Travelers Q3 Net Income Falls 31%

Third quarter net income at Travelers Companies dropped 31%, compared with the same period a year ago, to $454 million.

The P/C insurer said net income fell due to lower core income – $526 million compared with $655 million last Q3 – and net realized investment losses of $72 million compared with a gain of $7 million a year ago.

Catastrophe losses during Q3 were $512 million compared with $501 in 2021. Results include $326 million related to Hurricane Ian. Catastrophe losses primarily resulted from hurricanes Ian and Fiona, as well as other severe storms in several regions of the U.S. Losses were $216 in the business segment and $285 in the personal insurance business, mostly from auto losses in Florida.

“We are pleased to report solid third quarter 2022 results, particularly in light of significant industry-wide losses from Hurricane Ian,” said Alan Schnitzer, chairman and CEO. Core income was bolstered by a 10% increase in net written premiums, to nearly $9.2 billion.

“In business insurance, net written premiums grew by 9%,” Schnitzer said. “Renewal premium change was very strong at an historically high 10.2%, while renewal rate change of 5.0% was higher than in the first half of the year. Retention remained very strong at 86%, and new business increased 9% from the prior year period. In Bond & Specialty Insurance, net written premiums increased by 8%, driven by excellent production results in both our surety and management liability businesses. In personal insurance, renewal premium change was meaningfully higher both year over year and sequentially, as we continue to address elevated industry-wide loss costs.”

However, personal insurance saw a Q3 income loss of $111 million compared with a loss of $2 million in Q3 2021. In this segment the underwriting loss was $267 million, with catastrophe losses at $285 million, leading to a combined ratio of 107.2.

The overall Q3 combined ratio improved to 98.2 from 98.6 thanks to favorable prior-year reserve development. The bond & specialty insurance segment’s combined ratio led all segments with an improvement to 72.5 from 81.1 a year ago.

Schnitzer used the company’s earnings call to talk about public policy. “Hurricane Ian puts a spotlight on the troubled condition of the Florida insurance market. Other states may be headed for similar challenges,” he said.

“As policymakers consider how best to address the availability and affordability of insurance, we would urge them to consider the impacts of the unhealthy tort environment, fraud and abuse by a few that impact too many and regulatory practices that undermine free market principles,” Schnitzer continued. “I believe those factors are at least as consequential as the weather itself to the industry’s ability to provide our communities with effective and efficient ways to manage risk.”

Topics Profit Loss