Travelers Cos Inc's (TRV.N) quarterly profit more than quadrupled beating expectations, as underwriting gains surged.
The New York insurer raised its full-year earnings outlook, approved a 10 percent dividend increase, and authorized a $6 billion share buyback.
Third-quarter net income rose to $935 million, or $1.65 a share, from $214 million, or 36 cents a share, in the year-ago period.
Excluding investment gains and losses, Travelers had an operating profit of $914 million, or $1.61 a share. On that basis, analysts on average had forecast earnings of $1.31 a share, according to Thomson Reuters I/B/E/S.
Travelers, the largest publicly traded U.S. property-casualty insurer, was helped in the quarter by a $524 million underwriting gain. In the year-earlier quarter, the company posted a $288 million underwriting loss from catastrophe claims, after a series of hurricanes hammered the southeast coast of the United States.
In the latest quarter, Travelers also got a boost from a $309 million release in reserves set aside in prior years for potential losses.
These factors helped offset a 3 percent decline in net written premiums to $5.3 billion.
Chief Executive Jay Fishman attributed the contraction in policy sales to declining economic activity in recent quarters.
Travelers increased its full-year operating earnings outlook range between $5.30 and $5.50 a share. The company had previously expected full-year operating earnings of $4.80 to $5.05 a share.
The insurer does not include any estimates for potential reserve increases or decreases in its earnings forecast.
Shares of the insurer, added to the Dow industrial average earlier this year, have risen nearly 40 percent in the past year. The S&P insurance index .GSPINSC, which includes Travelers, has risen about 25 percent over the same period.