Hartford at a Loss After Q3 Accounting Error

Hartford Financial Services Group says it made an accounting error when reporting its third-quarter earnings—a mistake that now puts the insurer in the red for 2012.

Hartford says it made an amended filing with the U.S. Securities Exchange Commission on Friday to correct a miscalculation related to the sale of its life-insurance operations.

The Hartford is now reporting a net loss of $38 million for 2012. The company previously said net income for the year was $350 million, down 51 percent from 2011.

At the start of the year, Hartford said it completed the sale its individual life insurance to the Prudential Insurance Co., its retirement plans to Massachusetts Mutual Life Insurance Co., and its individual annuity business to Forethought Financial Group, Inc.

Due to the omission of “certain reinsurance recoverable balances on the gain/loss calculation,” Hartford now says the individual life insurance transaction will result in an after-tax loss of $393 million rather than no material gain or loss at all, as it had estimated last September.

The company says there was a “material weakness in its internal control over financial reporting” in September, but this has been resolved.

“We regret the error, but importantly the adjustments have no impact on our reported 2012 core earnings, statutory results or surplus, and announced capital management plan,” says CEO Liam E. McGee, in a statement.

He says the transactions “were attractive for The Hartford and completed on favorable financial terms.” The sales generated a statutory capital benefit of $2.2 billion, McGee adds.

Comments

Resource Center

View All »

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.