Financial Performance: Non-GAAP Reconciliations
Reconciliation of net income per share to core income per share on a diluted basis
For the year ended December 31,
| 2025 | 2024 | |
|---|---|---|
| Net income | $27.43 | $21.47 |
| Adjustments: | ||
| Net realized investment losses, after-tax | 0.16 | 0.11 |
| Core income | $27.59 | $21.58 |
Reconciliation of shareholders’ equity to adjusted shareholders’ equity
As of December 31,
| (dollars in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|---|
| Shareholders’ equity | $32,894 | $27,864 | $24,921 | $21,560 | $28,887 | $29,201 |
| Adjustments: | ||||||
| Net unrealized investment (gains) losses, net of tax, included in shareholders’ equity | 1,478 | 3,640 | 3,129 | 4,898 | (2,415) | (4,074) |
| Net realized investment (gains) losses, net of tax | 37 | 26 | 81 | 156 | (132) | (11) |
| Impact of changes in tax laws and/or tax rates1 | – | – | – | – | (8) | – |
| Adjusted shareholders’ equity | $34,409 | $31,530 | $28,131 | $26,614 | $26,332 | $25,116 |
1 Impact is recognized in the accounting period in which the change is enacted.
Calculation of return on equity and core return on equity
For the year ended December 31,
| (dollars in millions, after-tax) | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Net income | $6,288 | $4,999 | $2,991 | $2,842 | $3,662 |
| Average shareholders’ equity | $29,924 | $25,993 | $22,031 | $23,384 | $28,735 |
| Return on equity | 21.0% | 19.2% | 13.6% | 12.2% | 12.7% |
| Core income | $6,325 | $5,025 | $3,072 | $2,998 | $3,522 |
| Adjusted average shareholders’ equity | $32,643 | $29,295 | $26,772 | $26,588 | $25,718 |
| Core return on equity | 19.4% | 17.2% | 11.5% | 11.3% | 13.7% |
Calculation of book value per share and adjusted book value per share
As of December 31,
| (dollars in millions, except per share amounts) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|---|---|---|
| Shareholders’ equity | $32,894 | $27,864 | $24,921 | $21,560 | $28,887 | $29,201 | $25,943 | $22,894 | $23,731 | $23,221 |
| Less: Net unrealized investment gains (losses), net of tax, included in shareholders’ equity | (1,478) | (3,640) | (3,129) | (4,898) | 2,415 | 4,074 | 2,246 | (113) | 1,112 | 730 |
| Shareholders’ equity, excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity |
$34,372 | $31,504 | $28,050 | $26,458 | $26,472 | $25,127 | $23,697 | $23,007 | $22,619 | $22,491 |
| Common shares outstanding | 217.5 | 226.6 | 228.2 | 232.1 | 241.2 | 252.4 | 255.5 | 263.6 | 271.4 | 279.6 |
| Book value per share | $151.21 | $122.97 | $109.19 | $92.90 | $119.77 | $115.68 | $101.55 | $86.84 | $87.46 | $83.05 |
| Adjusted book value per share | $158.01 | $139.04 | $122.90 | $114.00 | $109.76 | $99.54 | $92.76 | $87.27 | $83.36 | $80.44 |
Reconciliation of net income to core income, and core income to after-tax underlying underwriting income (also known as underlying underwriting gain)
For the year ended December 31,
| (dollars in millions, after-tax) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net income | $6,288 | $4,999 | $2,991 | $2,842 | $3,662 | $2,697 | $2,622 | $2,523 | $2,056 | $3,014 |
| Net realized investment (gains) losses | 37 | 26 | 81 | 156 | (132) | (11) | (85) | (93) | (142) | (47) |
| Impact of changes in tax laws and/or tax rates2,3 | – | – | – | – | (8) | – | – | – | 129 | – |
| Core income | 6,325 | 5,025 | 3,072 | 2,998 | 3,522 | 2,686 | 2,537 | 2,430 | 2,043 | 2,967 |
| Net investment income | (3,254) | (2,952) | (2,436) | (2,170) | (2,541) | (1,908) | (2,097) | (2,102) | (1,872) | (1,846) |
| Other (income) expense, including interest expense | 326 | 308 | 337 | 277 | 235 | 232 | 214 | 248 | 179 | 78 |
| Underwriting income | 3,397 | 2,381 | 973 | 1,105 | 1,216 | 1,010 | 654 | 576 | 350 | 1,199 |
| Impact of net (favorable) unfavorable prior year reserve development | (815) | (559) | (113) | (512) | (424) | (276) | 47 | (409) | (378) | (510) |
| Impact of catastrophes | 2,915 | 2,632 | 2,361 | 1,480 | 1,459 | 1,274 | 699 | 1,355 | 1,267 | 576 |
| Underlying underwriting income | $5,497 | $4,454 | $3,221 | $2,073 | $2,251 | $2,008 | $1,400 | $1,522 | $1,239 | $1,265 |
2 Impact is recognized in the accounting period in which the change is enacted.
3 2017 reflects impact of Tax Cuts and Jobs Act of 2017 (TCJA).
Reconciliation of invested assets to invested assets excluding net unrealized investment gains (losses)
As of December 31,
| (dollars in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|---|---|---|
| Invested assets4 | $104,529 | $94,223 | $88,810 | $80,454 | $87,375 | $84,423 | $77,884 | $72,278 | $72,502 | $70,488 |
| Less: Net unrealized investment gains (losses), pre-tax | (1,862) | (4,609) | (3,970) | (6,220) | 3,060 | 5,175 | 2,853 | (137) | 1,414 | 1,112 |
| Invested assets excluding net unrealized investment gains (losses) | $106,391 | $98,832 | $92,780 | $86,674 | $84,315 | $79,248 | $75,031 | $72,415 | $71,088 | $69,376 |
4 Includes $3,347 million of invested assets classified as held for sale as of December 31, 2025.
Underlying underwriting income is net earned premiums and fee income less claims and claim adjustment expenses (excluding catastrophe losses and prior year reserve development) and insurance-related expenses.
Average shareholders’ equity is (a) the sum of total shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
Adjusted shareholders’ equity is shareholders’ equity excluding net unrealized investment gains (losses), net of tax, included in shareholders’ equity, net realized investment gains (losses), net of tax, for the period presented and the effect of a change in tax laws and tax rates at enactment (excluding the portion related to net unrealized investment gains (losses)). Adjusted average shareholders’ equity is (a) the sum of adjusted shareholders’ equity at the beginning and end of each of the quarters for the period presented divided by (b) the number of quarters in the period presented times two.
Return on equity is the ratio of (a) net income for the period presented to (b) average shareholders’ equity for the period presented. Core return on equity is the ratio of (a) core income for the period presented to (b) adjusted average shareholders’ equity for the period presented.
Definitions of certain terms in this report are included in the Glossary of Selected Insurance Terms portion of the Form 10-K.
More about financial performance
2025 results
Travelers delivered core income of $6.3 billion, or $27.59 of core income per diluted share, generating core return on equity of 19.4% – a meaningful spread over both the 10-year Treasury and our cost of equity.
Financial highlights
Review our financial highlights from recent years.
Delivering value over time
The success of our strategy – with all its component parts – drives our total return to shareholders over time.