Travelers beats profit estimates despite $2 billion wildfire hit

(Reuters) — Insurance bellwether Travelers Cos. Inc.’s first-quarter profit exceeded analysts’ expectations, as strong underwriting gains helped soften the hit from more than $2 billion of catastrophe losses driven by the Los Angeles wildfires.

Shares rose 2% before the market open, extending a recovery after tariff-related market turmoil drove them to a three-month low last week.

The results released Wednesday shed light on the fallout from one of the costliest natural disasters in California’s history, which claimed several lives and destroyed property, with some estimates pegging the economic losses at $250 billion.

Travelers’ catastrophe losses, net of reinsurance, reached a record $2.27 billion for the quarter, compared with $712 million in the year-earlier period.

But pretax underlying underwriting income grew 32% to $1.58 billion, as demand for insurance coverage stayed resilient.

“We are pleased to report a substantial profit for the quarter despite the devastating January California wildfires,” CEO Alan Schnitzer said.

Travelers reported a core profit of $443 million, or $1.91 per share, compared with $1.1 billion, or $4.69 per share, in the year-earlier period. Earnings per share were also helped by stock buybacks.

Analysts were expecting a profit of 78 cents per share, according to estimates compiled by LSEG.