Goldman Sachs analysts upgraded Travelers (NYSE:TRV) from Sell to Buy, raising the price target to $278, which represents a 17% total return opportunity over the next 12 months. The upgrade reflects Travelers’ robust positioning to exceed 2025 expectations, particularly in commercial lines profitability and net investment income, with an improving personal lines segment providing additional upside.
According to the analysts, Travelers stands out among its peers due to its effective pricing strategies and targeted exposure to high-growth areas such as commercial auto, excess liability, and umbrella coverage, which together accounted for over 20% of its 2023 commercial lines direct premiums written. Additionally, its small commercial segment, contributing 18% of GAAP net premiums written in 2023, further enhances its competitive edge.
While the potential for additional reserve strengthening in liability lines remains, the company has demonstrated prudent management in addressing loss trends. Travelers’ approach to reserve development is seen as balanced, with consensus expectations for net favorable reserve development appearing reasonable.
Travelers’ ability to deliver stable commercial lines profitability, coupled with an improving personal lines outlook and thoughtful risk management, positions the company as a leader in the property and casualty insurance sector.