Weather Claims Erode Travelers Profits
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.
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