Commercial and personal property insurer Travelers Cos. said today that lower investment income and underwriting profit drove its second-quarter earnings down 21 percent.
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.
