Travelers Posts Record Operating Profit
Travelers Cos. posted a record quarterly operating profit as prices rose and losses from natural disasters fell sharply, the property insurance company said on Thursday.
Travelers was able to increase rates in all business lines and also retain customers, a strong sign for the rest of the industry. The company has been a bellwether of insurers' ability to raise pricing after years of weakness.
The Dow Jones industrial average component reported a third-quarter net profit of $867 million, or $2.21 per share, compared with $333 million, or 79 cents per share, a year earlier.
Excluding net realized investment gains and losses, Travelers earned $2.22 per share, a record operating profit for any quarter in the company's history. Analysts polled by Thomson Reuters had expected $1.61.
Because Travelers does not give forecasts, the company's quarterly results often differ widely from analysts' estimates. Still, the latest quarter brought the largest positive surprise in at least two years.
Catastrophe losses in the period were $59 million after taxes, compared with $394 million a year earlier. The third quarter is historically a difficult one for property insurers, but relatively limited hurricane damage this year helped results.
Travelers also said it had taken a $108 million after-tax increase to its asbestos reserves, in line with past years. The company has some of the industry's largest liabilities stemming from the cancer-causing mineral.
Following the release, the property and casualty insurer's shares rose before the opening bell. (Click here to get real-time quotes for Travelers.)