* Q2 oper earnings $1.93/shr vs. est $2.07
* Catastrophe losses rise 28 pct to $436 mln
* Revenue rises 2 pct to $6.79 bln
* Shares fall as much as 5 pct
(Adds CEO quote, analysts' comments, conference call details,
By Amrutha Gayathri
July 22 Property and casualty insurer Travelers
Cos Inc reported a steeper-than-expected fall in
quarterly operating profit, hurt by bigger catastrophe losses
and a slowing pace of premium rate increases.
The company, led by industry veteran Jay Fishman, has
aggressively raised insurance prices in the past several
quarters to offset low interest rates affecting its fixed-income
However, the industry's ability to raise premiums is slowing
after several quarters of steady rate increases, analysts said.
"We haven't witnessed large catastrophe losses which would
deplete the industry capital position and necessitate large rate
increases," Macquarie Securities analyst Amit Kumar said.
Travelers' shares were down 4.1 percent at $91.37 in
afternoon trading on Tuesday, making it the top loser on Dow
Jones Industrial Average. Up to Monday's close, the stock
had risen 10.75 percent since it last reported results in April.
But Fishman did not rule out the possibility of premium rate
increases in certain businesses.
"There remains opportunity to further improve the product
portfolio... by achieving additional rate increases for those
accounts that continue to experience unusual weather
volatility," Fishman said in a statement.
Separately, a federal appeals court on Tuesday ruled
Travelers should pay more than $500 million to satisfy
asbestos-related claims stemming from its coverage of
policyholder Johns-Manville Corp, reversing a lower court
Travelers' catastrophe losses in the latest quarter rose to
$436 million from $340 million a year earlier.
Severe storms pounded parts of the central United States in
early June, producing baseball-sized hail. There were also
several tornado touchdowns and other dangerous wind storms.
Net income fell to $683 million, or $1.95 per share, in the
second quarter ended June 30, from $925 million, or $2.41 per
share, a year earlier.
Operating earnings of $1.93 per share missed the average
estimate of $2.07, according to Thomson Reuters I/B/E/S.
Travelers' earnings often differ substantially from Wall
Street estimates as the company does not provide forecasts.
Net investment income rose 8 percent to $695 million.
As one of the first insurers to report results, the
company's results are seen as a bellwether for the industry.
The company's combined ratio, the percentage of premium
revenue an insurer has to pay out in claims, rose to 95.1
percent in the quarter from 94.3 percent. A combined ratio of
under 100 indicates an underwriting profit.
(Reporting by Amrutha Gayathri; Editing by Ted Kerr and Don