Hartford Financial Services Group Inc. weathered a tough winter to achieve its third straight quarterly profit with first-quarter net income of $495 million, compared to a $241 million loss for the first quarter last year.
Core earnings in property/casualty operations rose to $386 million, a 21 percent increase compared with last year.
The first quarter 2014 underwriting gain was $253 million, up 64 percent from an underwriting gain of $154 million in first quarter 2013 as a result of improved current accident year results and favorable prior year development, partially offset by higher catastrophe losses.
The combined ratio for first quarter 2014 improved 3.8 points to 89.8 compared with 93.6 in first quarter 2013.
In commercial lines, first quarter 2014 written premiums grew one percent to $1,669 million from $1,645 million in first quarter 2013 as a result of three percent growth in small commercial and four percent growth in middle market, offset by an eight percent reduction in specialty commercial. The company said the reduction in specialty commercial written premiums was due to the company’s exit from transportation programs. Excluding programs, specialty commercial written premiums grew 16 percent.
Renewal written pricing increases in small commercial and middle market remained at seven percent.
“Hartford has focused on looking at the small and middle market, which is really where their strength is,” Gloria Vogel, an analyst at Drexel Hamilton LLC, told Bloomberg before results were announced. “They’ve been pretty aggressive at getting those rates.”
First quarter 2014 written premiums in personal lines rose six percent from first quarter 2013 as a result of strong new business premium growth, improved policy retention and sustained renewal written price increases, the insurer said.
Hartford has divested a U.K. annuity business, a life insurer and a retirement plan unit and yesterday announced it is selling its annuity business in Japan to Orix Corp. The company is focusing on its property/casualty, mutual funds and group benefits businesses.
“Despite the challenging winter weather, each business segment delivered core earnings growth over the prior year,” said The Hartford’s Chairman, President and CEO Liam E. McGee. He said margins are improving and premiums are growing in property/casualty while group benefits has turned around and mutual funds reported positive net flows.