The Travelers company headquarters in St. Paul, Minn., Jan. 25, 2010. Travelers Cos. reports quarterly financial results, Thursday, Jan. 21, 2016. Property casualty insurance provider The Travelers Cos. moved to a loss in its 2023 second quarter as wind and hail storms in several states brought about an increase in claims. (AP Photo/Jim Mone, File) Colorado Rockies assistant bullpen catcher Kyle Cunningham navigates a hail-covered walkway to the field after a storm Thursday, June 29, 2023, in Denver. The Rockies were scheduled to play against the Los Angeles Dodgers. (AP Photo/David Zalubowski) Hail covers a tarpaulin and the field after a summer storm packing heavy rain, high winds and large hail swept over Coors Field, Thursday, June 29, 2023, in Denver. The Colorado Rockies were set to host the Los Angeles Dodgers, Thursday. (AP Photo/David Zalubowski) A clubhouse worker struggles to guide rain and hail into a drain inside the visitor's clubhouse after heavy rain with high winds and large hail swept over Coors Field before the Colorado Rockies hosted the Los Angeles Dodgers, Thursday, June 29, 2023, in Denver. (AP Photo/David Zalubowski) Fans seek shelter in the enclave to the gates of Coors Field as heavy rain packing high winds and large hail sweeps over downtown Denver on Thursday, June 29, 2023. (AP Photo/David Zalubowski) Heavy rain packing high winds and large hail sweeps over Coors Field in Denver on Thursday, June 29, 2023. (AP Photo/David Zalubowski) Terre Haute Street Department and Terre Haute Wastewater Utility employees work to remove fallen trees on Thursday, June 29, 2023 in Terre Haute, Ind. Utility crews were scrambling Friday to restore electricity after a storm front moved across Illinois and Indiana on Thursday packing winds topping 70 miles an hour at times. (Joseph C. Garza/The Tribune-Star via AP)
Travelers, considered a bellwether for the insurance industry due to its size, said catastrophe losses doubled in its most recent quarter and the company swung to a loss as severe wind and hailstorms in a number of regions led to rising coverage claims.
The increasing frequency of extreme weather from hurricanes and wildfires to high winds and hail, are leading to disruptions in the insurance industry with some companies pulling out of states that are getting hit hard, such as Florida and California.
Catastrophe losses at Travelers jumped to $1.48 billion for the three-month period ending on June 30, up from $746 million in the same period last year.
Insurers have retreated from regions that have been hit repeatedly by severe weather, even after raising premiums for years to cover those losses.
State Farm and Allstate have pulled back from California's home insurance market, saying that increasing wildfire risk and soaring construction costs mean they'll no longer write new policies in the nation’s most populous state.
This week AAA said that it will not renew “a very small percentage” of homeowners and auto insurance policies in hurricane-wracked Florida, joining other insurers in limiting their exposure in the Sunshine State despite efforts by lawmakers to calm the volatile insurance market.
AAA insists it's not leaving Florida, but that last year’s devastating hurricane season had led to an unprecedented rise in reinsurance rates, making it more costly to operate there.
Florida has struggled to maintain stability in the state insurance market since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining insurers anxious about writing or renewing policies in Florida. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.
Rising claims at The Travelers Cos. contributed to a $14 million loss, or 7 cents per share. Adjusted for non-repeating costs, the company reported earnings of 6 cents per share, but that’s still far from the per-share profit of $2.27 that analysts polled by Zacks Investment Research had expected.
A year earlier the New York company turned a $551 million profit, or $2.27 per share.
Adjusted revenue reached $10.13 billion, however, outpacing expectations as net written premiums rose to an unprecedented $10.3 billion. Net written premiums are a measure of how much of the premiums paid by customers that a company gets to keep for assuming risk.
Shares rose slightly Thursday.
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