The Travelers Companies, Inc. today reported net income of $896 million, or $2.33 per diluted share, for the quarter ended March 31, 2013, compared to $806 million, or $2.02 per diluted share, in the prior year quarter. Operating income in the current quarter was $887 million, or $2.31 per diluted share, compared to $801 million, or $2.01 per diluted share, in the prior year quarter. The increase in net and operating income in the current quarter compared to the prior year quarter resulted from higher underlying underwriting margins (i.e., excluding net favorable prior year reserve development and catastrophe losses) and lower catastrophe losses, which more than offset lower net investment income and lower net favorable prior year reserve development.
We are pleased to report our highest quarterly operating income per diluted share since Travelers' initial public offering in 2002," commented Jay Fishman, Chairman and Chief Executive Officer. "Operating income of $887 million and operating return on equity of 15.8% reflect continued improvement in our underlying underwriting margins primarily due to the pricing and underwriting actions we have taken across all segments. Our high quality investment portfolio continued to perform well, with returns modestly declining in line with our expectations given continued low interest rates.
"We continue to be encouraged by the fact that in each of our segments renewal pricing exceeded expected loss cost trends and retentions remained stable. In Business Insurance, renewal rate change of 8% was generally consistent with levels achieved over the last five quarters and new business volumes modestly improved. In Financial, Professional and International Insurance, renewal rate change was consistent with the most recent quarter and improved meaningfully from a year ago, driven primarily by our Management Liability business. In Personal Insurance, we continue to achieve the improvements in pricing and terms and conditions needed to improve profitability.
"We are very pleased with the current quarter results and remain committed to our strategy of improving returns through selectively seeking price increases and improved terms and conditions given the continued low interest rates and uncertain weather patterns," concluded Mr. Fishman.