(Bloomberg) -- Travelers Cos., the lone property-casualtyinsurer in the Dow Jones Industrial Average, said first-quarterprofit fell 21% as investment income slipped on energy-relatedbets.

Net income declined to $833 million, or $2.55 a share, from$1.05 billion, or $2.95, a year earlier, the New York-based companysaid Tuesday in a statement. Operating profit, which excludes someinvestment results, was $2.53 a share, compared with the $2.52average estimate of 24 analysts surveyed by Bloomberg. The companyannounced a $5 billion stock buyback plan and lifted its dividend11% to 61 cents a share.

Chief Executive Officer Jay Fishman’s company and its peers havebeen coping with low bond yields. A slump in energy prices has alsoburdened portfolios.

“Investment income growth will be difficult to generate untilinterest rates move higher,” Jay Gelb, an analyst at Barclays Plc,said in an April 17 note.

Net investment income fell 20% to $592 million in a portfoliocomprised mostly of bonds. Profit from alternative holdings tumbledby more than half to $48 million as the company endured “lowervaluations for energy-related investments,” according to thestatement. A year earlier, the insurer benefited frombetter-than-usual results in the non-fixed income part of itsportfolio.

Travelers had climbed 0.3% this year through Monday, comparedwith the 1.2% gain of the Dow Average. The stock advanced 17% in2014 and 26% the year before.

Policy Sales

Policy sales rose less than 1% to $5.9 billion. Travelerscharged domestic business insurance customers 1.4% more at renewalin the three months ending March 31. That compares with an increaseof about 4.8% a year earlier. Retention of clients in the segmentclimbed to 84% from 81%.

“We were particularly pleased that in our domestic business weachieved a record level of retention while posting positive renewalrate change,” Fishman said in the statement.

Fishman, 62, whose company reported profits through thefinancial crisis, was diagnosed with a neuromuscular condition lastyear and has cut back on his commitments aside from leading theinsurer. He has been CEO since 2004, when he engineered a mergerwith St. Paul Cos.

Book value, a measure of assets minus liabilities, climbed to$77.96 per share from $77.08 at the end of December. Thefirst-quarter return on equity fell to 13.4% from 16.8% a yearearlier.

‘Difficult Winter’

Travelers posted a combined ratio of 88.9%, meaning it retained11.1 cents of each premium dollar after claims and expenses. Thatcompares with a ratio of 85.7 the previous year. Pretax catastrophecosts increased to $162 million from $149 million a year earlierafter a “very difficult winter on the East Coast and prolongeddrought on the West Coast,” Fishman said.

The gain from reserves narrowed to $243 million from $294million a year earlier. Insurers regularly reassess the moneythey’ve set aside for future claims and can reduce or increase theamount based on revised expectations of losses.

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