Hartford fourth quarter results cap profitable 2015Reprints
Hartford Financial Services Group Inc. saw an increase in net income in the fourth quarter of 2015 compared with the same period a year earlier despite an increasingly competitive market, the insurer said Friday.
The company's fourth-quarter net income increased 10.2% from the same period in 2014 to $421 million, the Hartford, Connecticut-based insurer said Thursday in an earnings statement.
Net income was $1.68 billion for the year, a 110.8% increase from in 2014, “which included a $551 million, after-tax, loss from discontinued operations associated largely with the Japan annuity business,” Hartford said in the statement.
Meanwhile, fourth quarter 2015 net investment income totaled $695 million before tax, a decrease of 7.6% from fourth quarter 2014 as a result of “continued runoff of Talcott Resolution,” which constitutes the company's run-off of U.S., international and institutional annuity books, according to the statement
Written premiums for commercial lines were up 3.3% to $1.61 billion in 2015 over last year
With a pre-tax underwriting gain of $198 million for the quarter, compared with the fourth quarter of 2014, the combined ratio for commercial lines improved to 88.1% from 92.4% in the same period a year earlier.
During a Friday conference call with analysts, Hartford Chairman and CEO Christopher J. Swift said “property and casualty had a very strong year,” adding that “top line growth continued, reflecting an increase in new business and the benefit of pricing and underwriting actions we've made over the past few years.”
Mr. Swift said during the call that “the business is running off steadily, returning capital to the holding company.”
Results are due to “improved results in workers compensation, general liability and non-(catastrophic) property losses,” said Hartford President Doug Elliot. “In workers compensation, our largest and most profitable line of business, loss trends continued to emerge favorably. As a result, pricing has flattened relative to the prior period.”
Despite favorable results in commercial lines and group benefits, personal lines results were “below our expectations,” Mr. Elliot said.
Revenue for the insurer fell 1.3% to $18.38 billion for the year, compared with2014.
Challenging dynamics, such as new capital entering the market, the advent of big data, and consolidation among carriers, as well as agents and brokers, are causing insurance companies to “reevaluate their operations and to adapt,” Mr. Swift said during the call. “We enter 2016 with a strong portfolio of businesses and capital flexibility. We remain focused on organically growing each of our business, and we'll explore acquisitions that meet our financial and strategic objectives.”
Mr. Swift added that investments the company has made in “strong talent” and new systems, such as the claims system, group benefits enrollments system, and middle market underwriting desktop, are “enabling us to judiciously expand into new market industry verticals” and “reducing cycle times and enhancing experiences for agents and customers.”