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Travelers profit falls 14% on elevated catastrophe losses

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Travelers

(Reuters) – Travelers Cos. Inc. on Wednesday reported a 14% fall in quarterly profit, as severe wind and hailstorms in parts of the United States drove up catastrophe losses for the insurer.

Core income of the New York-based company, often seen as a bellwether for the insurance sector as it typically reports results before peers, fell to $454 million, or $1.95 per share, in the third quarter ended Sept. 30, from $526 million, or $2.20 per share, a year earlier.

Severe wind and hail storms in multiple states caused the insurer’s catastrophe losses net of reinsurance to jump to $850 million from $512 million a year earlier.

Reinsurance broker Gallagher Re pegged global insured losses from natural catastrophes in the first nine months of 2023 at $93 billion, with the United States accounting for 74% of the losses.

The United States accounted for 23 out of 29 natural disasters that caused a loss of $1 billion each in the period, the broker said.

“Core income of $454 million for the quarter benefited from very strong underlying underwriting returns and net investment income but was also impacted by elevated catastrophe losses,” Travelers CEO Alan Schnitzer said.

The company reported a combined ratio of 101%, compared with 98.2% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.

It posted record net written premiums growth of 14% in the reported quarter.