Posted on 19 Oct 2011
Travelers Cos. shares rose 5% to top blue-chip advancers Wednesday, as investors focused on the insurer’s ability to push through higher rates in the face of severe weather -- even though third quarter profit fell 67% from one year ago.
The insurer's third-quarter profit was dogged by $394 million in after-tax catastrophe losses. While that number was five times worse than in the year-ago quarter, it was less than disaster costs incurred in the second quarter: $1.09 billion after taxes, the worst three months in New York-based Travelers’ history.
Getting some closure as to the extent of the damage while the company struck an optimistic tone on pricing was enough to draw buyers to Travelers shares, which are still down almost 3% for the year.