The Hartford Financial Services Group Inc (HIG) Reports Strong Earnings Growth in Q4 and Full ...
Net Income: Q4 net income available to common stockholders increased by 30% year-over-year to $766 million; full year net income jumped 38% to $2.5 billion.
Core Earnings: Q4 core earnings rose 25% to $935 million; full year core earnings climbed 11% to $2.8 billion.
Written Premiums: P&C written premiums grew by 10% in both Q4 and the full year, with Commercial and Personal Lines showing strong growth.
Combined Ratio: Commercial Lines Q4 combined ratio improved to 84.7; full year combined ratio stood at 89.6.
ROE: Net income ROE reached 17.5% and core earnings ROE hit 15.8% for the full year.
Capital Return: $479 million returned to stockholders in Q4, totaling $1.9 billion for the full year.
Book Value: Book value per diluted share increased to $49.43, up 18.6% from the previous year.
On February 1, 2024, The Hartford Financial Services Group Inc (NYSE:HIG) released its 8-K filing, announcing its financial results for the fourth quarter and full year ended December 31, 2023. The company, a leading provider of property and casualty insurance, group benefits, and mutual funds, demonstrated outstanding performance with significant increases in net income and core earnings, driven by robust underwriting results and solid investment income.
Financial Highlights and Company Performance
The Hartford reported a 30% increase in Q4 net income available to common stockholders, reaching $766 million, or $2.51 per diluted share. This improvement was primarily attributed to a higher P&C underwriting gain, including strong premium growth in Commercial Lines, and an improved Group Benefits loss ratio. Core earnings for Q4 also saw a 25% rise to $935 million, or $3.06 per diluted share, compared to the same period in 2022.
For the full year, net income available to common stockholders surged by 38% to $2.5 billion, or $7.97 per diluted share, while core earnings increased by 11% to $2.8 billion, or $8.88 per diluted share. The company's net income return on equity (ROE) for the last 12 months was an impressive 17.5%, with core earnings ROE at 15.8%.
The Hartford's Chairman and CEO, Christopher Swift, highlighted the company's exceptional underwriting in Commercial Lines and record core earnings from Group Benefits. CFO Beth Costello emphasized the strong performance in Commercial Lines with an underlying combined ratio of 86.6 and sustained double-digit written pricing increases in Personal Lines.
"Our 2023 core earnings ROE of 15.8 percent reflects exceptional underwriting in Commercial Lines, record core earnings from Group Benefits, and continued solid performance from our investment portfolio," said Swift.
Segment Performance
The Commercial Lines segment reported a 21% increase in net income to $687 million for Q4, with a combined ratio of 84.7, reflecting a strong underwriting gain and premium growth. Personal Lines saw a 12% increase in written premiums, although net income decreased slightly to $34 million due to higher loss ratios in auto liability and physical damage. Group Benefits experienced a 23% increase in net income to $176 million, with a notable improvement in the loss ratio.
The company also continued its commitment to returning capital to shareholders, repurchasing $350 million in shares and paying out $129 million in dividends in Q4, totaling $1.9 billion in capital returned for the full year.
Outlook and Strategic Positioning
Looking ahead, The Hartford is well-positioned to sustain its strong results into 2024. The company's diverse portfolio and investments in growth and innovation are expected to continue delivering industry-leading core earnings ROEs anchored at 15 percent.
For more detailed financial information, interested parties can access The Hartford's Investor Financial Supplement and the Q4 2023 Financial Results Presentation on the company's investor relations website.
The Hartford's solid financial performance in the fourth quarter and full year 2023 demonstrates the effectiveness of its strategy and execution, positioning the company for continued success in the future.
Explore the complete 8-K earnings release (here) from The Hartford Financial Services Group Inc for further details.
This article first appeared on GuruFocus.
