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Hartford Financial Services Group Inc. on Thursday posted third-quarter net income of $339 million, down 30% from the year-ago period, as the company grapples with cat losses from Hurricane Ian, looming economic instability and greater disciplined underwriting, according to company officials speaking during an earnings webcast Friday.
“These inflationary pressures are likely to remain as the Fed continues to tighten monetary policy and despite some early signs of reduced demand and economic output,” Christopher Swift, chairman and CEO of the Hartford, Connecticut-based insurer, said during the webcast.
“At the same time, changing weather patterns continue to drive increased frequency of events and associated claim severity,” he said. “There's no silver bullet to fix this problem; ongoing efforts to build more resilient homes, communities and commercial properties is to be an ongoing focus of policymakers, insurance agents and carriers. Taken together, these trends point to the need to maintain underwriting discipline, and ensure pricing keeps pace with latest trends and reserve assumptions… We’re continuing to file for increasing rate changes across our book to restore profitability.”
Still, the Hartford’s core earnings for the third quarter totaled $471 million, up 7% from this time last year.
“The Hartford produced a strong third quarter… which includes the impact of Hurricane Ian and the ongoing effects of a dynamic macroeconomic environment,” Mr. Swift said. “These are terrific results that reflect Hartford’s performance-based culture despite the continued headwinds of inflation and economic uncertainty.”
Commercial lines core earnings for the third quarter stood at $363 million, representing a 6% increase. Property/casualty current accident-year catastrophe losses in third-quarter 2022 were $293 million, including $214 million from Hurricane Ian, compared with $300 million in third quarter 2021 that included $200 million from Hurricane Ida. Still, property/casualty written premiums rose 9% in third-quarter 2022 to $3.6 billion. And commercial lines combined ratio of 97.7 improved 2.8 points from third-quarter 2021.
Bracing for greater catastrophe figures, President Doug Elliot said Friday during the webcast that losses from Hurricane Ian will continue.
“We're coming off a significant natural peril disaster in the southeast part of this country. So we expect that the property market will go through some changes in the coming quarters, starting very shortly,” Mr. Elliot said.
The economy overall is another area to watch, he added.
“I think between property and social and economic changes, it’s a really critical time that you stay on top of your trends and we’re trying to do exactly that here at the Hartford,” he said.