Workers compensation losses contribute to Hartford's 61% drop in net income
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HARTFORD, Conn.—Workers compensation loss costs contributed to a 61% drop in net income and an increased combined ratio last year for The Hartford Financial Services Group Inc., the insurer said Tuesday.
The Hartford reported net income of $662 million for 2011, down from $1.68 billion in 2010. Written premiums for the Hartford, Conn.-based insurer reached $6.18 billion last year, up 7% from $5.8 billion in 2010.
The company reported a combined ratio of 104.5% for 2011, compared to 89.7% in 2010. Total revenues declined to $21.86 billion last year, compared with $22 billion a year ago.
The Hartford said a firming insurance market boosted its written premiums. The company saw a 5% increase in renewal pricing for its standard commercial lines last year.
However, The Hartford attributed its decreased earnings in part to reserve fund strengthening costs, including $161 million in workers comp reserve costs during the fourth quarter. That's compared to a reserve release of $52 million for all other property/casualty lines during the fourth quarter, the company said.
"Capital markets volatility, low interest rates and higher-than-normal cat and noncat weather challenged the industry and The Hartford in 2011," President and CEO Liam E. McGee said in a statement. "Even in this environment, The Hartford is a much stronger and more efficient organization, with a significantly enhanced financial position and risk profile. As we said in December at our Investor Day, we are evaluating our strategy and business portfolio for opportunities to deliver greater value for shareholders."
For the fourth quarter ended Dec. 31, The Hartford reported net income of $127 million. That's down 79% from $619 million during the fourth quarter of 2010.
Written premiums for the recent quarter were $1.48 billion, up 2% from $1.45 billion for the fourth quarter of 2010.
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