Travelers to push for more rate hikes as profit falls

Travelers Cos. Inc. will seek “strong price increases” at upcoming renewals, the insurer’s top executive said Wednesday.

Discussing Travelers’ third-quarter results on a call with analysts, CEO Alan Schnitzer said the insurer secured higher rates on many lines in the quarter, including an average 7.9% increase in its main commercial insurance segment, but it plans to raise rates further.

“Given the uncertainty generally in terms of weather volatility, economic and social inflation, the hardening reinsurance market and the geopolitical landscape, we plan to continue pursuing strong price increases in both the property and casualty lines to achieve our over-time return objectives,” he said.

Travelers reported net income of $404 million in the third quarter, an 11% decrease from the same period last year.

Catastrophe losses for the quarter totaled $850 million, compared with $512 million in the year-earlier period. The insurer reported pre-tax net unfavorable prior-year reserve development of $154 million, primarily due to a $284 million addition of asbestos reserves.

Net written premium increased to $10.49 billion, up 14.1% compared with the same period last year. By segment, business insurance, Travelers’ main commercial lines business, reported net written premium of $5.08 billion, up 16.2%; bond and specialty was up 4% at $1 billion; and personal insurance was up 14.1% at $4.41 billion.

Investment income rose 29.7% in the quarter to $769 million.

Travelers’ combined ratio deteriorated to 101% for the quarter, compared with 98.2% in the prior-year period.