The Travelers Companies Inc., which includes auto insurance, reported a net income of $683 million, or $1.95 per diluted share, for the quarter ended June 30, 2014. This is down from a net income of $925 million, or $2.41 per diluted share, in the prior year quarter.
Operating income in the current quarter was $673 million, or $1.93 per diluted share, compared to $816 million, or $2.13 per diluted share.
“In personal insurance, we still have more work to do to improve our returns, but we have made considerable progress in both auto and homeowners. The market response of Quantum 2.0, our new product, is particularly encouraging,” says Jay Fishman, chairman and CEO of The Travelers Companies.
The 2014 second quarter net income of $683 million after-tax decreased by $242 million or 26 percent due to a reduction in operating income and net realized investment gains. Operating income of $673 million after-tax decreased by $143 million or 18 percent.
Year-to-date 2014 results showed a net income of $1.735 billion after-tax decrease from $86 million or 5 percent due to a reduction in net realized investment gains. Operating income of $1.725 billion after-tax increased by $22 million or 1 percent due to higher underwriting gains. The current year-to-date results included a $49 million after-tax benefit in the first quarter, resulting in the reduction in the estimated liability for state assessments.
In addition, record quarterly operating income for the 2014 second-quarter results of $254 million after-tax increased by $100 million or 65 percent. Meanwhile, year-to-date 2014 results had an operating income of $449 million after-tax increase by $132 million or 42 percent.
The 2014 second quarter income in comparison to last year’s second quarter was impacted by the increase in catastrophe losses as well as the inclusion of significant favorable tax and legal settlements in the prior year, according to Fishman.
“We are very pleased with our underlying combined ratio of 90.9 percent, which improved from 91.7 percent in the prior year quarter,” says Fishman. “Our results year-to-date were very strong and demonstrated our continued success in actively managing our businesses to produce superior returns on capital over time.”