Hurricane Ida, other storms set back Travelers earnings in Q3

HBJ File Photo The Travelers Cos. office in Hartford.

Write a Comment

By Zachary Vasile

Severe storms, including Hurricane Ida, took a bite out of The Travelers Cos.’s net profits in the third quarter, leading to a decline in year-to-year earnings.

According to financial results released Tuesday, the New York-based insurer reported net income of $662 million, or $2.62 per diluted share, between July and September, down from $827 million, or $3.23 per diluted share, in the corresponding period one year prior.

While net written premiums grew from $7.77 billion to $8.32 billion, and total revenues climbed from $8.27 billion to $8.8 billion, Travelers ultimately held on to less of that money than last year due to “significant catastrophe losses,” said Chairman and CEO Alan Schnitzer.

Catastrophe-linked losses totaled $501 million pre-tax, up from $397 million pre-tax in the third quarter of 2020.

Hurricane Ida, which made landfall on Aug. 29, cut a path of destruction from Cuba and Grand Isle, Louisiana to Prince Edward Island in Canada, causing widespread flooding throughout the Southeast, Mid-Atlantic and Northeast, including in New York City, and spawning tornadoes in New Jersey. According to commercial weather forecasting company AccuWeather, the storm’s total cost could reach $95 billion, making it the seventh-most damaging hurricane to hit the U.S. since 2000.

Also weighing on Travelers’ balance sheet were other severe storms in several regions of the country.

Still, higher catastrophe losses were at least partially offset by higher net investment income and a higher underlying underwriting gain.

For the year-to-date, Travelers has realized net income of $2.32 billion, up from $1.38 billion in the first nine months of 2020.