Property and casualty insurer Travelers Companies( NYSETRV ) Inc. announced on Wednesday that its quarterly profit had decreased as a result of strong wind and hailstorms that hit parts of the United States in March.
The New York-based company's's core income decreased by 6 % to$ 970 million, or$ 4.11 per share, in the first quarter ended on March 31. This company is frequently regarded as a bellwether for the insurance sector because it typically reports before industry peers.
The insurer's's crisis losses online of reinsurance increased from$ 160 million to$ 535 million as a result of the storms.
However, the company approved an additional$ 5 billion in share buybacks, increasing the price of its shares in premarket trading by almost 5 %.
According to a report from insurance broker Aon( NYSEAON ), global insured losses were expected to reach at least$ 15 billion in the quarter.
In addition to the devastating earthquake in Turkey, Aon predicted that the outbreak of storm activity in the United States on March 1 – 3 would result in insured losses of more than$ 3 billion.
Compared to 91.3 % the previous year, the company reported a combined ratio of 95.4 %. A ratio that is less than 100 % indicates that the insurer received more premium income than claims.
Travelers' underlying combined ratio increased by 3.9 points as a result of higher expense ratios and losses brought on by the banking industry's's disruption in bond and specialty insurance.
A flying of reserves spiraled out of control last month, causing two U.S. loans to fail. This caused a global crises that shook investor confidence in the finance sector and rattled markets.
After authorities intervened, the unrest has since subsided, but researchers have foreseen long-term effects on the banking sector.
A 4 % increase in net investment income to$ 663 million contributed to Travelers' profit.
In the quarter, the company's's net written premiums increased by 12 % to$ 9.4 billion.
Income for insurers travelers decreases due to US surprise costs
