NU Online News Service, July 14, 3:01 p.m. EDT

The Hartford, in announcing preliminary 2011 second-quarter results, says it expects to report net income of approximately $24 million, which would be down from net income of $76 million in the 2010 second quarter.

“The Hartford's second-quarter results were affected by severe U.S. catastrophe activity and other items unrelated to the fundamental performance of the underlying business,” said Liam E. McGee, chairman, president and chief executive officer of The Hartford, in a statement.

The company says 12 catastrophe losses in the quarter caused losses of $447 pre-tax, or $290 million after tax, in the consumer-markets and commercial-markets segments.

Additionally, the company took a reserve increase of $290 million pre-tax, or $189 million after tax, after its annual review of legacy asbestos liabilities. “The increase was primarily driven by higher frequency and severity of mesothelioma claims, particularly against certain smaller, more peripheral insureds,” The Hartford says.

Other factors impacting second-quarter earnings include a $73 million after-tax charge related to a discontinued software project and a $74 million after-tax charge related to The Hartford’s disposition of Federal Trust Bank, the Florida thrift it acquired in early 2009 as a prerequisite to receiving federal aid under the Troubled Asset Relief Program.

The Hartford announced in May it was selling Federal Trust as part of its program to divest itself of non-core assets.

McGee says, “The Hartford's businesses, as well as the investment portfolio, continued to perform well in the quarter. We had strong top-line growth in property and casualty commercial markets; solid underwriting profitability, excluding catastrophes and prior-year development, across our property and casualty businesses; and a net unrealized gain position of approximately $800 million in the investment portfolio at the end of June.”

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The Hartford Expects 2Q Net to Decline 68% on Cats, Asbestos Charges

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