Travelers Cos. Inc., the property casualty insurer with major operations in Hartford, easily beat first-quarter estimates on a surprise drop in catastrophe losses and raised its dividend amid evidence of improved insurance pricing and demand, Reuters reports.
As a result, Travelers raised its quarterly dividend to 41 cents a share from 36 cents.
New York City-based Travelers, the largest listed U.S. property insurer and a Dow Jones index component, said it is increasingly optimistic about the operating environment — a strong signal after years of weak pricing for property insurers.
It was the third quarter in a row that Travelers beat the Wall Street earnings consensus by more than 20 cents a share.
The company, which bought back $1.1 billion in stock during the quarter, raised its dividend 14 percent to 41 cents per share. In the wake of a devastating series of natural disasters in the first quarter, analysts had expected some insurers to limit how much capital they returned to investors.
But Travelers’ catastrophe losses plunged 61 percent in the quarter to $186 million, primarily due to severe U.S. winter storms. That, reserve releases and the resolution of historical tax disputes boosted results.
“We feel very good about our position in the marketplace and are cautiously but increasingly optimistic about the operating environment,” Chief Executive Jay Fishman said in a statement.
Net profit for the first quarter was $839 million, or $1.92 a share, compared with $647 million, or $1.25 a share, in the year-ago period.
Operating earnings, excluding investment gains and losses, were $1.89 a share. The company’s share count declined 16 percent year over year, boosting the per-share figure as well.
Analysts had expected the New York-based company to post a profit of $1.51 a share, according to Thomson Reuters I/B/E/S.
