Travelers reports net income of $925 million for Q2

The Travelers Companies, Inc. has reported a net income of $925 million for the second quarter of the year, up from $499 million in the same period last year.

The New York-based insurer also reported an operating income of $816 million for the three months ending June 30, up from $495 million in Q2 of 2012.

Those increases were driven mainly by lower catastrophe losses and “continued improvement in underlying underwriting margins in all segments,” the company said.

Its net and operating income also had an after-tax boost of $122 million from “favourable” tax and legal settlements and $109 million after-tax from net realized investment gains.

Operating return on equity was 14.2% for the quarter and 15.0% on a year-to-date basis.

“We are very pleased with the pricing levels we achieved, which once again exceeded expected loss cost trends in all segments, while maintaining solid retentions,” Jay Fishman, Travelers’ chairman and CEO noted in a statement on the results.

“Across our commercial insurance businesses, our ability to segment, price and select risk positions us well to continue to improve profitability,” he said. “In Personal Insurance, our strategy of seeking price increases and improved terms and conditions has improved profitability, but it has continued to negatively impact premiums.”

“In June, we reached an agreement to acquire The Dominion of Canada General Insurance Company, part of our strategy of making targeted investments in attractive markets outside the United States,” Fishman also noted. “The Dominion will significantly improve Travelers’ market position and scale in Canada, and we are very enthusiastic about this opportunity.”

Fishman added that the company will continue to seek higher margins as volatile weather and low interest rates remain challenges.