The Travelers Companies, Inc.’s TRV fourth-quarter 2018 core income of $2.13 per share beat the Zacks Consensus Estimate of $1.98 by 7.6%. However, the bottom line deteriorated 6.6% year over year.The Travelers Companies, Inc. Price, Consensus and EPS Surprise The Travelers Companies, Inc. Price, Consensus and EPS Surprise | The Travelers Companies, Inc. Quote This year-over-year decline in earnings can be attributed to higher level of catastrophe loss and a decrease in net favorable prior-year reserve development. However, an increase in underlying underwriting gain as well as investment income partially offset this downside. The bottom line also drew benefits from lower U.S. corporate income tax rate and the impact of share buybacks.Full-Year HighlightsFor 2018, Travelers reported core income per share of $8.94, missing the Zacks Consensus Estimate by 1.1% but improving 22.8% year over year.Total revenues of $30.3 billion topped the consensus mark by 1.2% and grew 4.8% year over year.Behind the Q4 Headlines Travelers’ total revenues rose nearly 4.6% from the year-ago quarter’s figure to $7.8 billion. The top-line figure also outpaced the Zacks Consensus Estimate of $7.7 billion. Net written premiums displayed a 4.2% year-over-year improvement to $6.7 billion owing to growth in each business segment, namely Business and International Insurance, Bond & Specialty Insurance and Personal Insurance. Net investment income climbed 5% year over year to $630 million on higher average level of fixed maturity investments and solid income from the fixed income investment portfolio.Travelers delivered an underwriting gain of $135 million, down 49.2% from the year-earlier period. Combined ratio deteriorated 200 basis points (bps) year over year to 97.5% due to higher catastrophe losses and lower net favorable prior-year reserve development. However, a lower underlying combined ratio partially offset this downside.At the end of the fourth quarter, statutory capital and surplus were $20.5 billion and the debt-to-capital ratio (excluding after-tax net unrealized investment gains) was 22.2%. Notably, this was within the company’s target range of 15-25%. Adjusted book value per share was $87.27, up 4.7% year over year.Segment Update Travelers’ Business Insurance unit reported net written premiums of $3.5 billion, up 2.8% year over year. This upside can be driven by a continued strong retention, an improved renewal premium change and a rise in new business. Combined ratio deteriorated 1080 bps year over year to 99.4% due to greater catastrophe losses, higher underlying combined ratio and lower net prior-year reserve development. Segment income of $391 million plunged 38.6% from the year-ago quarter’s level. Bond & Specialty Insurance: Net written premiums rose 8.4% year over year to $657 million, primarily backed by growth in surety premiums, a sustained solid retention and stronger new business in management liability. Combined ratio improved 1890 bps year over year to 64.8% owing to lower underlying combined ratio and higher net favorable prior-year reserve development. However, more massive catastrophe losses partially offset this upside. Segment income surged 96.4% year over year to $220 million. Personal Insurance: Net written premiums increased 5% year over year to about $2.5 billion. Combined ratio improved 610 bps year over year to 102.6%, riding on lower catastrophe losses, higher net favorable prior-year reserve development as well as lower underlying combined ratio. Segment income of $32 million came in against the segment loss of $50 million in the comparable quarter last year. Dividend and Share Repurchase Update The property & casualty (P&C) insurer returned total capital of $375 million to its shareholders in the reported quarter. This included a buyback of 1.4 million shares worth $170 million. The company is now left with $3.3 billion shares for repurchase under its existing authorization at the end of the fourth quarter. The company’s board approved a quarterly dividend of 77 cents per share in the quarter under review. The dividend is payable Mar 21, 2019 to shareholders of record at the close of business as of Mar 11, 2019. Zacks Rank Travelers carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Another InsurerThe bottom line of MGIC Investment Corp. MTG beat the Zacks Consensus Estimate in the fourth quarter.The Progressive Corp. PGR will report fourth-quarter 2018 earnings on Jan 23. The Zacks Consensus Estimate for the metric is pegged at $1.01 per share, reflecting a year-over-year rise of 27.9%.RLI Corp. RLI will also release fourth-quarter 2018 earnings on Jan 23. The Zacks Consensus Estimate for the same stands at 6 cents per share, indicating a year-over-year plunge of 88.2%.Looking for Stocks with Skyrocketing Upside?Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.See the pot trades we're targeting>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MGIC Investment Corporation (MTG): Free Stock Analysis Report RLI Corp. (RLI): Free Stock Analysis Report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report The Progressive Corporation (PGR): Get Free Report To read this article on Zacks.com click here. Zacks Investment Research