Travelers Companies: 150 Years of Insurance Innovation

With more than 165 years’ worth of history, The Traveler’s Companies, Inc (Travelers) continues to maintain its reputation as a leading property casualty insurer due to its exceptional customer care and stock performance.

In 1864, businessman James G. Batterson crossed paths with local banker James E. Bolter. Bolter who was aware that Batterson and others were setting up a company to introduce accident insurance in the U.S and asked what it would cost to insure him for his four-block walk home. Batterson responded, “Two cents.”

Today, that two-cent “premium” has become a valued memento at Travelers. Batterson led the company as president from its founding on 1 April 1864 until his death in 1901. 

To address the growing risk of fire, Alexander Wilkin, secretary of the Minnesota Territory, along with 16 St. Paul businessmen, founded the St. Paul Fire and Marine Insurance Company. The company handled its first claim in 1855 after a fire spread from a bakery to nearby offices. In 1968, the company transitioned to The St. Paul Companies, Inc.

A merger with Travelers on 1 April 2004 created one of the largest property casualty insurers, The St. Paul Travelers Companies, Inc. The company was renamed The Travelers Companies, Inc. in February 2007.

Travelers numerous innovations in the insurance industry

Since its founding in 1864, Travelers has pioneered numerous innovations in the insurance industry. It introduced accident insurance that same year, and in 1889, offered liability insurance to employers, now known as workers compensation.

Travelers issues its first automobile insurance policy in 1897 and continued its trailblasing efforts by opening an insurance school in 1903 and establishing a corps of safety engineers in 1904. In 1919, it launched an aircraft liability insurance program and built the Travelers Tower in Hartford, Connecticut, which stood as New England’s tallest building at the time.

Over the decades, Travelers has continued to innovate, introducing life insurance for women at lower rates than men in 1958, pioneering data processing coverage in 1961, and creating a mobile claims office, the “CAT Van” in 1968.

The company further expanded into new areas, such as space flight accident insurance in 1969, online banking protection in 1997, and identity fraud reimbursement in 1999. In recent years, Travelers has advanced its capabilities by leveraging technology, offering cyber insurance, launching digital tools for risk management, and partnering with leading organisations to explore innovative solutions in fields like virtual reality pain reduction and artificial intelligence for policy processing. Travelers has also supported green initiatives with hybrid vehicle discounts and continued to enhance customer service with mobile apps and digital claims options.

Travelers stock listing, shareholding, and market capitalisation

Shares of The Travelers Companies, Inc., are traded on the New York Stock Exchange under the ticker symbol “TRV”. The company’s market capitalisation as of 11 October 2024 is valued at US$53.92 billion, with revenue of US$44.07 billion, and a net income of US$3.69 billion. Travelers is a component of the Dow Jones Industrial Average, has more than 30k employees, and operates in the US and selected global markets.

As of 30 June 2024, the largest institutional holders of stocks in the company include Vanguard Group Inc., which holds 21.37 million shares, representing 9.38% of the company and valued at $5.06 billion. Blackrock Inc. follows closely with 20.17 million shares (8.85%) valued at $4.77 billion, while State Street Corporation holds 15.45 million shares (6.78%), worth $3.65 billion. JP Morgan Chase & Company owns 13.44 million shares (5.90%) with a value of $3.18 billion, and FMR, LLC holds 12.48 million shares (5.48%) valued at $2.95 billion.

Other significant holders include Massachusetts Financial Services Co. with 6.92 million shares (3.04%), Geode Capital Management, LLC with 4.96 million shares (2.18%), ClearBridge Investments, LLC with 4.27 million shares (1.87%), Price (T. Rowe) Associates Inc. with 4.01 million shares (1.76%), and Morgan Stanley with 3.84 million shares (1.68%), valued at $908.4 million.

Travelers reports strong 2^nd Quarter and Year-to-Date Results

On 19 July 2024, Travelers reported net income of $534 million, or $2.29 per diluted stock, for the quarter ending 30 June 2024. This contrasts sharply with a net loss of $14 million, or $0.07 per diluted share, during the same period last year. Core income for the current quarter reached $585 million, or $2.51 per diluted share, compared to $15 million, or $0.06 per diluted share, in the prior year.

The increase in core income was primarily attributed to a higher underlying underwriting gain, improved favourable prior year reserve development, and higher net investment income, partially offset by increased catastrophe losses. Net realized investment losses for the quarter were $65 million pre-tax ($51 million after-tax), up from $35 million pre-tax ($29 million after-tax) in the previous year’s quarter. Per share results were further enhanced by share repurchases.

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