Travelers' quarterly profit falls on higher catastrophe losses
Property and casualty insurer Travelers Cos Inc reported a 10.4 percent fall in quarterly profit on Thursday, hurt by higher catastrophe losses and lower underwriting gains.
Pretax catastrophe losses, net of reinsurance, rose to $403 million in the second quarter, from $333 million a year earlier, mainly due to wind and hail storms in several regions in the United States.
Underwriting gains slumped 54 percent to $112 million in the quarter ended June 30, the company said.
However, net investment income rose 5.9 percent to $468 million, helped in part by higher private equity returns.
Combined ratio, the percentage of premium revenue Travelers pays out in claims, rose to 96.7 percent from 93.1 percent.
A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.
Net income fell to $595 million, or $2.11 per share, in the quarter, from $664 million, or $2.24 per share, a year earlier.
On a core basis, the company earned $1.92 per share.
St. Paul, Minnesota-based Travelers, the only property and casualty insurer in the Dow Jones Industrial Average, is often considered a bellwether for the sector.
American International Group Inc, with whom it competes for the title of the biggest U.S. P&C insurer, reports second-quarter results on Aug. 2.
Through Wednesday's close, Travelers' stock had risen 10.3 percent so far this year.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Martina D'Couto)