Travelers Cos. Inc. shares (NYS:TRV) rose 3.7% in premarket trading Tuesday, after the insurer beat estimates for the third-quarter. The New York-based company posted net income of $662 million, or $2.62 a share, for the quarter, down from $827 million, or $3.23 a share, in the year-earlier period. Core income per share came to $2.60, well ahead of the $1.83 FactSet consensus. Revenue rose 6% to $8.805 billion from $8.275 billion, also ahead of the $8.167 billion FactSet consensus. "Core income decreased primarily due to net unfavorable prior year reserve development compared to net favorable prior year reserve development in the prior year quarter and higher catastrophe losses, partially offset by higher net investment income and a higher underlying underwriting gain (i.e., excluding net prior year reserve development and catastrophe losses)," the company said in a statement. The prior year reserve move included a $402 million pre-tax subrogation benefit from PG&E, related to the 2017 and 2018 wildfires in California. Net realized investment gains in the quarter were $8 million pretax, compared with $37 million pretax in the year-earlier quarter. Catastrophe losses came to $501 million pretax, mostly due to Hurricane Ida and severe storms in the parts of the U.S. Investment income came to $771 million, up from $671 million a year ago. The company had an underwriting gain of $75 million, compared with a gain of $339 million a year ago. Shares have gained 9% in the year to date, while the Dow Jones Industrial Average (DOW:DJIA) has gained 19.5% and the S&P 500 (S&P:SPX) has gained 15%.
Oct. 19, 2021, 7:15 a.m. EDT