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Hartford Financial (HIG) Q2 Earnings Beat on Commercial Lines
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The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year.
Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Strong quarterly earnings benefited from well-performing Commercial Lines and Group Benefits businesses. While the Commercial Lines unit benefited from higher premiums written, the Group Benefits business gained from fully improved insured ongoing premiums. However, the upside was partly offset by an increased expense level and poor performance in the Hartford Funds segment.
The Hartford Financial Services Group, Inc. Price, Consensus and EPS Surprise
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. The metric was driven by an 8.9% and 2.2% year-over-year rise in P&C and Group Benefits’ earned premiums, respectively.
Pre-tax net investment income of $602 million grew 11.5% year over yearbut missed the consensus mark by 1%. 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 3.7% year over year to $5.6 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 $912 million increased 35.7% year over year in the second quarter.
Segmental Update
P&C
Commercial Lines
Revenues in the segment amounted to $3.5 billion in the second quarter, which rose 8.5% year over year. The metric missed the Zacks Consensus Estimate by 3.1%. Core earnings of $551 million climbed 11.8% year over year on the back of higher earned premiums, an increase in net favorable prior accident year development within core earnings and growing net investment income.
The underlying combined ratio improved 90 bps year over year to 87.4%, attributable to a 70-bps improvement in the underlying loss and loss adjustment expense ratio.
Personal Lines
The segment recorded revenues of $924 million, which improved 12.7% year over year. The metric beat the consensus estimate by 5.4%. Core loss was $4 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 high severity in auto and homeowners.
The underlying combined ratio of 96.7% improved 500 bps year over year.
P&C Other Ops
Revenues of $16 million remained flat year over year in the second quarter.
Group Benefits
The segment’s revenues grew 2.6% year over year to $1.8 billion in the quarter under review, which beat the Zacks Consensus Estimate by 1.1%. Core earnings of $178 million rose 33.8% year over year on the back of improved group life ratio and expanding fully insured ongoing premiums.
The loss ratio improved 320 bps year over year to 68.9% as a result of a lower claim severity and long-term disability claim incidence.
Hartford Funds
Revenues amounted to $261 million, which increased 4.8% year over year in the second quarter but missed the Zacks Consensus Estimate by 0.6%. Core earnings deteriorated 2.3% year over year at $43 million in the second quarter of 2024.
The segment’s daily average assets under management improved 5% year over year at $134.1 billion.
Corporate
The segment’s revenues climbed 10% year over year to $33 million. The metric beat the consensus estimate by 35.8%. The unit incurred a core loss of $32 million in the quarter under review, narrower than the year-ago quarter’s loss of $35 million due to higher net investment income.
Financial Update (as of Jun 30, 2024)
Hartford Financial exited the second quarter with cash of $154 million, which rose from the 2023-end figure of $126 million. Total investments of $56.9 billion rose from the 2023-end figure of $55.9 billion.
Total assets of $79 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 $15.7 billion.
Book value per share was $52.2, up from the 2023-end level of $50.23.
Core earnings’ return on equity in the trailing 12 months improved 380 bps year over year to 17.4% at the second-quarter end.
Share Repurchase Update
Hartford Financial returned $490 million to shareholders via share buybacks of $350 million and common stockholder dividends of $140 million. It repurchased shares worth $105 million from Jul 1 to Jul 24, 2024. Under its $3-billion share repurchase program that will run till 2024 end, HIG had a leftover buyback capacity of $648 million as of Jun 30, 2024. The company approved a new share repurchase authorization worth $3.3 billion effective from Aug 1, 2024, to Dec 31, 2026.
Zacks Rank & Stocks to Consider
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.
The Zacks Consensus Estimate for PLMR’s second-quarter 2024 earnings is pegged at $1.11 per share, which indicates an improvement of 29.1% from the year-ago quarter’s reported figure.
Palomar’s earnings beat estimates in each of the trailing four quarters, the average surprise being 15.10%.
Reinsurance Group of America, Incorporated (RGA - Free Report) has an Earnings ESP of +2.81% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for RGA’s second-quarter earnings is pegged at $4.94 per share, which implies a 12.3% rise from the year-ago quarter’s reported figure.
Reinsurance Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 19.48%.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank of 3, at present. The Zacks Consensus Estimate for PRU’s second-quarter earnings is pegged at $3.43 per share, which indicates an improvement of 16.7% from the year-ago quarter’s reported figure.
Prudential Financial’s earnings beat estimates in one of the trailing four quarters and missed the mark thrice, the average surprise being 0.23%.
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Hartford Financial (HIG) Q2 Earnings Beat on Commercial Lines
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year.
Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Strong quarterly earnings benefited from well-performing Commercial Lines and Group Benefits businesses. While the Commercial Lines unit benefited from higher premiums written, the Group Benefits business gained from fully improved insured ongoing premiums. However, the upside was partly offset by an increased expense level and poor performance in the Hartford Funds segment.
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
Q2 Operations
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. The metric was driven by an 8.9% and 2.2% year-over-year rise in P&C and Group Benefits’ earned premiums, respectively.
Pre-tax net investment income of $602 million grew 11.5% year over yearbut missed the consensus mark by 1%. 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 3.7% year over year to $5.6 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 $912 million increased 35.7% year over year in the second quarter.
Segmental Update
P&C
Commercial Lines
Revenues in the segment amounted to $3.5 billion in the second quarter, which rose 8.5% year over year. The metric missed the Zacks Consensus Estimate by 3.1%. Core earnings of $551 million climbed 11.8% year over year on the back of higher earned premiums, an increase in net favorable prior accident year development within core earnings and growing net investment income.
The underlying combined ratio improved 90 bps year over year to 87.4%, attributable to a 70-bps improvement in the underlying loss and loss adjustment expense ratio.
Personal Lines
The segment recorded revenues of $924 million, which improved 12.7% year over year. The metric beat the consensus estimate by 5.4%. Core loss was $4 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 high severity in auto and homeowners.
The underlying combined ratio of 96.7% improved 500 bps year over year.
P&C Other Ops
Revenues of $16 million remained flat year over year in the second quarter.
Group Benefits
The segment’s revenues grew 2.6% year over year to $1.8 billion in the quarter under review, which beat the Zacks Consensus Estimate by 1.1%. Core earnings of $178 million rose 33.8% year over year on the back of improved group life ratio and expanding fully insured ongoing premiums.
The loss ratio improved 320 bps year over year to 68.9% as a result of a lower claim severity and long-term disability claim incidence.
Hartford Funds
Revenues amounted to $261 million, which increased 4.8% year over year in the second quarter but missed the Zacks Consensus Estimate by 0.6%. Core earnings deteriorated 2.3% year over year at $43 million in the second quarter of 2024.
The segment’s daily average assets under management improved 5% year over year at $134.1 billion.
Corporate
The segment’s revenues climbed 10% year over year to $33 million. The metric beat the consensus estimate by 35.8%. The unit incurred a core loss of $32 million in the quarter under review, narrower than the year-ago quarter’s loss of $35 million due to higher net investment income.
Financial Update (as of Jun 30, 2024)
Hartford Financial exited the second quarter with cash of $154 million, which rose from the 2023-end figure of $126 million. Total investments of $56.9 billion rose from the 2023-end figure of $55.9 billion.
Total assets of $79 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 $15.7 billion.
Book value per share was $52.2, up from the 2023-end level of $50.23.
Core earnings’ return on equity in the trailing 12 months improved 380 bps year over year to 17.4% at the second-quarter end.
Share Repurchase Update
Hartford Financial returned $490 million to shareholders via share buybacks of $350 million and common stockholder dividends of $140 million. It repurchased shares worth $105 million from Jul 1 to Jul 24, 2024. Under its $3-billion share repurchase program that will run till 2024 end, HIG had a leftover buyback capacity of $648 million as of Jun 30, 2024. The company approved a new share repurchase authorization worth $3.3 billion effective from Aug 1, 2024, to Dec 31, 2026.
Zacks Rank & Stocks to Consider
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.
Palomar Holdings, Inc. (PLMR - Free Report) currently has an Earnings ESP of +3.00% 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 PLMR’s second-quarter 2024 earnings is pegged at $1.11 per share, which indicates an improvement of 29.1% from the year-ago quarter’s reported figure.
Palomar’s earnings beat estimates in each of the trailing four quarters, the average surprise being 15.10%.
Reinsurance Group of America, Incorporated (RGA - Free Report) has an Earnings ESP of +2.81% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for RGA’s second-quarter earnings is pegged at $4.94 per share, which implies a 12.3% rise from the year-ago quarter’s reported figure.
Reinsurance Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 19.48%.
Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank of 3, at present. The Zacks Consensus Estimate for PRU’s second-quarter earnings is pegged at $3.43 per share, which indicates an improvement of 16.7% from the year-ago quarter’s reported figure.
Prudential Financial’s earnings beat estimates in one of the trailing four quarters and missed the mark thrice, the average surprise being 0.23%.