NU Online News Service, Nov. 3, 11:34 p.m. EDT
The Hartford Financial Services Group Inc. swung to a 2010 third-quarter profit of $666 million compared to a net loss of $220 million a year ago due to the company's progress on implementing a new strategy introduced earlier this year, said its chief executive.
Liam E. McGee, The Hartford's chairman, president and chief executive officer, said during a conference call that the insurer is making good progress on its plan to improve efficiency. The Hartford is focused on rate adequacy and "letting business go when we need to," he added.
Helping third-quarter results were vast improvements in The Hartford's investment portfolio, which had a net unrealized gain of $1.2 billion compared with a net loss of $1.5 billion at the end of June. The company said improved security valuations due to declining insurance rates drove investment gains.
The Hartford continues to target a long-term return on equity of between 13 percent and 14 percent, though "achieving this return remains challenging," said Mr. McGee, who added that there are some "slow and choppy" signs of improvement in the economic environment but results continue to be affected by "tepid job growth and cautious spending."
The commercial property and casualty market remains competitive, Mr. McGee said. Net written premium was up 4 percent in p&c commercial over the prior year period as lower catastrophe losses and underwriting expenses improved net income in the carrier's commercial markets segment by 25 percent to $352 million.
Retention was up three points in the third quarter compared with the same period last year, The Hartford said.
In consumer markets The Hartford said net income was $70 million compared to $15 million for the prior year period as prices have increased 8 percent in auto lines and 11 percent in homeowners lines upon renewal. However, written premiums were down slightly to $1.01 billion from $1.05 billion a year ago due to underwriting actions and a focus on what the company is calling a "more preferred customer demographic." The combined ratio here improved to 93.3 from 94.6, excluding catastrophes.
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