One year ago, Travelers posted a loss of $793 million during the 2002 fourth quarter, after taking a massive $1.3 billion charge to boost asbestos reserves.

The insurer's newest reserve addition didn't involve asbestos liabilities. The bulk of the charge, at $163.8 million pretax, was associated with Gulf Insurance, a majority-owned subsidiary that writes specialty insurance. Other charges involved American Equity, a runoff operation, and environmental coverages.

The Hartford, Conn.-based Travelers, which agreed last November to merge with The St. Paul Companies, still reported underwriting gain of $98 million for the fourth quarter despite the charge, in contrast to underwriting loss of $1.284 billion a year ago. Consolidated combined ratio for the quarter came in at 96.2, a 70.1 point improvement over 167.1 reported one year earlier.

Travelers said its net written premiums for the 2003 fourth quarter grew 11 percent to $3.389 billion after strong growth in both commercial and personal lines.

In commercial lines, net written premiums were up $204.4 million, or 11 percent, to $2.125 billion for the fourth quarter, based on higher premium rates, new business growth in targeted markets, and strong retention across all major business lines, the company said.

Personal-lines net written premiums gained $118.7 million, or 10 percent, to $1.264 billion, also helped by higher rates as well as increased business volumes and strong retention.

For full-year 2003, total net written premiums rose 10.5 percent to $13.2 billion. Full-year 2003 net income came in at $1.696 billion, in contrast to a loss of $27 million for 2002.

"We did have an excellent quarter and an excellent year, achieving a level of profitability that is historically among the top tier in our industry. We had a record operating income of $463 million for the quarter and $1.675 billion for the year," Travelers Chief Executive Robert Lipp said during an analyst conference call today.

"Operating return-on-equity, which is sort of a mantra around here, was over 17 percent for the fourth quarter, and 16.6 percent for the year, which are highs for the company," Mr. Lipp told analysts. This is the third quarter in a row in which Travelers had return-on-equity of over 17 percent, he noted. "We are very pleased with our new business volumes and continue to benefit from the positive rate environment."

Travelers' 2003 fourth-quarter net investment income, which made up the majority of the overall quarterly profit, came in at $379 million, slightly higher than $363 million reported for the 2002 fourth quarter. Mr. Lipp called this result "an encouraging sign."

Mr. Lipp also commented that he is "very pleased with the progress and how both management teams are working together" at Travelers and St. Paul. The two companies struck a deal this past November to combine and create one of the largest property-casualty insurers in the country.

"Now, some 30-odd integration teams have been set up," Mr. Lipp noted. "We hope to conclude the merger sometime in the second quarter.