The Hartford Financial Services Group, Inc.
CEO : Mr. Christopher Jerome Swift CPA
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 15.2% YoY | -100.0% | -14.3% | 2023-02-03 |
Beth Costello says,
Core Earnings and ROE
- Core earnings for the quarter were $746 million or $2.31 per diluted share, with a 12-month core earnings ROE of 14.4%.
Commercial Lines
- Core earnings in commercial lines were $562 million.
- Written premium increased by 9% reflecting written pricing increases and exposure growth.
- Small commercial had an underlying combined ratio of 87.5 and middle and large commercial had a solid 90.2.
- New business increased by 18% in small commercial and 6% in middle market.
Personal Lines
- Core earnings for the quarter in Personal Lines were $42 million.
- The underlying combined ratio was 96.2, reflecting continued auto liability and physical damage severity pressure driven by elevated repair costs, as well as increased bodily injury trends.
- Written premium grew by 4% for the quarter, largely reflecting pricing increases in both auto and home.
- Non-cat weather frequency continues to run favorable to long-term averages and together with the effect of earned pricing increases mitigates material and labor costs.
Reinsurance Renewals
- Current and aggregate property catastrophe protection renewed at an approximate 20% increase in cost and 28% on a risk-adjusted basis.
- We increased the attachment point on the 200 million aggregate cover to 750 million, up from 700 million.
Partnership Returns and Capital
- Partnership returns of 16.8% in the fourth quarter and 14.4% for full-year 2022 were exceptional.
- We expect a 4% to 6% return for partnership and other alternative investments in 2023.
- Holding company resources totaled 1 billion.
- For 2023, we expect dividends from the operating companies of 1.5 billion from P&C, 400 million from Group Benefits, and 125 million from Hartford Funds.
- During the quarter, we repurchased 4.9 million shares for $350 million.
Chris Swift says,
Financial Performance and Key Metrics
- Core earnings growth of 14% with core EPS growth of 23% in Q4 2022
- Top line growth in commercial lines of 11% with an underlying combined ratio of 88.3
- Group Benefits fully insured premium growth of 6% with a core earnings margin of 6.5%
- Strong investment results with excellent limited partnership returns and increasing fixed income portfolio yields
- Core earnings ROE of 14.4%, while returning 2.1 billion of excess capital to shareholders
Commercial Lines
- Written premium growth for the year was driven by strong exposure growth, pricing increases, higher policy retention, and continued strong new business
- Underlying margins improved by nearly a point driven by earned pricing, exceeding loss cost trends across most lines in growing expense leverage driven in large part by our Hartford Next program
- Small commercial consistently producing sub-90 underlying combined ratios with industry leading products and digital capabilities
- Expect to become a leading destination for excess and surplus binding opportunities and a strong complement to our existing admitted retail offering
- In middle and large commercial, written premiums grew 10% for the year with improved quality retention and solid new business
Global Specialty
- Tireless efforts have enabled us to meaningfully increase the size and scale of our specialty business to 3.6 billion of gross written premium, including over 800 million E&S premium
- Global Specialty results in 2022 were outstanding with an underlying margin of 84.6 improving over 4 points from prior year and over 11 points from 2019, demonstrating our execution financity, enhanced underwriting tools, and the expertise of the team
- Competitive position, breadth of products, and solid renewal written pricing, drove a 9% increase in gross written premiums for the year
Pricing
- Commercial Lines renewal written price increases for the quarter were 4.9%, flat compared to the third quarter
- Workers’ compensation pricing remained positive benefiting from average wage growth
- Personal lines pricing accelerated across auto and home, resulting in written premium growth of 4% for the fourth quarter and 2% for the full-year
- Filed auto rates averaged 8.3% increase, up 3.4 points from the third quarter
- In Homeowners, renewal written pricing of 10.7% for the year and 13.3% for the fourth quarter
Group Benefits
- Core earnings margin of 8.3% for the quarter and 6.5% for the full-year represents significant increases from last year as excess mortality has materially declined
- Fully insured sales for 2022 were 801 million, up 5% and employer group persistency was approximately 92%, a strong result for the year
- Expect the Group Benefits marketplace to remain dynamic as digital transformation, product innovation, and customer demand accelerate
Q & A sessions,
Commercial Lines Outlook for 2023
- Expecting a commercial lines underlying combined ratio between 87% to 89% in 2023
- Stable renewal written price increases in commercial lines, excluding workers’ compensation
- Meaningful written price increases in standard commercial property, auto, and general liability pricing in global reinsurance book, including over 30% for U.S. and European property coverage
- Workers’ compensation renewal written pricing expected to be flat to slightly negative, loss costs expected to be up slightly
- Expect workers’ compensation returns to remain attractive with deterioration equating to roughly 0.5 point on the commercial lines underlying combined ratio in 2023
Personal Lines Outlook for 2023
- Expecting a 2023 underlying combined ratio in the range of 93 to 95
- Renewal written price in auto expected to accelerate into the mid-teens by the second quarter and remain there for the balance of the year
- Loss cost trends, primarily driven by severity, expected to remain elevated during the first half of the year before returning to more normal level in the second half
- Earned pricing in Homeowners expected to generally keep pace with loss cost trends throughout 2023
- Focused on balancing re-adequacy, quality of new business, and marketing productivity
Group Benefits Outlook for 2023
- Expecting the 2023 core earnings margin to be between 6% and 7%
- Excess mortality losses expected to improve versus 2022
- Mortality trends expected to settle above pre-pandemic levels and pricing business accordingly
- Group life loss ratios expected to improve versus 2022 and in group disability, expecting some moderation of recent favorable incidents and recovery trends
Investment Income and ESG Achievements
- Expecting increase in investment income with a diversified portfolio of assets and healthy credit quality
- Recognized as one of two global catalyst award winners for advances in diversity, equity, and inclusion
- Named to The Bloomberg Gender-Equality Index and America’s most just companies list for 2023, earning both honors every year since their inception
No bad stock 