Due to large payouts to customers who suffered losses in severe storms in the United States, property and casualty insurers Cincinnati Financial Corp and Selective Insurance Group reported weak second-quarter earnings.
The second quarter is likely to go down as one of the worst years for the U.S. insurance industry, mostly for property insurers, which will report billions of dollars in catastrophe losses due to powerful tornadoes that struck in April and May.
Cincinnati Financial, the U.S. Midwestern insurer posted a narrower-than-expected quarterly operating loss helped by higher income from investments.
The company's operating loss -- a measure commonly used by insurance analysts, as it excludes investment gains and losses -- was 57 cents per share.
Analysts, on average, were expecting a loss of 64 cents per share, according to Thomson Reuters I/B/E/S.
Selective Insurance Group posted an operating income of 1 cent a share, below average analysts' expectations of 3 cents a share.
Cincinnati recorded second-quarter property casualty losses from natural catastrophes of $189 million, up $124 million from a year ago, while Selective's catastrophe losses rose 12 percent to $29.2 million.
Cincinnati Financial's property casualty combined ratio rose to 136.6 percent from 107.6 percent. Combined ratio is the percentage of premiums an insurer has to pay out in claims and expenses. A figure over 100 indicates that underwriting was unprofitable