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Storm losses not enough to flood Travelers’ Q2 profits

The insurer reported $534 million profit despite $1.5 billion in catastrophe losses.
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Insurance giant Travelers didn’t allow a few (actually, a lot of) thunderstorms to rain on its parade last quarter.

In Q2, Travelers reported a profit of $534 million, compared to a loss of $14 million in Q2 2023. Its combined ratio—a measure of underwriting profitability—was a nearly break-even 100.2%, a 6.3 percentage point improvement from last year. Net written premiums increased 8% YoY to $11.1 billion. In Q1, Travelers’ written premiums increased 8% YoY to $10.2 billion, as CFO Brew previously reported.

Business insurance customers renewing their policies in Q2 saw their premiums increase 10.1%, but “retention remained high at 85%,” CEO Alan Schnitzer said during an earnings call on Friday.

“A combination of strong pricing and retention reflects deliberate execution on our part and a marketplace that continues to be generally disciplined,” Schnitzer said.

These results were in spite of what he called a “record number of severe convective storms across the [US].” CFO Dan Frey noted on the earnings call that the quarter produced $1.5 billion in pre-tax catastrophe (CAT) losses.

“We had five events surpass the $100 million mark in Q2, all in the month of May,” Frey said.

CAT losses are something the insurance industry has its eyes on, as economies contend with growing losses due to factors like climate change and development in high-risk areas.

Even though severe storms have walloped the US so far this year, CAT losses globally haven’t been as bad as in recent history, Aon recently reported. The insurance broker estimated first-half economic losses from CATs at $117 billion, lower than the $137 billion 21st Century average.

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News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.