(Reuters) - Travelers Cos Inc, one of the largest U.S. property insurers, reported a lower-than-expected quarterly profit on Thursday because of costly damage from wind and hail storms that pounded several U.S. regions in recent months, potentially signaling weak results for other insurers.
Catastrophe losses, net of reinsurance, rose 21 percent to $488 million in the second quarter, Travelers said on Thursday.
The company’s combined ratio inched up to 98.1 percent, from 96.7 percent a year earlier. A ratio below 100 percent means the insurer earns more in premiums than it pays out in claims.
The company’s shares were down 2.3 percent at $127 in opening trade on the New York Stock Exchange.
U.S. wind and hail storms are typically challenging for U.S. insurers during the quarter, often tearing apart homeowners’ roofs and pummeling cars in auto dealership lots, and wreaking other havoc that triggers spates of claims.
Travelers, which reports earlier that many other large property and casualty insurers, is seen among analysts as a bellwether for the sector. Insurers American International Group Inc and the Allstate Corp, report in early August.
Travelers’ quarterly profit was also hurt by a charge of $45 million associated with fire-related commercial losses and an $18 million assessment related to Hurricane Harvey, the insurer said.
Net income fell to $524 million, or $1.92 per share, in the second quarter, from $595 million, or $2.11 per share, a year earlier.
Excluding special items, the company earned $1.81 per share, missing analysts’ average estimate of $2.42, according to Thomson Reuters I/B/E/S.
The Dow component’s total revenue rose 4 percent to $7.48 billion.
Allstate, also on Thursday, said it estimated $417 million in catastrophe losses for June, spurred by 16 storms, including three severe hail storms in Texas and Colorado that accounted for 75 percent of its June losses.
The insurer said it anticipates a total of $906 million in catastrophe losses for the second quarter.
Reporting by Nikhil Subba and Suzanne Barlyn; Editing by Arun Koyyur and Saumyadeb Chakrabarty