Travelers expects approximately $1.7 billion in pretax losses from the wildfires that affected Los Angeles last month.
The estimate includes losses from personal and commercial insurance segments, as well as assessments from the California FAIR Plan and recoveries from reinsurance. The Los Angeles wildfires destroyed more than 16,000 homes and businesses, causing significant damage in the Pacific Palisades and Altadena neighborhoods.
“On behalf of all of us at Travelers, I want to acknowledge the tragic wildfires that have devastated communities across Los Angeles,” Alan Schnitzer, the company’s chairman and chief executive officer, said in a statement releasing the company’s fourth-quarter and full-year results.
Travelers recently reported fourth-quarter core income of $9.15 per diluted share, up from $7.01 per share a year earlier. The increase was attributed to a higher underlying underwriting gain, increased net investment income and higher net favorable prior-year reserve development, partially offset by higher catastrophe losses.
For the full-year, core income rose 64% to over $5 billion, or $21.58 per share, driven by strong earned premiums, excellent underwriting margins and a higher level of net investment income, the company said.
Meanwhile, the company’s adjusted book value per share grew by 13% to $139.04 after business investments and the return of over $2.1 billion to shareholders through dividends and share repurchases.
Net written premiums increased 7% to $10.7 billion for Q4, and by 8% to $43.4 billion for the year. Net written premiums in the company’s business insurance sector rose by 8% in the quarter, with a renewal premium change of 9.6%, including a renewal rate change of 6.9% and retention of 85%.
Meanwhile, the bond and specialty insurance sector recorded a 7% increase in net written premiums, with retention of 88% in management liability.
The surety business also saw a 19% rise in net written premiums. Personal insurance net written premiums grew by 7%, with continued renewal premium growth, particularly in the homeowners sector.
Schnitzer said that the company’s strategy contributed to growth in book value per share, profitability and investment income. He also expressed confidence in the company’s outlook for 2025 and beyond.
