Insurance rates continued to rise in the third quarter for both businesses and individual customers, extending the pricing power that developed late last year, insurer Travelers Cos. Inc. said on Tuesday.
In a slide presentation prepared for a Barclays financial services conference, Chief Executive Officer Jay Fishman said business insurance rates were up an average of 7.7 percent so far in the third quarter, against gains of 7.2 percent last quarter.
Rates have also continued to rise in consumer homeowners and auto insurance, the CEO of the Dow Jones industrial average component said.
“We continue to be successful in achieving rate gains,” Fishman said in his presentation accompanying the slides. “We’re achieving about what we’re attempting to achieve. So far, the competitive environment is allowing us to achieve the rate gains that we are seeking.”
Travelers started raising prices last year, a response to increased catastrophe losses and persistently low interest rates, both of which squeezed the company and pushed it to start taking price increases when and where it could.
The company was something of a bellwether in that regard. In recent quarters, analysts have been watching to see whether it could maintain that price momentum, which the industry was looking for after years of falling rates.
Fishman also addressed interest rates, which are a huge concern for insurers that collect premiums and then have to invest them so they have the resources to pay future claims.
If the current rate environment persists and all else remains equal, the company would take a $145 million hit to net income in 2015 compared with 2014, Fishman said.