Travelers Q1 income drops as it awaits 9/11 compensation decision
The Travelers Companies' profits fell in the first quarter of 2017, which the company blamed on a $62 million pre-tax impact from the UK’s Ogden rate adjustment, a lower underlying underwriting gain and higher catastrophe losses.
However, Travelers and over 20 of its affiliated companies are suing two Saudi banks, Al Rajhi Bank, National Commercial Bank, businesses associated with the family of Osama bin Laden, as well as numerous charities for the sum of at least $4.2 billion over the attacks on the September 11th attacks.
The case, Charter Oak Fire Insurance Co et al v Al Rajhi Bank et al, was filed on April 12 at the US District Court in an attempt to gain compensation for policyholders who suffered injuries or damage to their person, property and businesses as a result of the attack.
Travelers reported a net income of $617 million for the three-month period ending March 31, an 11 percent decrease from $691 million for the same period last year.
“Core income of $614 million and core return on equity of 10.8 percent reflected unusually high first quarter catastrophe losses that arose from a record number of tornado and hail events,” commented CEO Alan Schnitzer.
The company's net written premiums for this period were $6.5 billion, a 5 percent increase for the same period in 2016.
“In our commercial businesses, the markets in which we operate remained stable," Schnitzer continued. "We continued to achieve historically high levels of retention, and renewal rate change remained positive and improved modestly from recent quarters. The improvement in renewal rate change reflects our focused efforts to seek rate selectively and thoughtfully on an account-by-account or class-by-class basis.”
Specifically, net written premiums from business and internal insurance were $4 billion, up 3 percent year-on-year.
Bond and specialty insurance premiums were $504 million, a 2 percent increase year-on-year.
Personal insurance premiums were $2 billion, up 12 percent year-on-year, including the impact of auto rate increases which Schnitzer said is consistent with plans to improve profitability.
Travelers’ combined ratio slipped in the first quarter to 96 percent, moving up 3.7 percentage points.
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