Hartford Reports Quarterly Net Off 24%

Focusing on the company's year-end results and core earnings (a financial estimate not based on Generally Accepted Accounting Principals), Ramani Ayer, the company's chairman and chief executive officer, during an investor analyst's conference call proclaimed "strong" results driven by performance in the property-casualty and life insurance sectors.

He said the volatility in the credit markets resulted in the company experiencing $429 million of net realized losses in the fourth quarter.

"Obviously, we don't like seeing losses of this magnitude in our portfolio," said Mr. Ayer. "Our investment professionals are actively managing a diversified $95 billion general accounts portfolio. With most of the portfolio invested in fixed maturities, it is difficult to avoid credit losses in markets like these."

He said the volatility has continued into 2008 and noted the focus on municipal bonds and uncertainty surrounding the bond insurer's ratings. The Hartford has $13.5 billion in these bonds, half of which is insured, but he added that their performance is not expected to have a material impact on the company.

On the property-casualty side, net income for the fourth quarter showed a losss of 30 percent, or $149 million, going to $349 million in 2007 from $498 million in 2006.

For the year, net income lost 1 percent, or $12 million, going from $1.52 billion in 2006 to $1.51 billion.

Life net income in the fourth quarter showed a loss of 23 percent, or $82 million, going to $277 million from $359 million in 2006.

The year-end results showed an 8 percent increase on the life side, increasing $117 million to $1.56 billion.

Both small commercial and middle market lines showed gains in the quarter. Small commercial rose 53 percent, or $71 million, to $204 million, while middle market increased 49 percent, or $18 million, to $55 million.

However, both personal lines and specialty lost ground. Personal lines had a loss of 72 percent, or $78 million, falling to $30 million, while specialty commercial lost $68 million for a loss of $55 million in the quarter compared to the same period in 2006.

For the year, only small commercial gained, rising 20 percent, or $86 million, to $508 million.

Personal lines came in with a 25 percent loss for the year, or $107 million, to $322 million. Middle market reported a 30 percent loss, or $63 million decline, to $144 million; and specialty commercial lost $58 million, coming in at a loss of $5 million for the year.

The Hartford reported that fourth-quarter personal lines written premium stood at $934 million, down 1 percent compared to the same period in 2006. Policies in force increased 3 percent in the quarter to 3.83 million.

Small commercial written premiums stood at $649 million, down $17 million in the quarter with a combined ratio of 70.4. Middle market written premiums fell $51 million to $591 million with a combined ratio of 90.3. Specialty commercial insurance written premium decreased 10 percent in the quarter to $337 million and a combined ratio of 114.7.

According to a Securities and Exchange Commission filing, the Hartford's consolidated combined ratio for the fourth quarter was 91.1, an increase of 2.5 points from the 2006 combined fourth-quarter ratio of 88.9. For the year, the combined ratio stood at 90.8, an increase from the 2006 combined ratio of 89.3.