The Travelers Companies (NYSE:TRV) reported a significant jump in fourth-quarter profit, surpassing analyst expectations as the insurance giant benefited from a combination of aggressive premium increases, a relatively quiet period for natural disasters, and soaring investment returns.
The New York-based insurer posted net income of $2.496 billion, or $11.06 per diluted share, for the period ended Dec. 31, 2025, a substantial increase from the $2.082 billion reported a year earlier.
Core income, which excludes certain investment gains and losses, rose to $2.511 billion, or $11.13 per share, comfortably beating the Wall Street consensus.
The company's performance was bolstered by an "underlying underwriting gain" that reflects the core profitability of its insurance policies before accounting for volatile catastrophe claims.
Travelers also saw lower-than-anticipated catastrophe losses during the quarter, while simultaneously reaping the rewards of a "higher-for-longer" interest rate environment that boosted income from its massive fixed-income portfolio.
Net investment income remains a powerful tailwind for the firm, as it reinvests premiums at significantly higher yields than in previous years.
For the full year, Travelers generated a record $10.606 billion in operating cash flow, providing the management team with significant dry powder for capital deployment.
The company was also aggressive in its return of capital to investors, handing back $1.897 billion over the course of 2025, including $1.653 billion in share repurchases that helped lift per-share earnings.
The insurer’s balance sheet also showed remarkable strength, with book value per share climbing 23% compared to the end of 2024.
This growth in intrinsic value underscores the firm's ability to navigate inflationary pressures in replacement costs while maintaining disciplined pricing across its business, bond, and personal insurance segments.