NEW YORK — Insurer Travelers Cos. said it was slowing its share buyback program after natural disasters cost the company about $1 billion over two months, already marking the second quarter as its most-expensive for catastrophes since Hurricane Katrina struck the U.S. in 2005.
Deadly tornadoes that plagued the U.S. in April and May combined with other disasters to cost Travelers about $1 billion to $1.05 billion, the company said in a statement Friday. That’s about equal to the amount the company spent on catastrophe claims for the past two years combined, and on par with the $1.01 billion in disaster costs Travelers incurred in the third quarter of 2005, when Hurricanes Katrina, Rita and Wilma combined to cause the insurance industry’s worst quarter on record.
Travelers’ disaster losses were concentrated in the company’s business insurance and consumer insurance operations, the company said. The figures are after taxes and reinsurance.
Travelers said it now expects stock repurchases to be less than $250 million in the quarter. The company spent $1.4 billion on buybacks in the same period a year earlier. Disaster costs a year earlier were $285 million, which had, until now, been Travelers’ highest ever second-quarter disaster tally.
The twisters that swept across the South and East Coast in late April were initially pegged by disaster-modeling company AIR Worldwide as the most-expensive tornadoes on record. But the next series of tornadoes, which struck from Michigan to Texas in late May, may have been even worse. Together, AIR estimates the two events caused up to $12.5 billion in insured losses industrywide.
