Travelers Cos. Inc. on Thursday posted a fourth-quarter net profit of $ 1.31 billion, an increase of 50% over the same period last year, which executives attributed in a profit call to gains in underlying subscription revenues and lower disaster losses.  The New York-based insurance company reported a net premium of $ 7.269 billion, an increase of 3% over the fourth quarter of 2019, and an underlying total ratio of 88.7%, an improvement of 3.4 points over the previous year .
"We feel very well positioned to take advantage of future opportunities as the economy continues to recover and beyond," said Alan Schnitzer, Traveler's Chairman and CEO.
Net written contribution in the Traveler's business insurance segment decreased by 2% to 3.63 million. The largest decrease was in employee benefits, with a net premium falling to $ 699 million, from $ 81
The underlying equity ratio of the business insurance segment improved 2.8 points to 93.6% due to earned pricing as exceeded trends in loss costs, says Greg Toczydlowski, CEO of Business Insurance.
The segment also achieved a record change rate of 8.4%, an increase of almost four points, with increases in all lines except labor compensation .
"I expect the favorable interest rate environment to continue and remain at levels that will lead to margins expanding for a while," Schnitzer said.
However, new business in the business insurance segment decreased $ 35 million to $ 440 million, "due to lower levels of economic activity and due to hardening market conditions," Mr. Toczydlowski said.
In the bond and specialty segment, the net contribution increased to $ 800 million from $ 714 million in the fourth quarter of 2019.
Dan Frey, Traveler's CFO, noted that losses related to COVID-19 have been modest, with the business security and bond and specialty segments "evenly" affected.
"We continue to take a cautious approach to estimating the impact of COVID-related losses given the ongoing uncertainty in our environment," he said.
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