Analyst Note| Brett Horn |
Travelers had previously announced preliminary fourth-quarter results, so the broad strokes of the quarter were already known before the full release Jan. 24. Relatively high catastrophe losses were a drag on profitability. Outside of that, Travelers continued to enjoy strong market conditions in commercial lines, partially offset by negative claims trends in personal auto. Overall, we see the adjusted annualized return on equity of 12% in the quarter as a reasonable result for the narrow-moat franchise, given the current industry backdrop. We will maintain our fair value estimate of $194 per share.