Travellers is about to release earnings. Ponder their Black Swans and contemplate if they will turn into Bear Case Scenario’s.
Most of Travellers fixed income portfolio is municipals. Local finances are shaky and ultra reliant on third-party guarantors. if there is a stampede for the exits not all risks will survive and travellers will be left holding the bag. If Travellers experiences enough defaults who will there be to refinance existing and new municipal finances.
Travellers is exposed to large-scale calamity insurance. Climate change has altered the reality on the ground. Risk analysts are not showing leadership in making correct pricing decisions.
Too much of Travellers product lines are commodities and subject to severe price competition. Not good for shareholders.
George Gutowski writes from a caveat emptor perspective.