Travelers Companies Inc., the biggest U.S. insurer by market value, gained the most in six weeks in New York Stock Exchange trading after fourth-quarter profit beat analysts' estimates.

Travelers rose $2.31, or 6.2 percent, to $39.89.

Operating earnings, which exclude some investment losses, were $1.58 a share, 12 cents better than the average estimate of 15 analysts surveyed by Bloomberg News. Net income fell 25 percent to $801 million, the St. Paul-based commercial insurer said Tuesday in a statement.

"They did pretty well," said Paul Newsome, an analyst with Sandler O'Neill & Partners in Chicago. "You've got pretty good underwriting results."

Travelers surpassed American International Group Inc. and MetLife Inc. in market value as Chief Executive Officer Jay Fishman sidestepped the mortgage-related investments that forced down competitors' shares by more than 50 percent in the past year. Travelers invests mostly in municipal bonds and corporate debt.

"Market conditions were clearly much more challenging than anyone anticipated," Fishman said on a conference call with analysts and investors Tuesday. "All things considered, I could not be more pleased with our performance and the position of our investment portfolio."

The insurer's full-year operating profit fell 29 percent, to $3.2 billion, or $5.27 a share. That result missed the company's estimate of 2008 profit made a year ago as claims costs from catastrophes, including Hurricanes Ike and Gustav, were almost triple what the company had forecast. For 2009, Travelers said it expects operating profit to come in between $4.50 and $4.90 a share.

The forecast includes potential losses tied to the insurer's coverage of firms that did business with Bernard Madoff, the alleged swindler who's accused of masterminding a $50 billion Ponzi scheme. The insurer estimated claims tied to Madoff of less than $50 million after tax from policyholders who purchased coverage to protect themselves from lawsuits, according to a presentation on Travelers' website.

Travelers' policy sales increased less than 1 percent to $5.38 billion in the latest quarter.

Travelers has a market value of about $23.3 billion while MetLife's is about $22 billion. New York-based AIG, valued more than $100 billion at the end of 2007, has a capitalization of about $18.1 billion now.

Fishman is scaling back on stock repurchases to build capital as the industry prepares for what analysts expect will be a wave of mergers and acquisitions. Travelers' forecast for 2009 assumes the insurer will spend $1 billion on stock buybacks, compared with the $2.1 billion it spent last year.