Reeling from what its chief executive called "the most challenging year" in the company's nearly 200-year history, Hartford Financial Services Group Inc. recently announced its fourth-quarter net losses. The fourth-largest U.S. insurer reported losses totaling $806 million or $2.71 per share, compared with a profit of $595 million, or $1.88 per share just a year earlier.
"The capital markets proved to be especially challenging during the latter half of 2008, particularly affecting our equity-based businesses and investment performance," said Ramani Ayer, chairman and chief executive, in a statement. "Even still, we took several actions to finish 2008 well capitalized and well prepared to deliver on our commitments to customers."
Despite the substantial losses, Ayer was quick to point out that the company's core businesses had a strong showing for 2008:
"We had outstanding underwriting results in property and casualty, and loss estimates for the current and prior accident years developed better than expected," he said. "In addition, our group insurance and individual life businesses executed well in competitive markets."
Written premiums for The Hartford's property and casualty (P&C) operations in the fourth quarter were $2.5 billion, which represented a 2-percent drop from the comparable 2007 period. For full 2008 year, written premiums were $10.2 billion, compared with $10.4 billion in the prior year.
The Hartford's P&C ongoing operations reported a combined ratio of 78 percent, excluding catastrophes. This compares with 88.4 percent in the year-ago quarter. The combined ratio measures the amount of money an insurer pays in claims and expenses compared with how much it receives from underwriting premiums. A ratio above 100 percent means the insurer is paying out more than it generates from premiums
Moving forward, the company says it plans to reduce its quarterly dividend to 5 cents per share — from 32 cents — so as to save about $350 million annually.
Source: www.thehartford.com
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