Property and casualty insurer Travelers Cos Inc reported a 17 percent fall in quarterly net profit on Thursday as catastrophe losses nearly doubled, mainly due to hail storms in Texas in late March.
Continue Reading Below
Travelers, a Dow-30 component, said its catastrophe losses jumped to $318 million, net of reinsurance, in the quarter ended March 31 from $162 million a year earlier.
The company, as the first insurer to report quarterly results, is seen as a bellwether for the industry.
Travelers' combined ratio - the percentage of premium revenue an insurer has to pay out in claims - was 90 percent in the latest quarter, compared with 90.3 percent a year earlier, excluding items.
A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.
The company's pretax net investment income, which accounts for nearly four-fifth of earnings, fell 8.1 percent to $544 million in the period.
Insurers' investment income has been falling for the past few years as the Federal Reserve has kept interest rates at near zero.
Travelers, which vies with American International Group Inc for the title of biggest U.S. commercial property and casualty insurer, increased its quarterly dividend to 67 cents from 61 cents.
The company's net income fell to $691 million, or $2.30 per share, in the period from $833 million, or $2.55 per share, a year earlier.
Travelers' shares, which had risen 2.6 percent this year up to Wednesday's close, were unchanged in premarket trading.
(Reporting By Sudarshan Varadhan in Bengaluru; Editing by Ted Kerr)