The latest insurance news from Travelers shows that it saw earnings far beyond expert predictions.
Travelers Cos Inc., a property insurer, left estimates from Wall Street analysts in the dust in terms of predictions regarding its first quarter earnings, and made insurance news when it increased its dividend by 12 percent as the losses from natural disasters fell and as rates continue to rise following several weak years.
Shares of the insurer increased to $62.35, an increase of 4.8 percent, reaching their highest level since May of last year. Analysts have stated that this should be considered to be a positive report.
According to Janney Capital Markets unit Langen McAlenney analyst, Larry Greenberg, in a letter he wrote to his clients, “Incorporating the first-quarter results, our 2012 estimate is very likely to increase,” and that he felt this was a good sign about property insurers as a whole, and that Travelers, in particular, would be a good option to buy in that sector.
Travelers announced that rates for commercial insurance increased 8 percent in Q1.
The insurer held a conference call with a number of Wall Street analysts, in which it stated that it will be maintaining its strength. Brian MacLean, the chief operating officer, said that “We feel good about what we’re seeing in the second quarter and … feel the momentum is continuing.”
Other lines also saw increases in their rates, such as in the auto sector, where there was a rise by 4 percent, and in the homeowners’ coverage sector, which saw spikes of 10 percent. Jay Fishman, the chief executive officer, stated in the conference call that the company was increasing deductibles in some areas, while tightening some of the terms in personal policies. He explained that the purpose of this move was to make the company more profitable.
Travelers has made insurance news several times in recent months with its aggressive moves.
The insurer has been notably more aggressive than its competitors within the industry in terms of the rate increases that it has made over the last few months, following several years of insurance news about tight price competition.
Article:Travelers makes insurance news by leaving Wall Street estimates in the dust
Article Source: Live Insurance News
Author: Julie Campbell
