Summary
The Travelers Companies, Inc. reported a significant decrease in net income for the third quarter of 2008, largely attributed to substantial catastrophe losses, particularly from Hurricanes Ike, Gustav, and Dolly. Net income fell to $214 million ($0.36 per share) compared to $1.20 billion ($1.81 per share) in the same period of 2007. This decline was partially offset by favorable prior year reserve development. Despite the hit from catastrophes, the company demonstrated resilience in its investment income and share repurchase activities. Net investment income, though lower than the previous year, still contributed significantly at $587 million after-tax. The company continued its share repurchase program, buying back 6.2 million shares for approximately $272 million, underscoring a commitment to returning capital to shareholders. Holding company liquidity remained strong at $2.11 billion, ensuring operational flexibility amidst market volatility.
Financial Highlights
20 data points| Revenue | $6.14B |
| Interest Expense | $95.00M |
| EPS (Basic) | $0.36 |
| EPS (Diluted) | $0.36 |
| Shares Outstanding (Basic) | 586.70M |
| Shares Outstanding (Diluted) | 594.70M |
Key Highlights
- 1Net income significantly decreased by 82% to $214 million ($0.36 per share) in Q3 2008, down from $1.20 billion ($1.81 per share) in Q3 2007, primarily due to $1.04 billion in pretax catastrophe losses.
- 2Net earned premiums remained relatively stable at $5.45 billion, a slight increase of less than 1% compared to the prior year's $5.41 billion.
- 3Net investment income was $716 million pretax ($587 million after-tax), a decrease of 23% from $929 million pretax ($724 million after-tax) in Q3 2007, largely due to lower returns from non-fixed maturity investments.
- 4The company recorded net realized investment losses of $170 million pretax ($116 million after-tax), including $156 million in impairments, notably $67 million related to Lehman Brothers.
- 5Favorable prior year reserve development provided a boost of $334 million pretax ($210 million after-tax), mitigating some of the impact from catastrophe losses.
- 6Shareholders' equity stood at $24.72 billion, with book value per common share at $41.94.
- 7The company repurchased 6.2 million common shares for approximately $272 million, with $3.91 billion remaining under its share repurchase authorization.