The Travelers Cos. reported record earnings Tuesday morning, and record revenue from net written premiums.
Net income was $1.05 billion, or $2.95 per share, for the quarter, compared with $896 million, or $2.33 per share, during the same period a year earlier.
Operating income was $1.05 billion, or $2.95 per share, compared with $887 million, or $2.31 per share, during the same period a year earlier.
Analysts polled by Thomson Reuters were expecting, on average, $2.16 per share.
Net written premium was $5.87 billion for the quarter, up 5 percent from $5.6 billion during the same period in 2013. Total revenues were $6.7 billion, compared with $6.33 billion.
Travelers Chairman and CEO Jay Fishman said in a statement, “Operating income of over $1 billion increased 19% from the prior year quarter, resulting in an operating return on equity of 17.8%, our highest quarterly level since 2009.”
“Results in each of our business segments were very strong this quarter,” Fishman said. “In Business Insurance, profitability improved despite the impact of severe winter weather as underlying underwriting margins continued to improve. We achieved written rate gains in excess of loss trends while increasing retention from already strong levels.
Travelers had a decline in its revenue from Personal Insurance, auto and home coverage for individuals. Net written premium for personal lines was down 4 percent to $1.62 billion from $1.69 billion during the same period a year earlier.
The company saw a decline in net written premium in automobile and homeowner coverage sold by insurance agents, but an increase in direct-to-customer sales, which includes people shopping online.
The Personal Insurance segment was more profitable, however, with operating income up to $268 million from $197 million a year earlier. Profits in that segment were helped by improved underwriting and better prior-year development. Prior-year development is unspent reserves from the corresponding quarter last year that were set aside to pay claims.
In addition, in July 2013, Travelers announced plans to lay off 450 people , including 90 in Connecticut, as the company sought to make its automobile insurance segment more profitable.
Revenue was up slightly for Business Insurance to $3.3 billion for the quarter compared with $3.26 billion for the same period a year earlier. Operating income for the segment was $653 million, up from $590 million in the first quarter of 2013. Improved underwriting and greater net investment income helped drive profit, though the company had lower prior-year reserve development and greater total cost from catastrophes, such as winter storms.
Net investment income, before taxes, was $736 million for the first quarter, up from $670 million during the same period last year. The company reported that its investment income was up “due to higher private-equity and real-estate partnership returns, modestly offset by lower reinvestment rates in the fixed income portfolio.”
The board of directors approved a 10 percent increase in the quarterly dividend to 55 cents per share, the 10th year the quarterly dividend has been raised.
Travelers employs about 30,000 people, including roughly 7,000 in Connecticut.
Shares of the company closed at $86.89 Tuesday on the New York Stock Exchange, up 49 cents in pre-market trading.