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Travelers reports lower profit on higher catastrophe losses

Travelers reports lower profit on higher catastrophe losses

(Reuters) — Travelers Cos. Inc. reported an 11% fall in quarterly profit hurt by higher catastrophe losses and lower underwriting gains.

The company also authorized a $5 billion share buyback program.

Wind and hail storms in several regions of the United States, as well as a winter storm in the eastern part of the country resulted in higher catastrophe losses during the quarter.

Net income fell to $617 million in the first quarter ended March 31, from $691 million a year earlier.

Total revenue rose 3.8% to $6.94 billion and net written premiums rose 5.3% to $6.50 billion. Net investment income rose 12 percent to $610 million, reflecting higher interest rates.

December and March saw the latest hikes in interest rates by the U.S. Federal Reserve. A quarter point uptick in each case, the hikes marked only the second and third raise in seven years, after being kept near zero.

Gains from underwriting, before tax, halved to $211 million. Pre-tax catastrophe losses, net of reinsurance, rose to $347 million from $318 million and Travelers’ combined ratio deteriorated rose to 91.7% from 90% a year earlier.




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