Travelers Cos. credits record premiums, investment gains for higher profits

Record premiums and a 10% rise in investment income helped Travelers Cos. post higher profits for the fourth quarter, beating analysts’ expectations. 

The New York-based insurer, which has major operations in Hartford, reported net income for the three months ending in December of $1.3 billion, compared to $873 million for the same period in 2019, a 50% increase. Earnings were $5.10 per diluted share, up from $3.35 in the year-ago period. 

Travelers CEO Alan Schnitzer credited strong underlying underwriting income, driven by record net earned premiums of $7.5 billion.

“That brings full year core income to $2.7 billion, or $10.48 per diluted share, and full year core return on equity exceeding 11%, a terrific result in a challenging economic and operating environment,” Schnitzer said.

Zacks had estimated earnings at $2.98 per share before the company’s report on Thursday morning, and The Street forecast $3.18 per share. 

Working against yearly profits were the COVID-19 pandemic and “a record number” of weather catastrophes resulting in property claims, the company said in a statement.