Insurance Company Travelers Had a Mediocre 2019. Next Year Could be the Same.

Ben Levisohn AAPL TRV WBA Apple Insurance S&P 500 Travelers Walgreens Boots Alliance Walgreens Boots Alliance Insurance Financial Services Catherine Seifert Seifert North America United States Equity Markets Commodity/Financial Market News Content Types Factiva Filters C&E Exclusion Filter I/INS M/FCL N/DJN N/MKT N/STK N/WER R/NME R/US WBA Barrons.com Barrons Blogs Wires DJIA Dow Jones Industrial Average CODES_REVIEWED Companies author Ben Levisohn author|Ben Levisohn topicid 8022 name Ben Levisohn extractedtext Ben Levisohn rank 1 codetype author code ben_levisohn nameformat surname_first author Ben Levisohn id Ben Levisohn co wlgrn co|wlgrn country US symbol WBA displayname Walgreens Boots Alliance why occur extractedtext Walgreens Boots Alliance source FACTIVA seoname walgreens_boots_alliance countrycode US relevancerange low chartingsymbol STOCK/US/XNAS/WBA fcode wlgrn fullextractedtext Walgreens Boots Alliance ticker WBA confidence 90 subcat com relevance 25 significance passing onlinesignificance passing-mention name Walgreens Boots Alliance confidencerange high exchange Nasdaq exchangeisocode XNAS codetype co code wlgrn co Insurance co|Insurance fullextractedtext Insurance Company displayname Insurance name Insurance extractedtext Insurance source FACTIVA subcat com codetype co code insurance co WLGRN co|WLGRN symbol WBA country US codetype co displayname Walgreens Boots Alliance extractedtext Walgreens Boots Alliance source MANUAL code wba name Walgreens Boots Alliance significance prominent onlinesignificance prominent exchange U.S.: Nasdaq exchangeisocode XNAS chartingsymbol STOCK/US/XNAS/WBA fcode WLGRN status modified co APPLC co|APPLC symbol AAPL country US codetype co displayname Apple extractedtext Apple source MANUAL code aapl name Apple significance prominent onlinesignificance prominent exchange U.S.: Nasdaq exchangeisocode XNAS chartingsymbol STOCK/US/XNAS/AAPL fcode APPLC status modified co STPAUL co|STPAUL symbol TRV country US codetype co displayname Travelers Cos. extractedtext Travelers source MANUAL code trv name Travelers significance prominent onlinesignificance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/TRV fcode STPAUL status modified co S&P 500 co|S&P 500 country US codetype co displayname S&P 500 Index extractedtext S&P 500 source MANUAL code spx name S&P 500 significance prominent onlinesignificance prominent exchange S&P US exchangeisocode S&P US chartingsymbol INDEX/US/S&P US/SPX status modified company TRV company|TRV name Travelers significance PROMINENT djn WBA djn|WBA significance passing onlinesignificance passing-mention name WBA why occur source FACTIVA fcode WBA codetype djn code wba djn I/INS djn|I/INS significance prominent onlinesignificance prominent name I/INS why about source FACTIVA fcode I/INS codetype djn code i_ins djn M/FCL djn|M/FCL name M/FCL why lineage source FACTIVA fcode M/FCL codetype djn code m_fcl djn N/STK djn|N/STK significance prominent onlinesignificance prominent name N/STK why about source FACTIVA fcode N/STK codetype djn code n_stk djn N/MKT djn|N/MKT name N/MKT why lineage source FACTIVA fcode N/MKT codetype djn code n_mkt djn R/US djn|R/US significance prominent onlinesignificance prominent name R/US why about source FACTIVA fcode R/US codetype djn code r_us djn R/NME djn|R/NME name R/NME why lineage source FACTIVA fcode R/NME codetype djn code r_nme djn N/DJN djn|N/DJN codetype djn value N/DJN source DJN-CONTROL status modified inactivebydefault true name N/DJN code n_djn djn N/WER djn|N/WER codetype djn value N/WER source DJN-CONTROL status modified inactivebydefault true name N/WER code n_wer editorial-seo-id travelers-had-a-mediocre-2019-51577475484 editorial-seo-id|travelers-had-a-mediocre-2019-51577475484 first_publish_headline Insurance Company Travelers Had a Mediocre 2019. 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Next Year Could be the Same. Insurance Company Travelers Had a Mediocre 2019. Next Year Could be the Same. Insurance Company Travelers Had a Mediocre 2019. Next Year Could be the Same.

Yes, Travelers, the insurance company, is a component of the Dow Jones Industrial Average—and it had a mediocre 2019. A look back at 2019, and what comes next.

Insurance Company Travelers Had a Mediocre 2019. Next Year Could be the Same.

Yes, Travelers, the insurance company, is a component of the Dow Jones Industrial Average—and it had a mediocre 2019. A look back at 2019, and what comes next.

https://www.barrons.com/articles/best-worst-company-stocks-dow-2019-51577139194 https://www.barrons.com/articles/walgreens-stock-dows-biggest-loser-in-2019-51577221703 https://www.marketwatch.com/story/travelers-beats-earnings-estimates-despite-higher-catastrophe-losses-2019-01-22 https://www.marketwatch.com/story/travelers-stock-falls-after-earnings-miss-2019-10-22 mailto:Ben.Levisohn@barrons.com Insurance Company Travelers Had a Mediocre 2019. Next Year Could be the Same. By Ben Levisohn

With the year almost over, we’re taking a look at all 30 stocks in the Dow, starting with the worst performer—Walgreens Boots Alliance—and working our way up to the highest-flying stock in the benchmark—Apple. The ranking may shift before the close of 2019 trading, but the stories behind the stocks shouldn’t.

It may come as a surprise to find out that Travelers, the insurance company, is in the Dow Jones Industrial Average, despite being tiny by Dow standards. Its market cap is just $35.2 billion, the smallest in the Dow and the 180th largest in the S&P 500. But a Dow member it is, and it was the either the 12th worst- or the 19th best-performing stock in the blue-chip benchmark in 2019, depending on how you look at it.

Travelers (ticker: TRV), the lone property and casualty insurance company in the Dow, has gained 14% in 2019, lagging behind the Dow’s 23% rise. But that only tells half the story, because Travelers shot out of the gate in 2019, only to get clobbered in the latter-half of the year.

It was all rosy to start the year. A January earnings beat helped, as did the fact that the market was still rallying back from its December 2018 near-death experience. By July 15, Travelers stocks was up 29%, nearly double the S&P 500’s 16% rise.

It was all downhill from there. The stock was already well off its 2019 highs when it reported third-quarter earnings on Oct. 22. Despite reporting sales of $8.01 billion, beating forecasts for $7.37 billion, Travelers reported a profit of just $1.43 billion, well below analyst expectations for $2.35 billion. Travelers also offered disappointing guidance, implied that share repurchases would also decline, and took a bigger-than-expected reserve hit. The stock fell 8.3%, its largest one-day decline since December 2008.

So it is on to 2020—but don’t expect things to get too much better for Travelers. CFRA analyst Catherine Seifert cites “social inflation”—the rise in claims due to trends like an increasing willingness to sue, a willingness to find for the plaintiff in those lawsuits, and massive jury payouts—to weight on Travelers. “There are several factors driving this trend, including an erosion in tort-reform legislation, an increase in litigation funding, a growing anti-business sentiment and a desensitization toward large jury awards,” writes Seifert, who says Travelers is one of the most impacted by the trend.

That could mean Travelers experiences another year like 2019, and finish somewhere in the middle of the pack.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.