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Solid Q3 earnings drive Travelers stock

The Travelers Companies, a leading US provider of property and casualty insurance services, issued solid financial for the third quarter of 2015. Policy sales rose 2.6% to a record $6.19 bn, and combined ratio improved 310 basis points to 86.9% on the back of strong performance across all of the company’s business segments. Adjusted operating income per share jumped 12.3% y-o-y to $2.93 and was well ahead of analysts’ average projection of $2.26.

In Q3, Travelers returned $939 mn to its shareholders through share buyback ($750 mn) and dividends. The company also has $4.3 bn worth shares remaining under its authorization. 

I believe that high retention rate, pricing gains, positive renewal rate changes, strong product portfolio, strategic acquisitions and strong capital position will support Travelers’ growth going forward. The company also remains committed to enhance its shareholders’ value via continued share buybacks and dividend payouts.

Recently, shares of Travelers surpassed a resistance level near $108 and, in my opinion, can move higher in short term. The closest aim is $115.