Insurer’s earnings miss estimates as underwriting gain declines

While Beazley reported a doubling of profits earlier today, the next earnings story has a less happy outcome. Travelers has missed Wall Street estimates for second-quarter profit, thanks to weather-related losses that led to an 18% decrease in underwriting gain, according to reports from Reuters. Gusty winds and hailstorms during the quarter destroyed homeowners’ roofs and policyholders’ cars, which in turn led to a wave of claims that were difficult for insurers like Travelers to handle. Reuters reported that claims rose 5.7% to US$4.82 billion, leading to a drop in underwriting gain to US$74 million in the quarter. Meanwhile, catastrophe losses (net of reinsurance) also dropped 25% to US$367 million. However, that result was an improvement compared to last year’s figure of US$488 million.