Travelers reports strong Q4

US insurer Travelers announced fourth quarter 2009 net and operating income of $1.285bn and $1.155bn with full year 2009 net and operating income of $3.622bn and $3.600bn.

Fourth quarter 2009 total revenues of $6.456bn increased 11% from the prior year quarter. It said the impact of renewal rate changes on premiums remained positive across all three business segments. But net written premiums fell 4% due to lower levels of economic activity.

Financial highlights (2008 in brackets)

• Net written premiums $21,336bn ($21,683bn)
• Operating income $3,600bn ($3,195bn)
• Net income $3,622bn ($2,924bn)
• Combined ratio 89.2% (91.9%)
• Reserves released in Q4 $238m ($140m)

"We are very pleased to report our best quarter for net income as well as net and operating income per diluted share since Travelers' initial public offering in 2002," said Jay Fishman, chairman and chief executive.

“Throughout the year our underwriting results were strong and our high quality investment portfolio continued to perform well.

Retention rates

"Our retention rates remained high and the impact of renewal rate changes on premiums remained positive across all three of our business segments.

"This pricing dynamic is generally better than recent industry surveys and reflects our targeted pricing actions, the property and casualty market segments in which we compete, our strong underwriting capabilities and our success in differentiating Travelers to our independent agents, brokers and customers by the value we provide through our products and services.

“In light of the continued historically low returns we anticipate will be available in the investment marketplace and modest premium growth opportunities given the economy, we expect to continue to return capital aggressively. In addition, our strategy will be to continue to seek premium rate gains where needed.”