"Our third quarter results were very strong," commented Jay Fishman, Chairman and Chief Executive Officer. "Net income of $1.0 billion was up 7 percent, or 28 percent on a per diluted share basis, and our return on equity was 15 percent. Underwriting results remained strong across each of our business segments, as evidenced by our consolidated combined ratio of 90.6 percent. Net investment income remained solid although modestly lower than the prior year quarter.
"In Personal Insurance we were very pleased with our performance. We achieved meaningfully positive renewal premium changes, and we continued to grow policies in force as retention and new business were strong. In addition, earned rate increases outpaced loss cost trends. All of these factors contributed to a higher level of profitability in the current quarter. Marketplace conditions are such that we are optimistic that we will be able to continue to grow our Personal Insurance business.
"While current profitability across our diversified commercial insurance businesses is solid, the general economic environment continues to present challenges. Reinvestment yields are low by historical standards and exposure and pricing remain flat. On a positive note, our retention continues to be, in general, at historical highs and loss cost trends remain benign. We have kept our focus on running the business for the long-term, emphasizing account retention, seeking rate where it is appropriate and growing our business where we believe pricing levels warrant. Account growth in Business Insurance has been impressive, and we believe we are well positioned to benefit upon an improvement in economic conditions.
"Lastly, we also remain committed to returning excess capital to shareholders as evidenced by the 66.8 million common shares for a total cost of $3.4 billion repurchased year-to-date. Since the Board's initial share repurchase authorization granted in the second quarter of 2006, we have repurchased 260 million common shares, or 37 percent of the then outstanding number, for a total cost of $12.9 billion," concluded Mr. Fishman.