Property and Casualty Insurer Travelers Tumbles After Its Earnings Report—Here’s Why
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Key Takeaways
The Travelers Companies posted lower-than-expected profit as its catastrophe losses soared.
The property and casualty insurer had $712 million in catastrophe claims payouts in the quarter, a 33.1% increase from a year earlier.
The company also announced a 5% increase in its quarterly dividend.
The Travelers Companies (
TRV
) shares plunged over 7% Wednesday after the property and casualty insurer posted weaker-than-expected results as it paid more to cover losses from major weather disasters.
The company reported first-quarter
earnings per share (EPS)
of $4.80 and core earnings per share of $4.69, both short of estimates. Revenue increased 15.7% from a year ago to $11.23 billion, higher than forecasts. However net premiums written, while up 8.4% to $10.18 billion, were lower than anticipated.
Catastrophe losses jumped 33.1% to $712 million, which the company said “resulted from severe wind and hail storms in the central and eastern regions of the United States.”
CEO Alan Schnitzer said that even with the hit it took from paying catastrophe claims, the company’s
combined ratio
improved 1.5 percentage points to 93.9%, though that missed estimates as well.
Along with the financial report, the company announced an increase in its quarterly
dividend
to $1.05 from $1.00, payable on June 28 to shareholders of record on June 10.
Shares of Travelers closed 7.4% lower at $206.67 Wednesday, though even with Wednesday’s losses, they remained in positive territory for 2024.
