Higher cat losses dent Travelers Q2 results
Property/casualty insurer Travelers saw catastrophe losses rise by $85 million pre-tax year on year to $488 million in the second quarter of 2018, impacting the results in the quarter.
The company’s combined ratio deteriorated to 98.1 percent in the second quarter from 96.7 percent in the same period a year ago. This development was driven by higher catastrophe losses (0.9 points), lower net favourable prior year reserve development (0.4 points) and a higher underlying combined ratio (0.1 points).
Overall, Travelers reported a decrease in net income to $524 million in the second quarter compared to $595million in the same period of 2017.
In addition to the higher cat losses, the results were affected by an incremental charge of $45 million associated with a few large commercial losses, primarily fire related, and an $18 million assessment from the Texas Windstorm Insurance Association (TWIA) related to Hurricane Harvey.
“Second quarter core income was $494 million, down from $543 million in the prior year quarter, due to a $122 million after-tax increase in catastrophe losses resulting from an active tornado and hail season,” CEO Alan Schnitzer commented.
At the same time, Travelers reported record net written premiums of $7.13 billion for the second quarter, up 7 percent from the prior year quarter, driven by growth in all segments.
“Results excluding catastrophe losses were strong, reflecting record net earned premiums and a consolidated underlying combined ratio of 93.6 percent, with each of our business segments contributing,” Schnitzer noted.
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