Travelers and Progressive reveal Q2 results - what did the tariff worries do to investment income?

Travelers revealed an “excellent” Q2 as it became part of the first wave of US major insurers to reveal their results for the quarter.

The quarter covers the time from President Trump’s announcements of tariffs on Liberation Day and the subsequent market volatility, as well as inflation in many markets beginning to creep up again.

In June, it was reported that effects from the recent economic decisions by the US government could be seriously damaging to investor confidence in the country, as well as possibly reigniting the higher inflation trend.

In June, a US federal court ruled the tariffs “exceed any authority granted to the president”.

However, the following day, an appeals court agreed to a temporary pause in the decision pending an appeal hearing. The Trump administration is expected to take the case to the Supreme Court if it loses.

For the first quarter, net investment income increased 6% after-tax over the prior year quarter.

“Core income increased primarily due to lower catastrophe losses, a higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses), higher net favourable prior year reserve development and higher net investment income,” it said.

“Net realised investment gains in the current quarter were $6 million pre-tax ($5 million after-tax), compared to net realised investment losses of $65 million pre-tax ($51 million after-tax) in the prior year quarter.”

“We earned core income of $1.5 billion, driven by underlying results, strong net

favourable prior year reserve development and higher investment income.”

Q2 net income was $1.509 billion, up 183%, and core income was $1.504 billion, up 157% from the same period in 2024.

The company said the results were partly due to good investment yields.

“We are pleased to report excellent results for the quarter, with both underwriting and investment income contributing to our performance,” said Alan Schnitzer, Chairman and CEO. “We earned core income of $1.5 billion, driven by excellent underlying results, strong net favourable prior year reserve development and higher investment income.”

Underlying underwriting income of $1.6 billion pre-tax was up 35% over the prior year quarter, which was driven by 7% growth in net earned premiums to $10.9 billion and a consolidated underlying combined ratio that improved three points to 84.7%.

“Our investment portfolio continued to perform well, generating after-tax net investment income of $774 million, driven by strong and reliable returns from our growing fixed income portfolio,” said Schnitzer.

For Travelers, net investment income for Q1 was $930 million compared to $846 million in the same period last year.

The heavy catastrophe losses weighed on results and caused issues for many in the market.

Elsewhere, the next major to announce, Progressive, said it saw $20.07 billion in new premiums written for Q1, a 12% increase on Q1 2024. Net income was $3.17 billion, up 118% from 2024 Q2’s $1.45 billion.

On Monday, W.R. Berkley said its results were showed net premiums written increased to a "record" $3.4 billion. Its Return on Equity was 19.1% and Operating Return on Equity was 20%.

The company also saw "record" net investment income of $379.3 million compared to $372.1 million in Q2 2024. "Our strong performance continued into the second quarter of 2025," said the company's press release. "Net income grew year-over-year, driven by higher underwriting gains and improved investment income, notwithstanding above-average industry catastrophe losses during the quarter."

Net investment income rose both year-over-year and sequentially to a quarterly record, which Berkley said was fuelled by "higher yields on our expanding domestic fixed-maturity portfolio". "The strength of our operating cash flow continues to drive growth in net investable assets, and our current new money rates remain comfortably above our average book yield, positioning us well for further investment income growth," it said.

Also reporting their results early was risk and strategy consultancy, Marsh McLennan.

Consolidated revenue in Q2 2025 was $7 billion, an increase of 12% compared with Q2 2024, or 4%.

Operating income rose 11% to $1.8 billion. Net income attributable to the Company was $1.2 billion.

For the six months ended June 30, 2025, consolidated revenue was $14 billion.