1 Value Stock That's Using Tough Times to Its Advantage
Travelers (NYSE: TRV) posted solid growth in the second quarter despite a tough insurance backdrop and inflationary effects on both wages and materials, which have impacted both auto and homeowners insurance claims in the period. The insurer also saw an uptick as claims returned to near pre-pandemic levels. Despite inflationary effects and rising claims putting pressure margins, CEO Alan Schnitzer isn't worried about a thing. Let's dig in.
In the second quarter, Travelers saw written premiums increase 11% from the same quarter last year to $8.1 billion. Its total revenue came in at $8.7 billion, up 17% from last year thanks to premium growth and solid investment income growth driven by its equity investments. As a result, net income came in at $934 million, a dramatic improvement from its $40 million loss in the same quarter last year.
During the quarter, the property and casualty insurer saw its combined ratio come in at 95.3%, an improvement from 103.7% in same quarter last year. Combined ratio is a measure of profitability in insurance, with a ratio of 100% and lower meaning the insurer is underwriting profitable polices. In the first half of the year, its combined ratio is 95.9%, versus 99.5% last year.
Source Fool.com
