January 23, 2018

Travelers 4Q profit declines on catastrophe losses

HBJ File Photo
HBJ File Photo
The Travelers Cos.

Property and casualty insurer The Travelers Cos., which has major Hartford operations, said wildfire and hurricane catastrophe losses took a bite out of its fourth quarter profits.

The New York headquartered company said its fourth quarter net income declined to $551 million, or $1.98 a diluted share, compared to $943 million, or 3.28 a diluted share in the year-ago period, but that includes $324 million after-tax catastrophe loss.

The quarter also included a charge of $129 million related to the passage of federal tax reform, the company said.

For the entire year, Travelers said its net income declined to $2 billion, or $7.33 a diluted share, from $3 billion, or $10.28 a diluted share, in the year-ago period.

President and Chief Operating Officer Brian MacLean noted that the company "generated over $2 billion of profits in a year dominated by the impact of weather related losses."

The high level of catastrophe losses arising out of the California wildfires and historically low interest rates accounted for the profit decline, CEO Alan Schnitzer said.

"We grew net written premiums by 6 percent in the quarter, including 5 percent in our commercial businesses and 8 percent in personal insurance, as we successfully executed our marketplace strategies in an improving pricing environment. In business insurance, domestic renewal premium change was 4 percent, the highest level in three years," Schnitzer said.

Regarding the long-term impact of corporate tax reform, Schnitzer noted: "The tax rate is just one factor impacting the pricing we need to achieve. For us, tax reform helps, but we still have ground to cover."

Schnitzer also noted that MacLean will retire March 31.

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