Travelers Companies, Inc. (TRV), a provider of property casualty insurance for auto, home and business, Tuesday reported a lower fourth-quarter profit, reflecting a decrease in underwriting gain and a fall in net investment income. Revenues marginally increased from last year and exceeded analysts' expectations.
In the fourth quarter, the company's net income declined to $618 million or $1.51 per share from $894 million or $1.95 per share reported last year.
Operating income was $609 million or $1.48 per share, lower than $864 million or $1.89 per share a year ago. On average, 22 analysts polled by Thomson Reuters expected the company to earn $1.53 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues slightly increased to $6.37 billion from $6.33 billion in the same quarter last year, which also exceeded analysts' estimate of $5.47 billion The company stated that higher pricing continued in all segments and had solid underlying underwriting performance in Business Insurance.
In Business Insurance segment, pricing improved with renewal price gains exceeding 6 percent overall, compared to 3 percent in the preceding third quarter.
Underwriting gain was $115 million, down from $303 million last year. Net realized investment gains dropped to $9 million from $30 million a year earlier. Travelers said its return on equity was 10 percent, compared to 13.6 percent in the previous year.
For the full year, the company's net income dropped to $1.43 billion or $3.36 per share from $3.22 billion or $6.62 per share a year ago. Annual revenues increased 1 percent to $25.45 billion from $25.11 billion in the preceding year.
Jay Fishman, chairman and chief executive officer of the company said, "In light of the fact that 2011 was the costliest catastrophe year on record for the insurance industry on a global basis, we are pleased that the strength of our businesses enabled us to generate net income of $1.4 billion and to grow book value per share by 7%."
The board also declared a quarterly dividend of $0.41 per share, to shareholders of record on March 9, 2012, payable on March 30.
Fishman added that the company remains confident in its ability to generate top tier returns on equity and deliver shareholder value.
TRV closed Monday's regular trading at $60.29 on the NYSE. In the pre-market activity, the shares are down 1.31 percent at $59.5.
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