Travelers has reported an underwriting loss of $246 million for the third-quarter of 2017, driven by a huge increase in catastrophe losses to $700 million, compared with just $89 million in the same period last year.
The $700 million of Q3 catastrophe losses relates primarily to hurricanes Harvey, Irma, and Maria, but also includes losses from wind and hail storms in the Southern parts of the U.S.
As a result of higher catastrophe losses, which increased by 687% on Q3 2016, Travelers recorded a combined ratio for the quarter of 103.2%, up 10.3% on last year, with catastrophe losses contributing to 9.3% of the combined ratio.
But despite the underwriting loss, net investment income of $588 million helped the firm record net income for the quarter of $293 million, which is down $423 million from the $716 million recorded in Q3, 2016.
For the nine month period ending September 30th, 2017, catastrophe losses have reached $1.45 billion, which is almost twice as much as the $740 million recorded for the same period in 2016. This has resulted in the company’s nine month underwriting income falling by more than $1 billion, year-on-year, to $138 million.
The firm’s combined ratio for the nine month period stands at 98.7%, which is weaker than the 92.8% recorded for the same period last year.
Travelers Chairman and Chief Executive Officer (CEO), Alan Schnitzer, said; “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%.
“Our disciplined coastal underwriting stood up to the storms, and we also delivered a consolidated underlying combined ratio of 92.8%, with all three segments contributing to the solid result.”
