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Higher cat, noncat weather losses hit Travelers' Q2 results

Travelers Cos.Inc. reported second-quarter operating income of $649 million, or$2.20 per share, a decline from $806 million, or $2.52 per share, in theyear-ago quarter.

Net income fell to $664 million, or $2.24 per share, in thesecond quarter, from $812 million, or $2.53 per share, in the prior-year period.

The S&P Capital IQ consensus normalized EPS estimate forthe quarter was $2.05.

The decline in net and operating income was attributed tohigher catastrophe losses, including the Fort McMurray wildfires, highernoncatastrophe weather-related losses and lower net investment income.Catastrophe and certain noncatastrophe weather-related losses were higher by$135 million after tax, or $200 million pretax, in the second quarter. Netinvestment income was lower by $61 million after tax, or $83 million pretax, to$549 million. The impact of the higher noncatastrophe weather-related lossesand lower net investment income was partially offset by favorable prior-yearreserve development that was higher by $59 million after tax, or $81 millionpretax. The second quarter of 2015 included a $32 million tax benefit.

The combined ratio deteriorated to 93.1% as of June 30 from90.8% as of June 30, 2015.

Book value per share was $85.73 as of June 30, up from$79.75 as of Dec. 31, 2015, and $77.51 as of June 30, 2015. Adjusted book valueper share was $77.61 as of June 30, compared with $75.39 as of Dec. 31, 2015,and $73.09 as of June 30, 2015.

During the second quarter, Travelers repurchased 4.9 millionshares at an average price of $112.12 per share for a total cost of $550million.