Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  The Travelers Companies    TRV

THE TRAVELERS COMPANIES (TRV)
Mes dernières consult.
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

The Travelers Companies, Inc. : Travelers Loses Customers, Promises It's All According To Plan

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/19/2012 | 09:30pm CEST
   By Erik Holm 
   Of  
 

Travelers Cos. (TRV) told investors Thursday it is selling less new coverage and hanging onto fewer of its existing customers as it continues to raise prices. And that means everything is going according to plan.

The customers the insurer has been losing in its business-insurance segment, in many cases, have been the ones that were the least profitable, according to Travelers Chief Operating Officer Brian MacLean. The company's effort to raise rates on those clients has driven some into the arms of competitors that are offering the coverage at prices that would have resulted in poor returns for Travelers, he said.

Investors applauded the news along with company's quarterly results Thursday, sending shares up 4.7% to $62.24 by mid-afternoon. The shares now stand at a nearly one-year high.

Travelers has been pushing through the price increases for over a year, partly in response to a rise in natural disasters and a decline in interest rates that have damped returns in its investment portfolio. The price hikes it has reported to investors have frequently outpaced the industry averages compiled by a variety of surveys.

In the first quarter, returning business-insurance customers saw premiums rise by 9% on average. Mid-sized businesses faced an 11% increase, the most since 2003.

That resulted in a 22% decline in new business and caused client retention to fall to 79% from 84% in last year's first quarter. Travelers had long cautioned that retention rates in the mid-eighties weren't sustainable.

"We are very comfortable with this volume and profitability trade-off," MacLean said on a conference call with analysts and investors after the company released first-quarter results. "If we're retaining our best business and retention is softening in the weaker business because we can't get the price increases we think we need, we're going to be perfectly fine with that."

MacLean characterized the 79% retention rate as "solid." In last year's fourth quarter, the rate was 78%.

"It's an active decision" to take actions that push down the number of returning customers, Chief Executive Jay Fishman said. "It's not a passive reaction."

Josh Stirling, an insurance analyst at Sanford C. Bernstein & Co., said he was "impressed" with the company's aggressiveness at raising prices and its "chasing away" of undesirable customers. The company has the expertise and data to "make reliably intelligent underwriting decisions," he said in a note to clients.

Travelers has also been raising rates at a smaller unit that sells coverage to consumers. In that segment, renewal premiums for auto insurance sold through agents rose 4% in the first quarter while the segment that includes home insurance saw 10% increases. The company said it was raising deductibles on its home-insurance policies and still working with state regulators to raise rates further in several states in response to "the potential for continued unusual weather patterns."

Travelers said the number of drivers with auto policies purchased through agents declined 1%. Home-insurance policies-in-force also "decreased slightly" from last year's first quarter. New-business volumes decreased in both lines of business.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on THE TRAVELERS COMPANIES
05/17TRAVELERS : Names Abbe Goldstein Head of Investor Relations
AQ
05/15TRAVELERS : Scores of vehicles at-risk for damage from discharge
AQ
05/14TRAVELERS : Announces 2018 Personal Insurance Agent of the Year Award Winners
BU
05/09TRAVELERS : Recognized for Military-Friendly Culture
BU
05/07TRAVELERS : Names Abbe Goldstein Head of Investor Relations
BU
05/03TRAVELERS : Named Noteworthy Company by DiversityInc
BU
05/02TRAVELERS : Sponsors Construction Safety Week 2018 to Encourage Safe Workplace P..
BU
04/30TRAVELERS : Institute Addresses Small Business Challenges During Small Business ..
BU
04/27TRAVELERS : Institute and the Harvard T.H. Chan School of Public Health Team Up ..
BU
04/25Travelers Profit Up With Core Income -- WSJ
DJ
More news
News from SeekingAlpha
05/19Consider Selling When Your Stock Does This 
05/15Jane's April Dividend Income Tracker - Retirement Accounts 
05/08In A Still-Challenging Market, Chubb's Strengths Stand Out 
05/07MONTHLY REVIEW OF DIVGRO : April 2018 
05/03My Dividend Growth Portfolio - 42 Holdings, 4 Buys 
Financials ($)
Sales 2018 27 342 M
EBIT 2018 3 268 M
Net income 2018 2 860 M
Debt 2018 -
Yield 2018 2,34%
P/E ratio 2018 12,55
P/E ratio 2019 11,49
Capi. / Sales 2018 1,28x
Capi. / Sales 2019 1,24x
Capitalization 35 093 M
Chart THE TRAVELERS COMPANIES
Duration : Period :
The Travelers Companies Technical Analysis Chart | TRV | US89417E1091 | 4-Traders
Technical analysis trends THE TRAVELERS COMPANIES
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 21
Average target price 143 $
Spread / Average Target 8,8%
EPS Revisions
Managers
NameTitle
Alan D. Schnitzer Chairman & Chief Executive Officer
Jay S. Benet Vice Chairman & Chief Financial Officer
Madelyn Lankton Chief Information Officer-Enterprise Operations
William Herbert Heyman Vice Chairman & Chief Investment Officer
Kenneth M. Duberstein Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
THE TRAVELERS COMPANIES-4.27%35 093
BERKSHIRE HATHAWAY-0.33%484 210
TOKIO MARINE HOLDINGS INC2.42%36 656
THE ALLSTATE CORPORATION-8.69%33 363
SAMPO OYJ-5.04%28 330
MS&AD INSURANCE GROUP HOLDING INC-6.03%19 865