Travelers Stock Is Rising as the Insurer Smashes Earnings Expectations

The property and casualty insurer reported core earnings of $6.51 a share for the second quarter. (Dreamstime)

Shares of Travelers were climbing Thursday after the property and casualty insurer reported second-quarter earnings that soared past expectations.

Travelers posted core earnings of $6.51 a share for the quarter, compared with $2.51 a year earlier. Analysts had been expecting core earnings of $3.65, according to FactSet. Net written premiums totaled $11.54 billion, up from $11.12 billion last year but just under the $11.62 billion Wall Street was anticipating.

Travelers stock was up 2.7% on Thursday.

The results marked a recovery from last quarter, when Travelers reported catastrophe losses of $2.3 billion, primarily due to the wildfires that swept through the Los Angeles area in January. Catastrophe losses normalized in the recent second quarter, dropping to $927 million. Meanwhile, the company’s underlying combined ratio, comparing its expenses and claims costs to earned premiums, improved to 84.7% from 87.7% a year prior.

“We are pleased to report excellent results for the quarter, with both underwriting and investment income contributing meaningfully to our performance,” said CEO Alan Schnitzer. “We remain highly confident in the outlook for our business.”

The insurer has now beaten analysts’ earnings expectations for five consecutive quarters. Travelers stock has risen 4.7% this year and 14% over the last 12 months as of Wednesday’s close.

Write to Nate Wolf at nate.wolf@barrons.com