On Sep 28, 2015, we issued an updated research report on The Travelers Companies, Inc.TRV .
Travelers is always focused on ramping up its growth profile - both organic and inorganic. Its committed implementation of pricing actions continues to increase returns and effectively revamp its portfolio with better performing classes of business. Its Quantum Auto 2.0 continues to drive results in Agency Auto as this lower-cost, lower-priced auto insurance product is live in all the planned markets.
With respect to inorganic growth, the company has always considered prudent acquisitions. In Apr 2015, Travelers announced the acquisition of a majority stake in the property casualty business of its J. Malucellijoint venture, talking the tally to 95% ownership.
These endeavors also testify to financial strength and flexibility of Travelers. We expect Travelers to pursue strategic acquisitions that would help it to ramp up its growth profile.
To drive margin expansion, Travelers has resorted to control cost. Travelers targets $140 million in costs savings over a two-year period. It had saved $100 million from expense reduction in 2014 and is on track to realize the remaining $40 million in 2015.
Riding on the strength of its operational performance, the company is also engaged in shareholder-friendly moves.
Nonetheless, exposure to catastrophe losses is affecting underwriting results and a persistently soft interest rate environment is weighing on its investment results.
With respect to earnings performance, the Zacks Rank #1 (Strong Buy) property and casualty insurer delivered positive surprises in three of last four quarters, with an average beat of 14.42%.
Other Stocks to Consider
Investors interested in the property and casualty industry can also take a look at Cincinnati Financial Corp. CINF , Hallmark Financial Services Inc. HALL and Universal Insurance Holdings Inc. UVE . All these share the Zacks Rank with Travelers.