Travelers Cos. earnings fell in the fourth quarter due to losses from recent wildfires in California.
On Tuesday, the insurance firm said its pretax catastrophe losses, net of reinsurance, totaled $499 million during the quarter, compared with the range of $525 million to $675 million it provided in November.
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The company's catastrophe losses were $137 million a year earlier.
New York-based Travelers, part of the Dow Jones Industrial Average, is among the largest sellers of insurance to U.S. businesses and sells car and home insurance to individuals and families. It is one of the first big property-casualty insurers to report quarterly earnings, and its results are watched closely as a bellwether for others that follow.
The insurance industry was slammed in the second half of 2017 with three major hurricanes -- Harvey, Irma and Maria -- along with earthquakes in Mexico and wildfires in California. The industrywide losses from all of those events could near or exceed $100 billion, according to risk-modeling firms.
In September, Travelers paused its share buyback program as it assessed the impacts of Hurricanes Harvey and Irma. It resumed buybacks in November.
Much of the damage from last year's natural disasters was borne by reinsurers. These are specialty firms that agree to take responsibility for some of the risk in policies sold by insurers to businesses and individuals.
Travelers posted core operating earnings of $633 million, or $2.28 a share, down from $919 million, or $3.20 a share, in the year-earlier period.
Core operating earnings are a widely watched industry benchmark because they exclude realized capital gains and losses in companies' big investment portfolios as well as items that aren't considered recurring in nature.
Travelers reported a $129 million charge on its deferred tax assets due to the new U.S. tax law.
Net premiums written, an important measure of revenue growth, rose 6% to $6.4 billion from $6.1 billion.
Overall, Travelers reported net income of $551 million, or $1.98 a share, down 40% from $943 million, or $3.28 a share, a year earlier. Total revenue, which includes investment income, rose 4% to $7.5 billion.
Analysts surveyed by Thomson Reuters had expected earnings of $1.51 a share on $6.3 billion in revenue.
Travelers announced last month that its president and chief operating officer, Brian MacLean, is set to retire at the end of March.
Cara Lombardo contributed to this article
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(END) Dow Jones Newswires
January 23, 2018 07:58 ET (12:58 GMT)
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