Travelers Cos Inc reported a second-quarter loss, missing analysts’ estimates by a huge margin as the property insurer suffered more than $1 billion in catastrophe losses from record-breaking tornadoes in April and May.
Travelers warned in early June that it would post an operating loss after some of the worst tornadoes in American history leveled towns like Joplin, Missouri. It also said at the time that it would have to slow down its share buyback program.
The company ended up with after-tax catastrophe losses of $1.09 billion in the quarter, slightly above the high end of its forecast range. The total losses were equal to the kind of hit the company would take from a once-in-100-years hurricane, it said.
Yet despite all the bad news, Travelers said pricing had improved across all of its business lines, a positive sign for a property insurer after years of market weakness.
The Dow Jones industrial average component posted a net loss of $364 million, or 88 cents per share, on Thursday, compared with a year-earlier profit of $670 million, or $1.35 per share.
Excluding investment gains and losses, the company’s operating loss was 91 cents per share. Analysts polled by Thomson Reuters I/B/E/S, on average, expected a loss of 64 cents.
It was the fourth quarter in a row that Travelers’ per-share results differed from the analysts’ average estimate by at least 20 cents.
Travelers competitor Chubb Corp reports results after Thursday’s market close. Despite its own disaster losses in the hundreds of millions of dollars, analysts still expect it will be profitable.
(Reporting by Ben Berkowitz and Rachel Chitra; Editing by Joyjeet Das and Lisa Von Ahn)
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