Travelers’ stock surges into record territory after big profit beat, amid lower catastrophe losses

Shares of Travelers Companies Inc.
TRV,
+0.43%
surged 6.3% into record territory in premarket trading Friday, after the property casualty insurer reported fourth-quarter profit that rose well above expectations, citing lower catastrophe losses and higher underwriting gains. Net income nearly doubled to $1.63 billion, or $6.99 a share, from $819 million, or $3.44 a share, in the year-ago period. Excluding nonrecurring items, core earnings per share of $7.01 beat the FactSet consensus of $5.10. Total revenue grew 13.4% to $10.93 billion, below the FactSet consensus of $11.17 billion, as net premiums written increased 13.2% to $9.99 billion to miss expectations of $10.40 billion. The combined ratio, a measure of profitability, improved to 85.8% from 94.5%, to beat the FactSet consensus of 94.1%. Catastrophes, net of insurance improved to $125 million from $459 million while underwriting gains improved to $1.38 billion from $449 million. Travelers’ stock has rallied 21% over the past three months through Thursday, while the SPDR S&P Insurance ETF
KIE,
+0.87%
has gained 7.7% and the S&P 500
SPX,
+0.88%
has advanced 11.8%.