Login Register Subscribe
Current Issue

Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Travelers profit rises as underwriting gains jump

Reprints

(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.