U.S. insurer Travelers beats profit estimates on higher returns

New York-based Travelers, often seen as a bellwether for the insurance sector as it typically reports before its industry peers, said net written premiums rose 2% to $7.51 billion in the quarter. Its core income came in at $699 million, or $2.73 per share, for the period ended March 31, up 3% from a year earlier.

Property and casualty insurer Travelers Cos Inc beat profit estimates for the first quarter on Tuesday as an increase in returns from investments helped cushion the hit from catastrophe claims. New York-based Travelers, often seen as a bellwether for the insurance sector as it typically reports before its industry peers, said net written premiums rose 2% to $7.51 billion in the quarter.

Its core income came in at $699 million, or $2.73 per share, for the period ended March 31, up 3% from a year earlier. Analysts had expected a figure of $2.37 per share, according to Refinitiv IBES data. While the insurance industry has faced claims from business reeling under the impact of the COVID-19 crisis, the hit has been less than what many investors expected due to pandemic-related exclusions in their contracts.

The sector is likely to be impacted this quarter by a cold snap that hit Texas in February. Travelers reported catastrophe losses of $835 million, mainly due to winter storms and wind storms that hit several U.S. regions. Travelers' underwriting gains slumped 25% to $217 million, while pre-tax net investment income surged 15% to $701 million, helped by gains in its non-fixed income investment portfolio.

The company reported a combined ratio of 96.6%, compared with 95.5% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims. Total revenue rose 5% to $8.31 billion.

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