ST PAUL TRAVELERS INCOME HIT AGAIN BY RESERVING CHARGES

US p/c group St Paul Travelers Cos has posted 2004 net earnings of $955m, a decrease of 44% that reflected $1.6bn in after-tax charges for prior-year reserve development, $511m in catastrophe losses and $19m in charges related to last April’s merger between St Paul Cos and Travelers Property Casualty. The reserving charge included Q4 pre-tax charges of $922m for an addition to asbestos reserves and $84m for environmental claims, which combined to yield a $673m after-tax charge and lead to a 38% drop in Q4 income to $303m. For the year, earned premiums grew 52% to $19bn, while the group’s combined ratio deteriorated to 107.7% from 96.3%. Its pre-tax underwriting result for the year fell to a loss of nearly $1.6bn from a year-earlier gain of $381m. The group also announced plans to sell its 79% stake in Nuveen Investments and to combine its major insurance pools. President and CEO Jay Fishman said the Nuveen divestiture would “increase our financial flexibility, operating company capital and tangible net worth”.