Travelers raises view of '09 operating earnings

NEW YORK (Reuters) - Travelers Cos Inc (TRV.N: Quote, Profile, Research) raised its 2009 operating earnings outlook by about 5 cents a share on Thursday, largely reflecting share buybacks, and said it was benefiting from the troubles of American International Group (AIG.N: Quote, Profile, Research) and other weakened competitors.

In an investor presentation, the large U.S. commercial, home and auto insurer said it expected full-year earnings of $4.55 to $4.95 a share before realized gains and losses on investments.

At an investor day in New York, Chief Financial Officer Jay Benet said the higher outlook primarily reflected shares the company had repurchased in the second quarter.

On an operating basis, analysts on average had expected Travelers to earn about $5.12 a share, according to Reuters Estimates.

The company had previously forecast operating earnings of $4.50 to $4.90 a share.

Chief Executive Jay Fishman said at the same investor event that the gap between Travelers' policy sales and those of competitors had widened in the company's favor in the fourth and first quarters.

He attributed Travelers' lead, at least in part, to winning customers away from rivals, including AIG, which has struggled after massive derivatives losses led to a $180 billion federal bailout.

"A flight to quality -- there is no doubt there is one," said Fishman. He added that feedback from agents and brokers was that "many are concerned some companies won't have the capacity to service customers."

Fishman made no predictions for revenue in future periods.