Travelers (NYSE:TRV) swung to a loss and fell widely short of expectations in the second quarter as the personal property and casualty insurer faced more than $1 billion in catastrophe losses from devastating tornados in the Midwest.
The New York-based insurer booked a net loss of $364 million, or 88 cents a share, compared with a profit of $670 million, or $1.35 a share, in the same quarter last year.
Excluding one-time investment gains and losses, the company lost 91 cents a share, much worse than the 64 cents a share predicted by analysts on average in a Thomson Reuters poll.
Our second quarter loss was due to the extraordinary tornadoes and hail storms that caused devastation across significant portions of the United States, Travelers CEO Jay Fishman said in a statement.
The company saw $1.09 billion in catastrophe losses last period, which were larger than those incurred by Travelers from Hurricane Katrina in 2005 and the same type of hit it would take from a once-in-100 years hurricane, according to Fishman.
Yet despite the poor performance, stronger pricing across all three of its business segments helped restore sales. Revenue for the three months ended June 30 was $6.4 billion, up 3% from $6.2 billion a year ago. Net written premiums climbed 2%.