Cat losses drag down profits at Travelers
Profits at US insurer Travelers were dragged down in the first quarter of 2016 by an increase in catastrophe losses.
Its profits fell to $691 million in the first quarter of 2016, a decrease of 17 percent compared with $833 in the first quarter of 2015.
The catastrophe losses were mainly driven by the hail storms that occurred in Texas in late March. The losses totalled $318 million (net of reinsurance) in the first quarter of 2016, compared with $162 million in the same quarter of the prior year.
Travelers combined ratio also deteriorated to 92.3 percent in the quarter, compared with 88.9 percent in the first quarter of 2015.
However, its net written premiums of $6.2 billion increased 5 percent from the prior year quarter. This was due to higher levels of retention and new business volumes and positive renewal premium changes in each business segment, according to the company.
Alan Schnitzer, chief executive officer, said: “Particularly in light of the relatively high level of catastrophe losses, we are pleased with the profitability of our underwriting across all three business segments as reflected in our 92.3 percent consolidated combined ratio.”
He added: “Our results from time to time will be impacted by higher levels of catastrophe losses, as they were this quarter, but the strength of our franchises, our meaningful and sustainable competitive advantages and our relentless execution have enabled us to deliver industry-leading returns over time, and we are well positioned to continue to do so.”
