As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Travelers (NYSE: TRV). The insurance business had a truly terrible year in 2011, with natural disasters ranging from the earthquake and tsunami in Japan and major flooding in Thailand to Hurricane Irene and a slew of other harsh weather events in the U.S., all contributing to major catastrophic losses. But shareholders are still happy, as the company managed to eke out a modest gain this year. Below, I'll take a closer look at the events that moved shares of Travelers this year.

Stats on Travelers

Year-to-Date Stock Return 9.3%
Market Cap $23.8 billion
1-Year Revenue Growth 0.9%
1-Year Profit Growth (52.8%)
P&C Combined Ratio, 2011 YTD 108.2%
Dividend Yield 2.8%
CAPS Rating ****

Source: S&P Capital IQ.

How did Travelers rise this year?
Travelers provides property and casualty insurance to individuals, businesses, and government entities. That's been a terrible place to be in 2011, as losses from a number of adverse events have added up to put a big hurt on insurance company earnings. Most of Travelers' sales come from the U.S., although it does a small amount of business in the U.K., Ireland, and Canada.

Yet Travelers has fared better than many companies. Allstate (NYSE: ALL) took huge losses from weather events in late 2010 and 2011, with double the losses in the second quarter that Travelers took. Progressive (NYSE: PGR) also saw catastrophe losses jump from year-ago levels, while reinsurers like XL Group (NYSE: XL) and PartnerRe (NYSE: PRE) saw their stocks drop in 2011 from all the cat-loss activity. Moreover, without focused exposure to Japan, Travelers escaped some of the losses that supplemental insurance provider Aflac (NYSE: AFL) and P&C insurer MetLife (NYSE: MET) suffered there.

Still, it'll take some time for Travelers to regain its footing. For its most recent quarter, Travelers' combined ratio jumped to 104.5%, meaning that losses and expenses exceeded premium income. Premiums rose during the quarter, but net income was slashed by two-thirds.

The good news going forward, though, is that bad years tend to support higher premiums in future years, which should help Travelers regain its lost profits over time. That's probably why shareholders took this year's catastrophe losses in stride rather than unfairly punishing Travelers' share price.

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