Alan D. Schnitzer
Chairman and Chief Executive Officer at Travelers Companies
Thank you, Abbe. Good morning, everyone. Thank you for joining us today. We're very pleased to report excellent results this morning. But before we dive into the quarter, I want to acknowledge the geopolitical crisis and humanitarian nightmare unfolding in Ukraine. Our thoughts and prayers are with those under attack, the millions of refugees seeking lies most basic necessities and the loved ones of those who have lost their lives.
Turning now to our results. We're off to a terrific start for the year with an excellent bottom line results, growth in all three segments, strong and improved profitability in our commercial business segments, progress addressing the environmental headwinds facing the Personal Insurance industry and another quarter of progress on a number of important strategic initiatives. Core income for the quarter was $1 billion or $4.22 per diluted share, generating core return on equity of 15.5%. These results were driven by net earned premiums of $8 billion, up 9% over the prior year quarter and an excellent combined ratio of 91.3%. We're particularly pleased with the continued strong underlying results in our commercial businesses.
Looking at the two commercial segments together. The combined BI, BSI underlying combined ratio was 90.2% for the quarter, an improvement of nearly 2 points from the prior year quarter. Underwriting results in Personal Insurance were impacted by auto loss frequency returning to more normal levels, as miles driven has increased as well as elevated severity in auto and property. Against this challenging backdrop of environmental headwinds, PI results for the quarter were nonetheless solid, with a 95.3% all-in combined ratio.
Turning to investments, our high-quality investment portfolio generated net investment income of $539 million after-tax for the quarter, reflecting reliable results from our fixed income portfolio, and strong returns from our non-fixed income portfolio. As you'll hear from Dan shortly, the recent rise in interest rates positively impacts our outlook for fixed income NII. Our excellent operating results, together with our solid balance sheet, enabled us to grow adjusted book value per share by 11% over the past year, and that's after making important investments in our business and returning excess capital to shareholders. During the quarter, we returned $773 million of excess capital to our shareholders, including nearly $560 million of share repurchases.
In light of our strong financial position and confidence in the outlook for our business, I'm pleased to share that our Board of Directors declared a 6% increase in our quarterly cash dividend to $0.93 per share, marking 18 consecutive years of dividend increases with a compound annual growth rate, 9%, over that period. Turning to the top line, thanks to excellent execution by our colleagues in the field and the strong franchise value we offer to our customers and distribution partners. We grew net written premiums by 11% this quarter to a record $8.4 billion. Each of our three segments made strong contributions.
In Business Insurance, renewal premium change was 9.1%, remaining near all-time highs. At the same time, retention of 87% was an all-time high. We have a very high-quality book of business and keeping it as a priority. Also as we've shared previously, strong retentions are a sign of a rational and stable pricing market. Underneath the headline numbers, execution at a segmented level is excellent, with higher retentions of our best business and more rate in those segments that need it. New business levels were also strong, up about 17% over the prior year quarter. All in, BI net written premiums grew 9%.
In Bond & Specialty Insurance, net written premiums increased by 22% driven by strong production in both Management Liability and Surety. In Management Liability, renewal premium change was up 12%, while retention remained high and new business was up 12%. In Surety, production was terrific, with net written premiums up 29%. Notwithstanding some severity pressure from the inflationary environment, we're pleased to see continued written margin expansion, in both of our commercial businesses, which, of course, will earn in overtime.
In Personal Insurance, net written premiums increased by 12%. We Renewal premium change -- renewal premium change increased in both auto and homeowners as we execute to improve margins. As we expected, retention in new business growth moderated a little bit in response. We'll hear more shortly from Greg, Jeff and Michael about our segment results. Notwithstanding our terrific results and an economy that, in many respects, feels pretty good at the moment, there's a fair amount to pay attention to in terms of the macroeconomic outlook for the world in general and our industry in particular. There's a wide range of views on the outlook for economic growth and headline inflation is at a 40-year high.
Geopolitical risk is at a decade high as were ranges in Eastern Europe, tensions rise elsewhere, and the world nationalizes reversing a trend of globalization. Between the plaintiffs bar, regulatory uncertainty and weather severity, loss costs are as challenging as ever to predict. The global pandemic reminds us of the risk of unknown unknowns. And the one thing we know for sure is that the pace of technological change is accelerating. Travelers is built for this environment.
For starters, a culture of unmatched underwriting and investment discipline positions us for nearly any environment. That's been the foundation of our success through the 2008 financial crisis, the most severe natural and man-made catastrophes like 9/11 and Hurricane Katrina, a major inflection in liability loss cost trends, the pandemic and now the war in Ukraine. Through all the twist and turns foreseeable and otherwise, we've consistently delivered industry-leading returns at industry low volatility.
We didn't exactly predict any of those events, but managing our business for long-term success of carefully balancing risk and reward on both sides of the balance sheet positioned us to successfully manage through all of them. In terms of the economic outlook, if the economy continues to grow, we'll benefit from higher insured exposures, as you've seen in our results over the past few quarters. If we head into a recession, we're very well positioned having made significant progress and improving productivity and efficiency in recent years.
In terms of higher inflation, there are several things to keep in mind. First, with respect to our fixed income portfolio, we would expect to benefit from higher net investment income as higher inflation is typically accompanied by higher interest rates. Second, on the underwriting side, we have a favorable business mix. Our domestic commercial GL and workers comp lines account for about a quarter of our premiums, both have an audit mechanism for retroactive premium adjustment.
And as we discussed, higher exposures, particularly from wages and sales, contribute to improved margins. The short-tail personal insurance lines and commercial property account for almost half of our premiums. In short-tail lines, we can identify and price for the impact of inflation reasonably quickly, and the reserves on the balance sheet are significantly less exposed to changes in loss inflation. Finally, we take into account the inflationary environment and the related uncertainties when we establish our loss picks and set our balance sheet reserves. When assessing inflation, we're generally cautious, especially during periods of elevated uncertainty. We're also well positioned in terms of geopolitical risk.
We're primarily US-based with more than 95% of our premiums coming from North America. And we have a focused international footprint with strong partnerships that provide us with the ability to place our customers' business all over the world. Consequently, our business is, to a significant degree, insulated from the heightened geopolitical risk environment.
With our leading franchise in the US, we have the pole position in the largest, most advanced and most stable economy in the world. Given the size of the US economy, even a modest rate of growth, generates substantial growth in dollar terms and therefore, substantial growth opportunities for Travelers. With our footprint, we have opportunities to continue growing through geographies, products, classes of business and distribution partners that we've known and understood for decades. And given our concentration as a primary insurer in Middle Market, there are meaningful barriers to entry. Importantly, within the largest insurance market in the world, our business also benefits from significant diversification. We offer nine major lines of insurance to personal and commercial customers. Our portfolio is balanced across these lines of business and further diversified across regions by distribution partner and by class and customer size.
In this business, the one constant is the loss costs are going to change. What's important is having the ability to quickly identify and react to the changes, and we do. We have an advantage in terms of the quantity and quality of our data and the sophistication of our analytics. We spent decades fostering a culture that knows how to balance the art and science of underwriting.
We have a strong orientation towards risk-adjusted returns, and we have an incredibly tight feedback loop among our underwriting, claim and actuarial disciplines. All of that contributed to our early recognition of social inflation, positioning us to respond early in terms of underwriting and claims handling strategies. We've been similarly forward leaning and developing underwriting and claims strategies to address weather severity. As we've discussed a few times, over the last five years, we've outperformed our market share in terms of cat losses.
Another thing that's crystal clear is the rapid pace of change in the world. While the current conditions require us to be laser focused on the here and now, and we are, the dramatic pace of change, together with our scale, industry leadership, deep domain expertise and talent advantage presents us with the opportunity to lead in transforming the way business is done. We have a well-defined innovation strategy and have demonstrated success over the past half dozen years or so in innovating with desired outcomes, growth, industry-leading returns and industry low volatility.
In short, we feel very well positioned for continued success no matter what environment comes our way. In the meantime, we're innovating on top of the foundation of excellence to transform our business to competitive advantages that are relevant, differentiating and difficult to replicate.
And with that, I'm pleased to turn the call over to Dan.
