Travelers Companies, Inc. (NYSE: TRV) announced its financial results for the fourth quarter of 2025 on Wednesday, revealing a performance that surpassed market forecasts in both revenue and earnings per share (EPS). The company reported a year-over-year sales increase of 4%, reaching $12.43 billion, outstripping analysts' expectations, which had averaged $10.98 billion.
Adjusted EPS for the quarter stood at $11.13, significantly exceeding the consensus street estimate of $8.80. This earnings strength was supported by an 18% year-over-year increase in core income, which ascended to $2.51 billion. The drivers of this growth included enhanced underlying underwriting results, growth in net investment income, a reduction in catastrophe-related losses, and a rise in favorable developments on prior-year reserves.
Investment performance contributed positively, with the net realized investment loss showing a reduction to $20 million pre-tax ($15 million after-tax), a marked improvement compared to the $55 million pre-tax ($44 million after-tax) loss in the same period the previous year. Meanwhile, net investment income increased by 10% pre-tax year over year, totaling $1.054 billion. This increase was attributable to a larger portfolio of average invested assets and improved yields within the long-term fixed income portfolio.
Travelers’ operational insurance metrics also showed progress in the quarter. Net written premiums edged up by 1% year-over-year to $10.86 billion. The company’s combined ratio, a key measure of underwriting profitability, improved by 3.0 points, settling at 80.2%. This improvement was driven by three main factors: a higher underlying combined ratio contributing 1.8 points, lower catastrophe losses adding 0.7 points, and a further 0.5 points from net favorable prior-year reserve developments.
The insurer’s adjusted book value per share, which excludes the effects of net unrealized investment losses, rose 14% compared to the close of 2024, reaching $158.01.
Segment Performance
Reviewing segment-level results, the Business Insurance division reported net written premiums of $5.5 billion, reflecting 2% growth year over year. This progress was backed by gains in both Select Accounts, which focus on small commercial business and grew 4% year over year, as well as the core Middle Market business, which advanced 3% compared to the prior year.
The Bond & Specialty Insurance segment continued its positive trajectory, with net written premiums reaching $1.1 billion, up 4% year over year. This growth stemmed from heightened production across both surety bonds and management liability products.
The Personal Insurance segment’s net written premiums remained stable at $4.2 billion year over year during the quarter under review.
Capital Return and Dividends
In terms of capital management, Travelers repurchased 5.8 million shares in the quarter, investing a total of $1.65 billion to reduce outstanding share count. At the end of December 31, 2025, the company maintained $2.015 billion in remaining share repurchase authority. Further reinforcing its commitment to returning value to shareholders, the board authorized an additional $5.0 billion for future share repurchases.
Additionally, the company declared a regular quarterly dividend of $1.10 per share, payable on March 31, 2026, to stockholders of record as of March 10, 2026.
Management Perspective
Travelers’ chairman and CEO, Alan Schnitzer, highlighted the company’s robust business operations and financial results. He emphasized that the combined effect of strong underwriting profitability, favorable prior year reserve developments, and reduced catastrophe claims substantially contributed to the overall improvement.
Schnitzer noted that all three segments achieved commendable underwriting results on both an underlying basis and as reported. He also pointed to the high quality of the company’s investment portfolio, which produced $867 million in after-tax net investment income during the quarter.
He further commented on the company's investment strategies and portfolio growth, stating that rising reinvestment rates were delivering significant net investment income growth. Schnitzer expressed optimism regarding Travelers’ prospects for 2026 and future years, underpinned by the company’s strong position and ongoing operational execution.
Market Reaction
Following the earnings announcement, Travelers’ shares experienced a modest decline in premarket trading on Wednesday, slipping 0.41% to $268.50, as reported by Benzinga Pro. The market appeared to react cautiously despite the solid financial results.
Key Points
- Fourth-quarter 2025 revenue grew 4% to $12.43 billion, surpassing analyst consensus.
- Adjusted EPS reached $11.13, beating the expected $8.80.
- Core income advanced 18% year over year to $2.51 billion, supported by underwriting gains and investment income growth.
- Combined ratio improved to 80.2%, benefiting from lower catastrophe losses and favorable reserve developments.
- Share repurchases of 5.8 million shares totaled $1.65 billion; additional $5 billion buyback authorization approved.
- Quarterly dividend declared at $1.10 per share, payable in March 2026.
Risks and Uncertainties
- Potential variability in catastrophe losses could impact underwriting results in upcoming periods.
- Investment income is subject to fluctuations in asset yields and market conditions, which may affect future income streams.
- Reserve development remains inherently uncertain and could shift unfavorably, influencing reported profitability.
- Market reaction to financial results suggests underlying investor sensitivity to broader economic and sector-specific factors.