Property and casualty (P&C) insurer Travelers Companies Inc. has reported a 20% drop in quarterly profit due to hurricane-related claims and lower returns on its investments.
Travelers’ core income fell to $526 million ($2.20 per share) in the third quarter ended September 30, from $655 million ($2.60 per share) in the same period last year. It posted record net written premiums growth of 10% to $9.2 billion in the quarter.
“Even in the face of challenging weather, we generated meaningful profit with core income for the quarter,” said Alan Schnitzer, chairman and CEO of Travelers, in a statement. “These results benefited from record net earned premiums of $8.6 billion, up 10% compared to the prior year period, and a solid underlying combined ratio of 92.5%.
“Underwriting income in our commercial businesses was excellent, driven by strong net earned premiums and an aggregate underlying combined ratio for business insurance and bond & specialty insurance of 88.0%.
“Our high-quality investment portfolio generated solid after-tax net investment income of $505 million despite the significant downturn in the broader equity markets. These results, along with our strong balance sheet, enabled us to return $722 million of excess capital to our shareholders this quarter, including $501 million of share repurchases.”
The New York-based insurer is often seen as a bellwether for the industry as it typically reports earnings before its peers.
Hurricanes Ian and Fiona, among a slew of storms that hit North America this year, have driven Travelers’ pre-tax catastrophe losses to $512 million from $501 million in 2021.
According to risk modelling firm Verisk, the insurance industry faces up to $57 billion in losses from Hurricane Ian’s onslaught in Florida and South Carolina.
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