Guides
How to read an insurance company's earnings report
How to read an insurer's earnings release as a buyer: combined ratio, reserve releases, renewal pricing and retention, using Travelers' Q2 2026 as the example.
An insurer's earnings release answers four questions: did it make money underwriting, how much of that came from luck, what is it charging customers like you, and is its balance sheet getting stronger. Read the combined ratio, the catastrophe and reserve lines that sit under it, the renewal premium change and the retention rate. Ignore the headline earnings per share unless you are buying the stock.
Where to find the numbers
Public insurers post a quarterly press release and a financial supplement on the investor relations page of their website, and file a Form 10-Q (quarterly) and 10-K (annual) with the SEC. Many also publish earnings call transcripts. Mutuals and other private insurers do not issue releases, but every U.S. insurer files a statutory annual statement with its home state regulator, which the NAIC compiles, and AM Best publishes its analysis of the companies it rates. Start with the press release for the story and use the supplement for the line-by-line data.
The measures that matter
| Measure | What it tells you | What to watch |
|---|---|---|
| Net written premiums | Premium sold in the period, after reinsurance (written premium) | Growth by segment. A carrier that is growing in commercial auto wants that business; one that is shrinking is pulling back |
| Net earned premium | The part of premium that applies to time already passed (earned premium) | It lags written premium, so growth shows up here later |
| Combined ratio | Losses plus expenses as a share of premium; under 100 is an underwriting profit | The gap between the reported and the underlying figure |
| Underlying combined ratio | The ratio excluding catastrophes and prior-year reserve changes | The cleanest read on whether current pricing covers current claims |
| Catastrophe losses | Storm, wildfire and earthquake claims, net of reinsurance | Volatility. A light quarter flatters the reported ratio |
| Prior-year reserve development | Whether last year's claim estimates held up. Favorable means reserves were too high; adverse means too low | Adverse development in casualty lines is an early warning; see loss reserves and reserve development: why they matter to buyers |
| Renewal premium change (RPC) | The average price change on policies that renewed | Compare it with claim cost trend; this is what other customers are paying |
| Retention and new business | Share of policies renewed; volume of new accounts | Falling retention means the carrier is pricing above the market |
| Net investment income | Interest and dividends earned on the portfolio | It cushions underwriting losses, especially in long-tail lines |
| Core or operating income | Net income with realized investment gains and similar items stripped out | Definitions differ by company |
| Book value per share, return on equity | Capital strength and returns | Capital supports the financial strength rating |
Companies use different names for adjusted earnings: Travelers says core income, Chubb says core operating income, The Hartford says core earnings. Each defines its own measure and says so in the release's glossary. Treat comparisons across companies as approximate.
A worked reading: Travelers, second quarter 2026
This is a real report, Travelers' second-quarter release of July 17, 2026, read the way a broker would. Travelers was the largest U.S. business insurer by 2025 commercial premiums (The 100 largest U.S. business insurance companies); see its profile.
- The headline. Net income was $2.208 billion and core income $2.160 billion, up from $1.509 billion and $1.504 billion in the second quarter of 2025. Core income excludes realized investment gains, discontinued operations and tax-law changes.
- The combined ratio. It fell to 83.6% from 90.3%, an improvement of 6.7 points.
- Why it improved. Travelers itself attributes the 6.7 points to lower catastrophe losses (3.6 points), more favorable prior-year reserve development (2.5 points) and a better underlying ratio (0.6 points). Catastrophe losses were $518 million, against $927 million a year earlier, and favorable reserve development was $578 million, against $315 million. About nine-tenths of the improvement was weather and reserve releases, which do not repeat on schedule.
- The underlying ratio. At 84.1% (84.7% a year earlier), it shows the core book is profitable. Its improvement was small.
- Commercial segment. The Business Insurance segment's combined ratio was 86.8% and its underlying ratio 88.2%. Reserve releases took 5.7 points off, catastrophes added 4.3, which is how 88.2 became 86.8.
- Pricing. Business Insurance renewal premium change was 4.8%: 6.1% in Middle Market and 9.4% in the small commercial Select Accounts unit. Retention was 86% and new business a record $805 million, up 8%.
- Capital. Book value per share was $158.81 at June 30, 2026, up 5% from year-end 2025; core return on equity was 24.9% for the quarter.
What this tells a buyer: a highly profitable commercial book, still taking rate increases on average, retaining 86% of customers and growing new business. That pattern points to an insurer that is comfortable and competing for accounts, not one cutting back. It does not mean your policy will renew flat. Your price follows your own loss history, class and exposure.
Red flags and green flags
- Adverse reserve development for several quarters in a row, especially in general liability, commercial auto or excess lines. It means past pricing was too low and may need correcting through rate on current customers.
- A combined ratio that looks good only after reserve releases. Compare it with the underlying ratio.
- Falling retention with rising RPC. The carrier is choosing price over customers.
- Growth far above peers. Rapid growth in a soft market often means loosened underwriting.
- A segment you buy in running above 100. Expect tighter appetite, higher rates or new exclusions at renewal. AM Best put the 2025 commercial auto combined ratio at 103.5, which is why that line stays firm; see the combined ratio: how insurers make (and lose) money on underwriting.
- Rating actions. An AM Best downgrade or negative outlook is more important to a policyholder than any quarter's profit; see how to judge a business insurance company.
Using what you learn
An earnings report will not set your premium, but it helps in three ways. It tells you whether your insurer wants your line of business. It gives your broker context for a renewal conversation: if the carrier reports 5% renewal increases and quotes you 15%, the broker can ask why. And it flags financial trouble early. For the market-wide picture, see commercial insurance pricing trends: what the 2026 indexes show and hard and soft insurance markets: what the cycle means for buyers, and try the ratios yourself on the loss ratio and combined ratio calculator.
Key takeaways
- Start with the combined ratio, then check how much came from catastrophes and reserve development before crediting the underlying business.
- Renewal premium change and retention are the clearest signals of how a carrier is pricing and whether customers accept it.
- Travelers' Q2 2026 combined ratio improved 6.7 points, but only 0.6 points came from the underlying ratio; the rest was lighter catastrophes and reserve releases.
- Adjusted earnings measures such as core income are defined company by company, so check the glossary before comparing.
- Financial strength ratings and adverse development matter more to a policyholder than earnings per share.