Hartford profits fall 9% in Q1Posted On: Apr. 22, 2021 1:05 PM CST
Hartford Financial Services Group Inc. reported a 9% decline in net income in the first quarter of 2021 compared with the same quarter in 2020, largely due to its $650 million settlement with the Boy Scouts of America, catastrophe and COVID-19 losses, the insurer announced in an earnings report Thursday.
The Hartford, Connecticut-based insurer’s net income for the first quarter of 2021 was $244 million. Written premiums increased 2%, to $3.2 billion, compared with the same quarter in 2020.
“I’m extremely bullish about the prospects of growth ... in the second half of 2021 and in 2022,” Christopher Swift, Hartford’s chairman and CEO, said in an earnings call Thursday morning. “I have never been more excited about The Hartford’s future.”
However, he declined to answer questions regarding Chubb Ltd.’s recent buyout offers — including its most recent offer of $70 a share that the board declined in a letter Thursday morning. He also dodged an analyst’s question on whether he and Chubb president and CEO Evan Greenberg have had a phone conversation and denied an in-person meeting had occurred between the two over the Zurich-based insurer’s takeover offers.
“We’re still in a pandemic, so that did not happen,” he said. “If you really look at our statements and our messages … it’s pretty clear that we had no interest (in a buyout) because of ultimately the conviction and commitment around executing our business plan. …I think our disclosures on this were crystal clear as far as what the board went through and why it decided what it did.”
In property/casualty, Hartford reported a net income of $251 million in the first quarter of 2021, compared with $224 million in 2020, and written premiums of $3.21 billion in the quarter, up from $3.15 billion in the same quarter in 2020. The combined ratio deteriorated to 104.3% for the quarter compared with 96.1% in the first quarter of 2020.
In the commercial segment, Hartford’s net income increased 7% to $129 million in the quarter compared with the first quarter of 2020 and its written premiums for the segment grew 4% to $2.5 billion compared with the same quarter in 2020. However, its combined ratio deteriorated more than 10 percentage points to 109.7% in the first quarter due to a $307 million reserve increase for general liability from the Boy Scouts settlement and a $214 million in pre-net catastrophe losses primarily from winter storms in Texas and other states.
“The Boy Scouts is a very unique situation,” Mr. Swift said. “We don’t see anything in our portfolio close to resembling” the exposures in the Boy Scouts situation.
The insurer also reported a significant increase in net income in its personal lines segment, reporting a 38% increase to $135 million in the first quarter, compared with the same quarter in 2020, but a sharp decline in group health, with a net income of $9 million compared with $104 million in the first quarter of 2020, which included significant excess mortality and COVID-19 short-term disability losses, according to the earnings report and supplemental financial results.
“We’re more encouraged on the economy and the recovery ... you can see it in our first-quarter results,” Mr. Swift said. “We have greater clarity and certainty that the pandemic is in the rearview mirror.”