(Reuters) — Travelers Cos. Inc. reported a 37% drop in quarterly profit on Tuesday, hurt by losses related to a winter storm that swept across the United States and Canada in the last week of 2022.
The company’s core earnings fell to $810 million, or $3.40 per share, in the fourth quarter, from $1.29 billion, or $5.20 per share, in the year-ago period.
The winter storm pushed the insurer’s net catastrophe losses after reinsurance to $459 million, from $36 million in the fourth quarter of 2021.
A dangerously cold Arctic air mass gripped much of the United States in late December, causing flooding, power outages, mudslides, evacuations and road closures.
Industry experts already expected hurricanes Ian and Fiona last year to drive smaller insurers out of business.
Travelers̵7; profit was also hit by a decline in net investment income to $625 million, from $743 million in the same period last year.
The New York-based company, which is often seen as a basement for the insurance sector because it typically reports ahead of its industry peers, posted net written premium growth of 10% to $8.83 billion in the quarter.
The company reported a total cost ratio of 94.5%, compared to 88% a year earlier. A ratio below 100% means that the insurer earned more in premiums than it paid out in claims.