The Hartford Posts 2Q Profits

August 5, 2010

The Hartford swung to a second-quarter profit of $76 million, rebounding from a $15 million loss in the year-ago period, despite sizable catastrophe losses and several other one-time charges.

The earnings reflect profitability for The Hartford Financial Services Group Inc., which includes both property/casualty and life insurance, as well as other operations for the company.

The Hartford’s property/casualty division posted net income of $188 million for the second quarter, up roughly 9 percent from the $173 million for the year-ago quarter. Written premiums for the second quarter of 2010 were $2.42 billion, down slightly from $2.46 billion in the second quarter last year.

The Hartford said growth in small commercial premiums was offset by decreased new business in personal lines, as well as reduced middle market premiums.

The second-quarter combined ratio was 96.8, compared with 93.7 in the second quarter of last year. In personal lines, The Hartford’s combined ratio was 107.4, up from the 101 in the year-ago period. In small commercial, the combined ratio was 90.4, up from 88.6. The Hartford’s middle market segment had a combined ratio of 104.6, up significantly from the 89.5 combined ratio in the second quarter of 2010. In specialty commercial, the combined ration was 60.6, down from 88.7 in the same period of 2010.

“The Hartford performed well, reporting another quarter of profitability in spite of market volatility, higher than expected catastrophes and several one-time events,” said the property-casualty and life insurer’s chairman and CEO Liam E. McGee. Among them: Wind and hail claims from storms in the Midwest that were $87 million more than expected during the second quarter. The Hartford’s bottom line also absorbed a $168 million charge for customer acquisition, a $110 million increase in reserves to pay asbestos-related claims and a $100 million goodwill-impairment charge related to acquiring Federal Trust Bank in 2009 — a move that transformed The Hartford into a bank-holding company and allowed it to receive federal stimulus money.

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