Travelers Cos. Inc., the largest publicly traded U.S. property casualty insurer, easily beat Wall Street estimates for the third quarter as premiums rose in its personal insurance lines and catastrophe losses fell sharply.
Travelers also raised its operating earnings outlook for the year by more than 10 percent, based on what it has seen thus far this year and the expectation of no new reserve developments in the fourth quarter.
The company saw continued growth and strong retention in both agency auto and homeowners insurance, while weak economic conditions had less of an impact on business insurance lines than in prior quarters.
Travelers said net income rose to $1.01 billion, or $2.11 per share, from $935 million, or $1.65 per share, a year earlier. The most recent quarter included an after-tax gain of $133 million on the sale of shares in Verisk, which makes risk and analytics software.
Operating earnings, which exclude investment gains and losses, were $1.81 per share. Analysts polled by Thomson Reuters I/B/E/S on average expected earnings of $1.51 per share.
Results for the New York-based company were also boosted by a decline in catastrophe claims. Travelers paid out $117 million pre-tax in the quarter to cover catastrophe losses, some 26 percent less than the year-earlier period.
For the year, Travelers raised its operating income outlook to a range of $5.75 to $5.95 per share, up from a prior range of $5.20 to $5.45 per share.
Travelers said that was based on its actual experience through the first three quarters, an estimated decrease in average invested assets in the low single digits, limited catastrophe losses and an assumption of no new reserve development from prior years, either favorable or unfavorable.
Travelers’ shares closed Wednesday at $54.64, near the multiyear highs the stock set in late March. The company carries a price-to-book ratio of 0.92, just below the sector median of 0.96, according to Reuters data.
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