Insurance giant Travelers (TRV) on Tuesday reported second-quarter earnings that missed Wall Street forecasts as weather-induced losses triggered a higher-than-expected number of claims.
The New York-based company posted second-quarter net income of $557 million, or $2.10 a share, vs. $524 million, or $1.92 a share, a year earlier. On an adjusted basis, the company earned $2.02 a share, below the $2.28 a share expected by analysts polled by FactSet.
Total revenue rose 4.8% to $7.83 billion from $7.47 billion a year earlier, above FactSet consensus estimates of $7.41 billion. Net written premiums rose 4% to $7.45 billion, also topping the FactSet consensus of $7.41 billion.
Catastrophic weather including strong wind and hailstorms sparked a jump in claims that put a dent in the company's bottom line. Claims rose 5.7% to $4.82 billion, leading to a drop in underwriting gain to $74 million in the quarter, the company said.
Catastrophe losses, net of reinsurance, fell 25% to $367 million but still came in above last year's $488 million figure.
The company reported a combined ratio of 98.4% compared with 98.1% a year earlier. A ratio below 100% means the insurer earns more in premiums than it pays out in claims.
Shares of Travelers were down 0.46% at $149.14 in morning trading on the New York Stock Exchange on Tuesday after ending the day Monday at $149.71.