US property and casualty insurer The Hartford has reported 36% growth in net income for the fourth quarter of 2021 and growth of 37% for the full year.
Q4 income amounted to $724 million, with the company attributing the quarterly improvement to a decrease in P&C net unfavourable prior accident year development.
Core earnings also rose 10% to $697 million during the quarter, largely due to a $165 million improvement in P&C underwriting results, again driven by favourable prior year development, as well as 8% growth in P&C earned premium.
The Hanover also benefitted from significantly lower catastrophe losses, which totalled $22 million in Q4 2021 versus $55 million in Q4 2020, with $39 million ceded to its aggregate property catastrophe treaty, which has an attachment point of $700 million.
Additionally, a reduction in P&C COVID-19 incurred losses further boosted results, with just $1 million of losses reported in fourth quarter 2021 compared with $28 million, previously.
Looking at the full year, net income amounted to $2.3 billion, with the improvement due to net realized gains of $509 million in 2021 and an increase in net investment income.
Core earnings similarly rose 4% to $2.2 billion, helped by the $500 million increase in investment income, which came to $2.3 billion.
The Hartford also reported a $429 million increase in P&C underlying underwriting gain, but these positives were offset by a decrease in earnings from group benefits business, as well as a reduction in favourable P&C prior year development, and higher catastrophe losses of $664 million.
“In 2021, The Hartford delivered strong financial performance with meaningful growth and P&C margin expansion driven by stellar results in Commercial Lines and a significant contribution from partnership investment returns. In Group Benefits, solid premium growth and underlying results were offset by pandemic related excess mortality,” said Chairman and CEO Christopher Swift.
President Doug Elliot also commented: “Our P&C underlying results for the year were excellent with margin expansion across Commercial Lines driven by strong earned pricing and underwriting execution … Across P&C, the performance was outstanding, and the results are a strong validation of our execution roadmap.”
“We begin 2022 competitively positioned with strong momentum and a winning formula to consistently produce superior risk-adjusted returns,” Swift added. “Our businesses complement each other extremely well and together represent a unique portfolio with distinctive advantages.”
“Continued execution on our strategic priorities will drive profitable growth, enable market-leading ROEs, deliver consistent capital generation and sustain our top quartile ESG performance all of which will maximize value creation for stakeholders.”