Travelers profit jumps on lower catastrophe costs

[October 22, 2009]  CHARLOTTE, N.C. (AP) -- Travelers Cos. said Thursday that lower losses related to severe weather and a rebound in its investment portfolio contributed to a jump in the insurer's profit for the third quarter.

The New York-based commercial and property insurer also boosted its quarterly dividend 10 percent and authorized an additional $6 billion share repurchase program, citing improved stability in capital markets.

The company raised its full-year earnings outlook.

Travelers said net income more than quadrupled to $935 million, or $1.65 per share, from $214 million, or 36 cents per share, a year ago.

Excluding items, operating profit totaled $1.61 cents per share -- beating analysts' estimates of $1.31.

Catastrophe losses linked to severe weather cost the company $103 million after taxes, an 85 percent drop from $682 million a year earlier.

2008 was a difficult year for property and casualty insurers. Hurricanes Ike, Gustav and Dolly slammed the Gulf Coast region. This year, only one named storm, Tropical Storm Claudette, made landfall in the U.S. in the three months ended Sept. 30.

A recovering stock market also helped the insurer.

Travelers recorded third-quarter net realized investment gains of $21 million, which boosted its total net investment income 5 percent to $616 million for the most recent quarter.

Travelers said it was revising its outlook for 2009 operating profit to a range of $5.30 and $5.50 per share, compared with prior estimates of $4.80 to $5.05 per share. Analysts have been expecting profit of $5.28 per share.

The company increased its quarterly dividend 10 percent to 33 cents per share.

[Associated Press; By IEVA M. AUGSTUMS]

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