Hartford’s Swift hails “strong” 2018 income despite catastrophe losses

Catastrophe losses fail to stop “strong” net income and core earnings in 2018 for The Hartford, said its chairman and CEO Christopher Swift in the firm’s year end results.

The consolidated earned premiums for property and casualty (P&C) rose to $15.9 billion in 2018 up from $14.1 billion in the year ending 2017, while net income in 2018 was $1.8 billion up from a loss of $3.1 billion in 2017, results showed.

The Hartford’s P&C combined ratio for the full year 2018 had improved by 2.2 points from 100 percent in 2017 to 97.8 in 2018. The company said this was caused in part by a “lower current accident year loss ratio before catastrophes and higher favourable prior accident year development".

Swift said: “The Hartford had another great year in 2018, with many important accomplishments and excellent financial results. Even with elevated catastrophe losses, net income and core earnings were strong, and our net income and core earnings return on equity were 13.7 percent and 11.6 percent, respectively.”

The company's fourth quarter income in 2018, from continuing operations after tax, was $196 million compared favourably with figures in the last quarter of 2017 which showed a loss of $558 million. The 2017 Q4 figure included an $877 million charge related to US corporate tax reform.

Core earnings in Q4 2018 were $284 million, a slight fall from $293 million in the same quarter a year before. This was partly explained by higher catastrophe losses in P&C, offset increased core earnings in group benefits and Hartford Funds, and a lower US corporate tax rate in 2018.

President Doug Elliot said: “2018 was an excellent year for our P&C and group benefits businesses. Each is delivering strong underwriting and financial performance, and operationally we continue to achieve aggressive targets on our major initiatives.

“Commercial lines had an outstanding result with a 92.6 percent combined ratio. In personal lines, 2018 results swung to a loss due to higher catastrophe losses, but underlying underwriting results and new business continued to improve.

"Group benefits had outstanding results, with better than expected disability incidence and a strong contribution from the 2017 acquisition. We remain focused on delivering strong results in P&C and group benefits, including margins and top line growth.”

Swift added: "With excellent financial results and expected excess capital generation, we are pleased to announce a new share repurchase authorization, totaling $1.0 billion, for use through year-end 2020.

"We also announced today the future operating model for commercial lines, including the global specialty business, to be formed upon closing the Navigators acquisition, which is expected in late March or April. We’re excited about the opportunities we see to create long-term shareholder value through strong operating performance, continued earnings growth, and disciplined capital management."

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