The Travelers Companies Inc. reported that quarterly net profit fell in the first quarter about 20 percent due to lower net investment income and a drop in underwriting gains.
Net income fell to $833 million for the quarter ended March 31, 2015, compared to $1.052 billion in the prior year quarter. Operating income in the current quarter dropped to $827 million compared to $1.052 billion in the prior year quarter.
Operating return on equity was 14.5 percent.
The overall combined ratio was 88.9 for the quarter, up 3.2 points from last year’s first quarter. Business and International Insurance posted a combined ratio of 93.3. Personal Insurance reported a combined ratio of 83.5 while Bond & Specialty Insurance reported 76.1.
Catastrophe losses were $162 million, up from $149 million.
New business was up 16 percent domestically even as the company continued its strategy of the past four years of raising prices.
“Our performance this quarter is an encouraging start to the year, and our strategies remain unchanged,” said CEO and Chairman Jay Fishman. “We do continue to note the severity of weather patterns, as evidenced by another very difficult winter on the East Coast and prolonged drought on the West Coast. In that regard, we continue to refine our highly segmented underwriting and pricing analytics to ensure that we are appropriately reflecting this uncertainty.”
In its Business and International Insurance results, net written premiums increased 1 percent to $3.797 billion. Domestic net written premiums increased 2 percent.
The company said its personal lines agency auto business continued to perform well with net written premium growth of 4 percent and policies in force growth of nearly 2 percent in the quarter.
The insurer saw additional income decrease by $12 million primarily due to the inclusion in the prior year quarter of revenues associated with the runoff of the company’s National Flood Insurance Program (NFIP) which was sold on a renewal rights basis in 2013.
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