US property and casualty insurer, The Hartford, has reported a net income of $333 million for the third quarter of 2022, down 20% compared to the $476 million reported last year.
According to the company, this was primarily due to lower net investment income and a change from net realised gains to net realised losses, partially offset by a reduction in excess mortality in Group Benefits and higher P&C underwriting results.
The Hartford Property & Casualty (P&C) written premiums rose 9% in Q3 2022, driven by Commercial Lines premium growth of 10% with increases in all three businesses. P&C current accident year (CAY) catastrophe (CAT) losses this quarter were $293 million.
This quarter’s P&C CAY CAT losses include $214 million from Hurricane Ian compared with $300 million in third quarter 2021 that included $200 million from Hurricane Ida.
Regarding commercial lines, this year’s third quarter The Hartford reported a net income of $286 million compared to $357 million reported in the same period last year. According to the insurer, this was principally due to a change from net realised gains to net realised losses and lower net investment income, partially offset by a change from an underwriting loss to an underwriting gain.
Commercial Lines written premiums were up 10%, from $2,532 million in Q3 2021 to $2,780 million in Q3 2022. An underwriting gain of $153million in 2022 was also reported, which compares to a loss of $30 million in Q3 2021, as well as a combined ratio of 94.3 and underlying combined ratio of 89.3.
Additionally, for this year’s third quarter Commercial Lines include CAY CAT losses of $179 million, including $133 million from Hurricane Ian, compared with $222 million in third quarter 2021, which included $164 million from Hurricane Ida.
The Hartford’s Personal Lines had a net loss of $36 million in third quarter 2022 compared with net income of $51 million in Q3 2021 largely driven by a change from an underwriting gain to an underwriting loss, a decrease in net investment income and a change from net realised gains to net realised losses.
CAY CAT losses for the Personal Lines were $114 million, including $81 million from Hurricane Ian, compared with $78 million in last year’s third quarter. It also has a combined ratio of 109.6 compared to the 98.7 reported in Q3 last year.
President Doug Elliot commented: “Through nine months, our financial performance demonstrates the strength of our broad product portfolio and underwriting execution. In the quarter, Commercial Lines top-line growth of 10% included strong Small Commercial new business and steady retention across each market.
“Commercial Lines pricing was consistent with second quarter and ahead of loss trends across most product lines. In Personal Lines, pricing actions continue to accelerate as we respond to inflationary pressures. Across Property and Casualty, we remain well positioned to sustain strong performance and effectively compete in the marketplace.”
The insurer also reported core earnings of $471 million compared to the $442 million reported in Q3 2021. It had an underwriting gain of $153 million in Q3 2022 compared to a loss of $30 million in the same period last year.
Additionally, it reported a net income return ROE for the trailing 12 months of 12.8% and core earnings ROE for the same period of 14.3%
Christopher Swift, Chairman and CEO said: “The Hartford continues to deliver strong financial performance with a 12-month core earnings ROE of 14.3%. In the quarter, top-line and core-earnings growth in Commercial Lines and Group Benefits, along with healthy investment returns, offset the impact of Hurricane Ian and a challenging macroeconomic environment.”
He added: “Our focus remains on underwriting excellence that optimises earnings and returns. In the first nine months of the year, we returned $1.6 billion of capital to shareholders and are pleased to announce a 10% increase in our common dividend. We are generating consistent sustainable industry leading returns, and delivering on our financial objectives.”
