In short: In Terranova's insurer list (12:31) — higher rates lift float income; a "building trend" he expects to last into year-end.
In short: Recommended: the early-soft-market winner — a middle-market, agent-based footprint that is "harder to burn your way into," and a reserve position that "impresses me quite a bit more than the other commercial lines underwriters." Knock: a bit expensive at ~12.5x earnings; he disagrees with the recent downgrades.
Insurers go through "hard" markets (they can raise prices at will) and "soft" markets (competition forces prices down). After an unusually long seven-year hard market, commercial insurance has turned soft. Tunis's point is that not all insurers feel that equally.
Travelers mostly insures mid-sized businesses through local agents who have relationships built over decades — a newcomer can't simply undercut its way in. It also set aside unusually conservative "reserves" (money held for future claims), which acts as a cushion when prices fall. That is why he prefers it, even though the stock isn't cheap.
27:19that actually allows you to absorb a lot of that rate pressure early on. Correct. Travelers' reserve position
27:27impresses me quite a bit more than the other commercial lines underwriters. Okay. so I feel better about the type of
In short: Named in Brown's insurance run — "insurance stocks, we've been highlighting them all year: Travelers, Chubb, Allstate, MetLife, one after another. All of those charts look great" — and part of why he thinks Berkshire's own strength "doesn't look out of place."
In short: ★ Today's rating change — moved off the Buy List onto Holds/Trims, rated H (lot 6/26/2026 @ $327.37, marked $373.24, +14.01%). The June-26 POW! quality-compounder pick is up ~14% in five weeks and is now a hold rather than a buy — the "raise cash in richly valued securities" instruction applied to a winner that has run to the top of its re-rating range.
Travelers is a big property-and-casualty insurer and was Haymaker's Pick of the Week on June 26 as a quality compounder. Five weeks later it's up about 14% and gets moved off the buy list to Hold. The June case (an insurer earning excellent returns, sitting on a $106 billion bond portfolio that pays more as rates rise, at a cheaper multiple than its peers) hasn't been withdrawn — the stock has simply covered a good chunk of the re-rating he was playing for. Combined with this week's "raise cash in expensive securities" message, the read is: keep it, don't buy more here.
In short: One of the reasonable-valuation insurers (with Allstate and Chubb) he cites as momentum-sector winners — "all doing really well YTD."
Travelers is a major commercial and personal insurer. It's one of the three insurance names (with Allstate and Chubb) Terranova cites as evidence that the momentum factor has spread into reasonably-valued financials — "all doing really well YTD." A way to own momentum without paying growth-stock prices.
In short: Pick of the Week — a Buy for long-term compounders. Q1 2026 core EPS $7.71 vs $7.08 est (+9% beat), revenue $11.92B (+7.4%), 19.7% ROE; FY2025 net written premium $43.6B, net income $6.3B (+25.8%), TTM core ROE 22.7%, combined ratio 88.6% / underlying 85.3%. Has repriced its whole book to "rate adequacy." A $106B investment portfolio (90%+ high-quality fixed income) earns a rising tail in a higher-for-longer world ($3.3B after-tax NII guided 2026). Capital return ~20% annualized on a ~$46B cap ($2.2B returned in Q1, dividend +14% — 14th straight year). AI/automation real: >half of claims straight-through, expense ratio −300bp since 2016 (~$430M/yr), $13B tech spend, 65B proprietary data points. ~10.8× NTM P/E vs Chubb 12.3× / Progressive 12.8× despite a higher ROE; re-rate toward ~13× the upside. Barclays cut to Underweight Jun 12 (main bear case) but the stock sits at a 52-week high; a likely ~5% pullback is a more aggressive entry. A long-term hold, not a trade.
Travelers is one of America's biggest property-and-casualty insurers — it writes the home, auto, business and specialty policies that pay out when something goes wrong. Two things make Haymaker like it right now. First, "rate adequacy": after years of catastrophe and inflation losses, the company has methodically re-priced almost every policy so the premiums it charges finally match the risks it takes — that's why it earns a 22.7% return on equity (one of the best in the industry) with lots of margin to spare. Second, the "float": insurers collect premiums today and pay claims later, and they invest the cash in between. Travelers sits on a $106 billion mostly-bond portfolio, and in a world where interest rates stay higher for longer, that pile now throws off a growing river of income (guided to $3.3 billion after tax this year) that was earning almost nothing during the zero-rate decade.
On top of that, the company hands shareholders roughly 20% of its market value back every year through dividends and buybacks (it just raised the dividend 14%, the 14th year in a row), yet the stock trades at only ~10.8× next year's earnings — cheaper than rivals Chubb and Progressive even though it out-earns them. Haymaker's view is simple: this is a high-quality "compounder" being priced like a boring, fully-valued utility, and it should drift up toward a ~13× multiple over time. The catch is that one bad hurricane season can dent any quarter, and a Wall Street desk (Barclays) just turned cautious with the stock at a 52-week high — so a ~5% dip is likely, and Haymaker would use it to buy more aggressively. This is a long-term hold to compound with, not a quick trade.
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