Travelers opens US first quarter reporting season with earnings beat

By Scott Vincent

April 16 - (The Insurer) - Travelers reported core income per diluted share of $1.91 as it opened the U.S. first quarter reporting season on Wednesday, beating analyst consensus of $0.79.

• Travelers reports core income per share of $1.91, beating expectations

• Catastrophe losses rise to $2.27 billion, impacting underwriting results

• Net income falls 65%, with return on equity down to 5.6%

The NYSE-listed insurer reported a combined ratio of 102.5% for the quarter, a deterioration of 8.6 percentage points compared with the first quarter of 2024 driven by January’s LA wildfire losses.

Catastrophe losses for the quarter rose to $2.27 billion, compared with $712 million during the first quarter of 2024.

January's LA wildfires drove the increase, accounting for $1.73 billion of the total, with severe wind and hail storms in multiple states driving the remainder of the quarterly catastrophe bill.

This increase was partially offset by an increase in favourable prior-year reserve development to $378 million, compared with $91 million in Q1 2024

Travelers reported an underwriting loss of $305 million for the quarter, compared with a profit of $577 million for the first quarter of 2024.

Core income during the quarter fell to $443 million from $1.1 billion in the prior-year quarter.

Net income contracted by 65% to $395 million, with the group’s quarterly return on equity down 12.3 points to 5.6%.

Net written premiums rose 3% to $10.5 billion during the quarter, with total revenue up 5% to $11.8 billion.

On an underlying basis, which excludes catastrophe losses and prior-year development, Travelers said its quarterly combined ratio improved by 2.9 points to 84.8%.

Within its business insurance segment Travelers reported an underwriting gain of $195 million, down from $334 million in the first quarter of 2024.

The segment’s combined ratio deteriorated 2.9 points to 96.2%, with catastrophes contributing 9.3 points compared with 4.1 points in the prior year quarter.

In bond and specialty, Travelers reported an underwriting gain of $170 million, up from $144 million in the first quarter of 2024.

A combined ratio of 82.5% for the segment represented an improvement of two percentage points year-on-year.

The group’s personal insurance segment accounted for $1.74 billion of the group’s quarterly catastrophe loss bill, and as a result slipped to an underwriting loss of $670 million for the three-month period. This compared with an underwriting gain of $99 million in the first quarter of 2024.

The segment’s combined ratio deteriorated to 115.2% compared with 96.9% in the first quarter of 2024.