Insurer Travelers posts better-than-expected Q3 earnings

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Insurer Travelers Cos. Inc. posted stronger-than-expected profit and revenue for the third quarter Tuesday, despite the impact of high catastrophe losses. The company posted net income of $827 million, or $3.23 a share, for the quarter, up from $396 million, or $1.50 a share, in the year-earlier period. Adjusted per-share earnings came to $3.12, ahead of the $3.03 FactSet consensus. Revenue rose to $8.275 billion from $8.013 billion, also ahead of the FactSet consensus of $7.595 billion, Net written premiums rose 3% to $7.771 billion. “We are pleased to report third quarter core income of $798 million and core return on equity of 13.5%, despite catastrophe losses that were well above the 10-year average for the third quarter,” Chief Executive Alan Schnitzer said in a statement. “Our earnings this quarter reflect strong underlying underwriting income, resulting from record quarterly net earned premiums and an underlying combined ratio which improved 2.6 points to 91.5%. The company’s investment portfolio generated net investment income of $566 million after-tax, up 8% from a year ago, he said. The company benefited from a $403 million subrogation benefit from utility Pacific Gas & Electric Co. stemming from 2017 and 2018 California wildfires. Catastrophe losses in the quarter were mostly due to derecho windstorm in the midwestern region of the United States, the Glass wildfire in California, Tropical Storm Isaias, Hurricane Laura and additional wildfires in the western United States. Shares rose 2.7% premarket, but have fallen 18% in the year to date, while the Dow Jones Industrial Average has fallen 1.2% and the S&P 500 has gained 6%.

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