UPDATE: Travelers 1Q Net Down 32% On Larger Realized Investment Losses
2009年5月1日 - 4:32AM
Dow Jones News
Travelers Cos.' (TRV) first-quarter net income fell 32% as the
commercial and personal insurance provider realized a larger amount
of investment losses.
As the insurance sector has been roiled by its exposure to the
troubled stock and debt markets, Travelers has emerged as a company
that, despite also suffering from investment and catastrophe
losses, is seen as one that can take advantage of its rivals'
weaknesses.
In a Thursday research note, FBR Capital Markets analyst Bijan
Moazami said its $2.6 billion in holding company liquidity puts
Travelers in a good position to potentially acquire Hartford
Financial Services' (HIG) property/casualty operations, which
reportedly are up for sale. Travelers "has the ability to complete
M&A transactions that other insurers cannot even consider,"
Moazami wrote.
Travelers, the second-largest U.S. commercial insurer behind
American International Group Inc. (AIG), posted net income of $662
million, or $1.11 a share, down from $967 million, or $1.54 a share
a year earlier. The company reported a net realized investment loss
of 23 cents from a loss of 6 cents a year ago, and $54 million in
first-quarter catastrophe losses compared with $62 million in such
losses a year ago. Excluding items, earnings fell to $1.34 from
$1.60.
Revenue decreased 8% to $5.74 billion.
Analysts surveyed by Thomson Reuters expected earnings of $1.31
and revenue of $6.13 billion.
The combined ratio, the percentage of each dollar the company
collects in premiums that it pays out on losses or expenses, rose
to 90.6% from 87.6% excluding items such as catastrophes.
Net premiums written rose 2.9% to $5.2 billion. Return on
equity, an important measure of profitability, slid to 10.2% from
14.4%.
During the insurer's earnings call Thursday, Jay S. Fishman,
Travelers' chief executive, echoed comments made by other insurers,
saying that customers are continuing to shop their insurance
business to better rated companies in a "flight to quality," that
has continued from the last couple of quarters. Travelers is
becoming "more successful at converting" these shoppers to
customers, Fishman said.
The company affirmed January's full-year view for earnings of
$4.50 to $4.90 a share, which was well below analysts' estimates at
the time. Analysts recently expected $5.39 a share.
Travelers' shares recently fell $1.32, or 3.2%, to $41.20.
-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141;
lavonne.kuykendall@dowjones.com
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com