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HARTFORD, Conn. (Reuters)—Insurer Hartford Financial Services Group Inc. posted a smaller second-quarter profit Wednesday after suffering large catastrophe losses and taking a charge to increase asbestos reserves.
The Hartford, one of three insurers to take a government bailout during the financial crisis, also said it would start a $500 million share buyback.
Liam McGee, The Hartford's chief executive, said in an interview: "We can easily handle this from the holding company," despite the various charges to increase reserves and that the company was confident in its balance sheet.
The company warned last month that its results would be hurt by those charges. The disaster losses were no surprise, given that other insurers had the same problem after devastating tornadoes struck the United States in April and May, but analysts were taken aback by the asbestos costs.
The Hartford reported a net profit of $24 million, or 3 cents per share, compared with a year-earlier profit of $76 million, or 14 cents per share.
Excluding items, the company reported a core earnings result of zero per share. Analysts polled by Thomson Reuters I/B/E/S, on average, expected a profit of 1 cent per share.
The company's wealth management unit was again the key profit driver, as results in the company's consumer and commercial insurance businesses nearly canceled each other out.
Assets under management rose 11%, while sales of individual life insurance products rose 14% over a year ago. The company has been aggressively cross-selling products from the wealth unit to the small-business owners who are clients of the insurance business.
The company shares rose 2.1% to $22.80 in after-hours trading.