July 19, 2018

Travelers 2Q profits down 12%

HBJ File Photo
HBJ File Photo
The Travelers Cos. headquarters in Hartford.

Property and casualty insurer The Travelers Cos., which has major Hartford operations, said catastrophe losses during tornado and hail season slashed its second quarter profits.

The New York headquartered company on Thursday reported second quarter net income of $524 million, or $1.92 a diluted share, down from $595 million, or $2.11 a diluted share, in the year-ago period. That represents a 12 percent decline in net income.

For the quarter ended June 30, Travelers posted operating income, also referred in the insurance industry as "core income," of $494 million, or $1.81 a diluted share, down from $543 million, or $1.92 a diluted share, in the year-ago period. The insurer's operating income, however, benefited from a lower U.S. income tax rate, saving the company $54 million.

The losses were mainly caused by pre-tax catastrophe losses of $488 million, up $85 million vs. the quarter-over-quarter period. Travelers was also slapped with a $45 million incremental charge associated with fire-related commercial losses and an $18 million assessment of Hurricane Harvey.

Travelers CEO Alan Schnitzer said second-quarter catastrophe losses were expected, but recent storms exceeded their historical projections by $50 million.

"As always, the impact of weather on our business has our full attention, and we will continue to use our leading actuarial expertise and the latest in weather modeling to inform our underwriting and pricing decisions," Schnitzer said.

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