Property and casualty insurer The Hartford has increased its full-year net earnings to $2.064 billion, due to lower catastrophe losses and investment income from the acquisition of Navigators Group.
This figure represents a 15% increase on the $1.801 billion achieved in the prior year.
Core earnings similarly came out at $2.062 billion, representing a 31% increase on the $1.575 billion figure from 2018.
The Hartford attributed this improvement to a decrease in wildfire-related catastrophe losses last year, as well as a 10% increase in net investment income, primarily driven by the acquisition of Navigators, organic growth of P&C assets, and higher returns on LP investments.
Partially offsetting these factors was a decrease in favourable prior year P&C development, and lower underlying underwriting results.
Underwriting performance was hindered by higher underwriting expenses, a higher loss ratio on workers’ compensation due to ongoing rate pressure principally in small commercial, higher non-catastrophe property losses and the inclusion of Navigators, which runs at a higher combined ratio.
Looking at the fourth quarter only, The Hartford increased its net income by 186% to $543 million and its core earnings by 84% to $522 million.
The company said this increase was mostly due to an increase in both P&C and Group Benefits, driven in part by a change from net realized capital losses in Q4 2018 to net realized capital gains this year.
P&C net income increased last quarter due to underwriting gains and investment income from the Navigators acquisition, while a lower group disability loss ratio boosted net income for Group Benefits.
“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,” he continued. “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 also 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,” he added. “We are well positioned to deliver profitable growth in the improving pricing market.”
And finally, Chairman and CEO Christopher Swift stated: “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.”