NEW YORK (

TheStreet

) -- Catastrophe losses cost

Travelers

(TRV) - Get Report

some profit in the fourth quarter, but management argues that higher prices in 2012 will more than offset what Mother Nature took away in 2011.

Travelers reported net income of $618 million, or $1.51 a share, for the fourth quarter, compared with $894 million, or $1.95 a share, in the year-earlier fourth quarter. The company said operating income was $609 million, or $1.48 share, compared with $864 million, or $1.89 a share, last year.

Analysts polled by

Zacks

estimated net income of $1.51 a share in the fourth quarter.

Catastrophe losses in the quarter -- including an early snowstorm in the northeastern United States -- bit into the insurer's bottom line and pushed up Travelers' combined ratio to 95.9%. The combined ratio is a key measure of profitability for insurers.

But the company added that it was seeing price increases across all business lines in the fourth quarter -- including an 8% rise in commercial accounts and "meaningful increases" in its personal lines business as the result of "unusual weather patterns" in the U.S.

"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%," said CEO Jay Fishman in a statement Tuesday.