April 22, 2014 / 11:12 AM / 4 years ago

Travelers' profit rises 17 percent on higher investment income

(Reuters) - U.S. property and casualty insurer Travelers Cos Inc (TRV.N) reported a 17 percent rise in first-quarter profit, helped by higher underwriting gains and an increase in net investment income.

Net income rose to $1.05 billion, or $2.95 per share, for the quarter ended March 31, from $896 million, or $2.33 per share, a year earlier.

Net investment income rose about 10 percent to $736 million as Travelers benefited from strong returns in its non-fixed income portfolio.

Underwriting gains jumped about 32 percent to $791 million.

Net written premiums rose about 5 percent to $5.87 billion, while total revenue rose 6 percent to $6.71 billion.

“Our very deep agent, broker and customer relationships, highly segmented pricing strategies and expense discipline continued to deliver strong and improving underwriting results,” Chief Executive Jay Fishman said in a statement.

On an operating basis, Travelers, which is a component of the Dow Jones Industrial Average Index .DJI, earned $2.95 per share.

Analysts on average were expecting the company to earn $2.16 per share, according to Thomson Reuters I/B/E/S.

Travelers’ results often differ from analysts’ average expectations as the company does not give a forecast.

    Pre-tax catastrophe losses, net of reinsurance, rose about 50 percent to $149 million.

    Travelers’ combined ratio, the percentage of premium revenue an insurer has to pay out in claims, fell to 88.2 percent in the quarter from 90.8 percent.

    A combined ratio of under 100 indicates an underwriting profit.

    Travelers had a market value of about $30 billion based on Monday’s close of $86.40 on the New York Stock Exchange.

    The company's shares have fallen by about 3.3 percent since the start of the year, while the Dow Jones Industrial Average Index .DJI has changed little during the same period.

    Reporting by Avik Das in Bangalore; Editing by Saumyadeb Chakrabarty and Prateek Chatterjee

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