This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Hartford Reports Third Quarter 2012 Financial Results

The Hartford (NYSE:HIG) reported net income of $401 million, or $0.83 per diluted share, for the third quarter of 2012, compared with net income of $60 million, or $0.11 per diluted share, in the third quarter of 2011. The company also reported that third quarter 2012 core earnings rose to $378 million, or $0.78 per diluted share, from $50 million, or $0.08 per diluted share, in the third quarter of 2011.

“The Hartford generated strong third quarter financial results, reflecting continued P&C pricing momentum and low catastrophes," said Chairman, President and CEO Liam E. McGee. "Renewal pricing increased 8% in Standard Commercial, 4% in personal auto and 6% in homeowners, with higher retention in all three lines. Group Benefits long-term disability terminations improved, resulting in a slightly lower loss ratio. Fixed income deposits grew in Mutual Funds, resulting in significantly better net flows."

“The Hartford achieved several strategic objectives this quarter, including the successful completion of sales agreements, ahead of schedule, for Individual Life, Retirement Plans and Woodbury Financial Services,” added McGee. “These transactions, which are expected to generate an approximately $2.2 billion statutory capital benefit, are a significant step forward in The Hartford's progress towards sharpening our focus on our P&C, Group Benefits and Mutual Funds businesses."

*Denotes financial measures not calculated based on generally accepted accounting principles (“non-GAAP"). More information is provided in the Discussion of Non-GAAP Financial Measures section below.
 

THIRD QUARTER 2012 FINANCIAL RESULTS
 
(in millions except per share data)   Three Months Ended
 

September 30, 2012
 

September 30, 2011
  Change
Net income   $401   $60   NM 2

Net income available to common shareholders per diluted share
  $0.83   $0.11   NM
Core earnings   $378   $50   NM

Core earnings available to common shareholders per diluted share
  $0.78   $0.08   NM
Book value per diluted share   $48.13   $43.81   10%
Book value per diluted share (ex. AOCI) 1   $41.35   $41.44   —%

[1] Accumulated other comprehensive income (AOCI) [2] The Hartford defines increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa, as “NM” or not meaningful.

Third quarter 2012 core earnings included the following items that, in total, increased core earnings by $7 million, after tax, or $0.01 per diluted share, and reduced net income by $49 million, or $0.10 per diluted share (all items are presented after tax):
  • Current accident year catastrophe losses totaled $7 million, which was $68 million below budget;
  • The deferred acquisition cost unlock charge (DAC unlock) included in core earnings was $23 million while the unfavorable DAC unlock charge included in net income was $79 million;
  • Net prior year P&C loss and loss adjustment expense reserve releases of $21 million;
  • Current accident year re-estimation of losses in P&C Commercial totaled $25 million; and
  • Restructuring and other costs related to the company’s exit from Individual Annuity new business, the sales of Individual Life, Retirement Plans and Woodbury Financial and other expense initiatives totaling $34 million.

COMMERCIAL MARKETS

Third Quarter 2012 Highlights:
  • Continued pricing and underwriting initiatives and significantly lower catastrophe losses generated P&C Commercial core earnings of $160 million compared with $87 million in the third quarter of 2011
  • Renewal written price increases compared with the prior year averaged 8% in Standard Commercial and 15% in Middle Market workers’ compensation
  • Group Benefits core earnings were $23 million, up 15% from $20 million in the third quarter of 2011
 

P&C COMMERCIAL

($ in millions)
  Three Months Ended
    September 30, 2012   September 30, 2011   Change
Written premiums   $1,552   $1,551   —%
Combined ratio 1   97.5%   99.4%   1.9
Core earnings   $160   $87   84%

[1] Excludes catastrophes and prior year development*
 

GROUP BENEFITS

($ in millions)
 

Three Months Ended
    September 30, 2012   September 30, 2011   Change
Fully insured premiums 2   $926   $1,000   (7%)
Loss ratio 2   79.3%   80.1%   0.8
Core earnings   $23   $20   15%

[2] Excludes buyout premiums
 

Commercial Markets net income rose 149% to $194 million in the third quarter of 2012 from $78 million in the third quarter of 2011 and core earnings increased 71% to $183 million from $107 million in the third quarter of 2011.

1 of 10

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,550.69 -47.51 -0.27%
S&P 500 2,093.32 -4.72 -0.22%
NASDAQ 5,105.5460 -9.8360 -0.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs