(By Balaseshan) Travelers Companies Inc. (NYSE:TRV), a provider of property casualty insurance, swung to a quarterly earnings on improved underwriting margins as well as strong net investment income. However, the results missed Street's expectations.
Earnings were $499 million or $1.26 per share for the second quarter, compared to a loss of $364 million or $0.88 per share last year.
"The latest quarter results benefited from meaningful improvement in its underlying underwriting margins as well as strong net investment income given the continuing low interest rate environment," the company commented.
Operating earnings were $495 million or $1.26 per share, compared to a loss of $377 million or $0.91 per share.
Revenue marginally declined 0.5% to $6.36 billion. Net premium written rose marginally by 0.9% to $5.868 billion.
Analysts, on average, had expected a profit of $1.35 per share on revenue of $5.97 billion for the second quarter.
Net investment income, after tax, declined to $589 million from $606 million, primarily driven by lower reinvestment rates in the fixed income portfolio.
Catastrophe losses were $357 million after tax, compared to $1.085 billion after tax in the prior year quarter. Catastrophe losses in the current quarter primarily resulted from wind and hail storms in several regions of the United States.
Underwriting loss, after tax, narrowed to $47 million from $924 million. The latest quarter underwriting loss reflected a GAAP combined ratio of 100.5%, as compared to 125.0% in the prior year quarter.
In addition, the board of directors declared a quarterly dividend of $0.46 per common share, payable September 28 to shareholders of record as of the close of business September 10.
TRV ended Wednesday's regular session up 1.09% at $64. The stock has been trading between $45.97 and $65.27 for the past 52 weeks.