Property and casualty (P&C) insurer The Hartford has reported a 35% year-on-year increase in net income to $733 million for the second quarter of 2024, driven by a higher underwriting gain in P&C, stronger net investment income, and an improved Group Benefits loss ratio.
Alongside the rise in net income, the insurer’s core earnings increased by 28% to $750 million, with a solid performance across the business.
Contributing to the increase in earnings year-on-year, The Hartford has reported 9% growth in P&C earned premiums, as commercial lines written premiums spiked 11% to $3.5 billion, and personal lines premiums grew 14% to $913 million.
The Commercial line segment’s underwriting result improved from $339 million in Q2 2023 to $393 million in Q2 2024, as the combined ratio strengthened by 1.4 percentage points to 89.8%.
Commercial lines cat losses totalled $155 million, primarily from tornado, wind and hail events across several regions of the United States, up from $123 million last year.
P&C current accident year catastrophe losses for the quarter hit $280 million, which is 7.1 points on the combined ratio, compared with $226 million, or 6.2 points on the combined ratio, in Q2 2023.
The Commercial lines result also included net favorable prior year development within core earnings of $44 million, before tax, in second quarter 2024. The segment’s net investment income rose to $402 million from $364 million.
All in all, commercial lines generated Q2 2024 net income of $540 million, a jump of 18% compared to $458 million in Q2 2023.
Turning to Personal lines, and the firm has reported a net loss of $11 million in Q2 2024, which is improved from the net loss of $60 million last year due to improved underwriting results and increased net investment income.
The reported core loss for the quarter stands at $4 million, so an improvement from the core loss of $57 million in the prior year quarter, supported by 12% growth in earned premium year-on-year.
There was also favourable prior year development of $34 million in the segment during Q2’24, compared with a $3 million in Q2 2023, attributed to reserve reductions in auto liability related to property damage, homeowners and auto physical damage.
Net investment income reported was $50 million, before tax, compared to $34 million in Q2 2023. Cat losses for the quarter were $125 million, an increase from $103 million last year.
The Personal lines segment combined ratio was 107.4% in Q2 2024, improved from 114.9% in the prior year quarter.
In the Group Benefits business, net income increased to $171 million for the quarter from $121 million, due to an improvement in the group life loss ratio. Core earnings were $178 million, up from $133 million in Q2 2023, consistent with the growth in net income.
It’s worth highlighting that The Hartford generated a net income benefit of $37 million, before tax, from amortization of a deferred gain on retroactive reinsurance related to an adverse development cover for Navigators of 2018 and prior accident years (Navigator’s ADC).
Christopher Swift, Chairman and Chief Executive Officer of The Hartford, commented: “The Hartford’s second quarter 2024 financial results were outstanding with a trailing 12-month core earnings ROE of 17.4 percent. Commercial Lines maintained robust top-line growth at highly profitable margins. Personal Lines continues to make great strides towards restoring target profitability in auto and Group Benefits achieved a stellar 10 percent core earnings margin during the quarter.”
Beth Costello, Chief Financial Officer, The Hartford, said: “Commercial Lines had an exceptional quarter with an underlying combined ratio of 87.4. Pricing, excluding workers’ compensation, accelerated to 9.5 percent in the quarter and remains above loss cost trends. Personal Lines achieved written price increases in auto of nearly 24 percent and Group Benefits continued to outperform with record core earnings, driven by strong performance in life and disability.”
Swift concluded, “The excellent financial performance in the first half of 2024 reflects the effectiveness of our strategy and on-going investments to differentiate The Hartford in the marketplace. With continued strong capital generation from our businesses, we are pleased to announce a new share repurchase authorization of $3.3 billion. I remain confident in our ability to continue to grow the franchise while enhancing shareholder value with an industry-leading ROE.”
