Travelers Cos. said its first-quarter profit fell from an
unusually strong period a year earlier, due partly to lower net
investment income.
The New York-based property-casualty insurer's net income
dropped to $833 million, down from $1.1 billion in the year-earlier
period. Travelers' operating profit, a key metric which excludes
realized capital gains or losses in its investment portfolio and is
the figure most closely watched by analysts, dropped to $827
million, or $2.53 a share, from $1.1 billion, or $2.95 a share, a
year earlier.
Revenue fell to $6.63 billion from $6.71 billion a year
earlier.
Analysts, according to Thomson Reuters, were looking for $2.54
in per-share operating profit and $6 billion in revenue.
Net written premiums edged 1% higher to $3.8 billion in a tough
pricing environment for property-casualty insurers.
New York-based Travelers sells an array of policies to small,
midsize and large companies, and is a well-known name in car and
home insurance sold to individuals. One of the country's largest
property-casualty insurers, Travelers often sets the tone for
industry earnings that will be announced by peers in the coming
weeks.
Analysts will be listening closely in the company's earnings
conference call for details on how the insurer is maneuvering
through the competitive price environment while low interest rates
continue to put pressure on insurers' big investment
portfolios.
Net investment income decreased 19.5% to $592 million pretax.
The company noted that results were depressed by lower valuations
for energy-related investments, and it faced lower reinvestment
rates compared with the year before.
The company's combined ratio was 89%--meaning it spent 89 cents
on claims and expenses for every dollar it collected in
premiums--from 86% a year earlier.
Travelers said its board had approved $5 billion in additional
buyback activity. The company also raised its quarterly dividend
11% to 61 cents a share.
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