Source: insurancebusinessmag.com

Property and casualty (P&C) insurer Travelers Companies Inc. has reported a 20% drop in quarterly profit due to hurricane-related claims and lower returns on its investments.

Hurricanes Ian and Fiona, among a slew of storms that hit North America this year. According to risk modelling firm Verisk, the insurance industry faces up to $57 billion in losses from Hurricane Ian’s onslaught in Florida and South Carolina. The storms have driven Travelers’ pre-tax catastrophe losses to $512 million from $501 million in 2021. Company’s core income fell to $526 million ($2.20 per share) in the third quarter ended September 30, from $655 million ($2.60 per share) in the same period last year.

Travelers posted record net written premiums growth of 10% compared to the prior year, to $9.2 billion in the quarter. The record net earned premiums was $8.6 billion, and a solid underlying combined ratio was 92.5%. Underwriting income in commercial businesses was excellent, driven by strong net earned premiums and an aggregate underlying combined ratio for business insurance and bond & specialty insurance of 88.0%.

Travelers’ high-quality investment portfolio generated solid after-tax net investment income of $505 million despite the significant downturn in the broader equity markets.

“Even in the face of challenging weather, we generated meaningful profit with core income for the quarter,” said Alan Schnitzer, chairman and CEO of Travelers, in a statement. “These results, along with our strong balance sheet, enabled us to return $722 million of excess capital to our shareholders this quarter, including $501 million of share repurchases.”