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Hartford Financial's (HIG) Q1 Earnings Surpass, Rise Y/Y

Zacks Equity Research

The Hartford Financial Services Group, Inc. HIG delivered first-quarter 2019 adjusted operating earnings of $1.39 per share, beating the Zacks Consensus Estimate by 12%. Moreover, the bottom line improved 9.4% year over year. This upside was primarily backed by stronger core earnings in Group Benefits and lower Corporate core losses. However, the results were partially offset by Property and Casualty (P&C) and Hartford Funds core earnings.

Total operating revenues came in at $4.94 billion, up 4.6% year over year, supported by net realized capital gains.

Total operating expenses of $4.1 billion dipped 0.2% year over year owing to lower interest expenses.

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. Quote

Quarterly Segment Results

Property & Casualty (P&C) segment’s total revenues of $3.1 billion rose 6% year over year owing to higher revenues from Commercial and Other. The segment witnessed an underwriting gain of $121 million, down 32% year over year.

Group Benefits

Group Benefits’ total revenues of $1.5 billion inched up 2.5% year over year.
Core earnings were $122 million, up 44% year over year, mainly owing to lower disability losses and lower expenses.

The total loss ratio of 74.7% improved 270 basis points (bps) over the year-earlier quarter’s tally on the back of a better group disability loss ratio. However, the same was partially offset by a deterioration in the group life loss ratio.

Hartford Funds

Mutual Funds operating revenues were down 6.6% year over year to $242 million.

Hartford Financial delivered core earnings of $28 million, down 17.6% year over year.

Average AUM was up 2% year over year to $118 billion due to higher market values in first-quarter 2019.


Corporate segment operating revenues skyrocketed 546% year over year to $84 million.

The Corporate segment’s core losses of $15 million are narrower than $66 million, incurred in the prior-year quarter. This is mainly because of an increase in other revenues, higher net investment income and lower interest expense.

Financial Update

Book value per share as of Mar 31, 2019 increased 9% to $38.36 from the level on Dec 31, 2018.

Net income return on equity rose 200 bps to 13.5%.

Capital Deployment

The company paid common stock dividends worth $109 million in the first quarter. However, it didnot repurchase any common stock during the first three months of the current year.

The company also announced a $1-billion share buyback authorization, effective through Dec 31, 2020.

Zacks Rank and Performance of Other Insurers

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

Among other players from the insurance industry having already posted first-quarter earnings, the bottom-line results of The Travelers Companies, Inc. TRV, Cincinnati Financial Corporation CINF and The Progressive Corporation PGR ) surpassed the respective Zacks Consensus Estimates.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
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