Travelers Reports Increase in Net Income, Drop in Operating Income for Q3

The Travelers Companies Inc. has reported net income of $1.005 billion, or $2.11 per diluted share, for the quarter ended Sept. 30, 2010, compared to $935 million, or $1.65 per diluted share, for the same quarter in 2009.

Operating income in the current quarter was $858 million, or $1.81 per diluted share, compared to $914 million, or $1.61 per diluted share, in the prior year quarter.

Travelers Chairman and CEO Jay Fishman described the company’s third quarter results as “very strong.” Total revenues of $6.482 billion represent a 2 percent growth compared with the third quarter of 2009.

Travelers had a 15 percent return on equity for the quarter and a consolidated combined ratio of 90.6 percent, which Fishman attributed to strong underwriting results across each of the company’s business segments.

“Net investment income remained solid although modestly lower than the prior year quarter,” Fishman said.

In personal lines, the company saw “positive renewal premium changes,” Fishman said. The number of policies grew through retention and the addition of new business.

“While current profitability across our diversified commercial insurance businesses is solid, the general economic environment continues to present challenges,” Fishman said.

Commercial business challenges include low reinvestment yields, exposure and flat pricing, he said.

“On a positive note, our retention continues to be, in general, at historical highs and loss cost trends remain benign,” Fishman said. Account growth in Travelers business insurance sector has been “impressive,” he added.

Source: Travelers