Profits at Travelers Companies fell 11 percent in the last quarter of 2007 as sales slowed.
The company reported solid underwriting results with a consolidated combined ratio of 87.4 percent.
Fourth-quarter net income declined to $1.06 billion, or $1.64 a share, from $1.19 billion, or $1.68, in the year-earlier period, the St. Paul, Minnesota-based company said.
Operating income in the quarter was $1.057 billion, or $1.66 per basic share and $1.63 per diluted share, compared to $1.193 billion, or $1.75 per basic share and $1.69 per diluted share, in the prior year quarter.
Net income for 2007 was $4.601 billion, or $7.04 per basic share and $6.86 per diluted share, compared to $4.208 billion, or $6.12 per basic share and $5.91 per diluted share, for 2006.
Operating income in 2007 was $4.500 billion, or $6.89 per basic share and $6.71 per diluted share, compared to $4.200 billion, or $6.11 per basic share and $5.90 per diluted share, in the prior year. Net and operating income per diluted share for the year ended Dec. 31, 2007 increased by 16 percent and 14 percent, respectively, from the prior year.
“Travelers produced another strong quarter, concluding a year of excellent performance and execution for our company,” said Jay Fishman, chairman and chief executive officer. “We delivered an operating return on equity of nearly 18 percent for the second consecutive year, while simultaneously making investments that are necessary for the long-term growth of our business.”
He said the board of directors has approved an additional $5.0 billion of common share repurchases.
“We enter 2008 in a position of strength, both financially and operationally, and will utilize this strength to write attractive business opportunities while always remaining highly disciplined in our underwriting,” said Fishman.
The company cited these full year 2007 highlights:
Return on equity and operating return on equity of 18.0 percent and 17.7 percent, respectively.
Strong underwriting results in all segments with GAAP combined ratios in Business Insurance of 87.8 percent; Financial, Professional & International Insurance of 87.6 percent; and Personal Insurance of 86.8 percent. Consolidated GAAP combined ratio of 87.4 percent.
Net favorable prior year reserve development of $351 million after-tax.
Net investment income of $2.9 billion after-tax, a 7 percent increase from the prior year.
Net written premiums of $21.6 billion, a 2 percent increase from the prior year, or a 3 percent increase when adjusted for the sales of Afianzadora Insurgentes and Mendota.
Book value per share (excluding FAS 115) of $41.23, a 14 percent increase from December 31, 2006, after repurchasing 56.0 million common shares for a total cost of $2.9 billion under the company’s share repurchase authorization during 2007.
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