Hartford Financial Swings To Profit, Tops Estimate

(RTTNews) - Insurance provider Hartford Financial Services Group Inc (HIG), Monday reported a swing to profit in the first quarter, due mainly to improved underwriting at its property and casualty business, while the prior year included some charges. Excluding items, core earnings for the quarter topped Wall Street estimates, but revenues fell short of expectations.

Results reflect sound fundamentals at property and casualty segment and other businesses as well, despite the harsh winter conditions, said Hartford Chief Executive Officer Liam McGee in a statement.

"Margins are improving and premiums are growing in P&C, while Group Benefits has achieved a substantial turnaround and Mutual Funds reported positive net flows," McGee said.

The Hartford, Connecticut-based insurer posted first-quarter net earnings to stockholders of $495 million or $1.03 per share, compared with net loss of $241 million or $0.58 per share last year.

Results for the quarter included after-tax net realized capital losses of $70 million. The prior year included, on an after-tax basis, an unlock charge of $541 million and debt-related charges of $138 million.

Excluding items, core earnings for the quarter were $564 million or $1.18 per share compared with earnings of $457 million or $0.93 per share a year ago.

On average, 19 analysts polled by Thomson Reuters estimated earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter were $4.46 billion compared with $9.02 billion in the prior year, when the company benefited from higher investment income and capital gains.

Analysts estimated revenues of $5.60 billion for the quarter.

Core earnings at the Property and Casualty business for the quarter increased 21 percent from last year to $386 million, and combined ratio at the segment improved to 89.8 percent from 93.6 percent.

Core earnings at Group Benefits segment climbed to $45 million from $30 million a year ago.

Total expenses and benefits for the quarter declined to $3.8 billion from $9.46 billion in the prior year.

At the end of the quarter, Hartford had a book value per share of $41.5, compared with $39.14 in the sequential quarter.

Hartford, under a February capital management plan, has $2 billion of share buyback authorization through December 2015. As of April 23, 2014, Hartford repurchased shares totaling $600 million.

Earlier today, Hartford agreed to sell its Japan Annuity Company Hartford Life Insurance K.K. or HLIKK to Orix Corp (IX) for $895 million. The deal will materially reduce Hartford's risk profile at attractive economics. The deal is expected to close in July.

Hartford expects proforma March 2014 capital benefit from sale of HLIKK at an estimated $1.4 billion and proforma March 2014 net loss estimated at $675 million, after-tax.

Earlier Hartford reduced VA policy counts in Japan and the U.S., and weaned away from non-core businesses to focus on property and casualty, group benefits and mutual fund businesses.

Hartford stock closed Monday at $34.47, down $0.51 or 1.46%, on a volume of 5.2 million shares on the NYSE. In after hours, the stock gained $0.03 or 0.09%.