- Fourth quarter 2024 net income available to common stockholders
of $848 million ($2.88 per diluted share) increased 11% from $766
million ($2.51 per diluted share) over the same period in 2023.
Core earnings* of $865 million ($2.94 core earnings per diluted
share*) decreased 7% from $935 million ($3.06 core earnings per
diluted share) over the same period in 2023.
- Full year 2024 net income available to common stockholders of
$3.1 billion ($10.35 per diluted share) increased 24% from $2.5
billion ($7.97 per diluted share) and core earnings of $3.1 billion
($10.30 core earnings per diluted share) increased 11% from $2.8
billion ($8.88 core earnings per diluted share) over the same
period in 2023.
- Net income ROE for the year of 19.9% and core earnings ROE* of
16.7%.
- Property & Casualty (P&C) written premiums increased by
7% in the fourth quarter of 2024 compared to the same period in
2023, and by 10% for the full year, driven by Commercial Lines and
Personal Lines premium growth of 6% and 12% in the fourth quarter,
and 9% and 13% for the full year, respectively.
- Commercial Lines fourth quarter 2024 combined ratio of 87.4 and
underlying combined ratio* of 87.1. Full year 2024 combined ratio
of 89.9 and underlying combined ratio of 87.9.
- Personal Lines fourth quarter 2024 combined ratio of 85.8
improved 15.4 points, and underlying combined ratio* of 90.2
improved 9.3 points compared with the 2023 period. Full year 2024
combined ratio of 99.1 improved 8.4 points, and underlying combined
ratio of 94.1 improved 5.2 points from the 2023 period.
- Group Benefits fourth quarter net income margin of 7.1% and
core earnings margin* of 7.8%. Full year net income margin of 7.9%
and core earnings margin of 8.2%.
- Returned $537 million to stockholders in the fourth quarter,
including $400 million of shares repurchased and $137 million in
common stockholder dividends paid. For the full year, returned $2.1
billion to stockholders, including $1.5 billion of shares
repurchased and $556 million in common stockholder dividends
paid.
* Denotes financial measure not calculated in accordance with
generally accepted accounting principles (non-GAAP); definitions of
non-GAAP measures and reconciliations to their closest GAAP
measures can be found in this news release under the heading
Discussion of Non-GAAP Financial Measures. ** All amounts and
percentages set forth in this news release are approximate unless
otherwise noted.
The Hartford (NYSE: HIG) today announced financial results for
the fourth quarter and year ended Dec. 31, 2024.
“The Hartford delivered an outstanding year with a core earnings
ROE of 16.7 percent,” said The Hartford’s Chairman and CEO
Christopher Swift. “Results were driven by sustained momentum in
Commercial Lines, which once again generated strong top-line growth
at highly profitable margins, significant progress in Personal
Lines toward restoring target profitability in auto, continued
strong margins in Group Benefits, and a higher investment portfolio
yield.”
The Hartford's Chief Financial Officer Beth Costello said,
“Commercial Lines had a strong quarter with top-line growth of 6
percent and an underlying combined ratio of 87.1. Pricing,
excluding workers’ compensation, accelerated to 9.7 percent in the
quarter and remains above loss cost trends. Personal Lines achieved
9.3 points of underlying combined ratio improvement in the quarter,
including over 10 points in auto. Group Benefits continued to
outperform with a core earnings margin of 7.8 percent, led by
strong life and disability results."
Swift continued, “Our outstanding results demonstrate the
strength of our franchise, particularly our exceptional
underwriting execution, extensive distribution relationships, and
an unparalleled customer experience. With these capabilities and
our high quality talent, we are well positioned to sustain our
momentum, delivering profitable growth at industry-leading ROEs in
2025 and beyond."
CONSOLIDATED RESULTS:
Three Months Ended
Year Ended
($ in millions except per share data)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income available to common
stockholders
$848
$766
11%
$3,090
$2,483
24%
Net income available to common
stockholders per diluted share1
$2.88
$2.51
15%
$10.35
$7.97
30%
Core earnings
$865
$935
(7)%
$3,076
$2,767
11%
Core earnings per diluted share
$2.94
$3.06
(4)%
$10.30
$8.88
16%
Book value per diluted share
$55.09
$49.43
11%
Book value per diluted share (ex.
accumulated other comprehensive income (AOCI))2
$64.95
$58.83
10%
Net income available to common
stockholders' return on equity (ROE)3, last 12-months
19.9%
17.5%
2.4
Core earnings ROE3, last 12-months
16.7%
15.8%
0.9
[1] Includes dilutive potential common
shares; for net income available to common stockholders per diluted
share, the numerator is net income less preferred dividends
[2] Denotes financial measure not
calculated in accordance with generally accepted accounting
principles (non-GAAP); definitions of non-GAAP measures and
reconciliations to their closest GAAP measures can be found in this
news release under the heading Discussion of Non-GAAP Financial
Measures
[3] Return on equity (ROE) is calculated
based on last 12-months net income available to common stockholders
and core earnings, respectively; for net income ROE, the
denominator is common stockholders’ equity including AOCI; for core
earnings ROE, the denominator is common stockholders’ equity
excluding AOCI
Fourth quarter 2024 net income available to common stockholders
of $848 million, or $2.88 per diluted share, improved from $766
million in fourth quarter 2023, primarily driven by improvement in
the P&C loss and loss adjustment expense ratio, earned premium
growth in both Commercial and Personal Lines, and higher net
investment income, partially offset by a higher expense ratio.
Included in the fourth quarter 2024 net income was a benefit of
$58 million, before tax, from amortization of a deferred gain on
retroactive reinsurance related to an adverse development cover for
Navigators pertaining to 2018 and prior accident years (Navigator’s
ADC). Additionally, there was a charge for adverse development of
$203 million, before tax, related to asbestos and environmental
(A&E) reserves, for which $62 million, before tax, was ceded to
the retroactive reinsurance treaty for A&E reserves (A&E
ADC) and recognized as a deferred gain on retroactive reinsurance,
which exhausts the treaty limit. This compares to a charge of $194
million, before tax, in the fourth quarter of 2023, all of which
was ceded to the A&E ADC and recognized as a deferred gain on
retroactive reinsurance.
Fourth quarter 2024 core earnings of $865 million, or $2.94 per
diluted share, compared with $935 million of core earnings in
fourth quarter 2023. Contributing to the results were:
- Net unfavorable prior accident year development (PYD) in core
earnings of $97 million, before tax, in 2024 compared with net
favorable PYD of $102 million in core earnings in 2023. Net
unfavorable PYD included in core earnings in fourth quarter 2024
was primarily driven by an increase of $141 million related to
A&E reserves after ADC reinsurance. Excluding the A&E
reserve development, prior accident year reserve development was
favorable by $44 million and included reserve reductions in
workers’ compensation, catastrophes, bond, professional liability,
and personal auto, partially offset by reserve increases in general
liability and commercial auto liability.
- Personal Lines loss and loss adjustment expense ratio of 59.3
improved 17.3 points compared with 76.6 in fourth quarter 2023,
including 4.9 points of more favorable PYD and 1.2 points of lower
CATs. Underlying loss and loss adjustment expense ratio* of 63.7
improved 11.2 points from fourth quarter 2023, largely due to the
impact of earned pricing increases, lower frequency in auto
physical damage and lower frequency in homeowners.
- Commercial Lines loss and loss adjustment expense ratio of 56.3
compared with 54.2 in fourth quarter 2023, including 2.1 points of
less favorable PYD. Underlying loss and loss adjustment expense
ratio of 56.0 compared with 56.1 in fourth quarter 2023.
- The expense ratios increased across P&C and Group Benefits
from fourth quarter 2023, primarily driven by higher staffing
costs, higher commissions and higher direct marketing costs in
Personal Lines, and increased investments in technology in Group
Benefits.
- Group Benefits loss ratio of 70.6 increased 0.7 points compared
with 69.9 in fourth quarter 2023, primarily driven by a higher
group disability loss ratio, partially offset by improvement in the
group life loss ratio.
- An increase in earnings generated by 10% growth in P&C
earned premium.
- Net investment income of $714 million, before tax, compared
with $653 million in fourth quarter 2023, primarily driven by a
higher level of invested assets and higher yields on our fixed
income portfolio.
- P&C CAY CAT losses of $80 million, before tax, in fourth
quarter 2024, driven by hurricanes and tropical storms, including
$68 million from Hurricane Milton, primarily in the Southeast
region, as well as net reductions for CATs incurred earlier in the
year of $18 million, compared with CAY CAT losses of $81 million in
fourth quarter 2023.
Full year 2024 net income available to common stockholders of
$3.1 billion, or $10.35 per diluted share, compared with $2.5
billion in the 2023 period, primarily due to a higher P&C
underwriting gain*, driven by earned premium growth across all
lines of business as well as 9.1 points of improvement in the
Personal Lines loss and loss adjustment expense ratio, higher net
investment income, lower net realized losses, and improvement in
the group life loss ratio, partially offset by a higher expense
ratio and higher loss ratios on group disability and supplemental
health products.
Included in full year 2024 net income was a benefit of $145
million, before tax, from amortization of a deferred gain on
retroactive reinsurance related to the Navigator’s ADC.
Additionally, there was a charge for adverse development of $203
million, before tax, related to A&E reserves, for which $62
million, before tax, was ceded to the A&E ADC and recognized as
a deferred gain on retroactive reinsurance, which exhausts the
treaty limit. This compares to a charge of $194 million, before
tax, in the fourth quarter of 2023, all of which was ceded to the
A&E ADC and recognized as a deferred gain on retroactive
reinsurance.
Full year 2024 core earnings of $3.1 billion, or $10.30 per
diluted share, compared with $2.8 billion of core earnings in the
2023 period. Contributing to the results were:
- An increase in earnings generated by 10% growth in P&C
earned premium and a 2% increase in Group Benefits fully insured
ongoing premium.
- Personal Lines loss and loss adjustment expense ratio of 73.1
compared with 82.2 in 2023, including a change from unfavorable PYD
in 2023 to favorable PYD in 2024 and 0.4 points of higher CATs.
Underlying loss and loss adjustment expense ratio of 68.1 in 2024
compared with 74.1 in 2023, with the improvement largely due to the
impact of earned pricing increases and lower frequency in auto
physical damage and in homeowners.
- Net investment income of $2.6 billion, before tax, compared
with $2.3 billion in 2023, primarily driven by a higher level of
invested assets and higher yields on our fixed income
portfolio.
- Group Benefits loss ratio of 70.8 improved 1.0 points compared
with 71.8, primarily driven by a lower group life loss ratio,
partially offset by a higher loss ratio in disability and
supplemental health products.
- Net favorable PYD in core earnings of $37 million, before tax,
in 2024, compared with net favorable PYD of $184 million in core
earnings in 2023. Net favorable core PYD in 2024 included an
increase of $141 million related to A&E reserves after ADC
reinsurance. Excluding the A&E reserve development, prior
accident year reserve development was favorable by $178 million and
included reserve reductions in workers' compensation, catastrophes,
bond, personal auto, homeowners, and professional liability,
partially offset by reserve increases in general liability and
commercial auto liability.
- The Group Benefits expense ratio increased by 1.1 points,
driven by higher staffing costs and increased investments in
technology.
- Commercial Lines loss and loss adjustment expense ratio of 58.5
compared with 58.3 in 2023, including slightly higher CATs of 0.1
points and slightly less favorable PYD of 0.1 points. Underlying
loss and loss adjustment expense ratio of 56.5 in 2024 was flat
with 2023.
- P&C CAY CAT losses of $768 million, before tax, in 2024,
driven by tornado, wind and hail events across several regions of
the United States, as well as hurricanes and tropical storms
primarily in the Southeast, South, and Mid-Atlantic regions,
compared with $676 million in 2023.
Dec. 31, 2024, book value per diluted share of $55.09 increased
11.5%, from $49.43 at Dec. 31, 2023, principally due to net income
in excess of stockholder dividends through Dec. 31, 2024, partially
offset by the dilutive effect of share repurchases.
Book value per diluted share (excluding AOCI) of $64.95 as of
Dec. 31, 2024, increased 10%, from $58.83 at Dec. 31, 2023, as the
impact from net income in excess of stockholder dividends through
Dec. 31, 2024, was partially offset by the dilutive effect of share
repurchases.
Net income available to common stockholders' ROE (net income
ROE) for the year ending Dec. 31, 2024, was 19.9%, an increase of
2.4 points from Dec. 31, 2023, primarily due to an increase in net
income available to common stockholders.
Core earnings ROE for the year ending Dec. 31, 2024, was 16.7%,
an increase of 0.9 points from Dec. 31, 2023, due to higher core
earnings.
BUSINESS RESULTS: Commercial Lines
Three Months Ended
Year Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income
$708
$687
3%
$2,349
$2,085
13%
Core earnings
$665
$723
(8%)
$2,296
$2,194
5%
Written premiums
$3,174
$2,990
6%
$13,351
$12,279
9%
Underwriting gain1
$416
$466
(11%)
$1,289
$1,212
6%
Underlying underwriting gain1
$425
$408
4%
$1,544
$1,423
9%
Losses and loss adjustment expense
ratio
56.3
54.2
2.1
58.5
58.3
0.2
Expenses
30.8
30.2
0.6
31.1
31.0
0.1
Policyholder dividends
0.3
0.3
—
0.3
0.3
—
Combined ratio
87.4
84.7
2.7
89.9
89.6
0.3
Impact of catastrophes and PYD on combined
ratio
(0.2)
1.9
(2.1)
(2.0)
(1.8)
(0.2)
Underlying combined ratio
87.1
86.6
0.5
87.9
87.8
0.1
Losses and loss adjustment expense
ratio
Underlying loss and loss adjustment
expense ratio
56.0
56.1
(0.1)
56.5
56.5
—
Current accident year catastrophes
2.0
2.0
—
3.8
3.7
0.1
Favorable prior accident year
development
(1.8)
(3.9)
2.1
(1.8)
(1.9)
0.1
Total Losses and loss adjustment
expense ratio
56.3
54.2
2.1
58.5
58.3
0.2
[1] Denotes financial measure not
calculated in accordance with generally accepted accounting
principles (non-GAAP); definitions of non-GAAP measures and
reconciliations to their closest GAAP measures can be found in this
news release under the heading Discussion of Non-GAAP Financial
Measures
Fourth quarter 2024 net income of $708 million compared with net
income of $687 million in fourth quarter 2023, principally due to
the impact of earned premium growth, higher net investment income,
and lower net realized losses, partially offset by less favorable
PYD. PYD includes a $58 million, before-tax, benefit due to the
amortization of the deferred gain related to the Navigators
ADC.
Commercial Lines core earnings of $665 million in fourth quarter
2024 compared with $723 million in fourth quarter 2023.
Contributing to the results were:
- 9% growth in earned premium.
- Net investment income of $479 million, before tax, compared
with $435 million in fourth quarter 2023.
- Net PYD within core earnings of $0 million, before tax, in
fourth quarter 2024, compared with $118 million of net favorable
PYD within core earnings in fourth quarter 2023. The net PYD in
fourth quarter 2024 primarily includes reserve reductions in
workers’ compensation, catastrophes, bond, and professional
liability, partially offset by increases in general liability and
auto liability.
- An underlying loss and loss adjustment expense ratio of 56.0 in
fourth quarter 2024 compared with 56.1 in fourth quarter 2023.
- CAY CAT losses of $67 million, before tax, in fourth quarter
2024, primarily from hurricanes and tropical storms, including $55
million from Hurricane Milton, primarily in the Southeast region,
as well as net reductions for CATs incurred earlier in the year of
$7 million, up from CAY CAT losses of $60 million, before tax, in
fourth quarter 2023.
Combined ratio of 87.4 compared with 84.7 in fourth quarter
2023, primarily due to a 2.1 point increase in the loss and loss
adjustment expense ratio, including 2.1 points of less favorable
PYD (including 1.8 points of favorable development related to the
amortization of the deferred gain) and a 0.6 point increase in the
expense ratio. Underlying combined ratio of 87.1 compared with 86.6
in fourth quarter 2023, primarily due to a 0.6 point increase in
the expense ratio, partially offset by a 0.1 point improvement in
the underlying loss and loss adjustment expense ratio.
- Small Commercial combined ratio of 83.8 compared with 84.0 in
fourth quarter 2023, including 2.2 points of lower CAY CATs and 1.1
points of less favorable PYD. Underlying combined ratio of 86.7
compared with 85.8 in fourth quarter 2023, primarily due to a
higher loss ratio in general liability and a higher expense ratio,
partially offset by favorable non-CAT property losses.
- Middle & Large Commercial combined ratio of 93.9 compared
with 89.3 in fourth quarter 2023, including a change from favorable
to unfavorable PYD and 0.4 points of higher CAY CATs. Underlying
combined ratio of 90.2 compared with 90.3 in fourth quarter 2023,
improved primarily due to favorable non-CAT property losses,
largely offset by a higher loss ratio in general liability and a
higher expense ratio.
- Global Specialty combined ratio of 84.7 compared with 79.6 in
fourth quarter 2023, including 3.4 points of higher CAY CATs and
1.0 points of less favorable PYD. The combined ratio included 6.3
points of favorable development due to the amortization of the
deferred gain related to the Navigators ADC. Underlying combined
ratio of 83.6 compared with 82.9 in fourth quarter 2023, primarily
due to a higher expense ratio and a higher loss ratio in primary
and excess casualty lines, partially offset by a lower loss ratio
in environmental.
- The Commercial Lines expense ratio of 30.8 increased 0.6 points
from fourth quarter 2023, primarily due to a doubtful account
reserve reduction in the 2023 period and higher staffing costs,
partially offset by the impact of higher earned premium.
Fourth quarter 2024 written premiums of $3.2 billion were up 6%
from fourth quarter 2023, with increases across the segment, strong
double-digit new business growth in Small Commercial, and the
effect of renewal written price increases.
Personal Lines
Three Months Ended
Year Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income (loss)
$154
$34
NM
$208
$(39)
NM
Core earnings (loss)
$155
$36
NM
$217
$(29)
NM
Written premiums
$871
$780
12%
$3,598
$3,198
13%
Underwriting gain (loss)
$129
$(10)
NM
$31
$(230)
NM
Underlying underwriting gain
$89
$4
NM
$205
$21
NM
Losses and loss adjustment expense
ratio
59.3
76.6
(17.3)
73.1
82.2
(9.1)
Expenses
26.5
24.6
1.9
26.0
25.2
0.8
Combined ratio
85.8
101.2
(15.4)
99.1
107.5
(8.4)
Impact of catastrophes and PYD on combined
ratio
4.4
(1.7)
6.1
(5.1)
(8.2)
3.1
Underlying combined ratio
90.2
99.5
(9.3)
94.1
99.3
(5.2)
Losses and loss adjustment expense
ratio
Underlying loss and loss adjustment
expense ratio
63.7
74.9
(11.2)
68.1
74.1
(6.0)
Current accident year catastrophes
1.4
2.6
(1.2)
8.2
7.8
0.4
Favorable prior accident year
development
(5.8)
(0.9)
(4.9)
(3.1)
0.4
(3.5)
Total Losses and loss adjustment
expense ratio
59.3
76.6
(17.3)
73.1
82.2
(9.1)
Net income of $154 million in fourth quarter 2024 improved from
net income of $34 million in fourth quarter 2023, primarily driven
by improved underwriting results and, to a lesser extent, an
increase in net investment income. Contributing to the improved
underwriting results was a lower loss and loss adjustment expense
ratio of 59.3, improving by 17.3 points compared with 76.6 in
fourth quarter 2023, and the impact of higher earned premium,
partially offset by a higher expense ratio.
Personal Lines core earnings of $155 million improved from core
earnings of $36 million in fourth quarter 2023. Contributing to the
results were:
- An underlying loss and loss adjustment expense ratio of 63.7 in
fourth quarter 2024, which improved 11.2 points from 74.9 in fourth
quarter 2023, primarily driven by the impact of earned pricing
increases and improvement in auto physical damage frequency and
homeowners frequency.
- $53 million, before tax, of favorable PYD in fourth quarter of
2024, compared with $7 million of favorable PYD in fourth quarter
2023. The net favorable PYD in fourth quarter 2024 primarily
includes reserve reductions in auto liability and physical damage,
catastrophes, and homeowners.
- 13% growth in earned premium.
- Net investment income of $64 million, before tax, in fourth
quarter 2024 compared with $52 million in fourth quarter 2023.
- CAY CAT losses of $13 million, before tax, in fourth quarter
2024, primarily from Hurricane Milton losses of $13 million, as
well as net reductions for CATs incurred earlier in the year of $11
million, down from $21 million of CAY CAT losses in fourth quarter
2023.
Combined ratio of 85.8 in fourth quarter 2024, improved from
101.2 in fourth quarter 2023, primarily due to a 17.3 point
improvement in the loss and loss adjustment expense ratio,
including an 11.2 point improvement in the underlying loss and loss
adjustment expense ratio, more favorable PYD of 4.9 points, and 1.2
points of lower CAY CAT losses, partially offset by a higher
expense ratio. Underlying combined ratio of 90.2 improved 9.3
points from 99.5 in fourth quarter 2023, primarily due to
improvement in the underlying loss and loss adjustment expense
ratio in auto and homeowners, partially offset by a 1.9 point
increase in the expense ratio, largely driven by higher commissions
and marketing expenses.
- Auto combined ratio of 98.3 improved 15.4 points from 113.7 in
fourth quarter 2023. The underlying combined ratio of 103.0
improved 10.5 points from 113.5 in fourth quarter 2023, primarily
due to improvement in the underlying loss and loss adjustment
expense ratio driven by the impact of double-digit earned pricing
increases as well as lower physical damage claim frequency,
partially offset by higher auto claim severities. The auto physical
damage claim severity trend has moderated from the prior year. The
auto liability severity increases continue to recognize the
inflationary effects and higher attorney representation rates on
bodily injury claims.
- Homeowners combined ratio of 57.8 improved 14.9 points from
72.7 in fourth quarter 2023. The underlying combined ratio of 61.7
improved 5.6 points from 67.3 in fourth quarter 2023, primarily due
to improvement in the underlying loss and loss adjustment expense
ratio driven by the impact of double-digit earned pricing and lower
claim frequency, partially offset by higher claim severities.
Contributing to the higher homeowners severity was the effect of
higher rebuilding costs.
- The expense ratio of 26.5 increased 1.9 points from fourth
quarter 2023, primarily driven by higher direct marketing costs,
higher staffing costs, and higher commissions, partially offset by
the impact of higher earned premium.
Written premiums in fourth quarter 2024 were $871 million
compared with $780 million in fourth quarter 2023 with:
- Renewal written price increases in auto and homeowners of 19.1%
and 13.9%, respectively, in response to elevated loss cost
trends.
- An increase in new business in both homeowners and auto from
the fourth quarter of 2023, with homeowners more than doubling to
$59 million and auto increasing by 18% to $77 million.
- Slightly lower effective policy count retention in auto and
home due to renewal written price increases.
Group Benefits
Three Months Ended
Year Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income
$126
$176
(28)%
$561
$535
5%
Core earnings
$139
$174
(20%)
$578
$567
2%
Fully insured ongoing premiums
$1,600
$1,590
1%
$6,392
$6,290
2%
Loss ratio
70.6%
69.9%
0.7
70.8%
71.8%
(1.0)
Expense ratio
26.7%
24.2%
2.5
25.4%
24.3%
1.1
Net income margin
7.1%
9.9%
(2.8)
7.9%
7.7%
0.2
Core earnings margin
7.8%
9.8%
(2.0)
8.2%
8.1%
0.1
Net income of $126 million in fourth quarter 2024 decreased from
$176 million in fourth quarter 2023, primarily driven by a higher
group disability loss ratio, a higher expense ratio, and net
realized losses in 2024, partially offset by improvement in the
group life loss ratio, the impact of higher fully insured premiums,
and higher net investment income.
Core earnings of $139 million compared with $174 million in
fourth quarter 2023, primarily driven by a higher group disability
loss ratio and a higher expense ratio, partially offset by
improvement in the group life loss ratio, higher fully insured
premiums, and higher net investment income.
Fully insured ongoing premiums were up 1% compared with fourth
quarter 2023, including an increase in exposure on existing
accounts, new business sales, and persistency in excess of 90%,
though slightly below the prior year period. Fully insured ongoing
sales were $68 million in fourth quarter 2024, compared with $71
million in fourth quarter 2023, driven by lower group disability
sales.
Loss ratio of 70.6 increased 0.7 points from fourth quarter
2023.
- Group life loss ratio of 79.9 improved 3.1 points largely
driven by lower mortality.
- Group disability loss ratio of 66.9 compared with 63.6 in
fourth quarter 2023, driven by a higher loss ratio in paid family
and medical leave products and the emergence of higher long-term
disability incidence in 2024, after two years of all-time
historically low incidence, partially offset by favorable long-term
disability claim recoveries.
Expense ratio of 26.7 increased 2.5 points compared with 24.2 in
fourth quarter 2023, primarily due to higher staffing costs and
increased investments in technology.
Net investment income of $130 million, before tax, compared with
$125 million in fourth quarter 2023.
Hartford Funds
Three Months Ended
Year Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income
$49
$47
4%
$192
$174
10%
Core earnings
$51
$39
31%
$182
$165
10%
Daily average Hartford Funds
AUM
$142,230
$124,676
14%
$136,477
$127,019
7%
Mutual Funds and exchange-traded funds
(ETF) net flows
$796
$(2,963)
127%
$(3,225)
$(7,027)
54%
Total Hartford Funds AUM
$139,598
$131,025
7%
$139,598
$131,025
7%
Fourth quarter 2024 net income of $49 million compared with $47
million in fourth quarter 2023, primarily due to an increase in fee
income net of operating costs and other expenses driven by higher
daily average Hartford Funds AUM, partially offset by a change from
net realized gains to net realized losses.
Core earnings of $51 million compared with $39 million in fourth
quarter 2023, primarily due to an increase in fee income net of
operating costs and other expenses driven by higher daily average
Hartford Funds AUM.
Daily average AUM of $142 billion in fourth quarter 2024
increased 14% from fourth quarter 2023.
Mutual fund and ETF net inflows totaled $796 million in fourth
quarter 2024, compared with net outflows of $3.0 billion in fourth
quarter 2023.
Corporate
Three Months Ended
Year Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net loss
$(28)
$(19)
(47)%
$(72)
$(121)
40%
Net loss available to common
stockholders
$(33)
$(24)
(38)%
$(93)
$(142)
35%
Core loss
$(39)
$(36)
(8)%
$(122)
$(158)
23%
Net investment income, before
tax
$16
$17
(6)%
$63
$47
34%
Interest expense and preferred
dividends, before tax
$55
$54
2%
$220
$220
—%
Net loss available to common stockholders of $33 million in
fourth quarter 2024 compared with $24 million in fourth quarter
2023, primarily driven by a decrease in net realized gains,
partially offset by a decrease in restructuring and other
costs.
Fourth quarter 2024 core loss of $39 million compared with a
fourth quarter 2023 core loss of $36 million.
INVESTMENT INCOME AND PORTFOLIO DATA:
Three Months Ended
Twelve Months Ended
($ in millions, unless otherwise
noted)
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net investment income, before
tax
$714
$653
9%
$2,568
$2,305
11%
Annualized investment yield, before
tax
4.7%
4.5%
0.2
4.3%
4.1%
0.2
Annualized investment yield, before
tax, excluding LPs1
4.6%
4.3%
0.3
4.4%
4.0%
0.4
Annualized LP yield, before tax
6.4%
7.0%
(0.6)
3.0%
4.8%
(1.8)
Annualized investment yield, after
tax
3.8%
3.7%
0.1
3.5%
3.3%
0.2
[1] Denotes financial measure not
calculated in accordance with generally accepted accounting
principles (non-GAAP); definitions of non-GAAP measures and
reconciliations to their closest GAAP measures can be found in this
news release under the heading Discussion of Non-GAAP Financial
Measures
Fourth quarter 2024 consolidated net investment income of $714
million compared with $653 million in fourth quarter 2023,
primarily due to the impact of a higher level of invested assets
and reinvesting at higher rates.
Fourth quarter 2024 net investment income, excluding limited
partnerships and other alternative investments* (LPs), of $635
million, before tax, compared to $571 million in fourth quarter
2023, an 11% increase driven by a higher level of invested assets
combined with a 0.3 point increase in annualized yield.
Fourth quarter 2024 included $79 million, before tax, of LP
income as compared with $82 million in fourth quarter 2023.
Annualized LP yield, before tax, of 6.4% compared to 7.0% in fourth
quarter 2023.
Net realized losses of $17 million, before tax, in fourth
quarter 2024 compared with net realized losses of $27 million,
before tax, in fourth quarter 2023.
Total invested assets of $59.2 billion increased $3.3 billion
from Dec. 31, 2023, primarily due to a net increase in book
value.
CONFERENCE CALL
The Hartford will discuss its fourth quarter and full year 2024
financial results on a webcast at 9:00 a.m. EST on Friday, Jan. 31,
2024. The call can be accessed via a live listen-only webcast or as
a replay through the Investor Relations section of The Hartford's
website at https://ir.thehartford.com.
The replay will be accessible approximately one hour after the
conclusion of the call and be available along with a transcript of
the event for at least one year.
More detailed financial information can be found in The
Hartford's Investor Financial Supplement for Dec. 31, 2024, and the
fourth quarter 2024 Financial Results Presentation, both of which
are available at https://ir.thehartford.com.
About The Hartford
The Hartford is a leader in property and casualty insurance,
group benefits and mutual funds. With more than 200 years of
expertise, The Hartford is widely recognized for its service
excellence, sustainability practices, trust and integrity. More
information on the company and its financial performance is
available at https://www.thehartford.com.
The Hartford Financial Services Group, Inc., (NYSE: HIG)
operates through its subsidiaries under the brand name, The
Hartford, and is headquartered in Hartford, Connecticut. For
additional details, please read https://www.thehartford.com/legal-notice.
HIG-F
From time to time, The Hartford may use its website and/or
social media channels to disseminate material company information.
Financial and other important information regarding The Hartford is
routinely accessible through and posted on our website at
https://ir.thehartford.com. In
addition, you may automatically receive email alerts and other
information about The Hartford when you enroll your email address
by visiting the “Email Alerts” section at https://ir.thehartford.com.
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
CONSOLIDATING INCOME
STATEMENTS
Three Months Ended December
31, 2024
($ in millions)
Commercial
Lines
Personal
Lines
P&C
Other Ops
Group
Benefits
Hartford
Funds
Corporate
Consolidated
Earned premiums
$
3,303
$
906
$
—
$
1,600
$
—
$
—
$
5,809
Fee income
10
9
—
56
269
10
354
Net investment income
479
64
19
130
6
16
714
Net realized gains (losses)
(3
)
(5
)
(1
)
(16
)
(3
)
11
(17
)
Other revenue
—
19
—
—
—
—
19
Total revenues
3,789
993
18
1,770
272
37
6,879
Benefits, losses, and loss adjustment
expenses
1,858
537
212
1,169
—
3
3,779
Amortization of DAC
516
67
—
8
—
—
591
Insurance operating costs and other
expenses
516
198
2
424
210
17
1,367
Interest expense
—
—
—
—
—
50
50
Amortization of other intangible
assets
8
—
—
10
—
—
18
Total benefits, losses and
expenses
2,898
802
214
1,611
210
70
5,805
Income (loss) before income
taxes
891
191
(196
)
159
62
(33
)
1,074
Income tax expense (benefit)
183
37
(40
)
33
13
(5
)
221
Net income (loss)
708
154
(156
)
126
49
(28
)
853
Preferred stock dividends
—
—
—
—
—
5
5
Net income (loss) available to common
stockholders
708
154
(156
)
126
49
(33
)
848
Adjustments to reconcile net income
(loss) available to common stockholders to core earnings
(loss)
Net realized losses (gains), excluded from
core earnings, before tax
2
3
1
15
3
(8
)
16
Integration and other non-recurring
M&A costs, before tax
2
—
—
—
—
—
2
Change in deferred gain on retroactive
reinsurance, before tax
(58
)
—
62
—
—
—
4
Income tax expense (benefit)
11
(2
)
(13
)
(2
)
(1
)
2
(5
)
Core earnings (loss)
$
665
$
155
$
(106
)
$
139
$
51
$
(39
)
$
865
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
CONSOLIDATING INCOME
STATEMENTS
Three Months Ended December
31, 2023
($ in millions)
Commercial
Lines
Personal
Lines
P&C
Other Ops
Group
Benefits
Hartford
Funds
Corporate
Consolidated
Earned premiums
$
3,038
$
804
$
—
$
1,591
$
—
$
—
$
5,433
Fee income
10
8
—
56
240
9
323
Net investment income
435
52
18
125
6
17
653
Net realized gains (losses)
(48
)
(5
)
(1
)
—
8
19
(27
)
Other revenue
1
17
—
—
—
—
18
Total revenues
3,436
876
17
1,772
254
45
6,400
Benefits, losses, and loss adjustment
expenses
1,646
616
217
1,152
—
2
3,633
Amortization of DAC
468
58
—
8
—
—
534
Insurance operating costs and other
expenses
464
160
(4
)
381
196
17
1,214
Restructuring and other costs
—
—
—
—
—
2
2
Interest expense
—
—
—
—
—
49
49
Amortization of other intangible
assets
8
—
—
10
—
—
18
Total benefits, losses and
expenses
2,586
834
213
1,551
196
70
5,450
Income (loss) before income
taxes
850
42
(196
)
221
58
(25
)
950
Income tax expense (benefit)
163
8
(42
)
45
11
(6
)
179
Net income (loss)
687
34
(154
)
176
47
(19
)
771
Preferred stock dividends
—
—
—
—
—
5
5
Net income (loss) available to common
stockholders
687
34
(154
)
176
47
(24
)
766
Adjustments to reconcile net income
(loss) available to common stockholders to core earnings
(loss)
Net realized losses (gains), excluded from
core earnings, before tax
41
3
1
(2
)
(8
)
(19
)
16
Restructuring and other costs
—
—
—
—
—
2
2
Integration and other non-recurring
M&A costs, before tax
1
—
—
1
—
—
2
Change in deferred gain on retroactive
reinsurance, before tax
—
—
194
—
—
—
194
Income tax expense (benefit)
(6
)
(1
)
(42
)
(1
)
—
5
(45
)
Core earnings (loss)
$
723
$
36
$
(1
)
$
174
$
39
$
(36
)
$
935
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
CONSOLIDATING INCOME
STATEMENTS
Year Ended December 31,
2024
($ in millions)
Commercial
Lines
Personal
Lines
P&C
Other Ops
Group
Benefits
Hartford
Funds
Corporate
Consolidated
Earned premiums
$
12,721
$
3,453
$
—
$
6,393
$
—
$
—
$
22,567
Fee income
43
33
—
222
1,035
40
1,373
Net investment income
1,714
222
74
475
20
63
2,568
Net realized gains (losses)
(73
)
(14
)
(4
)
(24
)
12
42
(61
)
Other revenue
1
85
—
—
—
2
88
Total revenues
14,406
3,779
70
7,066
1,067
147
26,535
Benefits, losses, and loss adjustment
expenses
7,441
2,525
219
4,681
—
8
14,874
Amortization of DAC
1,993
255
—
34
—
—
2,282
Insurance operating costs and other
expenses
2,018
740
13
1,609
824
54
5,258
Restructuring and other costs
—
—
—
—
—
2
2
Interest expense
—
—
—
—
—
199
199
Amortization of other intangible
assets
29
2
—
40
—
—
71
Total benefits and expenses
11,481
3,522
232
6,364
824
263
22,686
Income (loss) before income
taxes
2,925
257
(162
)
702
243
(116
)
3,849
Income tax expense (benefit)
576
49
(35
)
141
51
(44
)
738
Net income (loss)
2,349
208
(127
)
561
192
(72
)
3,111
Preferred stock dividends
—
—
—
—
—
21
21
Net Income (loss) available to common
stockholders
2,349
208
(127
)
561
192
(93
)
3,090
Adjustments to reconcile net income
(loss) available to common stockholders to core earnings
(loss)
Net realized losses (gains), excluded from
core earnings, before tax
70
12
4
22
(12
)
(40
)
56
Restructuring costs, before tax
—
—
—
—
—
2
2
Integration and other non-recurring
M&A costs, before tax
8
—
—
—
—
—
8
Change in deferred gain on retroactive
reinsurance, before tax
(145
)
—
62
—
—
—
(83
)
Income tax expense (benefit)
14
(3
)
(14
)
(5
)
2
9
3
Core earnings (loss)
$
2,296
$
217
$
(75
)
$
578
$
182
$
(122
)
$
3,076
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
CONSOLIDATING INCOME
STATEMENTS
Year Ended December 31,
2023
($ in millions)
Commercial
Lines
Personal
Lines
P&C
Other Ops
Group
Benefits
Hartford
Funds
Corporate
Consolidated
Earned premiums
$
11,641
$
3,087
$
—
$
6,298
$
—
$
—
$
21,026
Fee income
41
30
—
217
973
39
1,300
Net investment income
1,532
171
69
469
17
47
2,305
Net realized losses
(156
)
(16
)
(7
)
(45
)
10
26
(188
)
Other revenue (loss)
1
81
—
—
—
2
84
Total revenues
13,059
3,353
62
6,939
1,000
114
24,527
Benefits, losses, and loss adjustment
expenses
6,786
2,538
224
4,683
—
7
14,238
Amortization of DAC
1,779
231
—
34
—
—
2,044
Insurance operating costs and other
expenses
1,878
636
4
1,514
781
68
4,881
Restructuring and other costs
—
—
—
—
—
6
6
Interest expense
—
—
—
—
—
199
199
Amortization of other intangible
assets
29
2
—
40
—
—
71
Total benefits and expenses
10,472
3,407
228
6,271
781
280
21,439
Income (loss) before income
taxes
2,587
(54
)
(166
)
668
219
(166
)
3,088
Income tax expense (benefit)
502
(15
)
(36
)
133
45
(45
)
584
Net income (loss)
2,085
(39
)
(130
)
535
174
(121
)
2,504
Preferred stock dividends
—
—
—
—
—
21
21
Net income (loss) available to common
stockholders
2,085
(39
)
(130
)
535
174
(142
)
2,483
Adjustments to reconcile net income
(loss) available to common stockholders to core earnings
(loss)
Net realized losses (gains), excluded from
core earnings, before tax
132
13
6
37
(10
)
(26
)
152
Restructuring costs, before tax
—
—
—
—
—
6
6
Integration and other non-recurring
M&A costs, before tax
4
—
—
4
—
—
8
Change in deferred gain on retroactive
reinsurance, before tax
—
—
194
—
—
—
194
Income tax expense (benefit)
(27
)
(3
)
(42
)
(9
)
1
4
(76
)
Core earnings (loss)
$
2,194
$
(29
)
$
28
$
567
$
165
$
(158
)
$
2,767
The Hartford defines increases or decreases greater than or
equal to 200%, or changes from a net gain to a net loss position,
or vice versa, as "NM" or not meaningful.
DISCUSSION OF NON-GAAP FINANCIAL MEASURES
The Hartford uses non-GAAP financial measures in this news
release to assist investors in analyzing the company's operating
performance for the periods presented herein. Because The
Hartford's calculation of these measures may differ from similar
measures used by other companies, investors should be careful when
comparing The Hartford's non-GAAP financial measures to those of
other companies. Definitions and calculations of other financial
measures used in this news release can be found below and in The
Hartford's Investor Financial Supplement for fourth quarter 2024,
which is available on The Hartford's website, https://ir.thehartford.com.
Annualized investment yield, excluding
limited partnerships and other alternative investments -
This non-GAAP measure is calculated as (a) the annualized net
investment income, on a Consolidated, P&C or Group Benefits
level, excluding limited partnerships and other alternative
investments, divided by (b) the monthly average invested assets at
amortized cost, as applicable, excluding derivatives book value and
limited partnerships and other alternative investments. The Company
believes that annualized investment yield, excluding limited
partnerships and other alternative investments, provides investors
with an important measure of the trend in investment earnings
because it excludes the impact of the volatility in returns related
to limited partnerships and other alternative investments.
Annualized investment yield is the most directly comparable GAAP
measure. A reconciliation of annualized investment yield to
annualized investment yield excluding limited partnerships and
other alternative investments for the quarterly and twelve month
periods ended December 31, 2024 and 2023 is provided in the table
below.
Three Months Ended
Dec 31 2024
Dec 31 2023
Consolidated
Annualized investment yield
4.7
%
4.5
%
Adjustment for income from limited
partnerships and other alternative investments
(0.1
)%
(0.2
)%
Annualized investment yield excluding
limited partnerships and other alternative investments
4.6
%
4.3
%
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Consolidated
Annualized investment yield, before
tax
4.3
%
4.1
%
Adjustment for income from limited
partnerships and other alternative investments
0.1
%
(0.1
)%
Annualized investment yield excluding
limited partnerships and other alternative investments, before
tax
4.4
%
4.0
%
Book value per diluted share (excluding
AOCI) - This is a non-GAAP per share measure that is
calculated by dividing (a) common stockholders' equity, excluding
AOCI, after tax, by (b) common shares outstanding and dilutive
potential common shares. The Company provides this measure to
enable investors to analyze the amount of the Company's net worth
that is primarily attributable to the Company's business
operations. The Company believes that excluding AOCI from the
numerator is useful to investors because it eliminates the effect
of items that can fluctuate significantly from period to period,
primarily based on changes in interest rates. Book value per
diluted share is the most directly comparable U.S. GAAP measure. A
reconciliation of book value per diluted share to book value per
diluted share (excluding AOCI) is provided in the table below.
As of
Dec 31 2024
Dec 31 2023
Change
Book value per diluted share
$55.09
$49.43
11.5%
Per diluted share impact of AOCI
$9.86
$9.40
4.9%
Book value per diluted share (excluding
AOCI)
$64.95
$58.83
10.4%
Core earnings - The Hartford
uses the non-GAAP measure core earnings as an important measure of
the Company’s operating performance. The Hartford believes that
core earnings provides investors with a valuable measure of the
performance of the Company’s ongoing businesses because it reveals
trends in our insurance and financial services businesses that may
be obscured by including the net effect of certain items.
Therefore, the following items are excluded from core earnings:
- Certain realized gains and losses - Generally realized gains
and losses are primarily driven by investment decisions and
external economic developments, the nature and timing of which are
unrelated to the insurance and underwriting aspects of our
business. Accordingly, core earnings excludes the effect of all
realized gains and losses that tend to be highly variable from
period to period based on capital market conditions. The Hartford
believes, however, that some realized gains and losses are
integrally related to our insurance operations, so core earnings
includes net realized gains and losses such as net periodic
settlements on credit derivatives. These net realized gains and
losses are directly related to an offsetting item included in the
income statement such as net investment income.
- Restructuring and other costs - Costs incurred as part of a
restructuring plan are not a recurring operating expense of the
business.
- Loss on extinguishment of debt - Largely consisting of
make-whole payments or tender premiums upon paying debt off before
maturity, these losses are not a recurring operating expense of the
business.
- Gains and losses on reinsurance transactions - Gains or losses
on reinsurance, such as those entered into upon sale of a business
or to reinsure loss reserves, are not a recurring operating expense
of the business.
- Integration and other non-recurring M&A costs - These
costs, including transaction costs incurred in connection with an
acquired business, are incurred over a short period of time and do
not represent an ongoing operating expense of the business.
- Change in loss reserves upon acquisition of a business - These
changes in loss reserves are excluded from core earnings because
such changes could obscure the ability to compare results in
periods after the acquisition to results of periods prior to the
acquisition.
- Deferred gain resulting from retroactive reinsurance and
subsequent changes in the deferred gain - Retroactive reinsurance
agreements economically transfer risk to the reinsurers and
excluding the deferred gain on retroactive reinsurance and related
amortization of the deferred gain from core earnings provides
greater insight into the economics of the business.
- Change in valuation allowance on deferred taxes related to
non-core components of before tax income - These changes in
valuation allowances are excluded from core earnings because they
relate to non-core components of before tax income, such as tax
attributes like capital loss carryforwards.
- Results of discontinued operations - These results are excluded
from core earnings for businesses sold or held for sale because
such results could obscure the ability to compare period over
period results for our ongoing businesses.
In addition to the above components of net income available to
common stockholders that are excluded from core earnings, preferred
stock dividends declared, which are excluded from net income, are
included in the determination of core earnings. Preferred stock
dividends are a cost of financing more akin to interest expense on
debt and are expected to be a recurring expense as long as the
preferred stock is outstanding.
Net income (loss) and net income (loss) available to common
stockholders are the most directly comparable U.S. GAAP measures to
core earnings. Core earnings should not be considered as a
substitute for net income (loss) or net income (loss) available to
common stockholders and does not reflect the overall profitability
of the Company’s business. Therefore, The Hartford believes that it
is useful for investors to evaluate net income (loss), net income
(loss) available to common stockholders, and core earnings when
reviewing the Company’s performance.
A reconciliation of net income (loss) to core earnings for the
quarterly periods ended December 31, 2024 and 2023, for individual
reporting segments can be found in this news release under the
heading "The Hartford Financial Services Group, Inc. Consolidating
Income Statements."
Core earnings margin - The
Hartford uses the non-GAAP measure core earnings margin to
evaluate, and believes it is an important measure of, the Group
Benefits segment's operating performance. Core earnings margin is
calculated by dividing core earnings by revenues, excluding buyouts
and realized gains (losses). Net income margin, calculated by
dividing net income by revenues, is the most directly comparable
U.S. GAAP measure. The Company believes that core earnings margin
provides investors with a valuable measure of the performance of
Group Benefits because it reveals trends in the business that may
be obscured by the effect of buyouts and realized gains (losses) as
well as other items excluded in the calculation of core earnings.
Core earnings margin should not be considered as a substitute for
net income margin and does not reflect the overall profitability of
Group Benefits. Therefore, the Company believes it is important for
investors to evaluate both core earnings margin and net income
margin when reviewing performance. A reconciliation of net income
margin to core earnings margin for the quarterly periods and twelve
months ended December 31, 2024 and 2023, is set forth below.
Three Months Ended
Twelve Months Ended
Margin
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Net income margin
7.1
%
9.9
%
(2.8
)
7.9
%
7.7
%
0.2
Adjustments to reconcile net income
margin to core earnings margin:
Net realized losses (gains), before
tax
0.8
%
(0.1
)%
0.9
0.4
%
0.4
%
—
Integration and other non-recurring
M&A costs, before tax
—
%
0.1
%
(0.1
)
—
%
0.1
%
(0.1
)
Income tax (benefit) on items excluded
from core earnings
(0.1
)%
(0.1
)%
—
(0.1
)%
(0.1
)%
—
Core earnings margin
7.8
%
9.8
%
(2.0
)
8.2
%
8.1
%
0.1
Core earnings per diluted
share - This non-GAAP per share measure is calculated
using the non-GAAP financial measure core earnings rather than the
GAAP measure net income. The Company believes that core earnings
per diluted share provides investors with a valuable measure of the
Company's operating performance for the same reasons applicable to
its underlying measure, core earnings. Net income (loss) available
to common stockholders per diluted common share is the most
directly comparable GAAP measure. Core earnings per diluted share
should not be considered as a substitute for net income (loss)
available to common stockholders per diluted common share and does
not reflect the overall profitability of the Company's business.
Therefore, the Company believes that it is useful for investors to
evaluate net income (loss) available to common stockholders per
diluted common share and core earnings per diluted share when
reviewing the Company's performance. A reconciliation of net income
available to common stockholders per diluted common share to core
earnings per diluted share for the quarterly periods and twelve
months ended December 31, 2024 and 2023 is provided in the table
below.
Three Months Ended
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
PER SHARE DATA
Diluted earnings per common share:
Net income available to common
stockholders per share1
$
2.88
$
2.51
15
%
$
10.35
$
7.97
30
%
Adjustments made to reconcile net
income available to common stockholders per diluted share to core
earnings per diluted share:
Net realized losses, excluded from core
earnings, before tax
0.05
0.05
—
%
0.19
0.49
(61
)%
Restructuring and other costs, before
tax
—
0.01
(100
)%
0.01
0.02
(50
)%
Integration and other non-recurring
M&A costs, before tax
0.01
0.01
—
%
0.03
0.03
—
%
Change in deferred gain on retroactive
reinsurance, before tax
0.01
0.64
(98
)%
(0.28
)
0.62
NM
Income tax (benefit) on items excluded
from core earnings
(0.01
)
(0.16
)
94
%
—
(0.25
)
100
%
Core earnings per diluted share
$
2.94
$
3.06
(4
)%
$
10.30
$
8.88
16
%
[1] Net income available to common
stockholders includes dilutive potential common shares
Core Earnings Return on
Equity - The Company provides different measures of the
return on stockholders' equity (ROE). Core earnings ROE is
calculated based on non-GAAP financial measures. Core earnings ROE
is calculated by dividing (a) the non-GAAP measure core earnings
for the prior four fiscal quarters by (b) the non-GAAP measure
average common stockholders' equity, excluding AOCI. Net income ROE
is the most directly comparable U.S. GAAP measure. The Company
excludes AOCI in the calculation of core earnings ROE to provide
investors with a measure of how effectively the Company is
investing the portion of the Company's net worth that is primarily
attributable to the Company's business operations. The Company
provides to investors return on equity measures based on its
non-GAAP core earnings financial measure for the reasons set forth
in the core earnings definition. A quantitative reconciliation of
net income available to common stockholders ROE to core earnings
ROE is not calculable on a forward-looking basis because it is not
possible to provide a reliable forecast of realized gains and
losses, which typically vary substantially from period to
period.
A reconciliation of consolidated net income available to common
stockholders ROE to consolidated core earnings ROE is set forth
below.
Last Twelve Months
Ended
Dec 31 2024
Dec 31 2023
Net income available to common
stockholders ROE
19.9%
17.5%
Adjustments to reconcile net income
available to common stockholders ROE to core earnings ROE:
Net realized losses excluded from core
earnings, before tax
0.4%
1.1%
Integration and other non-recurring
M&A costs, before tax
0.1%
0.1%
Change in deferred gain on retroactive
reinsurance, before tax
(0.5)%
1.4%
Income tax (benefit) on items not included
in core earnings
—%
(0.5)%
Impact of AOCI, excluded from denominator
of core earnings ROE
(3.2)%
(3.8)%
Core earnings ROE
16.7%
15.8%
Underlying combined ratio-
This non-GAAP financial measure of underwriting results represents
the combined ratio before catastrophes, prior accident year
development and current accident year change in loss reserves upon
acquisition of a business. Combined ratio is the most directly
comparable GAAP measure. The Company believes this ratio is an
important measure of the trend in profitability since it removes
the impact of volatile and unpredictable catastrophe losses and
prior accident year loss and loss adjustment expense reserve
development. The changes to loss reserves upon acquisition of a
business are excluded from underlying combined ratio because such
changes could obscure the ability to compare results in periods
after the acquisition to results of periods prior to the
acquisition as such trends are valuable to our investors' ability
to assess the Company's financial performance. A reconciliation of
the combined ratio to the underlying combined ratio for individual
reporting segments can be found in this news release under the
heading "Business Results" for Commercial Lines" and "Personal
Lines". A reconciliation of the combined ratio to underlying
combined ratio for lines of business within the Company's P&C
reporting segments is set forth below.
SMALL COMMERCIAL
Three Months Ended
Dec 31 2024
Dec 31 2023
Change
Combined ratio
83.8
84.0
(0.2
)
Adjustment to reconcile combined ratio
to underlying combined ratio:
Current accident year catastrophes
(1.2
)
(3.4
)
2.2
Prior accident year development
4.1
5.2
(1.1
)
Underlying combined ratio
86.7
85.8
0.9
MIDDLE & LARGE COMMERCIAL
Three Months Ended
Dec 31 2024
Dec 31 2023
Change
Combined ratio
93.9
89.3
4.6
Adjustment to reconcile combined ratio
to underlying combined ratio:
Current accident year catastrophes
(0.5
)
(0.1
)
(0.4
)
Prior accident year development
(3.3
)
1.2
(4.5
)
Underlying combined ratio
90.2
90.3
(0.1
)
GLOBAL SPECIALTY
Three Months Ended
Dec 31 2024
Dec 31 2023
Change
Combined ratio
84.7
79.6
5.1
Adjustment to reconcile combined ratio
to underlying combined ratio:
Current accident year catastrophes
(5.4
)
(2.0
)
(3.4
)
Prior accident year development
4.3
5.3
(1.0
)
Underlying combined ratio
83.6
82.9
0.7
PERSONAL LINES AUTO
Three Months Ended
Dec 31 2024
Dec 31 2023
Change
Combined ratio
98.3
113.7
(15.4
)
Adjustment to reconcile combined ratio
to underlying combined ratio:
Current accident year catastrophes
—
(0.2
)
0.2
Prior accident year development
4.7
0.1
4.6
Underlying combined ratio
103.0
113.5
(10.5
)
PERSONAL LINES HOMEOWNERS
Three Months Ended
Dec 31 2024
Dec 31 2023
Change
Combined ratio
57.8
72.7
(14.9
)
Adjustment to reconcile combined ratio
to underlying combined ratio:
Current accident year catastrophes
(4.8
)
(8.0
)
3.2
Prior accident year development
8.6
2.7
5.9
Underlying combined ratio
61.7
67.3
(5.6
)
Underwriting gain (loss) -
The Hartford's management evaluates profitability of the Commercial
and Personal Lines segments primarily on the basis of underwriting
gain or loss. Underwriting gain (loss) is a before tax non-GAAP
measure that represents earned premiums less incurred losses, loss
adjustment expenses and underwriting expenses. Net income (loss) is
the most directly comparable GAAP measure. Underwriting gain (loss)
is influenced significantly by earned premium growth and the
adequacy of The Hartford's pricing. Underwriting profitability over
time is also greatly influenced by The Hartford's underwriting
discipline, as management strives to manage exposure to loss
through favorable risk selection and diversification, effective
management of claims, use of reinsurance and its ability to manage
its expenses. The Hartford believes that underwriting gain (loss)
provides investors with a valuable measure of profitability, before
tax, derived from underwriting activities, which are managed
separately from the Company's investing activities. A
reconciliation of net income (loss) to underwriting gain (loss) for
the quarterly periods and twelve months ended December 31, 2024 and
2023, is set forth below.
Underlying underwriting gain
(loss) - This non-GAAP measure of underwriting
profitability represents underwriting gain (loss) before current
accident year catastrophes, PYD and current accident year change in
loss reserves upon acquisition of a business. The most directly
comparable GAAP measure is net income (loss). The Company believes
underlying underwriting gain (loss) is important to understand the
Company’s periodic earnings because the volatile and unpredictable
nature (i.e., the timing and amount) of catastrophes and prior
accident year reserve development could obscure underwriting
trends. The changes to loss reserves upon acquisition of a business
are also excluded from underlying underwriting gain (loss) because
such changes could obscure the ability to compare results in
periods after the acquisition to results of periods prior to the
acquisition as such trends are valuable to our investors' ability
to assess the Company's financial performance. A reconciliation of
net income (loss) to underlying underwriting gain for individual
reporting segments for the quarterly periods and twelve months
ended December 31, 2024 and 2023, is set forth below.
COMMERCIAL LINES
Three Months Ended
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Dec 31 2024
Dec 31 2023
Net income
$
708
$
687
$
2,349
$
2,085
Adjustments to reconcile net income to
underwriting gain:
Net investment income
(479
)
(435
)
(1,714
)
(1,532
)
Net realized losses
3
48
73
156
Other (expense) income
1
3
5
1
Income tax expense
183
163
576
502
Underwriting gain
416
466
1,289
1,212
Adjustments to reconcile underwriting
gain to underlying underwriting gain:
Current accident year catastrophes
67
60
486
436
Prior accident year development
(58
)
(118
)
(231
)
(225
)
Underlying underwriting gain
$
425
$
408
$
1,544
$
1,423
PERSONAL LINES
Three Months Ended
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Dec 31 2024
Dec 31 2023
Net income (loss)
$
154
$
34
$
208
$
(39
)
Adjustments to reconcile net income
(loss) to underwriting loss:
Net investment income
(64
)
(52
)
(222
)
(171
)
Net realized losses
5
5
14
16
Net servicing and other income
(3
)
(5
)
(18
)
(21
)
Income tax expense (benefit)
37
8
49
(15
)
Underwriting gain (loss)
129
(10
)
31
(230
)
Adjustments to reconcile underwriting
loss to underlying underwriting gain:
Current accident year catastrophes
13
21
282
240
Prior accident year development
(53
)
(7
)
(108
)
11
Underlying underwriting gain
$
89
$
4
$
205
$
21
Underlying loss and loss adjustment
expense ratio - This non-GAAP financial measure is the
cost of non-catastrophe loss and loss adjustment expenses incurred
in the current accident year divided by earned premiums. The loss
and loss adjustment expense ratio is the most directly comparable
GAAP measure. Management believes that the underlying loss and loss
adjustment expense ratio is a performance measure that is useful to
investors as it removes the impact of volatile and unpredictable
catastrophe losses and prior accident year development ("PYD"). A
reconciliation of the loss and loss adjustment expense ratio to the
underlying loss and loss adjustment expense ratio for the quarterly
periods and twelve months ended December 31, 2024 and 2023, is set
forth below.
COMMERCIAL LINES
Three Months Ended
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Loss and loss adjustment expense
ratio
56.3
54.2
2.1
58.5
58.3
0.2
Adjustment to reconcile loss and loss
adjustment expense ratio to underlying loss and loss adjustment
expense ratio:
Current accident year catastrophes and
prior accident year development
(0.2
)
1.9
(2.1
)
(2.0
)
(1.8
)
(0.2
)
Underlying loss and loss adjustment
expense ratio
56.0
56.1
(0.1
)
56.5
56.5
—
PERSONAL LINES
Three Months Ended
Twelve Months Ended
Dec 31 2024
Dec 31 2023
Change
Dec 31 2024
Dec 31 2023
Change
Loss and loss adjustment expense
ratio
59.3
76.6
(17.3
)
73.1
82.2
(9.1
)
Adjustment to reconcile loss and loss
adjustment expense ratio to underlying loss and loss adjustment
expense ratio:
Current accident year catastrophes and
prior accident year development
4.4
(1.7
)
6.1
(5.1
)
(8.2
)
3.1
Underlying loss and loss adjustment
expense ratio
63.7
74.9
(11.2
)
68.1
74.1
(6.0
)
Net investment income, excluding
limited partnerships and other alternative investments
-This non-GAAP measure is the amount of net investment income, on a
Consolidated, P&C or Group Benefits level earned from invested
assets, excluding the net investment income related to limited
partnerships and other alternative investments. The Company
believes that net investment income, excluding limited partnerships
and other alternative instruments, provides investors with an
important measure of the trend in investment earnings because it
excludes the impact of the volatility in returns related to limited
partnerships and other alternative instruments. Net investment
income is the most directly comparable GAAP measure. A
reconciliation of net investment income to net investment income
excluding limited partnerships and other alternative investments
for the quarterly periods ended December 31, 2024 and 2023 is
provided in the table below.
Three Months Ended
Dec 31 2024
Dec 31 2023
Dec 31 2024
Dec 31 2023
Dec 31 2024
Dec 31 2023
Consolidated
P&C
Group Benefits
Total net investment income
$
714
$
653
$
562
$
505
$
130
$
125
Adjustment for income from limited
partnerships and other alternative investments
(79
)
(82
)
(65
)
(71
)
(14
)
(11
)
Net investment income excluding limited
partnerships and other alternative investments
$
635
$
571
$
497
$
434
$
116
$
114
SAFE HARBOR STATEMENT
Certain of the statements contained herein are forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,”
“projects,” and similar references to future periods.
Forward-looking statements are based on management's current
expectations and assumptions regarding future economic,
competitive, legislative and other developments and their potential
effect upon The Hartford Financial Services Group, Inc. and its
subsidiaries (collectively, the "Company" or "The Hartford").
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. Actual results could
differ materially from expectations depending on the evolution of
various factors, including the risks and uncertainties identified
below, as well as factors described in such forward-looking
statements; or in The Hartford’s 2023 Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and our other filings with the
Securities and Exchange Commission.
- Risks Relating to Economic, Political and
Global Market Conditions: challenges related to the
Company’s current operating environment, including global
political, economic and market conditions, and the effect of
financial market disruptions, economic downturns, changes in trade
regulation including tariffs and other barriers or other
potentially adverse macroeconomic developments on the demand for
our products and returns in our investment portfolios; market risks
associated with our business, including changes in credit spreads,
equity prices, interest rates, inflation rate, foreign currency
exchange rates and market volatility; the impact on our investment
portfolio if our investment portfolio is concentrated in any
particular segment of the economy; the impacts of changing climate
and weather patterns on our businesses, operations and investment
portfolio including on claims, demand and pricing of our products,
the availability and cost of reinsurance, our modeling data used to
evaluate and manage risks of catastrophes and severe weather
events, the value of our investment portfolios and credit risk with
reinsurers and other counterparties;
- Insurance Industry and Product-Related
Risks: the possibility of unfavorable loss development,
including with respect to long-tailed exposures; the significant
uncertainties that limit our ability to estimate the ultimate
reserves necessary for asbestos and environmental claims; the
possibility of a pandemic, civil unrest, earthquake, or other
natural or man-made disaster that may adversely affect our
businesses; weather and other natural physical events, including
the intensity and frequency of thunderstorms, tornadoes, hail,
wildfires, flooding, winter storms, hurricanes and tropical storms,
as well as climate change and its potential impact on weather
patterns; the possible occurrence of terrorist attacks and the
Company’s inability to contain its exposure as a result of, among
other factors, the inability to exclude coverage for terrorist
attacks from workers' compensation policies and limitations on
reinsurance coverage from the federal government under applicable
laws; the Company’s ability to effectively price its products and
policies, including its ability to obtain regulatory consents to
pricing actions or to non-renewal or withdrawal of certain product
lines; actions by competitors that may be larger or have greater
financial resources than we do; technological changes, including
usage-based methods of determining premiums, advancements in
certain emerging technologies, including machine learning,
predictive analytics, “big data” analysis or other artificial
intelligence functions, advancements in automotive safety features,
the development of autonomous vehicles, and platforms that
facilitate ride sharing; the Company's ability to market,
distribute and provide insurance products and investment advisory
services through current and future distribution channels and
advisory firms; the uncertain effects of emerging claim and
coverage issues; political instability, politically motivated
violence or civil unrest, which may increase the frequency and
severity of insured losses;
Financial Strength, Credit and
Counterparty Risks: risks to our business, financial
position, prospects and results associated with negative rating
actions or downgrades in the Company’s financial strength and
credit ratings or negative rating actions or downgrades relating to
our investments; capital requirements which are subject to many
factors, including many that are outside the Company’s control,
such as National Association of Insurance Commissioners ("NAIC")
risk based capital formulas, rating agency capital models, Funds at
Lloyd's and Solvency Capital Requirement, which can in turn affect
our credit and financial strength ratings, cost of capital,
regulatory compliance and other aspects of our business and
results; losses due to nonperformance or defaults by others,
including credit risk with counterparties associated with
investments, derivatives, premiums receivable, reinsurance
recoverables and indemnifications provided by third parties in
connection with previous dispositions; the potential for losses due
to our reinsurers' unwillingness or inability to meet their
obligations under reinsurance contracts and the availability,
pricing and adequacy of reinsurance to protect the Company against
losses; state and international regulatory limitations on the
ability of the Company and certain of its subsidiaries to declare
and pay dividends;
Risks Relating to Estimates, Assumptions
and Valuations: risks associated with the use of analytical
models in making decisions in key areas such as underwriting,
pricing, capital management, reserving, investments, reinsurance
and catastrophe risk management; the potential for differing
interpretations of the methodologies, estimations and assumptions
that underlie the Company’s fair value estimates for its
investments and the evaluation of intent-to-sell impairments and
allowance for credit losses on available-for-sale securities and
mortgage loans; the potential for impairments of our goodwill;
Strategic and Operational Risks:
the Company’s ability to maintain the availability of its systems
and safeguard the security of its data in the event of a disaster,
cyber breach or other information security incident, technology
failure or other unanticipated event; the potential for
difficulties arising from outsourcing and similar third-party
relationships; the risks, challenges and uncertainties associated
with capital management plans, expense reduction initiatives and
other actions; risks associated with acquisitions and divestitures,
including the challenges of integrating acquired companies or
businesses, which may result in our inability to achieve the
anticipated benefits and synergies and may result in unintended
consequences; difficulty in attracting and retaining talented and
qualified personnel, including key employees, such as executives,
managers and employees with strong technological, analytical and
other specialized skills; the Company’s ability to protect its
intellectual property and defend against claims of
infringement;
Regulatory and Legal Risks: the
cost and other potential effects of increased federal, state and
international regulatory and legislative developments, including
those that could adversely impact the demand for the Company’s
products, operating costs and required capital levels; unfavorable
judicial or legislative developments; the impact of changes in
federal, state or foreign tax laws; regulatory requirements that
could delay, deter or prevent a takeover attempt that stockholders
might consider in their best interests; and the impact of potential
changes in accounting principles and related financial reporting
requirements.
Any forward-looking statement made by the Company in this
document speaks only as of the date of this release. Factors or
events that could cause the Company’s actual results to differ may
emerge from time to time, and it is not possible for the Company to
predict all of them. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250130723607/en/
Media Contacts: Michelle Loxton 860-547-7413
michelle.loxton@thehartford.com
Matthew Sturdevant 860-547-8664
matthew.sturdevant@thehartford.com
Investor Contact: Susan Spivak Bernstein 860-547-6233
susan.spivak@thehartford.com
Hartford Insurance (NYSE:HIG)
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