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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

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  • Net written premiums of $679 million increased 2 percent from the prior year quarter due to increased renewal premium change as well as a higher level of audit premiums.
  • Renewal premium change was positive, continuing a long-standing trend.
  • Retention rates increased from recent quarters but were lower than the prior year quarter.
  • New business volumes decreased from the prior year quarter.

Commercial Accounts

  • Net written premiums of $805 million increased 8 percent from the prior year quarter primarily due to increased renewal premium change as well as a higher level of positive audit premiums.
  • Renewal premium change was again positive and increased from recent quarters.
  • Retention rates remained strong and increased from recent quarters.
  • New business volumes decreased from the prior year quarter, but were generally consistent with recent quarters.

Other Business Insurance

Includes Industry-Focused Underwriting, Target Risk Underwriting and Specialized Distribution

  • Net written premiums of $1.275 billion increased 3 percent from the prior year quarter primarily due to increased renewal premium change as well as a higher level of positive audit premiums.
  • Renewal premium change was positive and continued to increase from recent quarters.
  • Retention rates remained strong and increased from recent quarters.
  • New business volumes decreased from the prior year quarter.

National Accounts

  • Net written premiums of $202 million increased 15 percent from the prior year quarter primarily due to increased renewal premium change driven by payroll exposure growth as well as higher new business volumes. In addition, the repopulation of workers’ compensation residual market pools contributed to premium growth in the third quarter 2012.

Financial, Professional & International Insurance Segment Financial Results

“In Financial, Professional and International Insurance, we are pleased that our underlying combined ratio has improved both sequentially and year over year in each of the last four quarters driven by improved underwriting results in both our International and Management Liability businesses,” commented MacLean. “We are also pleased that thanks to solid execution in our Management Liability business written rate increases have accelerated both during the quarter and over the past several quarters.”

 
                             
       
($ in millions) Three Months Ended September 30,  
2012 2011 2012 2011  
Pre-tax After-tax  
 
Underwriting gain $ 149 $ 187 $ 97 $ 126

Underwriting gain includes:

Net favorable prior year reserve development 87 153 60 104
Catastrophes, net of reinsurance (1 ) (3 ) - (2 )
 
Net investment income 97 101 78 81
 
Other 8 6 5 4
             
Operating income $ 254   $ 294   $ 180 $ 211  
                             
 
GAAP combined ratio 80.2 % 76.2 %
 

Impact on GAAP combined ratio

Net favorable prior year reserve development (11.3 ) pts (19.1 ) pts
Catastrophes, net of reinsurance 0.1 pts 0.4 pts

 

 

Operating income of $180 million after tax decreased $31 million from the prior year quarter mostly due to a $29 million after-tax decrease in the underwriting gain, reflecting lower net favorable prior year reserve development, partially offset by higher underlying underwriting margins.

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