Insurer Travelers profit falls on hurricane costs, lower investment returns
1:24 pm Wednesday, October 19th, 2022
(Corrects net written premiums figure in paragraph 3 to $9.2 billion from $9.02 billion)
(Reuters) – Property and casualty insurer Travelers Companies Inc reported a 20% fall in quarterly profit on Wednesday, hurt by hurricane-related claims and lower returns on its investments.
The company’s core income fell to $526 million, or $2.20 per share, in the third quarter ended Sept. 30, from $655 million, or $2.60 per share, a year earlier.
New York-based Travelers, often seen as a bellwether for the insurance sector as it typically reports before its industry peers, posted record net written premiums growth of 10% to $9.2 billion in the quarter.
Hurricanes Ian and Fiona, as well as severe storms in many U.S. regions, pushed the insurer’s pretax catastrophe losses to $512 million from $501 million last year.
Insurers are bracing for a hit of up to $57 billion from Hurricane Ian in Florida and South Carolina, risk modeling firm Verisk said earlier this month.
Industry experts already expect the hurricane impact to push insurers into bankruptcy, homeowners into delinquency and make insurance less accessible in regions such as Florida.
The insurance industry also faces hefty claims from the Ukraine crisis and greater uncertainty brought on by higher claims costs from inflation.
Pretax net investment income dropped 23% to $593 million, Travelers said.
The company reported a combined ratio of 98.2%, compared with 98.6% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Devika Syamnath)
