Alan D. Schnitzer
Chairman and Chief Executive Officer at Travelers Companies
Thank you, Abbe. Good morning, everyone, and thank you for joining us today. We're pleased to report strong top and bottom-line results for the quarter and the first nine months of the year, including very strong underlying underwriting profitability and healthy top line growth.
Core income year-to-date of $2.2 billion is about $800 million higher year-over-year, generating core return on equity of 11.6%. Core income for the quarter was $655 million or $2.60 per diluted share, generating core return on equity of 10.1% despite a high level of catastrophe losses. Our cat losses were well below our market share and well above the prior-year quarter and the tenure average for the quarter.
Underlying underwriting income of $632 million pre-tax was 6% higher than in the prior-year quarter, driven by record net earned premiums of $7.8 billion and a very strong underlying combined ratio of 91.4%. We're particularly pleased with the continued strong underlying fundamentals in our commercial businesses. The underlying combined ratio improved by almost 4 points in Business Insurance and more than 5 points in Bond & Specialty Insurance. As you'll hear in a few minutes from Michael, underlying results in Personal Insurance were impacted by auto frequency returning to pre-pandemic levels and elevated severity in both auto and property due to higher costs for labor, materials. Our consolidated results demonstrate the value of having a diversified group of businesses.
Turning to investments, our high quality investment portfolio generated net investment income of $645 million after-tax, reflecting reliable performance in our fixed income portfolio and very strong returns in our non-fixed income portfolio. These results together with our strong balance sheet and cash flow enable us to grow adjusted book value per share by 10% over the past year after making important investments for the future and returning significant excess capital to our shareholders. During the quarter, we returned $821 million of excess capital to shareholders, including $601 million of share repurchases.
Turning to the top line, net-written premiums grew 7% to a record $8.3 billion. Each of our three segments again contributed meaningfully to the top line growth. In Business Insurance, net-written premiums grew by 5% with renewal premium change of 9.9%, up more than 200 basis points year-over-year, a near all-time high. Renewal premium change was driven by continued strong renewal rate change and higher exposure growth. Importantly, at the same time, retention was also higher. Our ability to continue to drive price change at historical highs while increasing retention reflects excellent marketplace execution and the stability of the pricing environment.
In Bond & Specialty Insurance, net-written premiums increased by 19%, driven by record renewal premium change of 13.6% in our Management Liability business and continued strong retention. We're also pleased to report strong production in our Surety business. In our Commercial businesses, written pricing continues to outpace estimated loss trend, which will continue to benefit margins as it earns in. Given social and other inflation, the frequency and severity of weather-related loss activity and the low interest rate environment, we expect the pricing environment to remain strong. In Personal Insurance, net-written premiums increased by 7%. Policies in force in both auto and homeowners were at record levels, driven by continued strong retention and growth in new business.
Before I wrap up on results, I'd like to spend a minute discussing how our leading data and analytics and risk expertise contributed to our relatively favorable loss experience with Hurricane Ida. As I shared in our first quarter earnings call, our share of the industry's property cat losses over the past five years have been meaningfully lower than our corresponding market share, and while there is always the potential for us to have outsized exposure to an event, it was no accident that we again outperformed in Hurricane Ida.
Our medium underwriting expertise supported by cutting edge data analytics are key to an effective assessment of risk and reward. For us third-party models are starting point for our more advanced proprietary cat modeling. At the portfolio level, the insights from our models warned us away from the coast where Ida made landfall, given the impediments to achieving an appropriate risk-adjusted return.
In the other states among Ida's path, we effectively managed risk selection, pricing and other terms and conditions, sophisticated data and analytics at the fingertips of our frontline underwriters. These include robust flood risk scoring, location intelligence down to the parcel level, Hill dashboards and output from our risk control engineers.
Within Personal Insurance, we continue to see the benefits from our highly segmented Quantum Home 2.0 product, which has now rolled out in more than 40 states. In the Northeast, extreme rainfall from Ida resulted in significant claim activity for the industry, including from water and drainage back up, which is a coverage we provide in our QH 2.0 product. The model underneath the product leverages data and analytics to underwrite a price tag coverage on a very granular basis.
In addition to underwriting, data and analytics are increasingly informing our claims handling strategies. For example, our AI-assisted claim damage detection model was a key part of our Ida claim response. This model uses AI and high-resolution aerial imagery to detect the extent of damage to individual properties as soon as a day after an event. Within two days of impact, we were collecting and analyzing aerial imagery of customer properties along Ida's path as it moved across 20 states.
This enabled us to remotely identify which of our customers properties had sustained exterior damage and effectively organize our claim response. In some cases, we can use this technology to adjust and pay total losses before the customer has even been able to return to their home. We also utilized other virtual capabilities in our Ida response, such as image share and live video capture, on a majority of claims with interior damage. These leading edge capabilities, enhanced the claim experience for our customers by cutting significant time out of the claim process, expediting an accurate loss assessment and in many cases, eliminating the need for physical inspection. Again, with Ida, we successfully closed 90% of all homeowners plans within 30 days. All of this also results in a more efficient outcome for our shareholders.
As strategic as the data and analytics are, maybe even more important is the culture that brings it all together. Our collaborative approach to developing a holistic, 360-degree view of risk, incorporating underwriting, claims, actuarial risk-control, legal and regulatory inputs is an important differentiating factor in effectively managing risk and reward. That culture is decades in the making and very hard to replicate. Before I turn the call over to Dan, I'd like to welcome Jeff Klenk, President of our Bond and Specialty Insurance segment to the call. As I shared last quarter, Jeff is a 22-year veteran at Travelers most recently as a member of Tom Kunkel leadership team and head of our Management Liability business.
Jeff succeeded Tom, following his retirement last month. We're fortunate to have Jeff in the role and you will hear from him in a few minutes. To sum it up, we're pleased with our results for the quarter and year-to-date. Our significant and hard to replicate competitive advantages position us very well and continued to deliver meaningful shareholder value over time.
And with that, I'm pleased to turn the call over to Dan.