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Asbestos liabilities lapped up any of Travelers Property Casualty’s 2002 profits including a nearly $1.3 billion charge it took in the fourth quarter to enhance it’s reserves.

Even though the carrier’s loss for the fourth quarter was about $790 million, it managed to escape 2002 with a total net loss of only a fraction of that size at $27 million. But juxtaposed against 2001’s $1.065 billion yield makes it tough to sugar coat 2002’s strong medicine.

Liberty Chariman and CEO, Robert Lipp commented on the recent figures. He said our “Commercial Lines recorded a 23% rise in net written premiums driven by continued rate increases, selective growth in new business, and higher customer retention,”

He then explained that, “During the quarter, we also completed our previously announced asbestos study and strengthened our asbestos reserves to $3.4 billion. This reserve strengthening reflects a conservative view of trends that have become clearer over the last few quarters and our estimate of the projected ultimate cost of our asbestos liabilities.”

Looking ahead, Lipp said, “As we enter 2003, Travelers holds a solid market position, has a strong balance sheet and has significant earnings potential. We are currently projecting record net and operating income for the full year 2003 of $1.7 billion to $1.8 billion, with projected return on equity of 16.7% to 17.6%.”

Aside from 2002’s losses, investors have something to gain from their Travelers shares. For the first time since Travelers became independent from Citigroup, the carrier will pay a dividend to shareholders.