J.P. Morgan Adjusts Travelers Estimates

J.P. Morgan is adjusting its estimates on Travelers Companies, Inc. TRV. “We are adjusting down our 2Q and FY 2011 EPS estimates for Travelers by $1.32 and $1.34 to $0.13 and $4.78, respectively, to reflect the significant weather losses that affected the US in the month of April,” J.P. Morgan writes. “Our estimate reduction reflects our estimate of these losses, partially offset by a one-third reduction to our previous catastrophe load. Specifically, we are assuming April losses of $900 million. For comparison, our estimate is 60% higher than what one would estimate by simply multiplying the industry loss (which PCS estimates to be almost $10 billion) by the company's personal and commercial market shares in the affected states. “The reason we are using a higher estimate is that the four companies that have preannounced losses to date for April storms have incurred losses 80% higher than their respective market shares would imply. This implies to us that industry losses may be higher than current projections rather than normal variance in company-specific losses.” Travelers Companies closed Monday at $62.94.