Travelers profit jumps as underwriting turns positive and catastrophe losses fall

Travelers’ latest quarter says the U.S. property-and-casualty market is still not handing customers much relief. Catastrophe losses fell sharply and underwriting swung back into the black, but the insurer’s results also showed that pricing discipline remains intact, a sign that homeowners and businesses in storm-prone states are still paying for protection even as insurers defend margins.

Travelers posted first-quarter net income of $1.711 billion, or $7.78 a share, up from $443 million, or $1.91 a share, a year earlier. Core income rose to $1.696 billion, or $7.71 a share. Underwriting income climbed to $1.521 billion before tax, the sixth straight quarter above $1.5 billion, while the consolidated combined ratio improved to 88.6% from 102.5% in the prior-year period.

The improvement was driven in part by a steep drop in catastrophe losses, which fell to $761 million before tax from $2.266 billion a year earlier, when the January 2025 California wildfires weighed heavily on results. Travelers also booked $413 million in net favorable prior-year reserve development across all three segments, and net written premiums reached $10.338 billion, underscoring that demand for coverage remained solid even with rate increases already embedded in the market.

The numbers point to a sector that is still making money the old-fashioned way: charging enough, controlling claims and keeping exposure in check. Travelers’ underlying combined ratio was 85.3%, only slightly worse than 84.8% a year earlier, suggesting that the company’s core underwriting discipline has held even as weather losses normalized. Net investment income also helped, rising 9% after tax to $833 million.

Chief executive Alan Schnitzer said the company’s strong balance sheet let Travelers return $2.223 billion of capital to shareholders in the quarter, including $1.985 billion in share repurchases. The board also raised the regular quarterly dividend 14% to $1.25 a share, payable June 30 to shareholders of record June 10. Return on equity reached 21.1%, with core return on equity at 19.7%, and book value per share stood at $150.42 as of March 31.

For the broader insurance market, the message is clear. Lower catastrophe losses can ease pressure on earnings, but they do not automatically translate into cheaper coverage. Travelers’ results suggest insurers are still using strong pricing, reserve strength and underwriting discipline to preserve profitability, especially in high-risk lines and states where weather volatility remains a persistent cost of doing business.