Property and casualty insurer Travelers reported a steep drop in quarterly profit on Thursday, hit by $700 million in catastrophe losses from hurricanes Harvey and Irma.
The company, often considered a bellwether for the insurance sector, said catastrophe losses rose 700 percent from a year ago, from the destruction caused by the hurricanes.
As a result, Travelers’ combined ratio came in at 103.2 percent from 92.9 percent a year ago. A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.
“In a quarter of unprecedented hurricane activity, our strength in underwriting and our investment expertise enabled us to deliver core income of $253 million and core return on equity of 4.5 percent,” Chief Executive Officer Alan Schnitzer said in a statement.
Shares of the company, a Dow component, were up 1.5 percent at $132 premarket.
Net income fell to $293 million, or $1.05 per share, for the quarter ended Sept. 30, from $716 million, or $2.45 per share a year earlier.
On a core basis, the company earned 91 cents per share. Analysts expected earnings of 43 cents a share, according to Thomson Reuters I/B/E/S.
Net written premiums rose 4.2 percent to $6.7 billion. Net investment income fell 3 percent to $457 million on strong private equity returns.