While hurricanes hammered Travelers with $700 million in pre-tax catastrophe losses, the property casualty insurer still ended its 2017 third quarter in the black.
Travelers reported $293 million in net income for Q3, or $1.05 per diluted share. That compares to $716 million, or $2.45 per diluted share, over the same period a year ago.
“Our disciplined coastal underwriting stood up to the storms,” Travelers Chairman and CEO Alan Schnitzer said in prepared remarks.
Still, Hurricanes Harvey, Irma and Maria made their impact felt.
Travelers said its $700 million in pre-tax catastrophe losses ($455 million after-tax) stemmed largely from Hurricanes Harvey, Irma and Maria, plus some wind and hail storms in the southern United States. The insurer’s combined ratio for the quarter came in at 103.2, 10.7 points of which were from catastrophe losses. In the 2016 third quarter, Travelers posted a 92.9 combined ratio.
Schnitzer said the company’s executives and employees continue to offer “thoughts and prayers” in the wake of all the hurricanes and other bad weather events that affected hundreds of thousands of people throughout the quarter. His remarks also gave a shoutout to claims professionals who have been working overtime to deal with the aftermath of each successive hurricane.
“We also extend our deep gratitude to our claim professionals, who tirelessly demonstrate to our customers and agents the value of the Travelers promise,” he said.
Schnitzer said all three of Travelers’ business segments contributed to a “solid result” for the quarter. In particular, he cited as positives higher earned premiums and lower general and administrative expenses for the Business Insurance division, “impressive profitability” in the Bond & Specialty unit, and Personal Insurance improvements for the combined ratio in auto, due to pricing and underwriting changes a year ago.
High investment returns were also among positives during Q3, he said. Travelers reported 588 million in pre-tax investment income for the 2017 third quarter ($457 million after-tax), compared to $582 million in the 2016 third quarter.
Here are other result highlights:
- Travelers reported a $246 million underwriting loss for the quarter, versus a $408 million underwriting gain in Q3 2016.
- Business Insurance net written premiums reached more than $3.4 billion, versus $3.38 billion over the same period a year ago. The Business Insurance combined ratio came in at 109.8, up from 96.1 in Q3 2016. Travelers blamed the change on higher catastrophe losses, a figure that was partially offset by favorable prior year reserve development.
- Bond & Specialty Insurance net written premiums hit $611 million, up from $600 million in Q3 2016.The division reported a 77.7 combined ratio for the quarter, compared to 70.6 a year ago.
- Personal Insurance net written premiums came in at over $2.6 billion for the 2017 third quarter, compared to $2.4 billion in the same, year-ago period. The division combined ratio reached 99.7 for Q3, versus 93.5 in the 2016 third quarter.