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Travelers insurance profits surpassing the Zacks Consensus

Best Insurance stock - Travelers insurance earnings surpassing the Zacks Consensus : The Travelers Companies, Inc. (TRV - Analyst Report) reported earnings of 72 cents per percentage inwards the quaternary quarter of 2012, surpassing the Zacks Consensus Estimate of 4 cents per share. However, results plunged 51% from $1.48 earned inwards the year-ago quarter. Operating income of $278 1000000 dipped 54% the reported quarter.

The year-over-year downside was largely attributable to higher catastrophe losses to a greater extent than oftentimes than non due to Hurricane Sandy. However, higher underlying underwriting margins in addition to higher cyberspace favorable prior-year reserve evolution express the downside to about extent.

Cat loss inwards the quarter was $689 1000000 or $1.78 per share. Including cyberspace realized investment gains of $26 1000000 or six cents per share, the companionship reported cyberspace income of $304 1000000 or 78 cents per share, comparison unfavorably with cyberspace income of $618 1000000 or $1.51 a share. The year-ago quarter included cyberspace realized investment gains of $9 million.

Operational Update
Net written premiums during the quarter were $5.4 billion, upward 2% twelvemonth over year.

Net investment income increased 5.7% twelvemonth over twelvemonth to $689 1000000 during the quarter, largely attributable to improve surgical operation at non-fixed income portfolio, partly muted yesteryear reduction inwards fixed income returns.

Travelers posted underwriting loss of $338 million, comparison unfavorably with earnings of $187 1000000 inwards the year-ago quarter. Combined ratio deteriorated 950 terra firma points twelvemonth over twelvemonth to 105.4% inwards the reported quarter. The deterioration was due to higher catastrophe losses, partially muted yesteryear higher underwriting margins in addition to higher cyberspace favorable prior-year reserve development.

Total revenue inwards the quarter nether review was $6.5 billion, increasing 2% twelvemonth over year, driven yesteryear the augmentation inwards premiums earned in addition to cyberspace investment income. Revenues surpassed the Zacks Consensus Estimate of $6.3 billion.

Full Year Highlights
Operating earnings of $6.21 per percentage outpaced the Zacks Consensus Estimate of $5.56 in addition to twelvemonth agone earnings of $3.28. The upside stemmed from a combination of lower catastrophe losses, higher underwriting margins in addition to higher cyberspace favorable prior-year reserve development

Including cyberspace realized investment gains of nine cents, the companionship reported cyberspace income of $6.30 per share, surging from $3.36 a percentage earned inwards 2011.

Total revenue increased 1% twelvemonth over twelvemonth to $25.7 billion. It every bit good outperformed the Zacks Consensus Estimate of $25.2 billion.

Underwriting gains of $296 1000000 reversed the year-ago loss of $745 million. Combined ratio improved 800 terra firma points.

Segment Update
Business Insurance: Net written premium increased 6% twelvemonth over twelvemonth to $2.78 billion inwards the quarter, largely driven yesteryear increases inwards renewal charge per unit of measurement change.

The combined ratio deteriorated 770 terra firma points twelvemonth over twelvemonth to 103.5%, mainly due to higher catastrophe losses.

Operating income slid 27% twelvemonth over twelvemonth to $326 1000000 inwards the quaternary quarter of 2012, primarily attributable to higher catastrophe losses.

Financial, Professional & International Insurance: Net written premium inwards the quarter nether review improved 2% twelvemonth over twelvemonth to $808 million, driven yesteryear a 6% increment inwards cyberspace written premiums inwards the International business.

The combined ratio deteriorated 100 terra firma points twelvemonth over twelvemonth to 80.2% inwards quaternary quarter 2012, attributable to higher catastrophe losses.

Operating income descended 13.8% twelvemonth over twelvemonth to $131 million, attributable to higher catastrophe losses, partly showtime yesteryear higher underlying underwriting margins

Personal Insurance: Net written premium skidded 3% twelvemonth over twelvemonth to $1.79 billion, primarily due to lower novel draw of piece of occupation concern volumes.

The combined ratio deteriorated 1540 terra firma points twelvemonth over twelvemonth to 89.7% inwards the quaternary quarter of 2012, largely driven yesteryear higher catastrophe losses.

Operating loss of $114 1000000 compared unfavorably with earnings of $77 1000000 inwards the year-ago quarter largely due to higher catastrophe loss. However, higher underlying underwriting margins in addition to higher cyberspace favorable prior-year reserve evolution express the downfall.

Dividend in addition to Share Repurchase
Travelers spent $400 1000000 to buyback 5.4 1000000 shares inwards the quarter, taking the tally to $1.45 billion spent to buyback 22.4 1000000 shares inwards 2012. The companionship is all the same left with $2.159 billion remaining nether its authorization.

The companionship every bit good paid $178 1000000 inwards dividends. Additionally, the board approved a quarterly dividend of 46 cents, payable Mar 29, 2013, to the shareholders of tape every bit of Mar 8, 2013.

Our Take
Travelers continues with the tendency of delivering positive earnings surprise.

Though its exposure to truthful cat loss weighs on the results, prudent underwriting practices in addition to favorable prior-year reserve evolution managed to restrict the adverse affect.

High retentiveness rate, pricing gains, positive renewal charge per unit of measurement changes, in addition to a rigid majuscule lay are alongside the other positives, which are probable to back upward Travelers perform improve going forward.

Travelers’ continuous percentage buyback strategy has a positive impact on earnings per percentage in addition to every bit good bolsters shareholder value.

Further, Travelers latterly increased its stake inwards J. Malucelli ParticipaƧƵes em Seguros e Resseguros S.A., a marketplace leader inwards the surety insurance draw of piece of occupation concern inwards Brazil. Further, it made about useful investments to augment its technology scientific discipline platform. It scores strongly with the rating agencies every bit well.

source -  Zacks.com

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