The Travelers Companies, Inc. saw its net income dip and its combined ratio rise during the 2018 second quarter, due largely to a spike in catastrophe losses.

Net income for the quarter came in at $524 million, or $1.92 per diluted share, versus $595 million or $2.11 per diluted share in the 2017 second quarter.

Travelers said its combined ratio for Q2 2018 was 98.1, a still-healthy number but worse than the 96.7 from the same period a year ago.

Travelers Chairman and CEO Alan Schnitzer said that the insurer dealt with a $122 million after-tax hike in catastrophe losses, stemming from both an active tornado and hail season. He added, however, that the insurer expects catastrophe losses to even out.

“Absent a severe hurricane season, we expect catastrophe losses to be highest in the second quarter,” he said. “Catastrophe losses were $488 million this quarter, approximately $50 million more than we would have expected, but within the range of normal variability.”

Schnitzer said that in terms of the broader fundamentals, he sees Travelers as being where it should be in terms of performance.

“We are pleased with the execution of our marketplace strategies,” he said, noting that net premiums reached a record $7.1 billion for the quarter, 7 percent higher than the same period a year ago.

Premiums grew strongly during Q2 for Travelers’ Business insurance, Bond & Specialty insurance, and Personal Insurance division, Schnitzer said.

Here is a roundup of additional result highlights:

• Net written premiums of $7.1 billion for the quarter compared to $6.4 billion in the 2017 second quarter.
• Net investment income reached $595 million, slightly lower than the $598 million produced in the 2017 second quarter.
• Travelers returned $559 million to shareholders in Q2, including $350 million in share repurchases. So far this year, Travelers has returned $1.1 billion to shareholders, including $751 million in share repurchases.

Source: Travelers