The Hartford Sees Q4 Net Income Rise 11%, Strengthens GL Reserves

ltcinsuranceshopper By ltcinsuranceshopper February 4, 2025


Net income at The Hartford increased 11% to $848 million in the fourth quarter 2024, driven by premium growth in commercial and personal lines.

Net income attributable to shareholders went up 24% for the year to $3.1 billion.

Property/casualty net written premiums increased 7% for the last quarter of 2024 and 10% for the full year. Commercial lines Q4 premiums increased 6% to about $3.2 billion. Personal lines premiums during the period went up 12% to $871 million. P/C catastrophe losses were about $80 million in Q4, including about $68 million from Hurricane Milton.

The combined ratios for commercial and personal lines for Q4 were 87.4 and 85.8, respectively. Personal lines results improved from 101.2 in Q4 2023.

It is too early to estimate losses related to the recent wildfires in California, the company said. During a call with analysts to discuss earnings, CEO Christopher Swift said personal lines will have some losses but the insurer has reduced its exposure in the state, but it has a larger market share of middle- and small-market commercial.

“We’ll have to see how things develop,” Swift said as he noted the insurer has just recently been able to get to affected areas to inspect. CFO Beth Costello said The Hartford’s per-occurrence reinsurance program includes wildfire coverage. It attaches at $200 million and exhausts at $1.2 billion. Costello said she expects The Hartford to be in the first layer of reinsurance ($150 million in excess of $200 million, retaining 60%). As for the second layer, which is another layer of $150 million in excess of $350 million, Costello said it is “not entirely clear that we’ll be at that level.”

Returning Q4 and year financial results, commercial and personal lines posted underwriting gains. In commercial, underwriting profit went down 11% and up 6% for Q4 and the year to $416 million and about $1.3 billion, respectively. Swift said The Hartford’s small commercial business “remains the cornerstone of growth and profitability” for the company, and he remains “incredibly bullish” on the outlook for the line of business.

The personal lines segment reversed underwriting losses in Q4 2023 and full year 2023 of $10 million and $230 million. The underwriting gains for Q4 and 2024 were $129 million and $31 million in personal lines.

During the recent earnings call, Swift said The Hartford continued to see “strong renewal written pricing increases across P/C during the quarter” including double-digit increases in personal home and auto, commercial property and auto, and general liability.

Staying with general liability, Swift said a Q4 review resulted in a strengthening of prior-year reserves of about $130 million pretax, including strengthening to the 2015-1018 years, which has been affected by higher construction-defect claims. Swift said the insurer has addressed recent trends and adjusted loss expectations to reflect the “potential for increasing settlement costs due to a higher percentage of attorney representation across all claims sizes,” and the rise in average settlements. He later said he feels “highly confident that we put a good chunk, if not all, of this behind us.”

In Q4, Costello said total P/C net unfavorable prior-year development was $97 million, pretax, on $141 million of asbestos & environmental development.

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