The Hartford (HIG, Financial) has released its first-quarter financial results, reporting revenue of $6.81 billion. This figure falls short of the market's expectations, which forecasted revenue to reach $6.97 billion.
Despite the revenue miss, The Hartford has demonstrated a robust performance with a trailing 12-month core earnings return on equity (ROE) of 16.2%. This positive outcome is attributed to strong underwriting and pricing strategies, alongside a focus on innovative, customer-oriented solutions.
The company continues to navigate a complex market landscape, which has seen increased catastrophe losses across the industry. However, The Hartford's disciplined approach and talented workforce have positioned it well to achieve its financial objectives amid these challenges.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for The Hartford Insurance Group Inc (HIG, Financial) is $130.53 with a high estimate of $150.00 and a low estimate of $110.00. The average target implies an upside of 9.47% from the current price of $119.24. More detailed estimate data can be found on the The Hartford Insurance Group Inc (HIG) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, The Hartford Insurance Group Inc's (HIG, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Hartford Insurance Group Inc (HIG, Financial) in one year is $113.00, suggesting a downside of 5.23% from the current price of $119.24. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Hartford Insurance Group Inc (HIG) Summary page.
HIG Key Business Developments
Release Date: January 31, 2025
- Core Earnings: $865 million for the quarter, $2.94 per diluted share.
- Full-Year Core Earnings ROE: 16.7%.
- Commercial Lines Written Premium Growth: 6% for the quarter.
- Commercial Lines Underlying Combined Ratio: 87.1% for the quarter.
- Small Commercial Written Premium Growth: 9% for the quarter.
- Small Commercial Underlying Combined Ratio: 86.7% for the quarter.
- Middle and Large Commercial Underlying Combined Ratio: 90.2% for the quarter.
- Global Specialty Underlying Combined Ratio: 83.6% for the quarter.
- Personal Lines Core Earnings: $155 million for the quarter.
- Personal Lines Underlying Combined Ratio: 90.2% for the quarter.
- Auto Written Pricing Increases: 19.1% for the quarter.
- Homeowners Written Pricing Increases: 13.9% for the quarter.
- Group Benefits Core Earnings Margin: 7.8% for the quarter.
- Net Investment Income: $714 million for the quarter.
- Share Repurchases: 3.4 million shares for $400 million during the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Hartford Financial Services Group Inc (HIG, Financial) reported strong top-line growth in Commercial Lines, with a 6% increase for the quarter and 9% for the year.
- Personal Lines achieved significant improvement, with a 9.3-point enhancement in the underlying combined ratio for the quarter.
- Group Benefits delivered an impressive core earnings margin of 7.8% for the quarter and 8.2% for the year.
- The investment portfolio continues to generate solid performance, contributing to a core earnings ROE of 16.7% for the year.
- The company achieved a record-breaking written premium of $5.5 billion in Small Commercial, maintaining a sub-90 underlying combined ratio for the 18th consecutive quarter.
Negative Points
- The Hartford Financial Services Group Inc (HIG) strengthened its general liability reserves by $130 million before tax due to increased settlement costs and higher attorney representation rates.
- The Personal Lines expense ratio increased by 1.9 points, driven by higher direct marketing costs, staffing costs, and commissions.
- The company faced a net unfavorable prior accident year development of $97 million before tax, primarily due to asbestos and environmental development.
- The Group Benefits disability loss ratio increased to 66.9%, driven by higher loss ratios in paid family and medical leave products.
- The company is closely monitoring potential losses from the California wildfires, which could impact its reinsurance programs.
