Hartford Financial Services Group Inc.
) reported first-quarter 2013 operating earnings of $456 million
or 92 cents per share, surpassing the Zacks Consensus Estimate of
83 cents. Operating earnings also outperformed the year-ago
earnings of $426 million or 87 cents per share.
Improvements in the Property & Casualty, Group Benefits,
Mutual Funds and Corporate segments were the chief reason for the
increase in Hartford Financial's earnings, partially offset by
lower earnings in the Talcott Resolution segment.
Hartford Financial's net loss in the reported quarter was $241
million or 58 cents per share, compared with net income of $96
million or 18 cents per share in the comparable quarter last
Hartford Financial's results for the reported quarter include
a post-tax unlock charge of $541 million, loss on extinguishment
of debt of $138 million after tax, post-tax catastrophe loss of
$36 million and pre-tax unfavorable prior-year development of $14
Total revenue of Hartford Financial for the reported quarter
stood at $9.18 billion, increasing from $7.66 billion in the
Hartford Financial reorganized its reporting segments in the
fourth quarter of 2012. As a result, the company now consists of
Property & Casualty (P&C), Group Benefits, Mutual Funds,
Talcott Resolution and Corporate segments.
Property & Casualty:
This segment covers Hartford Financial's P&C Commercial,
Consumer Markets and P&C Other businesses. The segment
generated core earnings of $318 million, up 12% from $284 million
in the first quarter of 2012. P&C reported net income of $351
million in the reported quarter, up 8% from $324 million in the
P&C written premiums declined 1% over the year-ago quarter
level to $2.52 billion. Meanwhile, combined ratio improved to
93.6 from 95.6 in the year-ago quarter. The combined ratio,
excluding catastrophes and prior-year development, improved to
91.8 from 93.9 in the prior-year quarter.
Investment income of witnessed a 2% decline to $312 million,
while underwriting gain improved to $154 million from $108
million in the year-ago quarter. This segment of Hartford
Financial witnessed catastrophe loss of $32 million in the
reported, compared with $71 million in the first quarter of
This segment generated core earnings of $30 million in the
reported quarter, increasing from $5 million in the year-ago
quarter due to improved results in the group long-term disability
business. Net income came in at $42 million, increasing from $18
million in the prior-year quarter, driven by higher core
Group Benefits' fully insured premiums declined 15% to $812
million from $954 million in the comparable quarter of 2012.
Meanwhile, loss ratio improved to 77.4% from 83% in the year-ago
Core earnings of Hartford Financial's Mutual Funds segment stayed
in line with $20 million earned in the prior-year quarter. Net
income of this segment declined 10% to $18 million from $20
million in the prior-year. Asset under management was $92.4
billion as of Mar 31, 2013, in line with the year-ago
Hartford Financial established this segment to cover the legacy
Wealth Management runoff and sold businesses, including U.S.
Annuity, International Annuity, Institutional, Private Placement
Life Insurance, and the former Individual Life and Retirement
Talcott Resolution's core earnings came in at $161 million,
down 26% from $219 million in the first quarter of 2012. The
segment reported net loss of $294 million, wider than the net
loss of $170 million in the year-ago quarter.
This segment's core loss amounted to $73 million, shrinking 28%
from $102 million incurred in the prior-year quarter, due to
improved investment income and reduced interest expenses.
Corporate segment's net loss was reported at $358 million, wider
than $96 million in the year-ago quarter.
Restructuring and other costs amounted to $10 million, surging
from $6 million in the first quarter of 2012. Interest expenses
declined 14% to $107 million from $124 million in the year-ago
quarter due to debt refinancing in the second quarter of
Hartford Financial's total invested assets, excluding trading
securities, were $86.7 billion on Mar 31, 2013, compared with
$105.3 billion on Dec 31, 2012 due to the divestiture of the
Retirement Plans and Individual Life businesses. Net investment
income, excluding trading securities, for the reported quarter
was about $856 million, down 20% year over year.
Hartford Financial's shareholder equity stood at $20.9 billion
as of Mar 31, 2013, down 7% from $22.4 billion as of Dec 31,
2012. Book value per share declined to $42.43 as of Mar 31, 2013
from $43.25 as of Mar 31, 2012. Excluding accumulated other
comprehensive income (AOCI), Hartford Financial's book value
decreased to $39.09 per share as of Mar 31, 2013 from $40.55 per
share as of Mar 31, 2012.
Hartford Financial carries a Zacks Rank #2 (Buy). Other
multi-line insurers worth considering are
FBL Financial Group Inc.
) - Zacks Rank #1 (Strong Buy),
) - Zacks Rank #2 (Buy) and
American International Group, Inc.
) - Zacks Rank #2 (Buy).
AMER INTL GRP (AIG): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
FBL FINL GRP-A (FFG): Free Stock Analysis
HARTFORD FIN SV (HIG): Free Stock Analysis
To read this article on Zacks.com click here.