By Staff, Agencies

Travelers reported a steep decline in first-quarter net income, falling to $395 million from $1.123 billion a year earlier, largely due to $2.266 billion in catastrophe losses tied to the January 2025 wildfires in California.

Core income also fell to $443 million, down from $1.096 billion in Q1 2024. Despite the financial hit, the insurer managed to mitigate some of the impact through stronger underwriting results and investment performance.

The company’s consolidated combined ratio rose to 102.5%, reflecting the strain from catastrophe losses. However, the underlying combined ratio improved by 2.9 points, reaching 84.8%. Underlying underwriting income surged 32% to $1.583 billion pre-tax, highlighting the strength of Travelers’ core business.

Travelers also benefited from $378 million in net favorable reserve development from prior years and a 10% boost in net investment income, which reached $930 million pre-tax ($763 million after tax). Operating cash flow for the quarter stood at $1.360 billion.

Premium growth provided further support, with net written premiums rising 3% to $10.515 billion. Business insurance premiums increased by 2% to $5.698 billion, bond & specialty insurance rose 6% to $999 million, and personal insurance saw a 5% gain to $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 Chairman and CEO Alan Schnitzer.

He also emphasized that net earned premiums of $10.7 billion contributed to the notable 32% rise in underlying underwriting income.

Despite the tough quarter, Travelers continued to reward shareholders, returning nearly $600 million in excess capital—including $358 million in share repurchases—and declared a 5% dividend increase, raising the quarterly payout to $1.10 per share.