Travelers Q2 Profit Rises 19%, Tops View

(RTTNews) - Property casualty insurance provider Travelers Companies, Inc. (TRV) reported Tuesday a profit for the second quarter that grew 19 percent from last year, despite lower net investment income, reflecting higher underwriting gains and lower catastrophe losses. Quarterly operating earnings per share also topped analysts' expectations.

"Our results were driven by strong underwriting performance across all of our business segments, as reflected in our consolidated combined ratio of 90.8%, as well as net investment income which was consistent with our expectations," Chairman and CEO Jay Fishman said.

The New York-based company reported net income of $812 million or $2.53 per share for the second quarter, higher than $683 million or $1.95 per share in the prior-year quarter.

Excluded certain items, operating income for the quarter was $806 million or $2.52 per share, compared to $673 million or $1.93 per share in the prior year.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $2.12 per share for the quarter. Analysts' estimates typically exclude one-time items.

The company reported an underwriting gain of $511 million for the quarter, higher than $257 million a year ago. Combined ratio improved 4.3 points to 90.8 percent from last year's 95.1 percent amid strong underwriting results in each business segment.

Total revenues for the quarter declined 1 percent to $6.71 billion from $6.79 billion in the same quarter last year. Net written premiums edged up to $6.17 billion from $6.16 billion a year ago. Fifteen Wall Street analysts were looking for revenues of $6.26 billion for the quarter.

Net investment income for the quarter declined to $632 million from $695 million in the year-ago quarter, primarily due to lower private equity and fixed income returns.

Further, Travelers said its Board of Directors declared a quarterly dividend of $0.61 per share, payable on September 30 to shareholders of record as of the close of business on September 10, 2015.

The company also said it returned almost $1 billion to shareholders, including about $800 million in share repurchases, in the quarter.

"We continue to believe that creating shareholder value is achieved by building meaningful and sustainable competitive advantages which deliver superior returns over time and returning excess capital to shareholders. This strategy has been extremely effective for us, and with our data-driven decisions and relentless focus on execution, we remain well positioned to continue to deliver superior shareholder value," Fishman added.

TRV closed Monday's regular trading session at $102.61, down $0.30 on a volume of 1.76 million shares. In the past 52-week period, the stock has been trading in a range of $88.81 to $110.49.