Travelers reported third-quarter core income of $1.947 billion on Friday, Oct. 16, up from $1.867 billion a year earlier. But the quarter also carried a $538 million pre-tax catastrophe bill, primarily from wind and hail storms, up from $402 million, and a $295 million pre-tax addition to asbestos reserves, which the company’s quarterly filing ties to higher payments and litigation.
Core income is net income excluding after-tax net realized investment gains and losses and certain other items. The release’s reconciliation shows those came to $30 million of realized losses this quarter, against a $21 million gain a year earlier.
The headline numbers
Net income was $1.917 billion, or $9.04 per diluted share, compared with $1.888 billion, or $8.24, a year earlier. Core income was $9.18 per diluted share, compared with $8.14.
Travelers’ release says core income rose “primarily due to higher net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses.” Net investment income was a record $1.098 billion before taxes, up 6%.
The combined ratio, which compares claims and expenses with premiums, was 86.8%, against 87.3% a year earlier. A ratio under 100% generally indicates an underwriting profit, as the release puts it. The company’s underlying combined ratio, which leaves out catastrophes and changes to earlier reserve estimates, was 84.1%, against 83.9%. Net written premiums, meaning premiums written, net of premiums passed to reinsurers, were $11.480 billion, essentially flat from $11.473 billion.
Chief executive Alan Schnitzer called the results “excellent” in the release. That is the company’s characterization.
What catastrophe losses are, and how large they were
Travelers defines a catastrophe as a severe loss designated, or expected to be designated, by an industry organization that tracks insured losses, such as Property Claim Services for events in the United States and Canada. The release says this quarter’s catastrophe losses “primarily resulted from severe wind and hail storms in multiple states.” It does not name a storm or a state, and the filings name no state or date for this quarter’s events.
Catastrophe losses, before taxes and net of reinsurance, were $538 million, compared with $402 million. That is an increase of $136 million, or about 34%. They added 4.8 points to the combined ratio, compared with 3.6 points a year earlier.
The 10-Q’s “Significant Catastrophe Losses” table, which covers events Travelers estimates will cost $100 million or more after reinsurance and before taxes, lists three events with third-quarter 2026 losses. All three are described as “Severe wind and hail storms” and identified only by Property Claim Services serial numbers: PCS 52, $154 million; PCS 58, $112 million; and PCS 63, $130 million. Together they come to $396 million, about 74% of the $538 million quarter total; that percentage is a calculation from the filing’s numbers, not a figure the company states. A footnote says PCS event 52 “was $5 million as of June 30, 2026” and exceeded the $100 million significant-catastrophe threshold as of Sept. 30, 2026.
Most of the increase fell on the segment that sells home and auto policies. Personal Insurance had $380 million of catastrophe losses, up from $263 million. The $380 million was about 71% of the quarterly total, and Personal accounted for $117 million of the $136 million increase. Business Insurance had $157 million, up from $139 million. Bond & Specialty Insurance had $1 million, compared with none.
Over nine months, catastrophe losses were $1.817 billion, compared with $3.595 billion in the same period of 2025.
The asbestos reserve addition
Travelers added $295 million to its asbestos reserves in the quarter. In the third quarter of 2025 the addition was $277 million. A reserve is money an insurer sets aside for claims it expects to pay in the future.
The release reports the addition in its consolidated quarter results and in the Business Insurance section, for the quarter and the year to date (the year-to-date bullet describes it as part of an addition to reserves related to run-off operations), without giving a cause. The company’s quarterly report to the Securities and Exchange Commission, the Form 10-Q, gives the reasoning. It says Travelers completed its annual asbestos claim review in the third quarter, including a look at policyholders with open claims and litigation.
According to the 10-Q, government data “continue to reflect a declining trend in deaths caused by mesothelioma,” and the number of policyholders with open asbestos claims was “relatively flat” from 2025. Net asbestos payments were up. The filing says the increases in both years were mainly driven by higher estimates of settlement and defense costs related to a broad number of policyholders. It cites payment trends “higher than previously anticipated,” a continued high level of mesothelioma claim filings and the current litigation environment. It also says payments are influenced by “an increase in severity for certain policyholders and a high level of litigation activity in a limited number of jurisdictions.”
How favorable reserve development offset it
Across all three segments, Travelers reported net favorable development of $234 million before taxes, compared with $22 million a year earlier, on reserves for earlier years. That figure already includes the asbestos addition. Adding back the $295 million gives about $529 million of other favorable development; that is a calculation from the release’s numbers, not a figure the company states.
The release attributes the favorable results segment by segment. In Business Insurance it cites better-than-expected loss experience in all major product lines. In Personal Insurance it cites Homeowners and Other and Automobile. In Bond & Specialty Insurance it cites fidelity and surety and general liability for management liability coverages.
Personal Insurance: home and auto
Personal Insurance income was $706 million after taxes, down from $807 million, which the release attributes “primarily” to higher catastrophe losses. Its combined ratio was 83.5%, against 81.3%. The underlying combined ratio improved to 76.7% from 77.7%, which the release says primarily reflected improvement in auto.
Net written premiums in the segment were $4.403 billion, down 7%. Without the Canadian operations, which Travelers divested in the first quarter of 2026, the decline was 3%. Domestic auto premiums fell 8%, to $1.892 billion from $2.062 billion. Homeowners and other premiums rose 1%, to $2.511 billion from $2.489 billion.
Neither the release nor the financial supplement gives a number for renewal premium change or retention in personal auto or home. The 10-Q gives direction without percentages. For Domestic Automobile it says retention rates remained strong and increased slightly over 2025, renewal premium changes in the third quarter and first nine months of 2026 were lower than in the same periods of 2025, and new business premiums decreased. For Homeowners and Other it says retention rates remained strong and increased over 2025, renewal premium changes remained positive but were lower than in the same periods of 2025, and new business premiums increased. It gives no percentages and does not say what any individual customer will pay.
Mr. Schnitzer cites “solid retention in both Auto and Homeowners and higher new business in our Homeowners business,” without numbers. “Solid” is his characterization, as “excellent” was.
Commercial renewals
For commercial customers, the release does give numbers. Business Insurance renewal premium change, the estimated change in average premium on policies that renew, including rate and exposure changes, was 4.1%, with 5.4% in Middle Market and 7.8% in Select. It was 7.0% excluding the property line. Retention, the share of premium up for renewal that was kept before price and exposure changes, was 86%. Business Insurance figures exclude National Accounts.
Buybacks and the dividend
Travelers returned $1.769 billion of capital to shareholders in the quarter, including $1.508 billion of share repurchases of 4.0 million shares. Another $2.415 billion of repurchase capacity remained. The regular quarterly dividend is $1.25 per share, payable Dec. 31, 2026, to holders of record on Dec. 10.
Shareholders’ equity was $28.995 billion, down 12% from year-end 2025, which the release attributes primarily to higher net unrealized investment losses, share repurchases and dividends. Those unrealized losses were $8.049 billion before taxes, up from $1.862 billion at year-end 2025, which the company links to higher interest rates.
What is not known
The release does not say which storms drove the quarter’s catastrophe losses, and the filings name no state or date for this quarter’s events. Neither the release nor the financial supplement gives renewal premium change or retention for personal auto or home, and the 10-Q’s direction-only language does not say what any individual customer will pay. The asbestos reserve is an estimate, and the 10-Q’s own language shows it has been raised in both of the last two years.
What comes next
Travelers said management would discuss the results on a webcast at 9:00 a.m. Eastern on Friday, Oct. 16. The next dividend is payable on Dec. 31 to shareholders of record on Dec. 10.