Travelers Reports More Rate Gains in Q2

The Travelers Companies said renewal rates are continuing to trend up across its business segments.

“In business insurance, renewal rate change exceeded 7 percent, with stable retentions, which demonstrates the success of our active pricing strategy and our continued focus on improving profitability,” CEO Jay Fishman said during the July 19 earnings conference call.

Company executives emphasized, however, that rate hikes are dependent on characteristics of each account. Currently, regarding Travelers’ commercial accounts, about 35 percent of the renewals get an increase of 10 percent or higher. But about 15 percent of renewals see no rate changes or even get rate decreases, executives said.

In personal insurance, renewal premium change — which includes changes in exposure — rose 6 percent in agency auto segment and 11 percent in “agency homeowners and other” segment. In homeowners insurance, the compay said it is pushing more aggressively for higher deductibles, though the emphasis is mostly on new accounts.

Travelers is also reevaluating how it covers roof hail losses and a potential change to covering roof losses, and doing a better job of selection regarding the age and the quality of the roof.

Travelers reported $499 million profit for the 2012 second quarter, compared with a year-earlier loss of $364 million. It reported a GAAP combined ratio of 100.5, improving from 125.0 one year ago.

Net written premiums were $5.87 billion, up from $5.82 billion one year ago. CAT losses were $357 million, compared to $1.085 billion in the prior year quarter. Net investment income was $589 million, falling from $606 million a year earlier.