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Tornadoes compress Travelers' gains
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The Travelers Companies, the St. Paul-based commercial insurer, posted its third consecutive profit decline because of costs from the record number of tornadoes in the second quarter.
Net income slipped 25 percent, to $942 million, or $1.54 a share, from $1.25 billion, or $1.86 a share, a year earlier, Travelers said in a prepared statement. Operating income, which excludes investment gains, was $1.50 a share, beating the $1.46 estimate of 18 analysts surveyed.
Natural disasters, including the most tornadoes in the second quarter since the National Weather Service began keeping track in 1950, caused an estimated $6.03 billion in industrywide losses in the three months ended June 30, more than twice as much as last year, Insurance Services Office Inc. said this week. Travelers said second-quarter catastrophe losses jumped almost ninefold, to $356 million before taxes.
"It was a massive catastrophe loss, and much more than the industry increase," said Alan Devlin, an analyst with Atlantic Equities in London.
"They were unlucky this quarter."
Travelers shares gained 94 cents, or 2.1 percent, to close at $45.60.
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