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Travelers Cos. posts sharp rise in Q3 core income on lower cat losses

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Travelers Cos. posts sharp rise in Q3 core income on lower cat losses

Travelers Cos. Inc. reported third-quarter core income of $687 million, or $2.54 per share, compared to $253 million, or 91 cents per share, in the year-ago quarter, reflecting a decrease in catastrophe losses and higher net investment income.

Core income also benefited from a lower U.S. corporate income tax rate. Net income rose year over year to $709 million, or $2.62 per share, from $293 million, or $1.05 per share, reflecting higher core income, partially offset by lower net realized investment gain.

The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was $2.26.

Catastrophe losses, net of reinsurance, came in at $264 million versus the year-ago quarter's $700 million. Losses in the most recent quarter primarily resulted from Hurricane Florence, wind and hail storms in various regions of the U.S. and a wildfire in California.

Net written premiums increased 6% year over year to $7.06 billion, while the combined ratio, which measures claims and costs as a share of premiums, improved to 96.6% from 103.2%. Travelers booked an underwriting gain of $198 million, compared to a loss of $246 million in the third quarter of 2017.

Net investment income rose to $646 million from $588 million, on the back of higher returns in the fixed-income and private equity portfolios.

During the quarter, the company repurchased 3.1 million shares at an average price of $130.22 per share for a total cost of $400 million.