The Travelers Cos. Inc.’s net income fell in the fourth quarter because of big costs related to claims from Superstorm Sandy, The Associated Press reports.
But the big property and casualty insurer, based in New York with major operations in Hartford, said Tuesday that investment income and premiums increased, a sign of strength for its core operations. Shares rose more than 3 percent in morning trading.
Travelers’ net income in the three months ended Dec. 31 fell to $304 million, or 78 cents per share, from $618 million, or $1.51 per share in the same period a year earlier.
The company reported after-tax catastrophe losses of $689 million, of which $669 million was related to the big storm that ravaged the coastlines of New York and New Jersey and caused damage across much of the eastern U.S. in late October. The catastrophe losses reduced earnings per share by $1.78, Travelers said.
A year earlier, total after-tax catastrophe losses were only $68 million.
The big loss from storm-related claims was partly offset by an increase in net investment income, which rose to $689 million from $652 million a year earlier.
Net written premiums, the amount earned from premiums minus the amount paid out in commissions and reinsurance, also rose, to $5.39 billion from $5.26 billion a year earlier.
Those gains boosted total revenue by 2 percent, to $6.47 billion from $6.37 billion in the fourth quarter of 2012.
The earnings result was far better than analysts had expected, while revenue fell short. Analysts surveyed by FactSet had anticipated, on average, net income of 36 cents per share on revenue of $6.41 billion.
For the full year 2012, Travelers earned $2.47 billion, or $6.30 per share, on revenue of $25.74 billion.
Travelers’ board approved a quarterly dividend of 46 cents per common share, payable March 29 to shareholders of record as of March 8.
Travelers shares rose $3.24, or 4.2 percent, to $79.52 in morning trading Tuesday. The stock is at an all-time high, and has gained 41 percent since hitting its 52-week low of $55.86 on March 7.
