Travelers:Quarterly Loss Of $793.4 Million
NU Online News Service, Jan. 23, 10:14 a.m. EST?Travelers Property Casualty Corp. reported a fourth-quarter net loss of $793.4 million, or 79 cents per share?a sharp contrast from a year ago when it reported a net income of $303.3 million, or 39 cents per share.
For the full year 2002, the company reported a net loss of $27 million, or three cents per share.
Travelers announced that the net loss for its last quarter was attributable to the previously announced $1.297 billion after-tax charge for boosting its asbestos reserves.
Hartford, Conn.-based Travelers said last week it had increased its asbestos reserves by $2.45 billion to $3.4 billion after reviewing its recently completed asbestos study. Its announcement surprised some industry experts who had not expected a reserve increase on such a large scale.
"During the quarter, we completed our previously announced asbestos study and strengthened our asbestos reserves to $3.4 billion. This reserve strengthening reflects a conservative view of trends that have become clearer over the last few quarters and our estimate of the projected ultimate cost of our asbestos liabilities," said Robert I. Lipp, Travelers' chairman and chief executive officer, in a statement.
On a brighter note, the company announced that its net written premiums for the fourth quarter grew 18 percent to $3.066 billion, and Mr. Lipp explained that Travelers' commercial and personal lines businesses continued to perform very well.
"Commercial lines recorded a 23-percent rise in net written premiums driven by continued rate increases, selective growth in new business, and higher customer retention. In personal lines, we recorded an 11-percent increase in net written premiums primarily resulting from continued rate increases and strong retention," Mr. Lipp said.
Mr. Lipp also forecasted that Travelers would record operating income for the full year 2003 of $1.7 billion to $1.8 billion, with a projected return on equity of 16.7 percent to 17.6 percent.
"As we enter 2003, Travelers holds a solid market position, has a strong balance sheet, and has significant earnings potential," he said.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.