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Hartford Financial Q3 Earnings Beat on Personal Lines Growth
The Hartford Financial Services Group, Inc. HIG reported third-quarter 2024 adjusted operating earnings of $2.53 per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line increased 10.5% year over year.
Operating revenues of HIG amounted to $4.7 billion, which improved 10.9% year over year in the quarter under review. The top line beat the consensus mark by 1.1%.
Strong quarterly results benefited from improved premiums earned, net investment income and well-performing Personal Lines and Hartford Funds businesses. The Personal Lines business benefited from a double-digit earned pricing increase, as well as a lower frequency of physical damage claims. However, the upside was partly offset by an increased expense level and poor performance in the Commercial Lines and Group Benefits segment.
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The Hartford Financial Services Group, Inc. Price, Consensus and EPS Surprise
The Hartford Financial Services Group, Inc. Price, Consensus and EPS Surprise
The Hartford Financial Services Group, Inc. price-consensus-eps-surprise-chart | The Hartford Financial Services Group, Inc. Quote
Q3 Operations
Earned premiums of Hartford Financial rose 8% year over year to $5.7 billion in the third quarter but missed the Zacks Consensus Estimate by 0.4%. The metric was driven by a 10.7% and 1.6% year-over-year rise in P&C and Group Benefits’ earned premiums, respectively.
Pre-tax net investment income of $659 million grew 10% year over year and beat the consensus mark by 5.9%. The year-over-year growth came on the back of improved returns from the fixed-income portfolio and higher invested assets. Net investment income witnessed year-over-year growth in the Property and Casualty segment while it witnessed a decline in Group Benefits.
Total benefits, losses and expenses increased 8.3% year over year to $5.8 billion in the quarter under review. The year-over-year increase was due to higher benefits, losses and loss adjustment expenses, amortization of deferred policy acquisition costs and insurance operating expenses.
Pretax income of $952 million increased 17.1% year over year in the third quarter.
Segmental Update
P&C
Commercial Lines
Revenues in the segment amounted to $3.7 billion in the third quarter, which rose 10.6% year over year. The metric beat the Zacks Consensus Estimate by 2.2%. Core earnings of $534 million declined 1.5% year over year due to higher catastrophe losses, a decrease in net favorable prior accident year development within core earnings and higher benefits, losses and loss adjustment expenses.
The underlying combined ratio deteriorated 80 bps year over year to 88.6%, attributable to a 70-bps improvement in the underlying loss and loss adjustment expense ratio.
Personal Lines
The segment recorded revenues of $971 million, which improved 13.7% year over year. The metric beat the consensus estimate by 3.3%. Core earnings were $33 million in the quarter under review. Double-digit earned premiums and investment income growth, coupled with an improved expense ratio, buoyed the segment’s results. This was partially offset by higher catastrophe losses.
The underlying combined ratio of 93.7% improved 530 bps year over year.
P&C Other Ops
Revenues of $18 million improved 12.5% year over year in the third quarter.
Group Benefits
The segment’s revenues grew 3.2% year over year to $1.8 billion in the quarter under review, which missed the Zacks Consensus Estimate by 0.9%. Core earnings of $154 million declined 9.4% year over year due to a higher expense ratio, group disability loss ratio and loss ratio on supplemental health products.
The loss ratio remained flat year over year to 70.2% in the third quarter.
Hartford Funds
Revenues amounted to $275 million, which increased 10.9% year over year in the third quarter and beat the Zacks Consensus Estimate by 5.5%. Core earnings improved 4.4% year over year to $47 million in the third quarter of 2024.
The segment’s daily average assets under management improved 7% year over year to $138 billion.
Corporate
The segment’s revenues increased 223.1% year over year to $42 million. The metric beat the consensus estimate by 73.1%. The unit incurred a core loss of $26 million in the quarter under review, narrower than the year-ago quarter’s loss of $52 million due to higher net investment income.
Financial Update (as of Sept. 30, 2024)
Hartford Financial exited the third quarter with cash of $223 million, which rose from the 2023-end figure of $126 million. Total investments of $59.4 billion rose from the 2023-end figure of $55.9 billion.
Total assets of $81.2 billion increased from the 2023-end figure of $76.8 billion.
Debt amounted to $4.4 billion, which inched up marginally from the figure as of Dec. 31, 2023.
Total stockholders’ equity improved from the 2023-end level of $15.3 billion to $17 billion.
Book value per share was $56.39, up from the 2023-end level of $50.23.
Core earnings’ return on equity in the trailing 12 months improved 250 bps year over year to 17.4% at the third-quarter end.
Capital Deployment Update
Hartford Financial returned $538 million to shareholders via share buybacks of $400 million and common stockholder dividends of $138 million. It repurchased shares worth $115 million from Oct. 1 to Oct. 23, 2024. HIG had a leftover buyback capacity of $3.5 million as of Sept. 30, 2024. HIG also increased its quarterly common dividend by 11%.
HIG’s Zacks Rank & Upcoming Releases
Hartford Financial currently carries a Zacks Rank #3 (Hold).
Here are a few companies from the insurance space that are set to report their respective quarterly earnings soon.
Brighthouse Financial, Inc. BHF currently has an Earnings ESP of +1.22% and a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BHF’s third-quarter 2024 earnings is pegged at $4.50 per share, which indicates an improvement of 7.7% from the year-ago quarter’s reported figure.
Brighthouse Financial’s earnings beat estimates in three of the trailing four quarters, missed once, the average surprise being 3.8%.
Manulife Financial Corporation MFC has an Earnings ESP of +1.43% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for MFC’s third-quarter earnings is pegged at 70 cents per share, which implies a 1.5% rise from the year-ago quarter’s reported figure.
Manulife Financial’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8%.
Primerica, Inc. PRI has an Earnings ESP of +0.22% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for PRI’s third-quarter earnings is pegged at $4.78 per share, which indicates an improvement of 11.7% from the year-ago quarter’s reported figure.
Primerica’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.7%.
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