 6.29B | 5.00B | 2.99B | 2.84B | 3.66B |
Balance Sheet | |||||
| Total Assets | 143.71B | 133.19B | 125.98B | 115.72B | 120.47B |
| Cash, Cash Equivalents and Short-Term Investments | 6.56B | 25.35B | 84.05B | 76.24B | 83.30B |
| Total Debt | 9.27B | 8.03B | 8.03B | 7.29B | 7.29B |
| Total Liabilities | 110.81B | 105.33B | 101.06B | 94.16B | 91.58B |
| Stockholders Equity | 32.89B | 27.86B | 24.92B | 21.56B | 28.89B |
Cash Flow | |||||
| Free Cash Flow | 0.00 | 9.07B | 7.71B | 6.46B | 7.27B |
| Operating Cash Flow | 10.61B | 9.07B | 7.71B | 6.46B | 7.27B |
| Investing Cash Flow | -7.65B | -7.26B | -6.82B | -3.73B | -5.20B |
| Financing Cash Flow | -2.66B | -1.75B | -1.05B | -2.67B | -2.04B |
Travelers Companies Technical Analysis
Positive
295.22
Price Trends
284.75
Positive
279.92
Positive
271.91
Positive
Market Momentum
1.32
Negative
69.72
Neutral
89.12
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRV, the sentiment is Positive. The current price of 295.22 is above the 20-day moving average (MA) of 279.79, above the 50-day MA of 284.75, and above the 200-day MA of 271.91, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 69.72 is Neutral, neither overbought nor oversold. The STOCH value of 89.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRV.
Travelers Companies Risk Analysis
Travelers Companies disclosed 23 risk factors in its most recent earnings report. Travelers Companies reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Travelers Companies Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $25.90B | 12.86 | 11.86% | ― | -6.96% | -26.28% | |
80 Outperform | $129.66B | 12.20 | 14.97% | 1.22% | 6.68% | -1.78% | |
76 Outperform | $65.85B | 10.51 | 20.70% | 1.49% | 6.75% | 30.83% | |
74 Outperform | $54.20B | 6.53 | 34.63% | 1.91% | 7.07% | 100.42% | |
71 Outperform | $26.67B | 15.55 | 19.67% | 1.88% | 11.08% | 22.01% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
55 Neutral | $1.26B | 37.31 | 2.66% | ― | -3.35% | -21.82% |
* Financial Sector Average
TRV
Travelers Companies
295.22
51.55
21.16%
CB
Chubb
329.45
60.13
22.33%
ALL
Allstate
207.12
18.93
10.06%
MKL
Markel
2,054.08
-5.75
-0.28%
PRA
ProAssurance
24.42
9.20
60.45%
WRB
W. R. Berkley Corporation
70.19
10.31
17.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.