P&C insurer Travelers Companies Inc. reported a 20% drop in quarterly profit on Wednesday, hurt by hurricane-related claims and lower investment returns.
The company’s revenue base fell to $526 million, or $2.20 per share, in the third quarter ended Sept. 30 from $655 million, or $2.60 per share, a year earlier.
New York-based Travelers, often seen as a bellwether for the insurance industry because it typically outperforms its industry peers, reported record net written premium growth of 10% to $9.2 billion during the quarter.
Hurricanes Ian and Fiona, along with severe storms in many parts of the United States, pushed the insurer’s pretax losses to $512 million from $501 million last year.
Insurers are bracing for a hit of up to $57 billion from Hurricane Ian in Florida and South Carolina, risk modeling firm Verisk said earlier this month.
Industry experts already expect the hurricane’s impact to push insurers out of business, homeowners into delinquency and make insurance less accessible in places like Florida.
The insurance industry is also facing heavy claims related to the Ukraine crisis and greater uncertainty caused by rising claims costs due to inflation.
Net investment income before taxes fell 23% to $593 million, Travelers said.
The company reported a combined ratio of 98.2%, down from 98.6% a year earlier. A ratio below 100% means that the insurer has earned more in premiums than it has paid in claims.