The Hartford’s 2019 Acquisition of Navigators Pays Off

By | February 5, 2020

The Hartford closed out 2019 with gains in net income and net investment income, buttressed in part by its $2.1 billion acquisition of specialty insurer Navigators Group last May.

Net income hit $543 million, or $1.49 per diluted share, during Q4 2019, up 186 percent over the 2018 fourth quarter. Similarly, 2019 full-year net income hit the $2 billion mark, or $5.66 per diluted share, a 15 percent rise over 2018.

Chairman and CEO Christopher Swift said that the company saw gains in multiple areas.

“Group Benefits results were exceptional with continued margin improvement reflecting favorable incidence in group disability,” Swift said in prepared remarks. “Property & Casualty underwriting income improved 36 percent, and the investment portfolio continues to perform well with strong partnership returns.”

Swift also touted an annualized core earnings return on equity of 13.6 percent, which he framed as “an impressive result in the current market environment.”

The fourth quarter was not without its blemishes, however. The Hartford’s commercial lines combined ratio, for example, was 98.2, up from 90.7 the year before. That spike came in part from inclusion of the Navigators results in Global Specialty, a line The Hartford said typically runs at a higher combined ratio. Other factors that adversely affected the number include rate pressure for workers compensation in small commercial and a higher expense ratio. As well, The Hartford blamed several large losses on international business written for Global Specialty.

Here are additional result highlights:

  • The Hartford said its fourth-quarter P/C net income grew so much versus a 2018 fourth quarter underwriting loss, thanks largely to its Navigators Group acquisition, which gave it a boost in underwriting and net investment income.
  • Consolidated net earned premiums for Q4 were $4.4 billion compared to just under $4 billion the year before. Commercial lines net earned premiums were nearly $2.3 billion and personal lines premiums reached $765 million compared to $1.8 billion for commercial net earned premiums and $835 for personal in the 2018 fourth quarter.
  • P/C underwriting results grew mostly because of lower current accident-year catastrophes versus the end of 2018, where the California wildfires hammered results. There were some issues, though, with a higher loss ratio for workers compensation due to ongoing rate pressure in small commercial, higher non-catastrophe property losses in personal lines and increased underwriting expenses.
  • Q4 net investment income was $298 million for commercial lines and $45 million for personal lines. That compares to $247 million for commercial and $39 million for personal in the 2018 fourth quarter. The Hartford said that its Navigators acquisition helped improve the results.

Source: The Hartford

Topics Mergers Profit Loss Property Casualty

About Mark Hollmer

Hollmer is a veteran business journalist and editor of's daily e-newsletter for the property/casualty insurance industry C-suite. He may be reached at More from Mark Hollmer

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