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Travelers Reports Net Income Per Diluted Share Of $2.21 And Quarterly Record Operating Income Per Diluted Share Of $2.22 For The Third Quarter

Stocks in this article: TRV

“We are also very pleased with our continued execution in the marketplace, noting in particular that we once again achieved written rate gains across each of our segments. In Business Insurance, we continue to leverage our data and analytics to achieve targeted rate gains in order to drive profitability. Our results this quarter demonstrate our success in this strategy as our underlying combined ratio improved meaningfully. In Financial, Professional and International Insurance, renewal rate change improvements from recent quarters were driven by Management Liability, which reported rate gains of more than 6 percent. In Personal Insurance, we again achieved strong increases in renewal premium change, which includes rate as well as changes in exposure, across the segment, as well as targeted changes in terms and conditions within Agency Homeowners & Other.

“We remain committed to continuing to improve profitability through a strategy of actively, but selectively, seeking price increases and improved terms and conditions, given historically low interest rates and uncertain weather patterns,” concluded Fishman.

 

Third Quarter 2012 Consolidated Results

                       
($ in millions)   Three Months Ended September 30,
2012   2011   2012   2011  
Pre-tax After-tax
 
Underwriting gain (loss) $ 514 $ (289 ) $ 327 $ (185 )

Underwriting gain (loss) includes:

Net favorable prior year reserve development 193 184 129 124
Catastrophes, net of reinsurance (91 ) (606 ) (59 ) (394 )
 
Net investment income 722 690 578 561
 
Other, including interest expense   (64 )   (71 )   (38 )   (44 )
 
Operating income 1,172 330 867 332
Net realized investment gains (losses)   (2 )   2     (3 )   1  
Income before income taxes $ 1,170   $ 332  
Net income $ 864   $ 333  
                       
 
GAAP combined ratio 90.3 % 104.5 %
 

GAAP combined ratio excluding incremental impact of direct to consumer initiative

89.3 % 103.6 %

 

Impact on GAAP combined ratio

Net favorable prior year reserve development (3.4 ) pts (3.3 ) pts
Catastrophes, net of reinsurance 1.6 pts 10.8 pts
 
 

Operating income of $867 million after tax increased $535 million from the prior year quarter mostly due to a $512 million after-tax improvement in the underwriting results, reflecting lower catastrophe losses and higher underlying underwriting margins.

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