Travelers CEO Fishman: Rate Hikes Continuing
In a slide presentation prepared for a Barclays financial services conference, Chief Executive Officer Jay Fishman said on Sept. 11 that business insurance rates were up an average of 7.7 percent so far in the third quarter, against gains of 7.2 percent last quarter.
Rates have also continued to rise in consumer homeowners and auto insurance, he said.
“We continue to be successful in achieving rate gains,” Fishman said in his presentation. “We’re achieving about what we’re attempting to achieve. So far, the competitive environment is allowing us to achieve the rate gains that we are seeking.”
Travelers started raising prices last year, a response to increased catastrophe losses and persistently low interest rates, both of which squeezed the company and pushed it to start taking price increases when and where it could.
The company was something of a bellwether in that regard. In recent quarters, analysts have been watching to see whether it could maintain that price momentum, which the industry was looking for after years of falling rates.
Fishman also addressed interest rates, which are a huge concern for insurers that collect premiums and then have to invest them so they have the resources to pay future claims. If the current rate environment persists and all else remains equal, the company would take a $145 million hit to net income in 2015 compared with 2014, Fishman said.