Insurer Travelers misses revenue estimates on slower commercial property growth

Oct 16 (Reuters) - Insurance bellwether Travelers Companies TRV.N third-quarter revenue missed Wall Street expectations on Thursday, as the company's focus on underwriting discipline slowed growth in large commercial property.

Shares of the company, whose earnings often serve as a bellwether for the sector as well as broader underwriting trends, fell 2.6%

Travelers is pulling away from large property accounts where the premiums do not justify the risk in the event of a catastrophe, keeping a tight grip on its underwriting standards and turning away from underpriced businesses even as competitors chase volumes.

Losses from hurricanes, wildfires and severe storms often hit insurers' quarterly earnings despite their efforts to price in risks and share them through reinsurance.

"The decline in property premiums reflects large-account business dynamics," CEO Alan Schnitzer said. "We've seen this before and won't compromise our underwriting discipline."

The value of this approach becomes clear when catastrophic events occur, he said.

Travelers' catastrophe losses came in at $402 million on a pre-tax basis in the third quarter, compared with $939 million a year earlier, while its underwriting income more than doubled to $1.38 billion on a pre-tax basis.

The New York-based company's adjusted profit of $8.14 per share sailed past Wall Street's estimates of $6.35, according to data compiled by LSEG.

Its net investment income also rose to $1.03 billion, up 14.3%, boosted by higher yields on fixed-income securities as interest rates remained elevated.

Net written premiums, the total value of policies sold after accounting for reinsurance, rose 1% to $11.47 billion, but fell short of average analysts' expectations of $11.81 billion.

Businesses and individual households continue to prioritize protection against financial risks and natural disasters despite higher borrowing costs.

Travelers' underlying combined ratio came in at 83.9% in the quarter. A ratio below 100 indicates that the insurer collected more in premiums than it paid out in claims and expenses.