Insurer Travelers posts lower 2Q profit

Commercial and personal property insurer Travelers Cos. said today that lower investment income and underwriting profit drove its second-quarter earnings down 21 percent.
JUL 30, 2009
By  Bloomberg
Commercial and personal property insurer Travelers Cos. said today that lower investment income and underwriting profit drove its second-quarter earnings down 21 percent. However, the insurer raised its full-year earnings outlook. The St. Paul, Minnesota-based company, which is now a component of the Dow Jones industrial average, said its net income tumbled to $740 million, or $1.27 per share, from $942 billion, or $1.54 per share, a year ago. On an operating basis, the company it earned $1.25 per share — missing analysts' average profit estimate of $1.28 cents per share, according to Thomson Reuters. The estimates typically exclude one-time items. Revenue decreased 2.1 percent to $6.16 billion. Travelers said net investment income fell 12 percent to $547 million from $624 million a year ago, due mostly to negative returns in its non-fixed income portfolio and lower short-term interest rates. Net premiums written were flat at $5.61 billion, as were net premiums earned, which totaled $5.35 billion. Catastrophe losses fell to $130 million from $231 million a year earlier, as tornadoes and hail storms continued throughout the U.S. The company's combined ratio for the quarter rose 3.9 points to 93.2. Combined ratios measure the amount of money insurers pay out in claims and expenses compared with how much they receive from writing new business. A ratio above 100 means the insurer pays out more in claims and expenses than it takes in from writing new premiums. Travelers revised its outlook for 2009 operating profit to a range of $4.80 to $5.05 per share, compared with prior estimates of $4.55 to $4.95. Analysts have been expecting profit of $5.17 per share. Travelers was added to the Dow Jones industrial average last month, replacing its former parent Citigroup Inc., from which it was spun off in 2002.

Latest News

Northern Trust names new West Region president for wealth
Northern Trust names new West Region president for wealth

The new regional leader brings nearly 25 years of experience as the firm seeks to tap a complex and evolving market.

Capital Group extends retirement plan services further with a focus on advisors
Capital Group extends retirement plan services further with a focus on advisors

The latest updates to its recordkeeping platform, including a solution originally developed for one large 20,000-advisor client, take aim at the small to medium-sized business space.

Why RIAs are the next growth frontier for annuities
Why RIAs are the next growth frontier for annuities

David Lau, founder and CEO of DPL Financial Partners, explains how the RIA boom and product innovation has fueled a slow-burn growth story in annuities.

Supreme Court slaps down challenge to IRS summons for Coinbase user data
Supreme Court slaps down challenge to IRS summons for Coinbase user data

Crypto investor argues the federal agency's probe, upheld by a federal appeals court, would "strip millions of Americans of meaningful privacy protections."

Houston-based RIA Americana Partners adds $1B+ with former Morgan Stanley director
Houston-based RIA Americana Partners adds $1B+ with former Morgan Stanley director

Meanwhile in Chicago, the wirehouse also lost another $454 million team as a group of defectors moved to Wells Fargo.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.