<div id="subtitle">Travelers 3rd-qtr profit jumps on lower catastrophe costs; insurer raises dividend, outlook</div><div><p>Travelers Cos. said Thursday that lower losses related to severe weather and a rebound in its investment portfolio contributed to a jump in the insurer's profit for the third-quarter.</p><p>The New York-based commercial and property insurer also boosted its quarterly dividend 10 percent and authorized an additional $6 billion share repurchase program, citing improved stability in capital markets.</p><p>The company raised its full-year earnings outlook.</p><p>Travelers said net income more than quadrupled to $935 million, or $1.65 per share, from $214 million, or 36 cents per share, a year ago.</p><p>Excluding items, operating profit totaled $1.61 cents per share — beating analysts' estimates of $1.31.</p><p>Travelers shares rose $2.99, or 6.2 percent, to $51.01 in late morning trading after rising to a 52-week high of $51.10 earlier in the session.</p><p>Catastrophe losses linked to severe weather cost the company $103 million after taxes, an 85 percent drop from $682 million a year earlier.</p><p>2008 was a difficult year for property and casualty insurers. Hurricanes Ike, Gustav and Dolly slammed the Gulf Coast region. This year, only one named storm, Tropical Storm Claudette, made landfall in the U.S. in the three months ended Sept. 30.</p><p>A recovering stock market also helped the insurer.</p><p>Travelers said its third-quarter net investment income rose 5 percent to $616 million and the company had a net realized investment gain of $21 million.</p><p>Keefe, Bruyette & Woods analyst Cliff Gallant said he expects many insurers to post similar strong results over the next few weeks, driven by similar trends.</p><p>But said he has concerns for the sector as "good results now will lead to increased competition in 2010 and weak results thereafter."</p><p>During the quarter, Traveler's net written premiums fell 3 percent to $5.34 billion, largely attributable to the decline in economic activity in recent quarters, the company said.</p><p>Travelers, like other insurers, continues to seek customers at a time when employers have fewer workers and less valuable property to insure.</p><p>The company said it continues to be cautious about how much it will be able to raise rates, "given general economic conditions," but it will "continue to seek rate gains where needed," Travelers Chief Executive Jay Fishman said in a statement.</p><p>The company's combined ratio for the quarter fell 15 points to 88.7 percent. Combined ratio measures the amount of money insurers pay out in claims and expenses compared with how much they receive from writing new business. A ratio above 100 means the insurer pays out more in claims and expenses than it takes in from writing new premiums.</p><p>Travelers said it was revising its outlook for 2009 operating profit to a range of $5.30 and $5.50 per share, compared with prior estimates of $4.80 to $5.05 per share. Analysts have been expecting profit of $5.28 per share.</p><p>The company increased its quarterly dividend 10 percent to 33 cents per share.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=61670389&bid=informcom" /></div><div id="copyright"><div>

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