The Travelers Companies Inc. today reported second-quarter net income rose 24 percent, beating consensus estimates by about 22 cents per share.
Formerly known as St. Paul Travelers, the carrier reported second-quarter net income of $1.2 billion, or $1.90 per basic share, compared with $970 million, or $1.40 per basic share for the same year-ago quarter.
Morgan Stanley analyst William Wilt mentioned that the performance resulted partly from reserve releases, net investment income and lower catastrophe figures. "Overall, the beat was solid, though not exceptional in our view," he wrote.
Mr. Wilt said that among the surprising items from the report was the fact that unit growth "in the company's highflying auto segment began to cool, up 4 percent as opposed to being up 9 percent over several proceeding quarters."
"Moreover, net premiums written declined 4 percent against the rising unit count, likely a sign of lowering prices, among other factors," he wrote.
Jay Fishman, Travelers chairman and chief executive officer, said that "each of our segments generated strong underwriting results, and our investment portfolio produced impressive returns."
The company listed the following highlights for the quarter:
o Return on equity of 19.9 percent and operating return on equity of 18.6 percent.
o Net investment income of $758 million after-tax, a 13 percent increase from the prior-year quarter.
o Net written premiums of $5.7 billion, a 1 percent increase from the prior-year quarter, or 2 percent when adjusted for the recent sale of two operations, Mendota and Afianzadora Insurgentes.
o An overall combined ratio of 87.8–in business insurance of 88.1; financial, professional and international insurance of 91; and personal insurance of 85.9.
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