Travelers' third-quarter profit rises to $1.9 billion on reserve releases and investment income

US property and casualty insurer Travelers reported net income of $US1.917 billion, or $9.04 per diluted share, for the three months to 30 September, up from $1.888 billion, or $8.24 a share, a year earlier, the company said on Friday (US time).

Core income, which excludes investment gains and losses, rose to $1.947 billion, or $9.18 a share, from $1.867 billion. The company said the increase came mainly from larger releases of reserves set aside for claims from previous years and from higher investment income, partly offset by higher catastrophe losses, mostly from wind and hail storms in several US states. Zacks Investment Research said the result beat analysts’ consensus estimate of $7.07 a share.

Net investment income reached a record $1.098 billion before tax. Net written premiums were $11.48 billion, little changed from a year earlier; excluding Canadian operations sold in the first quarter, premiums rose 2%. The combined ratio, a measure of underwriting profitability where below 100% indicates a profit, improved to 86.8%.

Travelers returned $1.769 billion to shareholders in the quarter, including $1.508 billion of share buybacks, and declared a quarterly dividend of $1.25 a share.

“We are pleased to report excellent third quarter results,” chairman and chief executive Alan Schnitzer said.

Travelers shares were down about 3% in pre-market trading after the release, Zacks reported.