(Reuters) – Travelers Cos Inc posted a record quarterlyoperating profit as prices rose and losses from natural disastersfell sharply, the property insurance company said on Thursday.

Travelers was able to increase rates in all business lines andalso retain customers, a strong sign for the rest of the industry.The company has been a bellwether of insurers' ability to raisepricing after years of weakness.

Shares of Travelers rose as much as 4.6 percent to set anall-time high.

The Dow Jones industrial average component reported athird-quarter net profit of $867 million, or $2.21 per share,compared with $333 million, or 79 cents per share, a yearearlier.

Excluding net realized investment gains and losses, Travelersearned $2.22 per share, a record operating profit for any quarterin the company's history. Analysts polled by Thomson ReutersI/B/E/S had expected $1.61.

Because Travelers does not give forecasts, the company'squarterly results often differ widely from analysts' estimates.Still, the latest quarter brought the largest positive surprise inat least two years.

Analysts said the results were strong across the board andpointed to further gains in coming quarters.

“Even with a much higher-than-consensus estimate for 2013, wewould expect our estimate to go higher,” analyst Larry Greenberg ofJanney Capital Markets unit Langen McAlenney said in a note toclients.

Travelers said catastrophe losses in the third quarter were $59million after taxes, compared with $394 million a year earlier. Thethird quarter is historically a difficult one for propertyinsurers, but relatively limited hurricane damage this year helpedresults.

In a slide presentation for analysts, the company noted thatcustomer retention in its homeowner and auto insurance businesseshad been steady compared with the second quarter, even as the rateat which it raised premiums rose.

The trends were similar in business insurance, where rates havebeen increasing steadily in recent quarters and retention haspicked up after a dip late last year.

Travelers also said it had taken a $108 million after-taxincrease to its asbestos reserves, in line with past years. Thecompany has some of the industry's largest liabilities stemmingfrom the cancer-causing mineral.

The company's shares were up 3.8 percent at $74.06 in morningtrading after rising to nearly $74.70 earlier in the session.

At Wednesday's close, the stock was up about 21 percent for theyear, roughly matching gains in the broader S&P insuranceindex.