The Hartford P&C underwriting boosts Q2 earnings

US-based The Hartford has increased net income in its core property & casualty (P&C) business by 27 percent year on year to $383 million in the second quarter of 2018.

The improvement was driven by commercial lines, which saw net income rise 44 percent year on year to $372 million over the period, primarily due to higher underwriting gain and lower income taxes as a result of US corporate tax reform.

The underwriting gain of $173 million in commercial lines in the second quarter of 2018 compares to $93 million in second quarter 2017. The combined ratio of 90.1 improved 4.5 points year on year from 94.6 in second quarter 2017, primarily due to a 4.2 point net favourable change in prior accident year development (PYD) and a 0.9 point improvement in the underlying combined ratio. This was partially offset by current accident year catastrophe losses that were higher by 0.5 point.

Overall, commercial lines written premiums were up 2 percent year on year at $1.7 billion due to “strong middle market and specialty commercial premium growth,” the company said.

“P&C and group benefits results reflect our disciplined approach to pricing and underwriting in markets that remain competitive,” said The Hartford’s president Doug Elliot. “I’m pleased with our pricing progress across commercial lines, with a 70 basis point sequential quarter increase in renewal written pricing.

“While catastrophe losses were higher this quarter than a year ago, P&C net income increased 27 percent over second quarter 2017, including improved underlying margins in both commercial lines and personal lines. Group benefits net income grew 39 percent, including the benefit of the acquisition, higher sales and strong persistency, as well as lower loss and expense ratios and tax rates," Elliot added.

The Hartford entered into a definitive agreement to acquire Aetna's US group life and disability business for a cash consideration of $1.45 billion in October of 2017.

Group benefits’ net income rose 39 percent year on year to $96 million in the second quarter 2018 primarily due to the fourth quarter 2017 acquisition, an improved disability loss ratio, and the favourable impact of a lower US corporate tax rate.

Overall, The Hartford reported net income of $582 million for the second quarter of 2018 after a net loss of $40 million in the same period a year ago, which was impacted by a pension settlement charge.

“Looking across all the businesses, I am very pleased with our financial performance and our progress on strategic product, distribution and technology initiatives, and the group benefits integration that continues to go very well and remains on schedule,” The Hartford’s CEO Christopher Swift commented.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

More of today's news

Marsh restructures business to free capital for investments

Tokio Marine specialty unit reveals new CEO replacing Williams

Aon reinsurance expands 8% organically in Q2

Munich Re hires Hennessy for US specialty expansion

RGA’s US group business ‘disappoints’ in Q2

IUA unveils new contract continuity clause for 'no-deal' Brexit

Gallagher Q2 results boosted by brokerage

Don't miss our insurtech email newsletter - sign up today