The Travelers Cos. reported on Thursday a 32 percent drop in first-quarter profit, primarily due to losses on its investments, and confirmed full-year guidance well below analysts' estimates.
The St. Paul, Minn.-based property and casualty insurer earned $662 million, or $1.11 per share, in the January-March period. This compares with earnings of $967 million, or $1.54 per share, a year earlier.
Results included $137 million in net realized investment losses, up from $41 million in the 2008 first quarter.
Operating income, or income excluding investment gains and losses, fell to $799 million, or $1.34 per share, from $1.01 billion, or $1.60 per share, in the first quarter of last year.
Analysts polled by Thomson Reuters, on average, were expecting earnings of $1.31 per share.
Net written premiums rose slightly to $5.20 billion from $5.19 billion in the prior-year quarter. The company said new business volumes were slightly lower as incremental growth in its business insurance segment was more than offset by lower volumes in financial, professional and international insurance and personal insurance.
Net investment income slipped 27 percent to $474 million from $650 million a year ago.
Catastrophe losses declined to $54 million from $62 million.
Travelers said its combined ratio for the quarter rose to 90.6 percent from 87.6 percent in the first quarter of last year.
Combined ratio measures the amount of money an insurer generates from writing new premiums compared with how much it pays out in claims and other expenses. A ratio above 100 percent means an insurer is paying out more in claims and expenses than it receives from generating new policies.
Travelers continues to expect full-year operating income of $4.50 to $4.90 per share. This guidance assumes catastrophe losses of $360 million. Analysts are calling for a profit of $5.39 per share.
In 2008, Travelers earned $2.92 billion, or $4.82 per share.
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