The Hartford Says Its Balance Sheet is Strong

October 11, 2011

At an investor meeting on Oct. 6, The Hartford Financial Services said the company has “significantly enhanced” its financial risk management and believes its balance sheet is strong.

The company also announced it is forecasting $200 catastrophe losses, pre-tax, for the third quarter.

“The Hartford has taken aggressive steps to improve the fundamental financial foundation of the company,” said The Hartford CEO Liam McGee.

“We have significantly enhanced The Hartford’s risk management capabilities and processes and reduced the company’s overall risks. The balance sheet is strong and the investment portfolio is in good shape.

“As a result of the work we have done, we are confident that we are positioned to maintain strong capitalization, even if market conditions deteriorate materially from current levels,” McGee said.

Investment Income on Par with Last Year

The Hartford said during the investor meeting that the company has the strength to maintain sufficient capital levels, consistent with current ratings, even under significant economic stress scenarios.

The company noted that since 2008, it substantially reduced the risk in the portfolio–while balancing net investment income, capital preservation and total return.

The company provided an estimate based on annualized results through August that equaled $4.4B in investment income for the year, and 4.5 percent in pre-tax annualized yield for the year.

The Hartford said it is maintaining portfolio yield in a falling rate environment while still reducing portfolio risk. It reduced total real estate exposure by $10.4 billion since 2008.

$200M CAT Losses Last Quarter

On the p/c side, The Hartford forecast $200 catastrophes losses, pre-tax.

The company said its p/c insurance subsidiaries currently have $7.6 billion in statutory capital resources. “We expect our P&C companies to generate surplus in excess of requirements,” the company stated.

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