The Travelers Cos. says it expects the effects of Hurricanes Ike, Gustav and Dolly to hurt its pretax earnings in the third quarter by $1.05 billion.
The insurer also said it recorded third-quarter net realized investment losses of $170 million pretax, which includes impairments of $67 million pretax due to securities issued by failed investment bank Lehman Brothers Holdings Inc.
In total, the company expects these items to reduce its operating income by about 80 cents per share and net income by about $1 per share in the third quarter.
Like most insurers, Travelers emphasizes operating income because it excludes certain costs — including investment losses — that insurers do not consider reflective of trends in their business.
Analysts polled by Thomson Reuters, on average, forecast earnings of $1.09 per share in the third quarter.
Travelers is expected to report third-quarter earnings on Oct. 22. (AP)
