Travelers: 2Q26 Takeaways: Improving AYLR and Increasing Buyback

Research evidence excerpt

Travelers: 2Q26 Takeaways: Improving AYLR and Increasing Buyback

elect increased 120bps QoQ to 9.4%, though management

largely attributed the increase to the timing of state rate filing approvals. Exhibit 1 - Renewal premium trends in BI are

moderating, though Select improved 1.2pts

Management noted an incremental improvement in its view of loss trends overall, with some QoQ

cautious inclusion of this improved outlook in its loss picks, though to a small degree. Workers' 16%14%

comp remains favorable, with frequency and severity trends supporting strong performance. In change 12%

8%Surety, the market backdrop remains favorable, and large projects and data center construction premium 10%

4%fueled 40% NPW growth in the quarter. Management does not expect this outsized growth to Renewal 6%

persist. 2%0%

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26

In Personal Auto, pricing continues to decline as competition remains strong. Loss trends remain . DomesticDomestic BIBI (Middle(ex Nat'l Market)Accts) DomesticBond & Specialty:BI (Select)Mgmt Liability

supportive, leading to further competition and pricing reductions. In Homeowners', pricing is Source: Company data, Jefferies

moderating, though profitability remains strong. The company noted it is deploying additional

property capacity.

Business Insurance: The BI underlying loss ratio of 57.9% improved 60bps YoY and beat

expectations by ~160bps. The company attributed the improvement to some pricing benefit, mix,

a slightly improved view on loss trend, and benefits from investments and claims execution.

The expense ratio of 29.0% was elevated due to higher profit-sharing commissions and variable