Hartford, CT – The Hartford (NYSE: HIG) recently announced financial results for the fourth quarter and year ended Dec. 31, 2019.
“2019 was a pivotal year strategically for The Hartford as we positioned the company with enhanced capabilities to strengthen our competitive advantages in a dynamic market environment”, said The Hartford’s Chairman and CEO Christopher Swift. “Group Benefits results were exceptional with continued margin improvement reflecting favorable incidence in group disability. Property & Casualty underwriting income improved 36% and the investment portfolio continued to perform well with strong partnership returns. We generated an annualized core earnings return on equity of 13.6%, an impressive result in the current market environment.”
The Hartford’s President Doug Elliot further commented, “2019 was a very good year for our P&C businesses. Small Commercial continues to deliver industry leading financial results, products and capabilities. In Middle and Large Commercial we are maintaining positive traction across our industry verticals and in Global Specialty product breadth and underwriting expertise is deepening our relationships with distribution partners and customers. Personal Lines delivered excellent earnings in 2019 and new business continues to grow. I am very encouraged by the pricing momentum in both our Middle and Large Commercial lines and Global Specialty markets. We are well positioned to deliver profitable growth in the improving pricing market.”
Chairman and CEO Christopher Swift further commented, “Entering 2020, we remain focused on execution and integration of our recent acquisitions. The combination of continued investments to further enhance the capabilities of our platform, consistent financial performance and ongoing capital management will create value for the benefit of all stakeholders.”
Fourth quarter 2019 net income available to common stockholders was $543 million, or $1.49 per diluted share, up 186% and 187%, respectively, from fourth quarter 2018.
The increase was principally due to an increase in both Property & Casualty (P&C) and Group Benefits driven, in part, by a change from net realized capital losses in fourth quarter 2018 to net realized capital gains in fourth quarter 2019:
- P&C net income also increased due to the change from an underwriting loss in fourth quarter 2018 to an underwriting gain in fourth quarter 2019, and an increase in net investment income, mostly driven by the acquisition of Navigators Group
- Group Benefits net income increased primarily due to a lower group disability loss ratio in fourth quarter 2019
Core earnings of $522 million and core earnings per diluted share of $1.43 in fourth quarter 2019 were up 84% and 83%, respectively, compared with fourth quarter 2018, primarily attributable to improved underwriting results in P&C, a lower group disability loss ratio in Group Benefits and higher net investment income.
- P&C underwriting results increased primarily due to lower current accident year (CAY) catastrophes (CATs) as fourth quarter 2018 included losses from the California wildfires. Underlying underwriting results, which exclude CATs and prior year development (PYD), decreased compared to fourth quarter 2018 due to the inclusion of Navigators results, which incurred several large losses in fourth quarter 2019, a higher loss ratio for workers’ compensation due to ongoing rate pressure in Small Commercial, higher non-CAT property losses in Personal Lines compared to unusually low losses in fourth quarter 2018, and increased underwriting expenses, mostly related to higher variable compensation
- Group Benefits results reflect a lower group disability loss ratio from favorable incidence and recoveries
- Net investment income was higher than fourth quarter 2018 by 10%, largely driven by the acquisition of Navigators and, to a lesser extent, income from make whole payments and mortgage loan prepayments, partially offset by lower reinvestment rates
Full year 2019 net income available to common stockholders of $2,064 million, or $5.66 per diluted share, were up 15% and 14%, respectively, from full year 2018. The increase in net income available to common stockholders was due to an increase in income from continuing operations, partially offset by a reduction in income from discontinued operations due to the sale in May 2018 of the life and annuity business. Income from continuing operations, net of tax, increased by $600 million, primarily due to a change to net realized capital gains in 2019 compared to net realized capital losses in 2018, an increase in P&C underwriting gain, a lower loss ratio in Group Benefits and an increase in net investment income, partially offset by a higher loss on extinguishment of debt and higher integration costs in 2019.
The complete results release is available here: The Hartford Fourth Quarter And Full Year 2019 Financial Results
Source: The Hartford