The Travelers Companies (NYSE:TRV) shares are under pressure today after the insurance provider’s first-quarter results saw an impact from adverse climate events. Net written premiums increased by 8% year-over-year to $10.18 billion. Its total revenue increased by 16% to $11.23 billion. However, the EPS of $4.69 fell short of estimates by $0.23.
Winds and Hail Storms
The quarter was marked by elevated catastrophe losses of $712 million for TRV, owing to severe wind and hail storms in the central and eastern parts of the U.S. This figure stood at $535 million a year ago. Simultaneously, the company’s consolidated combined ratio improved by 1.5% points to 93.9%. A combination of higher net investment income and increased underlying gain helped TRV increase its core income to $1.1 billion from $970 million in the year-ago period.
TRV’s Focus on Shareholder Returns
Notably, TRV generated after-tax net investment income of $698 million on the back of gains in its fixed income, as well as non-fixed income portfolio. Buoyed by this performance, TRV is increasing its quarterly cash dividend by 5% to $1.05 per share. The TRV dividend is payable on June 28 to investors of record on June 10.
Additionally, TRV repurchased shares worth $250 million in Q1. The company had $5.79 billion remaining under its current share repurchase program at the end of March 2024.
Is TRV Stock a Buy, Sell, or a Hold?
Today’s price decline comes after a nearly 33% jump in TRV shares over the past six months. Overall, the Street has a Hold consensus rating on The Travelers Companies, alongside an average TRV price target of $217.42. However, analysts’ views on TRV could see changes following today’s earnings report.
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