Shares of Travelers Companies Inc. (TRV) saw a remarkable surge of 6.3% in premarket trading on Friday, as the property casualty insurer reported fourth-quarter profits that far exceeded expectations. The company attributed this success to lower catastrophe losses and higher underwriting gains.
Impressive Financial Performance
Net income for Travelers Companies Inc. nearly doubled to $1.63 billion, or $6.99 per share, compared to $819 million, or $3.44 per share, in the same period last year. When excluding nonrecurring items, core earnings per share stood at $7.01, surpassing the FactSet consensus of $5.10.
Solid Revenue Growth
Although total revenue experienced a strong 13.4% growth to reach $10.93 billion, it fell slightly below the FactSet consensus of $11.17 billion. Net premiums written increased by 13.2%, reaching $9.99 billion but missed expectations of $10.40 billion.
Improvements in Profitability
Travelers Companies Inc. showcased significant improvements in both its combined ratio and underwriting gains. The combined ratio, which measures profitability, improved to an impressive 85.8% from 94.5%, surpassing the FactSet consensus of 94.1%. Furthermore, catastrophes, net of insurance, significantly reduced to $125 million from $459 million, while underwriting gains soared to $1.38 billion from $449 million.
Continuous Growth in Stock Performance
Travelers' stock has shown exceptional growth over the past three months, rallying by an impressive 21%. In comparison, the SPDR S&P Insurance ETF (KIE) experienced a gain of 7.7%, and the S&P 500 (SPX) advanced by 11.8%.
These outstanding results firmly establish Travelers Companies Inc. as a major player in the property casualty insurance industry. With lower catastrophe losses, higher underwriting gains, and a consistently strong stock performance, the company is poised for continued success in the future.
