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The Hartford sees fall in reported Q2 net income

29th July 2022 - Author: Kassandra Jimenez-Sanchez

US property and casualty insurer, The Hartford, reported a net income of $437 million for the second quarter of 2022, after falling from $900 million in the 2021 period.

The HartfordAccording to the insurer, this was primarily due to a $485 million, before tax, change from net realised gains to net realised losses.

The Hartford Property & Casualty (P&C) segment had a net loss of $20 million in Q2 2022, compared to an income of $17 million in the same period last year.

Total benefits, losses and expenses was $32 million, compared to the $2 million reported in Q1 2021.

Yet P&C written premiums rose 10% in the second quarter of 2022, driven by Commercial Lines premium growth of 14% with increases in all three businesses, The Hartford noted.

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Regarding commercial lines, the insurer reported a net income of $389 million, down 32% compared to the $569 million reported in Q2 2021.

This was principally due to a change from net realised gains to net realised losses, The Hartford noted.

Despite this, the combined ratio for the segment improved to 87.3%, compared to the 88.9% reported in last year’s second quarter.

Commercial lines written premiums were up 14%, to $2.8 billion in Q2 2022, reflecting higher new business in Small Commercial, as well as higher policy count retention in Small Commercial and Middle Market.

Additionally, this figure also reflected the effect of renewal written price increases across all lines and higher audit and endorsement premiums in Small Commercial from a larger exposure base, including higher payrolls, partially offset by a decrease in new business in Middle Market and Global Specialty.

Personal lines saw an income of $6 million, a lower figure compared to the $118 million reported in Q2 2021, according to the insurer, this was largely driven by a decrease in underwriting results, a change from net realised gains to net realised losses, and a decrease in net investment income.

Underwriting loss was $13 million in Q2 2022, compared to a gain of $96 million in the same period last year, with a weaker combined ratio of 101.8%, compared to the 87.0% reported in Q2 2021.

According to The Hartford, this was primarily due to less favourable PYD, an increase in CAY losses before CATs, a higher CAY CAT ratio and a higher expense ratio.

Chairman and CEO Christopher Swift, commented: “The Hartford delivered another quarter of excellent financial performance with a 12-month core earnings ROE of 14.0%. Results reflect premium growth and margin expansion in Commercial Lines, a 9.8% core earnings margin in Group Benefits and a significant contribution from partnership investment returns.”

President Doug Elliot added:“The Hartford’s Property and Casualty business sustained strong performance through the second quarter. In Commercial Lines, underwriting results were excellent, highlighted by a combined ratio of 87.3 and our fifth consecutive quarter of double-digit top-line growth.

“Commercial Lines pricing is still exceeding loss trends across most product lines. In Personal Lines, our Prevail rollout advances and we continue to respond to inflation pressures with pricing actions. Overall, I am pleased with our Property and Casualty first half performance and believe we are very well positioned to effectively compete in the market.”

Swift said: “Continued execution on our strategic priorities has established The Hartford as a consistent performer committed to optimising returns. In the first half of 2022, we returned $1.1 billion of capital to shareholders and are pleased to announce a new share repurchase authorization of $3.0 billion through 2024.

“Through profitable growth, investments in our business and prudent capital management we are generating superior returns and delivering on our financial objectives to maximise value creation for all stakeholders.”

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