- Core Earnings: $639 million or $2.20 per diluted share.
- Trailing 12 Month Core Earnings ROE: 16.2%.
- Business Insurance Written Premium Growth: 10%.
- Business Insurance Underlying Combined Ratio: 88.4%.
- Small Business Written Premium Growth: 9%.
- Small Business Underlying Combined Ratio: 89.4%.
- Middle and Large Business Written Premium Growth: 9%.
- Middle and Large Business Underlying Combined Ratio: 90.6%.
- Global Specialty Written Premium: $1 billion.
- Global Specialty Underlying Combined Ratio: 84%.
- Personal Insurance Core Earnings: $6 million.
- Personal Insurance Underlying Combined Ratio: 89.7%.
- Auto Underlying Combined Ratio: 96.1%.
- Homeowners Underlying Combined Ratio: 75.1%.
- Personal Insurance Written Premium Growth: 8%.
- Auto Written Pricing Increases: 15.8%.
- Homeowners Written Pricing Increases: 12.3%.
- P&C Current Accident Year Catastrophe Losses: $467 million before tax.
- Net Favorable Prior Accident Year Development: $90 million before tax.
- Employee Benefits Core Earnings: $136 million.
- Employee Benefits Core Earnings Margin: 7.6%.
- Net Investment Income: $656 million.
- Annualized Portfolio Yield (Excluding LPs): 4.4% before tax.
- Share Repurchases: 3.5 million shares for $400 million.
- Remaining Share Repurchase Authorization: $2.75 billion through December 31, 2026.
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Hartford Insurance Group Inc (HIG, Financial) reported a strong start to 2025 with a 10% topline growth in Business Insurance and an underlying combined ratio of 88.4%.
- Personal Insurance saw a 6.4 point improvement in the underlying combined ratio, with auto improving by over 8 points.
- Employee Benefits achieved a core earnings margin of 7.6%, surpassing the long-term target of 6% to 7%.
- Global Specialty reported outstanding results with an underlying combined ratio in the mid-80s and over $1 billion in quarterly written premium.
- The company is leveraging digital capabilities and AI to enhance customer experience and operational efficiency, positioning itself as an industry leader in technology integration.
Negative Points
- The Hartford Insurance Group Inc (HIG) faced significant catastrophe losses totaling $467 million before tax, including $325 million from the January California Wildfires.
- Retention rates in the Business Insurance segment dropped slightly, indicating potential competitive pressures.
- The Personal Insurance segment's expense ratio increased by 1.7 points due to higher direct marketing costs and a higher commission ratio.
- Workers compensation remains a competitive market with pricing pressures, leading to a strategic shrinkage of the comp book.
- The company anticipates potential impacts from tariffs on loss costs, particularly in auto insurance, which may necessitate future rate adjustments.
Q & A Highlights
Q: How is The Hartford navigating competitive market conditions in the Business Insurance segment, particularly with new business growth and retention rates?
A: Christopher Swift, CEO, noted that all business segments are performing exceptionally well. Adin Tooker, Head of Commercial Lines, explained that while there is pressure on workers' compensation, the company is making strategic choices on renewals. Despite competitive pressures, The Hartford achieved 9% growth in Middle & Large business, leveraging diversification to maintain topline growth.
Q: Can you elaborate on The Hartford's technology progress and how it compares to peers?
A: Christopher Swift, CEO, highlighted that The Hartford has been improving core platforms over the last 10-15 years, including claim systems and billing systems. The company is also moving data and applications to the cloud. Recent investments focus on organizing data, enhancing customer-centric digital capabilities, and implementing AI in claims, underwriting, and operations.
Q: What impact could tariffs have on loss costs, particularly in auto insurance and commercial insurance?
A: Christopher Swift, CEO, stated that tariffs might affect the prices of automobiles, parts, and building materials, potentially causing a step change in costs. The Hartford has set prudent loss picks for 2025, allowing for some absorption of tariff-related increases. The company is prepared to adjust pricing in response to these changes, particularly in personal auto liability and commercial property.
Q: How is The Hartford addressing pricing and competitive dynamics in the Business Insurance segment, and what is the outlook for the underlying combined ratio?
A: Christopher Swift, CEO, expressed confidence in achieving consistent underlying combined ratios. The company is executing well in the SME market, with strong pricing increases in property and general liability. Adin Tooker, Head of Commercial Lines, emphasized the importance of underwriters making the right choices in a competitive market, while Mike Fish, Head of Group Benefits, noted strong disability experience and rate improvements in paid family leave products.
Q: What is The Hartford's approach to workers' compensation reserves, and how does it compare to peers?
A: Christopher Swift, CEO, and Beth Costello, CFO, assured that there are no problems with the reserves. The company is cautious with post-COVID accident year reserves, allowing them to season appropriately. Releases this quarter were from 2020 and prior, reflecting a careful approach to reserve management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
