This Day On The Street
Continue to site right-arrow
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Hartford Reports Third Quarter 2012 Financial Results

Stocks in this article: HIG

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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs