NU Online News Service, Aug. 2, 11:42 a.m.EDT

The Hartford says it took a second-quarter net loss of $101million due to a debt it paid to Allianz SE.

Hartford says it paid $587 million to extinguish the debt byrepurchasing $1.75 billion in securities it sold to Allianzduring the height of the financial crisis.

Without this payment, net income would have been $486 million,as Hartford reports price increases in the low- to mid-singledigits. The insurer booked a $33 million profit after the secondquarter a year ago.

The insurance group says it continues to carry out a plan tofocus on P&C operations. Hartford announced this week itwill sell its broker-dealer operation, Woodbury Financial Services,to American International Group (AIG).

Liam E. McGee, chairman, president and chief executive officer,says during a conference call that plans to sell the company's lifeand retirement plans are “proceeding as expected.”

“These are attractive businesses,” he says. “It's a competitiveprocess.”

The P&C business continues to get rate increases atrenewals. P&C operations reported a second-quarter profit of$112 million, beating an estimate of $94 million set by investmentbank Keefe Bruyette & Woods.

Standard commercial lines received pricing increases of 7percent during the second quarter. Homeowners' pricing rose 6percent and auto was up 4 percent.

As Hartford takes steps to improve pricing, retention took aslight hit in the second quarter. Small commercial business wasdown to 82 percent from 83 percent for the second quarter a yearago, and middle market was down 6 percent to 73 percent.

Douglas G. Elliot, president of commercial markets, says the“trade-off is a good one for us” as the insurer improves margins.He expects retention to be a bit lower in the third quarter as thecompany continues to seek rate.

The company saw overall premium growth of 1 percent incommercial markets.

Renewal price increases were 16 percent in middle-marketworkers' compensation.

Hartford's affinity partnership with AARP continues to produceresults for its consumer markets segment, were written premiumincreased 17 percent in the second quarter, compared to the sameperiod in 2011.

Hartford's consumer markets posted a $50 million second-quarternet loss compared to a loss of $172 million during the same timelast year. Catastrophe losses and a charge of $73 million relatedto the discontinuation of a software program dropped earnings.

Second-quarter catastrophe losses were $290 million from 13events.