The Travelers Companies (TRV), an insurance firm, continues to benefit from the pandemic induced judicial backlog. Court backlogs spiked following COVID-19 lockdowns, delaying legal verdicts and settlements for which Travelers will one day owe clients it insures. In its latest 10-Q, Travelers revealed its claims reserve increased $666, or 1.2% from the year prior’s quarter, due in part, to:

“...reduced claim settlement activity largely due to continued disruptions in the judicial system related to COVID-19…”

Separately, as Travelers grows premium volumes it may return less capital to shareholders, due, in part, to S&P’s proposed increases in capital requirements for insurance companies. If the company is required to hold more capital to prevent downgrades of its claims-paying and financial strength ratings, Travelers may not be able to repurchase shares as in the amounts originally desired.