Travelers Cos. Inc .:'s CEO said on Tuesday that the insurance company expects the pricing of commercial insurance to remain strong, driven by inflation, disasters and a low interest rate environment, as the company's profits fell by 20% during the third quarter.
The New York-based insurer reported a net profit of $ 662 million for the quarter, compared to $ 827 million the previous year, mainly due to unfavorable reserve developments from the previous year and higher catastrophic losses.
Net written premiums increased by 7% to a record $ 8.324 billion, while the combined ratio deteriorated 3.7 points to 98.6%.
Each of the company's three business segments made a meaningful contribution to peak growth during the quarter, said Travelers Chairman and CEO Alan Schnitzer in an income interview on Tuesday.
Disaster losses of $ 501
Travelers recognized a $ 95 million partial recovery from its reinsurance loss-making surplus during the quarter, compared to a full recovery during the third quarter of last year. "It gives us $ 255 million for potential recovery in the fourth quarter depending on the level of qualifying losses we actually experience," Frey said.
In the business insurance segment, net written premiums increased by 5% to $ 4.021 billion and the combined ratio improved by 4.8 points to 97.5%. Renewal premiums increased by 9.9%, "close to an all-time high, driven by continued strong renewal rates and higher exposure growth," Schnitzer said.
At the same time, retention was higher. The ability of travelers to continue to drive price changes at historic highs, while increasing detentions, reflects "the stability of the price environment," he said.
Written pricing continues to exceed the estimated loss trend in Traveler's commercial business, says Schnitzer. .
The change in premium renewal increased by more than two points from the third quarter last year, with a strong renewal of 6.3% and a continued improvement in customer exposure growth, says Greg Tocydlowski, Traveler's President of Corporate Insurance.  "In addition to our detailed pricing, we have also focused on careful management of deductibles, anchor points, limits, sub-limits and exclusions that may also contribute to an increase in price," said Tocydlowski.
New business declined from the previous year's quarter as travelers continued to "think about balancing risk and reward for new business in the market," he said.
Travelers' bond and specifications in the ialty insurance segment reported net insurance premiums of $ 894 million, an increase of 19% over the previous year, driven by a record renewal of 13.6% of the renewal, strong retention in management responsibility and production in the guarantee business.
Its personal insurance segment showed net premiums of $ 3.409 billion, an increase of 7% from the previous year.
Net investment increased 14% to $ 645 million, up from $ 566 million in the third quarter of last year.
Travelers returned $ 821 million of surplus capital to shareholders during the quarter, including $ 601 million in share repurchases.