Travelers Companies surpassed third-quarter profit expectations in its latest financial results release thanks to higher premiums, lower costs and an increase in return from non-fixed income investments, according to a Reuters report.
The property and casualty insurer reported that net written premiums rose 3% to $7.77 billion in Q3. Core income was $3.12 per share, surpassing analysts’ average estimate of $3.03 per share. Total revenue was up by 3%.
Overall profit more than doubled to $827 million, or $3.23 per share, in Q3, partly driven by a one-time gain of about $403 million from Pacific Gas & Electric’s emergency from bankruptcy, Reuters reported. The gain stemmed from payments Travelers made for claims on wildfires in 2017 and 2018.
The profit rise came despite catastrophe losses well above the 10-year average for the third quarter, Travelers CEO Alan Schnitzer said. However, Q3 also saw lower revenue from fixed-income investments and the need to shore up reserves for asbestos claims to $295 million, according to Reuters.
Travelers reported pre-tax catastrophe losses of $397 million, mostly due to severe storms in several regions of the US and wildfires.
Claims and claim adjustment expense fell to $4.89 billion from $5.23 billion. Travelers reported a combined ratio of 94.9%, down from 101.5% a year earlier. A ratio below 100% means an insurer earned more in premiums than it paid in claims.