Property and casualty insurer The Hartford has announced $251 million in COVID-19 related losses, pre-tax, for the second quarter.
The company’s net income in Q2 increased 24% to $463 million, while core earnings of $438 million represent a 10% decline from the prior year quarter.
The Hartford incurred $248 million in current accident year catastrophes, including $110 million, related to the US riots.
Q2 results also included net favourable P&C reserve development of $268 million, mostly due to $400 million in favourable prior year catastrophes, including the subrogation recoverable from PG&E Corporation.
P&C underwriting results increased $86 million from the second quarter 2019.
In its commercial lines segment, The Hartford posted an underlying underwriting loss of $62 million, compared to a gain of $136 million in second quarter 2019, primarily due to incurred losses from COVID-19 within property, workers’ compensation and financial lines.
Net investment income stood at $339 million, compared to $488 million, in the prior year quarter, primarily due to a change to losses on limited partnerships and other alternative investments in second quarter 2020
“Although the second quarter was dominated by the challenges of the COVID-19 health crisis, the economic shutdown and the disruption of our everyday lives, the strength of our underlying business was evident and we delivered core earnings of $438 million or $1.22 per diluted share, and a 12-month core earnings ROE of 12.7 percent,” said The Hartford’s Chairman and CEO Christopher Swift.
The Hartford’s President, Doug Elliot, added, “The second quarter has certainly presented some extraordinary challenges. COVID-19 has touched nearly all aspects of our business and has significantly impacted each of our stakeholders.
“I am proud of the actions we’ve taken to soften the impact for our customers affected by the crisis while we continue to pay claims and remain disciplined in our underwriting. Pricing remained strong in the quarter.
“Non-workers’ compensation standard commercial rate increases were 7.8 percent and U.S. wholesale specialty commercial lines rate increases were 24 percent. Notwithstanding the economic uncertainty, our underlying foundation is solid and we will continue to advance our profitability and underwriting objectives.”
“At The Hartford, we are effectively navigating through these unprecedented challenges by remaining focused on supporting customers, responding to distribution partners and safeguarding the health of our employees,” Swift added.
“While uncertainty surrounds the nation’s economic recovery over the coming quarters, our strong risk management, underwriting capabilities and financial resources position us to continue to achieve our strategic goals.”