Travelers Beats Q4 Earnings Forecast on Record Premiums, Investment Gains

Record earned premiums and net investment income gains drove Dow component Travelers to stronger-than-expected fourth quarter earnings Thursday.
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Travelers Companies Inc.  (TRV) - Get Report posted stronger-than-expected fourth quarter earnings Thursday thanks to record premiums and a 10% jump in investment income.

Travelers said core income for the three months ending in December came in at $4.91 per share, a 54% increase from the same period last year and firmly ahead of the Street consensus forecast of $3.18 per share. Group revenues also impressed, rising 4% to an analyst-beating $8.4 billion.

Net investment income rose 9.9% to $677 million, the company said, while net written premiums were up 3% to $7.27 billion. The group's core return on equity for the quarter was 21%, Travelers said, while its combined ratio, a key metric of insurance industry profit that show improvement when it falls, declined 5.7 points to 86.7%.

 “Our ability to deliver strong results over this past year in the face of an historic pandemic, a record number of PCS catastrophe events and historically low interest rates reflects the value of underwriting excellence, our leading data and analytics, the dedication of our highly engaged and talented workforce and the significant value we bring to our customers and distribution partner, said CEO Alan Schnitzer. "Looking forward, we believe we are well positioned to capitalize on the opportunities ahead as the economy reopens and to continue to deliver meaningful shareholder value over time,” he added.

Travelers shares, a Dow component, were marked 4.8% higher in early trading immediately following the earnings release to change hands at $152.00 each, a move that extends the stock's six-month gain to around 25%.