The Travelers Companies Inc. (TRV) announced the offering of three new coverages to health care providers. The coverages are devised to manage risk as diverse as the safety of patients and employees to the protection of buildings and equipment.
The new coverages are: Ordinance or Law – Communicable Disease Contamination Coverage, Condemnation of Medical Property and Unintentional Errors or Omissions – Failure to Report Locations.
In the first quarter, net written premiums of Travelers increased 4% year over year to $5.4 billion, largely attributable to higher net written premiums in Business Insurance as well as Personal Insurance. We expect introduction of new products will further augment the company to continue to deliver solid growth in the upcoming quarter.
Travelers reported operating earnings of $1.89 per share in the first quarter, surpassing the Zacks Consensus Estimate by 34 cents. Higher underwriting gains, favorable resolution of prior-year tax matters, lower catastrophe losses and lower outstanding shares helped the company to post improved results.
The Zacks Consensus Estimate for second-quarter 2011 is $1.30 per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, $6.26 per share and $6.24 per share.
Travelers focuses on enhancing shareholder value through dividends and share buybacks, which continues to positively impact earnings per share figures. Based on a high retention rate, favorable renewal rate changes, favorable prior-year reserve development and prudent underwriting practice, Travelers is poised to improve its performance, going forward. The pricing environment is also expected to improve.
We thus maintain our Neutral recommendation on Travelers. The quantitative Zacks # 3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
Based in New York, The Travelers Companies, through its subsidiaries, provides a wide variety of property and casualty insurance and surety products and services to businesses, organizations and individuals in the United States and in selected international markets. It competes with Hartford Financial Services Group Inc. (HIG) and W.R. Berkley Corporation (WRB).
HARTFORD FIN SV (HIG): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
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