For Travelers, the first out of the gate, net investment income increased 30% pre-tax over the prior year quarter, primarily due to strong fixed income returns.
The healthier investment numbers are in direct opposition to Q3 2022, which saw many large US insurers take losses on investments and in portfolios.
Travelers reported a net income of $404 million for the quarter that ended on 30 September 2023, compared to $454 million in the prior year quarter. Core income in the current quarter was $454 million to $526 million in the prior year quarter.
In Q2, the company saw a net loss of $14 million and a core income of $15 million.
Natural catastrophe losses for the company were at $1.481 billion pre-tax compared to $746 million pre-tax in the prior year quarter. Net realised investment losses in the current quarter were $35 million pre-tax ($29 million after-tax), compared to $95 million pre-tax ($74 million after-tax) in the prior year quarter.
“Core income decreased primarily due to higher catastrophe losses and net unfavourable prior year reserve development (driven by the Company’s run-off businesses) compared to net favourable prior year reserve development in the prior year quarter, partially offset by a higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses) and higher net investment income,” it said in its statement on the result. “Net realised investment losses in the current quarter were $65 million pre-tax ($50 million after-tax), compared to $93 million pre-tax ($72 million after-tax) in the prior year quarter.”
“Income for the quarter benefited from underwriting returns and net
investment income but was also impacted by elevated catastrophe losses.”
“Core income for the quarter benefited from underlying underwriting returns and net investment income but was also impacted by elevated catastrophe losses,” said Alan Schnitzer, Chairperson and CEO. “We are very pleased with the underlying fundamentals of our business. Our high-quality investment portfolio continued to perform extremely well, generating after-tax net investment income of $640 million.”
Travelers specified that income from the fixed income investment portfolio increased over the prior year quarter due to a higher average yield and growth in fixed maturity investments. Income from the non-fixed income investment portfolio increased over the prior year quarter due to higher private equity partnership returns.
For year-to-date results, Travelers’s net investment income of $2.144 billion pre-tax ($1.791 billion after-tax) increased 11%. Income from the fixed income investment portfolio increased over the prior year period due to a higher average yield and growth in fixed maturity investments. Income from the non-fixed income investment portfolio was solid but decreased from a strong level in the prior year period, primarily due to lower private equity and real estate partnership returns.
Last year, in Q3, its net income was $454 million – a decrease of $208 million – due to lower core income and net realised investment losses compared to net realised investment gains in the prior year's quarter. “Core income of $526 million decreased $129 million, primarily due to lower net investment income and a lower underlying underwriting gain, partially offset by net favourable prior year reserve development compared to net unfavourable prior year reserve development in the prior year quarter,” said the company’s statement.
Ohio-based insurer Progressive saw net income of $1,121.3 million for Q3 2023, compared to $124.1 million for the period in 2022. For September, the company swung from $684.4 million loss in 2022, to $369.3 million in income for 2023, a 154% change.
Net premiums written were $15.6 billion in Q3 2023 compared to $13.0 billion in Q3 2022.
“We maintained our debt-to-total capital ratio at 30 June,
below our annual financial guideline of 30%.”
In its Q2 shareholder report, the firm espoused a cautious approach to its capital management and investments. “As we operate in this environment, we believe that it is appropriate to apply a conservative approach to managing our capital,” said Tricia Griffith, President and CEO, in a letter in the report. “With that in mind, we issued $500 million of senior debt in the second quarter. While markets remain volatile, we continued to maintain strong investment-grade ratings. We have no bonds maturing until 2027 and believe that the attractive financing rates we achieved over the last several years will serve us well into the future.”
Griffith added that while the investment market and operating environment remain challenging, “we maintained our debt-to-total capital ratio at 30 June, below our annual financial guideline of 30%.”
The firm will announce further details of its Q3 results on 1 November.
RLI Corporation reported third quarter 2023 net earnings of $13.5 million, compared to $439.9 million for the third quarter of 2022, which included $437.7 million from the sale of RLI’s investment in Maui Jim, Inc.
The company’s net investment income for the quarter increased by 50.3% to $32.0 million, compared to the same period in 2022. The investment portfolio’s total return was -1.7% for the quarter and 2.2% for the nine months that ended on 30 September 2023.
In Q2 of this year, the company had net earnings of $77.7 million, compared to a net loss of $2.2 million for the second quarter of 2022. This included a 55.8% increase in net investment income to $28.8 million, compared to the same period in 2022.
“We have been working diligently to help our policyholders recover from the devastating Hawaiian wildfires that occurred in the quarter,” said RLI Corp President and CEO Craig Kliethermes. “This event contributed 17 points to our combined ratio. Despite this impact, our diversified portfolio delivered underwriting profitability and an 11% increase in gross premiums written. Growth in investment income supported $0.61 per share of operating income, while book value per share increased to $28.47.”
Giant Marsh McLennan, which includes Marsh, Mercer, Guy Carpenter, and Oliver Wyman, among others, said it saw consolidated revenue in the third quarter of 2023 of $5.4 billion, an increase of 13% compared with the third quarter of 2022. On an underlying basis, revenue increased 10%.
“We had another quarter of double-digit underlying revenue growth,
strong adjusted EPS growth, and margin expansion.”
For the nine months that ended on 30 September 2023, consolidated revenue was $17.2 billion, an increase of 9%, or 10%, on an underlying basis compared to the prior period.
“We had another quarter of double-digit underlying revenue growth, strong adjusted EPS growth and margin expansion,” said John Doyle, President and CEO. “We achieved these results while also continuing to make significant investments for the future."
Investment income was $1 million, compared to a loss in Q3 2022, and a total-to-date for 2023 of $2 million, compared to a loss of $4 million in 2022. Total investment income to date this year was $6 million, compared to $27 million for the same period in 2022.
Chubb, one of the world’s largest insurers, said its net income and core operating income were each $2.04 billion, up 157.8% and 55.4%, respectively. “For the nine months, net income was $5.73 billion, up 45.5%, and core operating income was a record $5.93 billion, up 24.7%,” it said in its statement on the results.
Pre-tax net investment income in the quarter was $1.31 billion, up 34.2%, and adjusted net investment income was $1.41 billion, up 34.2%. Both were records.
“Our investment income continues to grow as we reinvest our
strong cash flow at higher rates.”
“Book value was unfavourably impacted by after-tax net realised and unrealised losses of $2.18 billion in the company's investment portfolio, principally due to the mark-to-market impact of rising interest rates in the fixed income portfolio,” it added.
"We had another outstanding quarter which contributed to a record nine months,” said Evan Greenberg, Chairperson and CEO of Chubb. “Our performance in the quarter included Global P&C premium revenue growth, world-class P&C underwriting results, record net investment income, and strong life operating income. Our investment income continues to grow quickly as we reinvest our strong cash flow at higher rates and compound income in our predominantly fixed-income, relatively short-duration portfolio.”
