TRAVELERS COMPANIES, INC. Quarterly Report for Q3 Ended Sep 30, 2010

Summary

The Travelers Companies, Inc. reported solid results for the third quarter and first nine months of 2010. Net income for the third quarter was $1.01 billion, or $2.11 per diluted share, marking a significant increase from the prior year's quarter, driven by higher net realized investment gains and lower catastrophe losses. For the first nine months, net income was $2.32 billion, relatively stable year-over-year, with a slight decrease in net income offset by the positive impact of share repurchases on earnings per share. The company's financial condition remains strong, with total investments of $74.72 billion and total assets of $108.15 billion. Debt levels are manageable, with a debt-to-total capital ratio of 18.6%. Travelers continued its commitment to shareholder value by repurchasing $600 million of common stock in the third quarter. The company also highlighted a robust capital position and sufficient liquidity, with $2.82 billion in cash and short-term investments at the holding company level.

Key Highlights

• 1Net income for Q3 2010 was $1.01 billion, a 7% increase year-over-year, leading to diluted EPS of $2.11, up 28%.
• 2Total investments stood at $74.72 billion, with fixed maturities and short-term securities comprising 94% of the portfolio.
• 3The company repurchased $600 million of common stock in Q3 2010, demonstrating a commitment to returning capital to shareholders.
• 4Net favorable prior year reserve development was $222 million in Q3 2010, contributing to underwriting profitability, though lower than the $309 million in Q3 2009.
• 5Catastrophe losses were $117 million pretax in Q3 2010, down from $158 million in the prior year's quarter.
• 6Book value per common share increased by 15% year-over-year to $59.11.
• 7The company entered into a new $1.0 billion revolving credit agreement, replacing its previous agreement, indicating ongoing access to liquidity.

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