St. Paul Travelers Cos., the nation’s second largest business insurer, said its profit fell in the fourth quarter as it absorbed big charges for boosting asbestos reserves and losses from the hurricanes that hit the Gulf Coast and Florida, according to Associated Press.
Shares dropped $1.15, or 2.5 percent, to $44.46 in trading on the New York Stock Exchange. They have traded in a 52-week range of $33.70 to $47.89.
Profit dropped to $179 million, or 26 cents per share, for the October-December period compared with $303 million, or 44 cents per share, a year earlier. Operating income, which excludes net investment gains or losses, was 22 cents per share versus 40 cents.
Revenue edged lower to $6.18 billion from $6.23 billion in last year’s fourth quarter.
The current quarter included after-tax charges of $566 million for asbestos and environmental reserve development and $435 million for catastrophe losses, including $187 million related to Hurricane Wilma. St. Paul said in late October it expected to record losses of $220 million from the hurricane.
Jay Fishman, St. Paul Travelers chairman and CEO, said results during 2006 should be more favorable for the company.
In a statement, Fishman added that the company believes underlying margins should remain attractive. For catastrophe-prone risks, rates are continuing to firm, terms and conditions are generally tightening and insured values are increasing. For non-catastrophe impacted exposures, we believe rates should generally stabilize, he said.
St. Paul Travelers was formed in an April 2004 merger between St. Paul Companies, Inc. and the Hartford, Conn.-based Travelers Property Casualty Corp.