Travelers posts solid growth and profits in 2014
US insurer Travelers increased its net profit by 1 percent in 2014 driven both by marginally better underwriting results and improved investment returns.
The company made a net profit of $3.69 billion, an improvement of $19 million, or 1%, compared with the year before.
Its operating income increased by $74 million or 2 percent to $3.6 billion, primarily driven by a higher underwriting gain and higher net investment income. But its overall profits were offset by a reduction in net realized investment gains.
Its combined ratio improved by 0.8 points to 89 percent due to an improved underlying combined ratio (1.0 points) and higher net favorable prior year reserve development (0.2 points), partially offset by higher catastrophe losses (0.4 points).
Net favorable prior year reserve development occurred in all segments, the company said. Catastrophe losses were primarily due to wind, hail and winter storms in several regions in the US.
The company enjoyed solid overall growth. Its net written premiums increased by 5 percent to $23.9 billion, primarily due to the inclusion of Dominion and growth in domestic business insurance.
“For the full year, all our business segments performed very well,” said Jay Fishman, chairman and chief executive officer. “Business and international insurance profitability was very strong, with a combined ratio of 93.1 percent and operating income of over $2.3 billion. We remain very pleased with, and intend to continue, our proactive, account by account, class by class pricing strategy.
“We remain optimistic that we will continue to achieve superior returns over time across our business segments, and that, combined with our active capital management strategy, positions us to continue to deliver meaningful shareholder value.”
