Travelers profit rises as underwriting gains jumpReprints
(Reuters) — Property/casualty insurer Travelers Cos. Inc. reported a 5% rise in quarterly net profit, helped by higher underwriting gains and lower losses from natural disasters.
The company reported operating earnings of $3.07 per share for the fourth quarter ended Dec. 31. Analysts on average had expected $2.54 per share, according to Thomson Reuters I/B/E/S.
Travelers' earnings often differ substantially from Wall Street estimates as the company does not provide forecasts.
Net written premiums rose 3.6% to $5.84 billion, and underwriting gains rose 25.7% to $866 million.
Travelers' combined ratio, the percentage of premium revenue an insurer has to pay out in claims, improved to 85% in the quarter from 87.7% a year earlier. A combined ratio of under 100 indicates an underwriting profit.
The company, a Dow Jones Industrial Average component, has aggressively raised premiums in the past quarters to offset low interest rates that have hurt its fixed-income investments.
"We remain very pleased with, and intend to continue, our proactive, account-by-account, class-by-class pricing strategy," Chief Executive Jay Fishman said in a statement.
The company said net income rose to $1.04 billion, or $3.11 per share, in the fourth quarter, from $988 million, or $2.70 per share, a year earlier.
Pretax catastrophe losses, net of reinsurance, fell to $41 million from $53 million. Net investment income fell 9.3% to $637 million.
As one of the first insurers to report results, Travelers' results are seen as a bellwether for the industry.
The company's shares gained about 17% last year, outperforming a 7.5% rise in the Dow Jones Industrial Average Index.