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Travelers Warns of Second-Quarter Loss From Storms and Civil Unrest

Travelers says the coronavirus pandemic and related economic conditions 'had a modest net impact in the quarter.'
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Travelers Cos.  (TRV) - Get Travelers Companies, Inc. Report on Tuesday said it expects to report a quarterly loss of 16 cents a share as the insurance carrier contends with catastrophe losses from severe storms and civil unrest.

Shares of the New York-based company were rising 2.5% to $117.06.

Travelers is scheduled to report second-quarter results on July 23.

Travelers said it expects to report an adjusted per-share loss of 20 cents, falling short of the FactSet consensus for earnings per share of $1.27.

Catastrophe losses are expected to total $854 million on a pretax basis, or $673 million after tax, net of reinsurance. 

"Catastrophe losses primarily resulted from severe storms in several regions of the United States, as well as events related to civil unrest," the company said. 

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A number of cities in the U.S. and other countries experienced civil unrest following the death in May of George Floyd, a black man who was killed in Minneapolis while being arrested.

Travelers expects net investment income of $268 million pretax, or $251 million after-tax, which includes $511 million from its fixed income portfolio and a loss of $234 million in its non-fixed income portfolio. 

The company said that the coronavirus pandemic and related economic conditions "had a modest net impact in the quarter."

Insurance losses directly attributed to the pandemic are expected to total $114 million pre-tax.

Separately, Travelers said it expected its subrogation recoveries related to claims against PG&E Corp.  (PCG) - Get PG&E Corporation Report resulting from the 2017 and 2018 wildfires in California will allow the company to recognize favorable prior year reserve development of about $400 million pre-tax.

Last month, PG&E pleaded guilty to involuntary manslaughter in the deaths of 84 people in the raging 2018 fire that destroyed the town of Paradise in Northern California.