The Hartford (NYSE:HIG) reported core earnings of $324 million, or $0.66 per diluted share, for the three months ended June 30, 2013 (second quarter 2013), up 18% from $274 million, or $0.56 per diluted share, in second quarter 2012. The improvement from the prior year quarter was principally due to higher core earnings in Property & Casualty (P&C), Group Benefits and Mutual Funds and a lower core loss in Corporate.
The company reported a second quarter 2013 net loss of $190 million, or $0.42 per diluted share, which included $421 million, after-tax, of realized capital losses, principally from the company's international variable annuity (VA) hedging programs, and a $126 million, after-tax, loss from discontinued operations due to the agreement to sell Hartford Life International Limited (HLIL) for approximately $285 million in cash. Second quarter 2012 net loss totaled $101 million, or $0.26 per diluted share, and included a $587 million, after-tax, loss on extinguishment of debt and realized capital gains of $369 million, after-tax, principally from international VA hedging programs.
“The Hartford continues to deliver shareholder value through profitable growth, reduced risk and capital management,” said The Hartford's Chairman, President and CEO Liam E. McGee. “This quarter, P&C, Group Benefits and Mutual Funds margin improvements drove core earnings for those businesses up 28% compared with second quarter 2012. We remain focused on achieving renewal written price increases in P&C Commercial, which averaged 8% this quarter for Standard Commercial, in line with the last three quarters. In June, we expanded the 2013 and 2014 equity repurchase program by $750 million, to a total of $1.25 billion, and increased the quarterly dividend by 50%.”
*Denotes financial measures not calculated based on generally accepted accounting principles (“non-GAAP").“We continue to make progress reducing the size and risk of Talcott Resolution,” said Executive Vice President and Chief Financial Officer Christopher J. Swift. “During the second quarter, variable annuity surrender activity increased, with full surrenders rising to 34.8% on the Japan block and to 17.5% in the U.S., reflecting policyholder behavior in strong markets and our management of the block. In addition, we agreed to sell our U.K. variable annuity business at attractive economics to a subsidiary of Berkshire Hathaway.”