Wildfires, hurricanes, tornadoes, hail storms, Nor’easters and mudslides. A string of disasters has pummeled the biggest U.S. insurers over the past year, and the second quarter was no exception.
Allstate Corp. estimated its pretax catastrophe losses at $906 million for the period, the most in a year, and Travelers Cos. reported its sixth-straight quarter in which such costs rose above $300 million.
The series of tragic weather events “exceeded our historical experience and our expectations,” Travelers Chief Executive Officer Alan Schnitzer said on a conference call Thursday, after reciting a list of catastrophes that struck the U.S. “We haven’t seen a string like that in the last decade.”
Allstate, which plans to release second-quarter results Aug. 1, cited three major hail storms in Texas and Colorado in June as contributors to the second-quarter surge.
Travelers shares fell 3.9 percent to $124.99 at 10 a.m. in New York, the most in almost three months. Allstate dropped 1.4 percent to $94.41.
Travelers’ losses from storms and other catastrophes jumped 21 percent to $488 million, the New York-based company said Thursday in a statement. Such costs, which pushed profit below analysts’ estimates, also weighed on the insurer in the first quarter, when it fell short of expectations because of winter storms in the eastern U.S., wind and hail in the southern U.S. and mudslides in California.
“Results excluding catastrophe losses were strong,” Schnitzer said in the statement. The catastrophe figure was about $50 million more than the company expected, but likely marks the worst of it for this year unless the hurricane season turns out worse than predicted, he said.
Travelers profit excluding certain items was $1.81 a share in the three months ended June 30, compared with $1.92 a year earlier, the insurer said. That missed the $2.41 average estimate of 20 analysts surveyed by Bloomberg.
More Travelers results:
Net written premiums for the quarter climbed 7 percent to $7.13 billion billion from a year earlier. Book value, a measure of assets to liabilities, was $84.51, down 3 percent from the end of 2017. The company’s combined ratio was 98.1 percent compared with 96.7 percent a year earlier, meaning it keeps 1.9 cents for every premium dollar after claims and expenses.
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