Hartford Financial Services Group Inc.
Summary
- The Hartford is a leader in property and casualty insurance, group benefits and mutual funds.
- It provides property and casualty insurance, group benefits, and mutual funds to individuals and business customers.
- It was formed as Hartford Fire Insurance Company in 1810.
Hartford Financial Services Group Inc. (NYSE: HIG, LSE: 0J3H) is a financial holding company that provides a range of property and casualty insurance, group benefits, and mutual funds to individuals and business customers. It is one of the largest insurance companies in the United States.
Recent Developments
The Hartford Launches New Digital Submission Capabilities for Agents and Brokers1
September 13, 2023; The Hartford has expanded its digital capabilities with new submission and quote Application Programming Interfaces (APIs), and portal options for agents and brokers who write midsize and large businesses. These new capabilities save time, provide faster turnaround, and increase accuracy. Agents and brokers now have easier access to share submission data and request a quote for general liability, auto, property and workers’ compensation accounts.
Access to the new business submission process is available through direct API capabilities and online portals. The Hartford will also enable API operating relationships with agents and brokers who use vendor API solutions for their midsize, large and specialty accounts. The insurer has partnered with Highwing, Inc., a company that is focused on providing data management and processing solutions for both brokers and carriers. Highwing helps to seamlessly connect agents and brokers with carriers, ensuring open communication, transparency, and accurate data sharing with The Hartford.
Financial Highlights
Third Quarter 2023 Results
October 26, 2023; The Hartford (NYSE: HIG) today announced financial results for the quarter ended Sept. 30, 2023.2
Third quarter 2023 net income available to common stockholders of $645 million, or $2.09 per diluted share, improved compared with $334 million in third quarter 2022, primarily due to a higher P&C underwriting gain, an increase in net investment income, lower net realized losses, and higher Group Benefits results, with improvements in both life and disability.
Third quarter 2023 core earnings of $708 million, or $2.29 per diluted share, compared with $472 million of core earnings in third quarter 2022.
Net income ROE for the trailing 12 months of 17.7% and core earnings ROE for the same period of 14.9%.
Property & Casualty (P&C) written premiums rose 8% in third quarter 2023 compared with third quarter 2022, driven by both Commercial Lines and Personal Lines. Group Benefits fully insured ongoing premium growth of 8% in third quarter 2023.
Commercial Lines third quarter combined ratio of 90.2 and underlying combined ratio of 87.8.
Group Benefits third quarter net income margin of 8.5% and core earnings margin of 9.8%.
Returned $481 million to stockholders in the third quarter, including $350 million of shares repurchased and $131 million in common stockholder dividends paid. Increased the quarterly common dividend per share by 11%, to $0.47, payable Jan. 3, 2024 to shareholders of record at the close of business on Dec. 1, 2023.
Company Overview
The Hartford Financial Services Group, Inc. is a holding company for a group of subsidiaries that provide property and casualty insurance, group benefits insurance and services, and mutual funds and exchange traded funds to individual and business customers in the United States as well as in the United Kingdom and other international locations. The Hartford is headquartered in Connecticut and its oldest subsidiary, Hartford Fire Insurance Company, dates back to 1810. As of December 31, 2022, total assets and total stockholders’ equity3
Business Overview
The Hartford conducts business principally in five reporting segments including Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds, as well as a Corporate category.
Commercial Lines
Through its three lines of business, small commercial, middle & large commercial, and global specialty, Commercial Lines offers its products and services to businesses in the United States ("U.S.") and internationally. Commercial Lines generally consists of products written for small businesses and middle market companies as well as national and multi-national accounts, largely distributed through retail agents and brokers, wholesale agents and global and specialty reinsurance brokers. The majority of Commercial Lines written premium is generated by small commercial and middle market lines, which provide coverage options and customized pricing based on the policyholder’s individual risk characteristics. Small commercial and middle market lines within middle & large commercial are generally referred to as standard commercial lines.
| Principal Products and Services | |
| Automobile | Covers damage to a business's fleet of vehicles due to collision or other perils (automobile physical damage). In addition to first party automobile physical damage, commercial automobile covers liability for bodily injuries and property damage suffered by third parties and losses caused by uninsured or under-insured motorists. |
| Property | Covers the building a business owns or leases as well as its personal property, including tools and equipment, inventory, and furniture. A commercial property insurance policy covers losses resulting from fire, wind, hail, earthquake, theft and other covered perils, including coverage for assets such as accounts receivable and valuable papers and records. Commercial property may include specialized equipment insurance, which provides coverage for loss or damage resulting from the mechanical breakdown of boilers and machinery. |
| General Liability | Covers a business in the event it is sued for causing harm to a person and/or damage to property. General liability insurance covers third party claims arising from accidents occurring on the insured’s premises or arising out of their operations. General liability insurance may also cover losses arising from product liability and provides replacement of lost income due to an event that interrupts business operations. |
| Marine | Encompasses various ocean and inland marine coverages including cargo, craft, hull, specie, transport and liability, among others. |
| Package Business | Covers both property and general liability damages. |
Workers' Compensation | Covers employers for losses incurred due to employees sustaining an injury, illness or disability in connection with their work. Benefits paid under workers’ compensation policies may include reimbursement of medical care costs, replacement income, compensation for permanent injuries and benefits to survivors. Workers’ compensation is provided under both guaranteed cost policies (coverage for a fixed premium) and loss sensitive policies where premiums are adjustable based on the loss experience of the employer |
Professional Liability | Covers liability arising from directors and officers acting in their official capacity and liability for errors and omissions committed by professionals and others. Coverage may also provide employment practices insurance relating to allegations of wrongful termination and discrimination. |
| Bond | Encompasses fidelity and surety insurance, including commercial surety, contract surety and fidelity bonds. Commercial surety includes bonds that insure non-performance by contractors, license and permit bonds to help meet government-mandated requirements and probate and judicial bonds for fiduciaries and civil court proceedings. Contract surety bonds may include payment and performance bonds for contractors. Fidelity bonds may include ERISA bonds related to the handling of retirement plan assets and bonds protecting against employee theft or fraud. The Company also provides credit and political risk insurance offered to clients with global operations. |
Assumed Reinsurance | Includes assumed reinsurance of property, liability, surety, credit and political, marine and agriculture risks throughout the world but principally in Europe and the Americas. Business principally provides cover on broad books of business (i.e. treaty), as opposed to individual risks (i.e. facultative). |
Personal Lines
Personal Lines provides automobile, homeowners and personal umbrella coverages to individuals across the United States, mostly through a program designed exclusively for members of AARP (“AARP Program”). The Hartford's automobile and homeowners products provide coverage options and pricing tailored to a customer's individual risk. The Hartford has individual customer relationships with AARP Program policyholders and, as a group, they represent a significant portion of the total Personal Lines' business. Business sold to AARP members, either direct or through independent agents, amounted to earned premiums of $2.7 billion, $2.7 billion and $2.8 billion in 2022, 2021 and 2020, respectively. The AARP relationship provides The Company with a competitive advantage to capitalize on the continued growth of the over age 50 population.
| Principal Products and Services | |
| Automobile | Covers damage to an individual insured’s own vehicle due to collision or other perils and is referred to as automobile physical damage. In addition to first party automobile physical damage, automobile insurance covers liability for bodily injuries and property damage suffered by third parties and losses caused by uninsured or underinsured motorists. Also, under no-fault laws, policies written in some states provide first party personal injury protection. Some of the Company’s personal automobile insurance policies also offer personal umbrella liability coverage for an additional premium. |
| Homeowners | Insures against losses to residences and contents from fire, wind and other perils. Homeowners insurance includes owned dwellings, rental properties and coverage for tenants. The policies may provide other coverages, including loss related to recreational vehicles or watercraft, identity theft and personal items such as jewelry. |
Property & Casualty Other Operations
Property & Casualty Other Operations includes certain property and casualty operations, managed by the Company, that have discontinued writing new business and includes substantially all of the Company's pre1986 asbestos and environmental ("A&E") exposures.
Group Benefits
Group insurance typically covers an entire group of people under a single contract, most typically the employees of a single employer or members of an association. Group Benefits provides group life, disability and other group coverages to members of employer groups, associations and affinity groups through direct insurance policies and provides reinsurance to other insurance companies. In addition to employer paid coverages, the segment offers voluntary product coverages which are offered through employee payroll deductions. Group Benefits also offers disability underwriting, administration, and claims processing to self-funded employer plans. In addition, the segment offers a single-company leave management solution, which integrates work absence data from the insurer’s short-term and longterm group disability and workers’ compensation insurance business with its leave management administration services.
| Principal Products and Services | |
| Group Life | Typically is term life insurance provided in the form of yearly renewable term life insurance. Other life coverages in this category include accidental death and dismemberment and travel accident insurance. |
| Group Disability | Typically comprised of short-term disability and long-term disability plans that pay a percentage of an employee’s salary for a period of time if they are ill or injured and cannot perform the duties of their job. Short-term and long-term disability policies have elimination periods that must be satisfied prior to benefit payments. The Company also earns fee income from leave management services for federal, state and employer family and medical leave programs, as well as the administration of employer self-funded disability plans. |
| Other Products | Includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages. |
Hartford Funds
The Hartford Funds segment provides investment management, administration, product distribution and related services to investors through a diverse set of investment products in domestic markets. Hartford Funds' comprehensive range of products and services assist clients in achieving their desired investment objectives. AUM are separated into three distinct categories referred to as mutual funds, ETFs and Talcott Resolution life and annuity separate accounts, which relate to the life and annuity business sold in May 2018.
| Principal Products and Services | |
| Mutual Funds | Includes approximately 60 actively managed mutual funds across a variety of asset classes including domestic and international equity, fixed income, and multi-strategy investments, principally subadvised by two unaffiliated institutional asset management firms. |
| Exchange-traded funds | Exchange-traded funds ("ETF") include actively managed ETFs and multifactor ETFs. Actively managed ETFs include fixed income, domestic equity and commodity products utilizing the same investment platform as its mutual funds. Multifactor ETFs are designed to track indices using passive investment techniques that strive to improve performance relative to traditional capitalization-weighted indices. |
| Talcott Resolution life and annuity separate accounts | Relates to assets of the life and annuity business sold in May 2018 that are still managed by the Company's Hartford Funds segment. |
Corporate
The Company includes in the Corporate category investment management fees and expenses related to managing third party business, including management of a portion of the invested assets of Talcott Resolution, reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, capital raising activities (including equity financing, debt financing and related interest expense), transaction expenses incurred in connection with an acquisition, certain M&A costs, purchase accounting adjustments related to goodwill and other expenses not allocated to the reporting segments
References
- ^ https://newsroom.thehartford.com/newsroom-home/news-releases/news-releases-details/2023/The-Hartford-Launches-New-Digital-Submission-Capabilities-For-Agents-And-Brokers-Of-Midsize-And-Large-Accounts/default.aspx
- ^ https://newsroom.thehartford.com/newsroom-home/news-releases/news-releases-details/2023/The-Hartford-Announces-Third-Quarter-2023-Financial-Results/default.aspx
- ^ https://fintel.io/doc/sec-hartford-financial-services-group-inc-874766-10k-2023-february-24-19413-7777
