Home > Boards > US Listed > Insurance > The Travelers Companies, Inc. (TRV)

Buffett's TRV Holding

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
bar1080 Member Profile
Followed By 206
Posts 21,535
Boards Moderated 7
Alias Born 07/07/04
160x600 placeholder
Quarterly Report (10-q) Edgar (US Regulatory) - 10/20/2020 7:11:03 AM
Travelers Reports Third Quarter 2020 Net Income per Diluted Share of $3.23 & Core Income per Diluted Share of $3.12, Both Up ... Business Wire - 10/20/2020 6:57:00 AM
Travelers Releases ‘Zaadii: The Legend of Z-Hawk’ during New York Comic Con’s Metaverse to Honor a Life Cut Short by Di... Business Wire - 10/8/2020 9:24:00 AM
Statement of Changes in Beneficial Ownership (4) Edgar (US Regulatory) - 10/1/2020 4:31:36 PM
Statement of Changes in Beneficial Ownership (4) Edgar (US Regulatory) - 10/1/2020 4:29:48 PM
2020 Travelers Risk Index Finds Fewer Companies Taking Steps to Mitigate Cyber Threats Despite Increased Concern Business Wire - 9/29/2020 9:00:00 AM
Travelers Introduces IndustryEdge® Program for Professional Services Business Wire - 9/23/2020 9:06:00 AM
Travelers Introduces AI-Based Ergonomic Assessments Business Wire - 9/21/2020 9:01:00 AM
Travelers Survey Shows Renewed Focus on Home Improvements During Pandemic Business Wire - 9/17/2020 9:06:00 AM
Travelers Schedules Conference Call to Review Third Quarter 2020 Results Business Wire - 9/16/2020 9:00:00 AM
Travelers Chairman and CEO to Participate in the Barclays Global Financial Services Conference Business Wire - 9/8/2020 9:00:00 AM
Travelers Recognized for Military-Friendly Culture Business Wire - 9/3/2020 9:00:00 AM
Travelers Recommends Shareholders Reject TRC Capital’s “Mini-Tender” Offer Business Wire - 9/1/2020 6:23:00 PM
Travelers Enhances Traverse App With Image Recognition Technology Business Wire - 9/1/2020 9:09:00 AM
Travelers Redesigns Constitution State Services Business Wire - 8/26/2020 9:03:00 AM
Statement of Changes in Beneficial Ownership (4) Edgar (US Regulatory) - 8/17/2020 4:07:39 PM
Statement of Changes in Beneficial Ownership (4) Edgar (US Regulatory) - 8/12/2020 4:07:09 PM
Initial Statement of Beneficial Ownership (3) Edgar (US Regulatory) - 8/6/2020 4:25:48 PM
Travelers Recognised for Diverse and Inclusive Hiring Practices Business Wire - 8/5/2020 2:30:00 AM
Travelers Europe Strengthens CyberRisk Product Business Wire - 8/3/2020 2:30:00 AM
Travelers Enhances IntelliDrive® App to Further Promote Safe Driving Business Wire - 7/30/2020 9:17:00 AM
Travelers Canada prolonge le programme de remise sur les primes d’assurance automobile Business Wire - 7/27/2020 12:00:00 PM
Travelers Teams Up with Procore to Help Contractors Manage Total Cost of Risk Business Wire - 7/27/2020 9:09:00 AM
Travelers Reports Loss as Catastrophe Costs Climb--Update Dow Jones News - 7/23/2020 3:59:00 PM
Travelers Reports 2Q Loss, Catastrophe Losses Climb Dow Jones News - 7/23/2020 7:54:00 AM
bar1080   Saturday, 01/19/19 01:18:30 PM
Re: bar1080 post# 27
Post # of 34 
Buffett's TRV Holding

"18: Travelers Companies (TRV)
Percent of Warren Buffett’s Portfolio: 0.2%
Dividend Yield: 2.5% Forward P/E Ratio: 11.3x (as of 11/15/18)
Sector: Financials Industry: Property and Casualty Insurance
Dividend Growth Streak: 14 years

Travelers is actually a competitor to Berkshire Hathaway's Geico business, which Buffett has studied closely since 1951. The company insures over 6 million customers, with business and specialty insurance lines accounting for over 65% of net written premiums.

Buffett loves the insurance industry's business model. Specifically, property and casualty insurers like Travelers collect money upfront when they sell a new policy. However, until claims are made, they don't have to pay the money back.

In the meantime, this pool of money can be invested in stocks and bonds to earn a return. So long as the insurer is skilled at risk management, in theory it should mint money.

Travelers certainly fits the bill and has proven to be a disciplined operator over the years. Throughout the last five years the firm's average combined ratio (incurred losses and expenses divided by earned premiums) sits below 100% in both its commercial and personal insurance lines, meaning they turned a profit on average before taking investment gains into account.

With such impressive scale, including being the only carrier with a top five market position in all major commercial product lines, Travelers also benefits from the vast amounts of claim data it can crunch to better price its policies. The firm can also meet more of its customers' needs, gaining greater wallet share and efficiencies.

Thanks to these advantages, management targets a mid-teens return on equity over time, which is about double the industry average. However, the underwriting cycle is notoriously cyclical due to its high competitive intensity; anyone with enough capital can sell an insurance policy.

Travelers has shown great discipline by pulling back on growth when the industry's policy terms are unfavorable, helping preserve its profitability.

Simply put, Travelers possesses many of the qualities Buffett likes in a business. TRV's stock declined more than 15% from its January 2018 high through early July, providing an opportunity for Berkshire to initiate a position.

The property and casualty insurance industry faced tough times last year due to an unusually high number of natural catastrophes, but Berkshire's ground-level visibility and conviction to put some money to work in Travelers suggests better times could be ahead.


Because the Good Life is Just a Pump or Two Away
Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
Current Price
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences