The St Paul Travelers Companies has reported a 38% drop in income for the last quarter, compared to the corresponding period of the previous year. The downturn was largely attributed to the $1 billion in reserve adjustments for asbestos claims the company had to make.

Net income was $303 million for the fourth quarter, or $0.45 per basic share, compared to $489 million, or $1.13 per basic share, in the prior year quarter. Operating income for the current quarter was $307 million, compared to $463 million in the prior year quarter. However, revenue rose 58% to $6.37 billion as premiums written increased 52% to $5.15 billion from $3.39 billion.

In an attempt to reinvigorate its capital reserves, the company also announced its intentions to explore strategic alternatives to divest its 79% equity stake in Nuveen Investments.

Commenting on its policy towards Nuveen, Jay Fishman, president and CEO of St Paul Travelers, said, A divestiture of our equity stake in Nuveen would significantly increase our financial flexibility, operating company capital and tangible net worth.

With the steps taken in 2004, and the initiatives planned for the future, we are well positioned to realize our earnings power in 2005 and beyond, Fishman concluded.