By Utkarsh Shetti
July 17 (Reuters) – Property and casualty insurance giant Travelers swept past Wall Street estimates for second-quarter profit on Friday, boosted by lower catastrophe losses and robust investment income, sending its shares up 8.5%.
Demand for insurance has remained resilient despite broader spending pressures, as businesses and consumers continue to seek protection against financial, legal and catastrophe-related risks.
The firm, which is the first of the big U.S. insurers to post earnings, is considered a bellwether for the insurance industry, whose results offer a window into underwriting trends across the sector.
Travelers has generally taken a conservative approach to underwriting, regularly raising rates and limiting exposure to riskier lines to protect profitability, even as competitors seek volumes to fuel growth.
“Our underlying underwriting income and net investment income have grown into a formidable earnings base, substantial enough to absorb significant catastrophe losses,” CEO Alan Schnitzer told analysts.
Catastrophe losses, which are a major swing factor in insurers’ results due to their unpredictable nature, fell to $518 million on a pre-tax basis from $927 million a year earlier.
Its underwriting income rose to $1.74 billion, from $1.02 billion a year ago. Strong underwriting helps insurers maintain profitability by ensuring premiums adequately cover claims.
“We believe TRV’s results validate our positive outlook for the P&C business generally in 2Q26 and raise the performance bar for other publicly traded insurance companies,” analysts at Raymond James said in a note.
Travelers, which primarily invests in high-quality bonds, has also increasingly benefited from its vast investment portfolio. Elevated interest rates allow the company to earn more from reinvesting maturing securities.
Its net investment income jumped 13.6% to $1.07 billion from $942 million a year earlier, while net written premiums came in at $11.53 billion, versus $11.54 billion a year earlier.
“The scale of our earnings and cash flow enable us to invest in differentiating technology, including AI… we remain highly confident in the outlook for Travelers,” Schnitzer said in a statement.
The underlying combined ratio, a key industry metric that indicates underwriting profitability, improved marginally to 84.1% from 84.7%. A ratio below 100 indicates claims and expenses paid out were lower than premiums collected.
Travelers posted an adjusted profit of $10.04 per share, surpassing expectations of $5.42, according to data compiled by LSEG.
Shares of the company have risen over 16% so far this year, outperforming the benchmark S&P 500 index.
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Leroy Leo)
By Utkarsh Shetti | Reuters | © Copyright Thomson Reuters 2026.
