The Travelers Companies Inc. reported net income of $691 million for the quarter ended March 31, 2016, down 17 percent from $833 million in the prior year quarter. Operating income in the current quarter was $698 million compared to $827 million in the prior year quarter. These declines were primarily due to higher catastrophe losses mainly arising out of hail storms that occurred in Texas in late March, according to the insurer.
Alan Schnitzer, chief executive officer, said the company was pleased with its $428 million underwriting gain for the quarter (compared to $620 million in 2015’s initial quarter) especially in light of the high catastrophe losses this year. The company achieved a 92.3 consolidated combined ratio compared to 88.9 for the first quarter in 2015.
He also praised business retention, premium increases and gains in business in both Business and International Insurance (94.9 combined ratio) and Bond & Specialty Insurance (69.3 combined ratio).
In Personal Insurance (93.7 combined ratio), Schnitzer said the company continued to build on its agency channel, with net written premium growth of 9 percent, resulting from 13 percent growth in agency automobile business and 2 percent growth in agency homeowners business.
“Our results from time to time will be impacted by higher levels of catastrophe losses, as they were this quarter, but the strength of our franchises, our meaningful and sustainable competitive advantages and our relentless execution have enabled us to deliver industry-leading returns over time, and we are well positioned to continue to do so,” Schnitzer said in a statement.
Travelers, one of the first insurers to report quarterly results, is not alone in feeling the effects of recent Texas storms. Allstate has not reported its overall results for the first quarter but did estimate its catastrophe losses in the first quarter from 17 events to be $830 million, with about $638 million of that in March. The insurer blamed Texas storms for two-thirds of its catastrophe losses for the quarter.
Texas has also suffered damaging hail and rain storms in April. Estimated insured losses from just one storm that hit the San Antonio area on April 12 are expected to reach $560 million for vehicles and $800 million for homes and businesses, according to the Independent Insurance Agents of San Antonio.
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