Property and casualty insurer Travelers reported a stronger-than-expected quarterly net profit as catastrophe losses almost halved and the company recorded a gain from the resolution of tax issues.
The company, led by industry veteran Jay Fishman, has aggressively raised insurance prices in the past several quarters to combat low interest rates that have kept insurers' investment income in the doldrums over the past few years.
Travelers' net investment income fell 9 percent to $632 million in the second quarter ended June 30.
However, pretax catastrophe losses, net of reinsurance, fell to $221 million from $436 million, while underwriting gains almost doubled to $511 million.
The company, which vies with American International Group for the title of biggest U.S. commercial property and casualty insurer, said it mainly paid out catastrophe losses for wind and hail storms in the United States.
The Dow-30 company said its net income rose 19 percent, to $812 million, or $2.53 per share, in the second quarter ended June 30. That compared with a net profit of $683 million, or $1.95 per share, a year earlier.
Excluding the $32 million tax benefit, Travelers earned $2.41 per share, according to calculations by Thomson Reuters I/B/E/S. Analysts on average had expected a profit of $2.12 per share on that basis.
The company's combined ratio, the percentage of premium revenue an insurer has to pay out in claims, was 90.1 percent in the quarter, compared with 95.1 percent a year earlier.
A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.