Insurer Travelers misses profit estimates on storm losses
(Adds context and details about Allstate estimate)
By Nikhil Subba and Suzanne Barlyn
July 19 (Reuters) - Travelers Cos Inc, one of the
largest U.S. property insurers, reported a lower-than-expected
quarterly profit on Thursday because of costly damage from wind
and hail storms that pounded several U.S. regions in recent
months, potentially signaling weak results for other insurers.
Catastrophe losses, net of reinsurance, rose 21 percent to
$488 million in the second quarter, Travelers said on Thursday.
The company's combined ratio inched up to 98.1 percent, from
96.7 percent a year earlier. A ratio below 100 percent means the
insurer earns more in premiums than it pays out in claims.
The company's shares were down 2.3 percent at $127 in
opening trade on the New York Stock Exchange.
U.S. wind and hail storms are typically challenging for U.S.
insurers during the quarter, often tearing apart homeowners'
roofs and pummeling cars in auto dealership lots, and wreaking
other havoc that triggers spates of claims.
Travelers, which reports earlier that many other large
property and casualty insurers, is seen among analysts as a
bellwether for the sector. Insurers American International Group
Inc and the Allstate Corp, report in early
Travelers' quarterly profit was also hurt by a charge of $45
million associated with fire-related commercial losses and an
$18 million assessment related to Hurricane Harvey, the insurer
Net income fell to $524 million, or $1.92 per share, in the
second quarter, from $595 million, or $2.11 per share, a year
Excluding special items, the company earned $1.81 per share,
missing analysts' average estimate of $2.42, according to
Thomson Reuters I/B/E/S.
The Dow component's total revenue rose 4 percent to $7.48
Allstate, also on Thursday, said it estimated $417 million
in catastrophe losses for June, spurred by 16 storms, including
three severe hail storms in Texas and Colorado that accounted
for 75 percent of its June losses.
The insurer said it anticipates a total of $906 million in
catastrophe losses for the second quarter.
(Reporting by Nikhil Subba and Suzanne Barlyn; Editing by Arun
Koyyur and Saumyadeb Chakrabarty)
First Published: 2018-07-19 13:00:59
Updated 2018-07-19 15:38:17
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