US primary insurer The Travelers Companies, Inc. has announced its results for the second quarter of 2025, reporting an underwriting gain of $1.022 billion, a significant improvement compared to the prior year quarter’s loss of $65 million, as net income grew 183% year-on-year.

The insurer’s net income increased to $1.509 billion in the quarter, up from $534 million in Q2 2024. Growth was driven by higher core income and net realized investment gains compared to net realized investment losses in the prior year quarter.

Core income in Q2 2025 also increased, to $1.504 billion from $585 million reported in the same period last year. This was primarily due to lower catastrophe losses, a higher underlying underwriting gain (excluding net prior year reserve development and catastrophe losses), higher net favourable prior year reserve development and higher net investment income.

The firm’s underwriting gain in Q2 2025 significantly improved in the quarter, growing by $1.087 billion. This includes net favourable prior year reserve development of $315 million, up from $230 million in Q2 2024; and catastrophes losses, net of reinsurance, of $927 million compared to $1.509 billion in the prior year quarter.

According to the insurers, catastrophe losses were driven by severe wind and hail storms in multiple states.

At 90.3%, Travelers’ combined ratio also improved in the quarter, compared to the 100.2% reported in Q2 2024. This improvement was due to lower catastrophe losses (6.2 points), an improvement in the underlying combined ratio (3.0 points) and higher net favourable prior year reserve development (0.7 points).

The underlying underwriting gain in Q2 2025 benefited from higher business volumes. Net realized investment gains were $6 million pre-tax, compared to net realized investment losses of $65 million pre-tax in the prior year quarter.

Net investment income saw a 6% increase in the quarter, to $942 million, primarily due to growth in average invested assets and a higher average yield in the long-term fixed income investment portfolio.

Additionally, net written premiums experienced slight growth, to $11.5 billion, up 4% when compared to Q2 2024.

Travelers also revealed its year-to-date 2025 results, reporting net income growth to $1.904 billion driven by higher core income, partially offset by higher net realized investment losses.

Core income for H1 2025 stood at $1.947 billion, increasing $266 million compared to the prior year. According to the insurer, this was due to a higher underlying underwriting gain, higher net favourable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses.

The combined ratio in H1 2025 improved 0.8 points to 96.3%. This was due to an improved underlying combined ratio (3.0 points) and higher net favourable prior year reserve development (1.7 points), partially offset by higher catastrophe losses (3.9 points).

Travelers noted that its H1 2025 catastrophe losses included Q2 2025’s severe wind and hail storms experienced in several states and the January 2025 California wildfires. All in all, catastrophe losses, net of reinsurance, for H1 2025 rose to $3.193 billion from $2.221 billion in H1 2024.

The H1 2025 underwriting gain hit $717 million, up from $512 million in H1 2024 despite the higher catastrophe losses.

H1 2025 net written premiums totalled $22.1 billion, an increase of 4% on the prior year’s $21.3 billion.

“We are pleased to report excellent results for the quarter, with both underwriting and investment income contributing meaningfully to our performance,” said Alan Schnitzer, Chairman and Chief Executive Officer.

He added: “Through skilled execution by our field organization, we grew net written premiums in the second quarter to $11.5 billion. In Business Insurance, we grew net written premiums by 5% to $5.8 billion. Renewal premium change remained strong at 7.7%, with renewal premium change of 8.6% in our core Middle Market business and 10.7% in our small commercial Select business. Retention in the segment remained strong at 85%, and new business was a record $744 million.

“In Bond & Specialty Insurance, we grew net written premiums by 4% to $1.1 billion, with strong retention of 87% in our high-quality management liability business. In our industry-leading surety business, we grew net written premiums by 5% compared to a particularly strong result in the prior year quarter. In Personal Insurance, net written premiums grew 3% to $4.7 billion, driven by strong renewal premium change in our Homeowners business.

Schnitzer concluded: “Our trailing twelve-month core return on equity of 17.1% reflects exceptional underwriting performance and steadily rising returns from our growing fixed income portfolio. Over that period, we grew adjusted book value per share by 14%, after making strategic investments in our business and returning substantial excess capital to shareholders.

“We’re building on this strong momentum through continued disciplined execution of our proven strategy. With our diversified business operating from a position of strength, we remain highly confident in the outlook for our business.”

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