Weather Claims Erode Travelers Profits

July 23, 2010

Weather-related claims of nearly $440 million dragged down profits by 9 percent at Travelers, which reported second quarter net income of $670 million, down from the $740 million the insurer earned in the year-ago period.

Catastrophe claims — chiefly wind and hail damage — more than doubled from $200 million in the year-ago period.

For the quarter, the company’s GAAP combined ratio stood at 95.2 — two points higher than the 93.2 in the same period last year.

Net written premiums climbed 1 percent to $5.69 billion, up from $5.61 billion in the second quarter of 2009.

Agency-based sales of Travelers personal lines products increased in the second quarter. Personal auto net written premiums were $945 million, up 3 percent from the prior-year quarter. Agency homeowners net written premiums were up 9 percent to $1.035 billion, while policies in force increased 4 percent from the prior year quarter.

Net written premiums in Travelers business insurance segment fell slightly, to $2.795 billion, down from $2.813 billion.

“We continue to anticipate some accident year loss ratio deterioration on a consolidated basis for 2010, exclusive of catastrophes, as we expect loss cost increases to modestly outpace projected earned rate increases in our commercial businesses,” Chairman and CEO Jay Fishman said.

Topics Claims Profit Loss

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