The Hartford Net Up On PC Earnings
NU Online News Service, Oct. 30, 2:51 p.m. EST?Led by its property casualty insurance sector, The Hartford Financial Services Group, Inc. said it had moved out of the loss column with third quarter net income of $265 million.
The latest results were in contrast to the same period last year when the company had a net loss of $103 million, said the Hartford. On a per-share basis, net income rose to $1.06, compared with a per-share loss of 43 cents last year. The company said assets are at $175.5 billion.
For the coming quarter, the company said it expects earnings will be affected by stock market declines and the dilutive impact of capital-raising activities, which added 7 million shares, and shares issued and exercised under stock compensation plans, which added 2.6 million shares.
The Hartford expects that next year, earnings per share will range between $4.50 and $5.00. Without a strong stock market recovery and achievement of maximum sales projections, the figure will be at the low end of that range, the company said.
"Our third quarter results are clearly benefiting from the effects of strong pricing and lower catastrophes, as well as significant underwriting improvements in our property-casualty businesses," said Ramani Ayer, the Hartford's chairman and chief executive officer.
The company said included in the net income for the recent quarter were after-tax net realized capital losses of $100 million, compared to after-tax net realized capital losses of $51 million for the same period last year.
Losses were attributed to securities impairments of $111 million (after-tax), arising from writedowns of asset-backed securities, which were partially offset by $11 million in after-tax capital gains.
Adjusted for the Sept. 11 impact, tax benefits and other items, operating income for the quarter was $289 million, or $1.15 a share for the quarter, up from $271 million or $1.12 a share last year.
The company said third quarter adjusted results exclude $76 million of tax benefits at Hartford Life.
Property-casualty operations for the quarter saw net income of $119 million, compared with a $339 million net loss for the same quarter last year. The company said that the combined ratio in all segments had improved and its business segment reported a 212 percent increase in written premium, to $867 million.
Life operations reported a decrease in net income for the period going from $250 million last year to $161 million, the company said.
Life sector operating income was driven down 12 percent to $156 million, due primarily to the effect of a declining stock market on individual annuity results, the company explained.
Mr. Ayers said that the unfavorable stock market impact was reflected in third quarter individual annuity results, "which overshadowed the double-digit earnings growth in our other investment products and group benefits businesses."
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