TRVThe Travelers Companies, Inc.

Travelers insures business property and liability — profit comes from pricing accuracy and income on reserves.

The primary client is business: property, liability, fleet and workers' compensation cover. The key metric is the combined ratio — the share of premium consumed by claims and expenses. Below one hundred means underwriting is profitable in itself, not merely the investments.

The second income source is the bond portfolio holding the reserves. When rates rise it earns markedly more, so insurers benefit from expensive money unlike most industries. The catch is timing: the portfolio reprices slowly as old bonds mature, so the benefit arrives over years rather than in the quarter rates move.

The principal risk is catastrophe: hurricanes, hail and wildfires can consume a year's profit in a quarter, and such events are growing more frequent. The industry's answer is higher rates and revised terms. Travelers pays a dividend with a very long record of increases.