Catastrophe losses of $2.266 billion, driven by the January 2025 California wildfires, contributed to a decline in Travelers' first-quarter net income to $395 million, down from $1.123 billion last year.
Core income also dropped to $443 million, compared to $1.096 billion in the same period of 2024.
Despite these losses, the company managed to offset some of the impact through improved underwriting performance and investment gains.
The consolidated combined ratio rose to 102.5%, but the underlying combined ratio improved by 2.9 percentage points to 84.8%. Underlying underwriting income increased by 32%, reaching $1.583 billion pre-tax.
In addition, Travelers reported net favorable prior year reserve development of $378 million pre-tax, helping to cushion the financial blow.
Net investment income saw a 10% increase, totaling $930 million pre-tax ($763 million after tax), further bolstering the company’s financial position. Operating cash flows for the quarter totaled $1.360 billion.
Travelers also posted a 3% rise in net written premiums, which amounted to $10.515 billion. Business insurance premiums grew by 2% to $5.698 billion, while bond & specialty insurance saw a 6% increase to $999 million. Personal insurance premiums rose by 5%, reaching $3.818 billion.
“We earned core income of $443 million, or $1.91 per diluted share, as outstanding underlying results, strong net favorable prior year reserve development and higher investment income more than offset catastrophe losses," said Alan Schnitzer, Travelers' chairman and CEO.
Schnitzer also pointed out that the 32% increase in underlying underwriting income to $1.6 billion pre-tax was driven by net earned premiums of $10.7 billion.
During the quarter, Travelers returned nearly $600 million in excess capital to shareholders, including $358 million in share repurchases. The company also declared a 5% increase in its quarterly dividend, raising it to $1.10 per share.
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