Travelers Companies Inc. reported a smaller-than-expected fall in quarterly profit on Thursday, as record premium growth cushioned a hit from higher catastrophe-related claims and lower returns on investments.

The company’s core income fell nearly 29 percent to $625 million, or $2.57 per share, in the second quarter ended June 30, from $879 million, or $3.45 per share, a year earlier.

Analysts on average had expected a profit of $1.97 per share, according to Refinitiv IBES data.

The company’s shares were down 1.1 percent in pre-market trading.

New York-based Travelers, often seen as a bellwether for the insurance sector as it typically reports before its industry peers, said net written premiums rose 11 percent to $9.02 billion in the quarter.

Swiss Re this month forecast that global insurance premiums will surpass $7 trillion for the first time ever by the end of this year.

Travelers reported catastrophe loss net of reinsurance of $746 million compared with $475 million a year earlier, impacted mainly by severe wind and hailstorms in several regions of the United States.

Global insured catastrophe losses in the first half of 2022 were estimated at $39 billion — 18 percent higher than the 21st century average of $33 billion — with severe convective storms in the United States and Europe alone accounting for 54 percent of the total, according to broker Aon.

The insurance industry faces hefty claims from the Ukraine crisis and greater uncertainty brought on by higher claims costs from inflation.

Underwriting gains fell to $113 million from $324 million a year earlier, while pretax net investment income dropped to $707 million from $818 million a year earlier.

The company reported a combined ratio of 98.3 compared with 95.3 a year earlier. A ratio below 100 means the insurer earned more in premiums than it paid out in claims.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Maju Samuel)