Travelers reports fall in H1 and Q2 results
Travelers has revealed that its net income for the second quarter of 2017 came to $595 million, a ten percent fall from the $664 million it made over same period of 2016. As a result the company reported that net income for the first half of 2017 came to $1.21 billion, an 11 percent fall on the $1.35 billion it made over the same period of 2016.
The company blamed this fall to lower core income, due to lower net favourable prior year reserve development, higher catastrophe losses and a lower underlying underwriting gain.
Net written premiums for the second quarter of 2017 totalled $6.64 billion, a five percent increase on the $6.34 billion it wrote over the same period of 2016. This took total net written premiums for the first six months of 2017 to $13.13 billion, a rise of five percent on the $12.5 billion it made over the first half of 2016.
Travelers combined ratio for the first half of 2017 was 96.4 percent, a 3.7 percent rise on the first half 2016 figure of 92.7 percent.
“Second quarter core income of $543 million and core return on equity of 9.5 percent were impacted by high levels of catastrophe and non-catastrophe weather-related losses caused by significant US tornado and hail activity,” commented Alan Schnitzer, CEO of Travelers. “The storm activity had the greatest impact on personal insurance, affecting results in both home and auto. Within personal auto, we were pleased that the actions we have undertaken to improve profitability remain on track. We were also pleased with results in our commercial businesses this quarter. In business insurance, segment income was up seven percent and the underlying underwriting gain improved. In bond & specialty insurance, while segment income was lower than in the prior year quarter, the decrease was entirely due to lower net favourable prior year reserve development as compared to a particularly high level in the prior year quarter.
“Our investment portfolio performed very well, with after-tax net investment income increasing six percent over the prior year quarter due to strong private equity returns. Additionally, we were able to return $676 million to shareholders in the quarter, including $475 million in share repurchases.”
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