Three major insurers are reporting difficult times. Travelers Cos. — the only P&C insurer found on the Dow Jones Industrial Average — said fourth quarter profits fell 17%. Declining investment income on low bond yields and the value of its energy-related holdings are the reason.
Comparing fourth quarter of 2014 to the fourth quarter in 2015, net income fell to $866 million from $1.04 billion. That’s $2.83 per share in the fourth quarter of last year when it was $3.11 the year before.
Return on equity in quarter four of 2015 is 14.5%. It was 16.6% in the same quarter of 2014. Net income fell 6.9% to $3.44 billion.
Zurich took a big hit as well. Operating losses in its non-life unit are estimated to be $100 million for the fourth quarter. Three big storms in the British Aisles cost the company $275 million in claims.
Also hurting was the restructuring of its General Insurance unit.
UnitedHealth Group is the largest health insurance in the country. It took a huge financial hit in 2015 in its individual market health plans. The loss is estimated at $720 million. That’s up $300 million from the original estimate of $425 million a few months ago.
Participation in the ObamaCare exchanges is getting the blame.
Source links: Insurance Business America, PropertyCasualty360.com, Carrier Management