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The Travelers Companies, Inc.
385 Washington Street
St. Paul, MN 55102-1396
Travelers Reports Fourth Quarter 2008 Net Income of $801 Million, or $1.35 per Diluted Share
Fourth Quarter 2008 Operating Income of $939 Million, or $1.58 per Diluted Share
Full Year 2008 Net Income of $2.924 Billion, or $4.82 per Diluted Share
NEW YORK (January 27, 2009) The Travelers Companies, Inc. (Travelers, NYSE: TRV) today reported net income of $801 million, or $1.37 per basic share and $1.35 per diluted share, for the quarter ended December 31, 2008, compared to $1.063 billion, or $1.67 per basic share and $1.64 per diluted share, for the quarter ended December 31, 2007. Operating income in the current quarter was $939 million, or $1.61 per basic share and $1.58 per diluted share, compared to $1.057 billion, or $1.66 per basic share and $1.63 per diluted share, in the prior year quarter.
Travelers produced operating income of $939 million and an operating return on equity of 14.7% in the fourth quarter of 2008, commented Jay Fishman, Chairman and Chief Executive Officer. These results reflected solid underwriting performance as evidenced by a combined ratio of 85.9% and were achieved despite lower net investment income due to difficult investment markets. Notwithstanding these lower returns, we continue to be very pleased with the high quality and diversification of our investment portfolio. Net written premiums grew slightly in the quarter. Business retention remained at historically high levels, and the impact of a slightly improving rate trend was partially offset by lower coverage demands from existing policyholders due to general economic conditions.
For the full year, despite significant storm activity and difficult investment markets, we recorded operating income of $3.2 billion and an operating return on equity of 12.4%, and book value per share increased by 2% after repurchasing approximately $2.1 billion of common stock and paying common stock dividends of $712 million. These results helped us continue to achieve our goal of delivering a mid-teens annual operating return on equity over time. Average annual operating return on equity from January 1, 2005 through year-end 2008 was approximately 14.5%.
Looking forward to 2009, we believe that Travelers is well positioned in the current uncertain economic environment. Our balance sheet is strong with capital at or above all of our target levels, our debt to capital ratio of 19.5% is below our target of 20% and holding company liquidity of $2.1 billion is approximately twice our target level. Equally important, our disciplined approach to evaluating risk and reward in both our underwriting and investment activities remains deeply embedded in the culture of the company and has been strengthened by experience. We are all very proud of what this franchise has continued to accomplish, concluded Mr. Fishman.
The following information was filed by Travelers Companies, Inc. (TRV) on Tuesday, January 27, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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