TRAVELLERS, a US-based insurance company, reported that its first-quarter results were hurt by recent catastrophe in the Texas. The firm posted a total net income of $691 million for the first quarter that ended March 31, 2016, a decrease of 17% from $833 million in the corresponding period last year. The fall in quarterly income was the result of higher disaster losses.
The company's quarterly earnings per share dropped 10% to $2.30 from $2.55 in the year-ago period. Travellers noted that its disaster losses, excluding tax impact, increased to $318 million from $162 million in the previous year period. Operating income fell 16% to $698 million from $827 million in the same period in 2015. Quarterly operating earnings per share totalled $2.33, down 8% from $2.53 in the previous year period.
Total revenue increased 1% to $6.7 billion from $6.6 billion in the first quarter that ended March 31, 2015. Total written premiums jumped 5% to $6.2 billion from $5.9 billion in the same period last year. Meanwhile, book value per share climbed 6% to $82.65 from $77.96 in the previous year period. On an adjusted basis, quarterly book value per share amounted to $76.63, up 7% from $71.45 in the year-ago period. The company's Board increased its quarterly dividend by 10% to $0.67 a share
The shares of the company dropped 4% to $111.38 during the early trading session on Thursday, the largest fall among others on the Dow Jones industrial average. According to Reuters, hails are anticipated to impact insurance sector's earnings in the upcoming second quarter. The company's net investment earnings during the period dropped 8.2% to $439 million.
Reuters quoted a report from The Insurance Council of Texas, which said that storm losses for the insurance industry are expected to reach $1.36 billion as a result of the recent storm, the most expensive disaster in the history of the Texas insurers. Like Travellers other insurers in Texas were also affected by the recent hailstorm.
Progressive Corp, an automobile insurer, reported a close 14-fold increase in disaster losses and Kemper Corp said that it anticipates its losses to deepen in the future. Meanwhile, Allstate Corp, insurance products provider for auto and homeowners, said that it estimates disaster losses before tax burden to increase roughly to $827 million.
ARTEMIS reported that more than 110,000 vehicles are said to have been smashed by the storm that happened on April 12. Robert Crosby, Independent Insurance Agents' executive director said, "The storm primarily struck the northwestern portion of Bexar County moving across northern areas of San Antonio with large hail that was shaped like jagged rocks."
The Insurance Council expects the auto insurance losses to reach at $560 million while insurance losses to industries and homes are predicted to be $800 million. the current net loss estimation for the insurance industry is higher than the $1.1 billion loss estimation in 1995 May storm incident that hit Fort Worth.
