(Bloomberg) — Hartford Financial Services Group Inc., the insurer that has been using excess capital to repurchase shares and redeem debt, said it will be able to shift strategies to rebuild the company and possibly pursue acquisitions.
"We feel we're in a different place, we're a different company today," Chief Executive Officer Chris Swift said on a conference call Tuesday. "And we can be a little bit more offensive-minded about opportunities in the marketplace."
Swift reported a second-quarter profit of $413 million Monday, compared with a loss of $467 million a year earlier. The company also lifted its dividend 17 percent and expanded its stock buyback by $1.6 billion.
The insurer gained 2.9 percent to $46.98 at 11:04 a.m. in New York trading. Hartford, based in the Connecticut city of the same name, has rallied 13 percent this month, partly on speculation that it could be a takeover target after Ace Ltd. agreed to buy Chubb Corp. for more than $28 billion.
Swift said Hartford may eventually use more capital to expand and help build premium revenue, and could actually be a buyer of another company. While he dismissed the idea of a "transformative" deal or a large expansion beyond the U.S., the talk of acquisitions was a shift for the company. His predecessor Liam McGee, who died in February, sold units to build capital, limit risk and simplify the insurer to focus on property-casualty coverage.
"Since our transformation, we have really driven down our cost of equity capital, reduced our leverage, improved our valuation," Swift said. "So, I think today we have greater flexibility to think about acquisitions."
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