Profits soar at The Hartford despite high cat losses
Profits at US insurer The Hartford soared in the first quarter of the year largely driven by a reduction in net realized capital losses though this was partially offset by higher catastrophe losses. The company also enjoyed steady growth.
The company made a net profit of $378 million in the quarter compared with net income of $323 million in first quarter 2016. This 17 percent increase was mainly due to a reduction in net realized capital losses, which totalled $13 million, after-tax, in first quarter 2017 compared with $101 million, after-tax, in first quarter 2016.
This was offset somewhat by higher catastrophe losses which rose 66 percent from $59 million, after-tax, in first quarter 2016 to $98 million, after-tax, in first quarter 2017. The estimate of first quarter 2016 catastrophe losses subsequently increased by $26 million, after-tax, during 2016 due to the occurrence of storms late in that quarter.
The company also enjoyed some growth, its overall revenues reaching $4.65 billion in the quarter compared with $4.4 billion a year earlier.
“The Hartford is off to a very good start in 2017,” said Christopher Swift, The Hartford’s chairman and CEO. “Commercial Lines and Group Benefits both delivered top line growth and very strong margins. Mutual Funds had a great quarter, including a 14 percent increase in assets under management. The investment portfolio also continues to perform well, including solid limited partnership returns. Finally, I’m encouraged by the improvement in personal auto, where we have been addressing elevated loss cost trends.”
President Doug Elliot added: “I am pleased with the underlying performance of Commercial Lines and Group Benefits as well as with the progress we’re making in Personal Lines. Our personal auto profitability initiatives are taking hold, with a significant improvement in the underlying loss ratio compared with last year, adjusted for unfavorable development during 2016.
“Commercial Lines results remained very strong, including outstanding performance in Small Commercial and Specialty Commercial, with both top line growth and excellent underlying margins. Middle Market results remained good, despite sustained competition and margin pressures. In Group Benefits, top line growth and a stable loss ratio resulted in a great quarter, excluding the impact of a previously-announced state guaranty fund assessment.”
