ST. PAUL (dpa-AFX) - Property casualty insurer Travelers Companies, Inc. (TRV) Tuesday reported higher third-quarter profit, reflecting a decline in catastrophe losses and rise in investment income. Earnings per share topped analysts' expectations. The company said its result also benefited from net realized investment gains.
Jay Fishman, chairman and chief executive officer said, 'Our results were driven by strong underwriting performance across all of our business segments, as reflected in our consolidated combined ratio of 90.0%, and higher investment returns driven by private equity performance.'
Within Business and International Insurance, the firm improved retention in its domestic businesses. Bond & Specialty Insurance improved profitability, and in Personal Insurance, Auto net written premiums were up 3 percent from last year.
For the third quarter, the company's net income increased to $919 million or $2.69 per share from $864 million or $2.30 per share in the prior year.
Excluding net realized investment gains, operating earnings totaled $893 million or $2.61 per share. For the prior-year quarter, the company posted operating earnings of $2.35 per share.
On average, 26 analysts polled by Thomson-Reuters were looking for earnings of $2.27. Analysts' estimates typically exclude one-time items.
Pre-tax impact of catastrophes was $83 million, lower than $99 million a year earlier.
Total revenues grew 7 percent to $6.89 billion from $6.45 billion a year earlier. Analysts expected revenues of $5.99 billion.
Net written premiums increased 6 percent to $6.03 billion, mainly due to inclusion of Dominion and domestic business insurance growth within Business and International Insurance, the firm said.
Net investment income was $719 million, up from $657 million a year ago.
For the recent quarter, the company recorded net realized investment gains totaling $26 million, compared to a loss of $19 million last year.
The combined ratio increased 1.1 points to 90 percent as the benefit of lower catastrophe losses was more than offset by lower net favorable prior year reserve development and a higher underlying combined ratio. Underlying combined ratio rose 0.5 points to 90.5 percent.
'As we continue to face persistently low interest rates and uncertain weather patterns, we remain focused on delivering superior profitability and returns on equity,' Fishman said.
The board has recommended a quarterly dividend of $0.55 per share, to shareholders on record December 10, 2014, payable December 31.
TRV closed Monday's trading at $93.20. In the pre-market activity on Tuesday, the shares are up 1.13 percent.
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