Travelers Quarterly Profits Battered By Tough Hurricane Season
Oct. 20--Third quarter profits at Travelers Cos. were battered by claims from an unusually severe hurricane season, and the property-casualty insurer said Thursday that it is keeping a close watch on the wildfires in California as it heads to the end of the year.
Net income in the quarter ended Sept. 30 was $293 million, or $1.06 a diluted share, compared with $716 million, or $2.45 a diluted share, for the same quarter a year ago.
Catastrophe losses tied to a series of hurricanes -- primarily hurricanes Harvey and Irma -- were $700 million in the quarter.
Travelers has major operations in downtown Hartford and in the greater Hartford area.
Core operating income -- which doesn't typically include one-time gains and losses -- was $253 million, or 91 cents a diluted share, compared with $701 million, or $2.40 a diluted share.
The core earnings per share in the most recent quarter still handily beat the Wall Street consensus estimate of 42 cents a share, according to a survey of analysts by Bloomberg, even with the losses racked up from the hurricanes.
"The fact that we made a considerable profit in one of the costliest hurricane seasons on record demonstrates the earnings power of our franchise, which is built on a strong foundation of underwriting and investment expertise," Alan Schnitzer, Travelers chairman and chief executive, said on a conference call with analysts Thursday.
Schnitzer said the company is now keeping an eye on the wildfires that are devastating large portions of California's wine country.
"The wildfires are out there," Schnitzer said. "That is an ongoing event. That will be significant for us."
Travelers said the "pre-tax" cost of Hurricane Harvey was $319 million, with Hurricane Irma coming in at $242 million and Hurricane Maria at $82 million.
Travelers said the costs for Harvey came in significantly lower than initial estimates.
On the conference call, Schnitzer said the insurer's response to the hurricanes included the largest deployment of Travelers' drone fleet ever.
"We conducted more than 1,000 inspections with drones, which significantly accelerates the speed and reduces the cost of handling those claims," Schnitzer said. "Again, a better experience for our customers and a more efficient outcome for us."
Travelers owns and operates all its drones, and the insurer expects to have a fleet of more than 650 of them by the mid-2018.
The catastrophe losses were partly offset by an increase in investment income, the insurer said.
Travelers also benefited from net written premiums rising 4 percent to a record $6.6 billion in the quarter.
Wall Street rewarded the insurer's performance in the quarter as shares closed at $133.17, up $3.15 Thursday.
------
(c)2017 The Hartford Courant (Hartford, Conn.)
Visit The Hartford Courant (Hartford, Conn.) at www.courant.com
Distributed by Tribune Content Agency, LLC.
Pruco Life Inurance Co of New Jersey Flxbl Prmium Var Ann Ac Files SEC Form 497, Definitive Materials: (Oct. 6, 2017)
Mercury Insurance is Ready to Help Victims of North Bay Wildfires
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News