NU Online News Service, Feb. 9, 3:39 p.m. EST
The Hartford Financial Services Group Inc., reversing a loss, reported a fourth-quarter profit on the strength of its investment portfolio and disciplined underwriting, the company’s chief executive said today.
The Hartford, Conn.-based insurer reported fourth-quarter net income stood at $557 million, or $1.19 a share, an improvement over the prior year’s net loss of $806 million, or negative $2.71 a share.
For all of 2009, net income showed a loss of $887 million, or negative $2.93 a share, compared with a net loss of $2.75 billion, or negative $8.99 a share in 2008.
The results were partly due to a 68 percent increase in property and casualty business in the quarter, from $297 million to $498 million. For the year, net income rose from $189 million to $1.06 billion for the segment.
During a conference call with investment analysts, Liam E. McGee said, “Our franchise is stable with growing momentum. The Hartford has a strong capital foundation. We are decisively facing our challenges and our team is focused on delivering superior returns through sustained, profitable growth.”
The company results declined with the onset of the recession and the insurer eventually applied for and secured $3.4 billion from the U.S. Treasury’s Troubled Asset Relief Program.
Mr. McGee said this was the third consecutive quarter of improvement in core earnings reflecting strong execution by its investment team and a rebound in investment income. On the property and casualty side, he said the performance reflected solid underwriting, release of prior year reserves of $128 million and a light catastrophe year.
The company reported p&c operations produced net income of $508 million and an accident year combined ratio, excluding catastrophes, of 92.6. P&C earnings contributed $1.4 billion increase in statutory surplus for all of last year.
Small commercial grew 21 percent and middle market business increased 7 percent.
The Hartford said written premiums for the company’s p&c operations in the quarter were $2.4 billion compared to $2.5 billion for the previous year. The company said the decline was due to the combination of pressures from the economic recession and soft market conditions.
On the life side, operations showed a profit of $118 million compared to net loss of $807 million for the fourth quarter of 2008.
As part of its effort to improve the bottom line, over the past year the company has reduced its workforce by 10 percent, or 3,000 people, he said.
Looking ahead, Mr. McGee said the economy and markets remain uncertain, but a slow, gradual economic recovery is expected. He said underwriting will remain disciplined.
On the growth side, Mr. McGee said its p&c product offered to AARP members through independent agents will expand from 20 states to 41 by the end of this year.
The company’s small commercial Spectrum business owners policies program will also be expanded to 13 more states by the spring.