Summary
The Travelers Companies, Inc. (TRV) reported a net income of $333 million, or $0.79 per diluted share, for the third quarter of 2011. This represents a significant decrease from the $1,005 million in net income reported in the same period of the prior year. The decline was primarily driven by a substantial increase in catastrophe losses, notably from Hurricane Irene and Tropical Storm Lee, which amounted to $606 million. Additionally, the company experienced reduced underwriting margins, lower net favorable prior year reserve development, and a decline in net investment income. Despite the lower net income, the company demonstrated a commitment to returning capital to shareholders by repurchasing 7.3 million common shares for $375 million. Total investments remained substantial at $73.65 billion, with a conservative allocation to high-quality fixed maturities. The company's financial condition remained solid, with total assets of $106.93 billion and a debt-to-total capital ratio of 20.8%. Investors should note the significant impact of catastrophe events on quarterly results and monitor underlying underwriting performance and reserve development trends in future filings.
Financial Highlights
30 data points| Revenue | $6.41B |
| Operating Income | $332.00M |
| Interest Expense | $97.00M |
| Net Income | $333.00M |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.79 |
| Shares Outstanding (Basic) | 415.00M |
| Shares Outstanding (Diluted) | 418.50M |
Key Highlights
- 1Net income decreased significantly to $333 million ($0.79/share) in Q3 2011 from $1,005 million ($2.11/share) in Q3 2010, largely due to $606 million in catastrophe losses.
- 2Net earned premiums increased by 3% to $5.61 billion in Q3 2011 compared to the prior year period.
- 3The GAAP combined ratio deteriorated to 104.5% in Q3 2011 from 90.6% in Q3 2010, primarily driven by higher catastrophe losses and reduced underlying underwriting margins.
- 4Total investments stood at $73.65 billion, with 93% in fixed maturities and short-term securities, reflecting a conservative investment strategy.
- 5The company repurchased 7.3 million common shares for $375 million during the quarter, demonstrating a commitment to returning capital to shareholders.
- 6Shareholders' equity increased by 3% year-over-year to $25.17 billion, with book value per common share at $60.98.
- 7The Business Insurance segment experienced a significant drop in operating income to $294 million from $543 million, impacted by increased catastrophe losses and reduced net favorable prior year reserve development.