Travelers (NYSE:TRV) reported Q4 EPS of $1.89, topping estimates of $1.68. Net premiums rose 1% year-over-year to $5.23 billion, just shy of the Street estimate of $5.29 billion. The big insurer said that its full-year net income of $3.22 billion was reduced vs. the year ago period largely due to higher catastrophe losses in the first half of 2010.
The company said that its book value per share rose 11% from 2009 to $58.47. Its combined ratio also improved 7.2 basis points from 83.4% to 90.6%.
Travelers' Board also authorized an additional $5 billion for its share repurchase program.
Chairman and CEO Jay Fishman said, "Our strong full year results, which we achieved notwithstanding recording more than twice the level of last year's catastrophe losses, demonstrate Travelers' superior risk selection skills and sophisticated pricing analytics...Given recent experience, we are more optimistic about an improvement in the operating environment in 2011 than we were in previous quarters. We anticipate that exposures will improve from 2010 levels, and we are hopeful that the pricing environment will continue to improve. Nonetheless, we expect a modest increase in the consolidated loss ratio in 2011, excluding catastrophes and prior year reserve development. Furthermore, while interest rates have recently risen above their historic lows of the third quarter 2010, we continue to anticipate a modest decline in net investment income from our fixed income portfolio due to reinvesting proceeds from maturing fixed-income securities at lower rates. Our capital management philosophy remains unchanged and we are strategically committed to continuing to return excess capital to shareholders."
