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Hartford Financial (HIG) Q2 Earnings Top Estimates, Rise Y/Y

Zacks Equity Research

The Hartford Financial Services Group, Inc. HIG reported second-quarter 2019 adjusted operating earnings of $1.33, beating the Zacks Consensus Estimate by 20%. Moreover, the bottom line increased 18% year over year on the back of improved Personal Lines, Group Benefits and Corporate results. However, the same was offset by lower Commercial Lines core earnings.

Total operating revenues came in at $5 billion, up 5.8% year over year. This upside was primarily driven by a rise in earned premiums.

Total benefits and expenses of $5 billion rose 9% year over year, induced by benefits, losses and loss adjustment expenses, amortization of DAC, etc.

The Hartford Financial Services Group, Inc. Price, Consensus and EPS Surprise

The Hartford Financial Services Group, Inc. Price, Consensus and EPS Surprise

The Hartford Financial Services Group, Inc. price-consensus-eps-surprise-chart | The Hartford Financial Services Group, Inc. Quote

Quarterly Segment Results

Property & Casualty (P& C) segment’s total revenues of $3.2 billion improved 8.4% year over year owing to its Commercial Lines business. The segment recorded an underwriting gain of $3 million, down from the year-ago quarter’s gain of $112 million.

Group Benefits

Group Benefits’ total revenues of $1.5 billion inched up 2.1% year over year.
Core earnings were $115 million in the quarter under review, up 11% year over year.

The total loss ratio of 74.6% improved 90 basis points (bps) over the year-earlier quarter’s tally, backed by better group disability loss ratio. However, the same was partially offset by an increase in the group life loss ratio.

Hartford Funds

Mutual Funds operating revenues were up 3% year over year to $253 million.

Hartford Financial’s core earnings of $38 million were in line with the year-ago quarter’s period.

Average AUM increased 4% year over year to $121 billion on the back of a strong equity market performance in the first half of the year. However, the same was offset to some extent due to reduction in Talcott Resolution life and annuity separate account AUM.

Corporate segment operating revenues skyrocketed 150% year over year to $45 million.

The Corporate segment suffered core losses of $35 million, narrower than $76 million incurred in the prior-year quarter.

Business Update

In May 2019, the company closed the pending buyout of Navigators.

Share Repurchase and Dividend Update

In the quarter under review, the company repurchased shares worth $27 million and paid out common dividend worth $107 million.


The company also provided its second-half 2019 guidance for Commercial Lines’ combined ratios in the range of 95-97%.

Financial Update

Book value per share was $41, up17% from 2018-end level.

Zacks Rank and Performance of Other Insurers

Hartford Financial has a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players having already reported second-quarter results, the bottom-line figures of The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate. However, The Travelers Companies, Inc.’s TRV earnings missed the mark.

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