Major insurer The Hartford saw its net income fall and its commercial lines combined ratio spike during the 2019 second quarter, due in part to costs associated with its $2.1 billion acquisition of specialty insurer Navigators Group.
Second quarter 2019 net income came in at $372 million down from $582 million the year before. The Hartford said that the closing of its Navigators acquisition on May 23 led to $149 million in related reinsurance and reserve charges, which took a bite out of net income.
On the other hand, Q2 2019 consolidated net investment income landed at $488 million before taxes, up 14 percent from $428 million in Q2 2018, due largely to higher income from fixed maturities following the Navigators acquisition.
The Hartford’s commercial lines combined ratio was 100.3 during the quarter, compared to 90.1 the year before. Its personal lines combined ratio, hit 97.5, down from 104.9 in the same, year-ago period. Executives blamed the commercial lines spike on costs stemming from the Navigators acquisition, but also a slightly higher current accident year catastrophe loss ratio.
The personal lines combined ratio declined due to significantly lower catastrophe loss costs, according to The Hartford.
Other result highlights:
- Commercial lines written premiums came in at $2.1 billion, up 20 percent from Q2 208. Earned premiums rose 14 percent to 2 billion, up from $1.7 billion in the 2018 second quarter.
- Small commercial written premiums grew 6 percent, thanks to a nearly 30 percent growth in new business. Middle and large commercial written premiums jumped 15 percent, after a more than 30 percent growth in new business, and higher renewal premium in the middle market due to price increases and higher retention.
- Personal lines written premiums reached $824 million, but that is down 3 percent from the 2018 second quarter, despite price increases and improved policy retention rates.
Source: The Hartford
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