Travelers reported an increase in quarterly profit last week, beating analysts’ estimates. The jump was driven in part by an increase in returns from investments and lower catastrophe claims.
Travelers posted a core income of US$1.26 billion (CA$1.6 billion) in the fourth quarter, up from US$867 million (US$3.32 per share) a year earlier, according to a Reuters report. Analysts had predicted a profit of US$3.18 per share on average, according to data from Refinitiv.
Travelers said net written premiums rose 3% to US$7.27 billion for the quarter.
The insurer’s strong fourth quarter comes amidst the COVID-19 pandemic, which has not impacted property and casualty insurers as severely as many market watchers expected – primarily because of pandemic-related exclusions in their contracts, according to Reuters.
Travelers reported US$31 million in pre-tax COVID losses for Q4. The insurer is adding communicable disease exclusions to some policies as workplaces reopen. It is also being cautious in its approach to potential future upcoming workers’ compensation losses, Reuters said.
Underwriting gains were US$955 million in Q4, up from US$513 million a year earlier, while pre-tax net investment was up 10% to US$677 million. Travelers reported a combined ratio of 86.7%, down from 92.4% the previous year.
Travelers posted catastrophe loss net of reinsurance of US$29 million in Q4, down from US$85 million the year prior. Full-year losses rose to US$1.6 billion, driven by weather events and civil unrest in the US, Reuters reported.