The Hartford’s First Quarter Net Income Up 41% Over 2023
Hartford announced its results for the first quarter of 2024 on April 25. For the quarter, net income increased 41% to $748 million ($2.47 per diluted share) compared to $530 million ($1.66 per diluted share) over the same period in 2023. The company’s first-quarter results showed improvements in income core earnings and written premiums across different business segments. The Property & Casualty (P&C) division, in Personal Lines and Small Commercial accounts, demonstrated progress in pricing and combined ratios.
Noted increase in Personal lines growth
In the Personal Lines sector, written premiums increased by 13% compared to the same period last year. The company focused on achieving target profitability in auto insurance and maintaining margins in homeowners insurance.
For auto insurance
Written premiums saw an increase due to a rise of 25.7% in renewal written prices.
The auto combined ratio improved from 110.2 in Q1 2023 to 103.9 in Q1 2024.
The underlying combined ratio for auto insurance also improved from 105.1 in Q1 2023 to 104.4 in Q1 2024, mainly due to double-digit earned pricing increases while effectively managing severity levels. (“Underlying combined ratio” is a non-GAAP financial measure of underwriting results used by The Hartford to represent the combined ratio before catastrophes, prior accident year development, and current accident year change in loss reserves upon acquisition of a business.)
For homeowner insurance
Home insurance premiums showed growth in renewal prices, with an increase of 15.2%. The overall performance of the homeowners insurance combined ratio improved slightly from 96.8 to 96.2 in the first quarter of 2024. The underlying combined ratio’s performance for homeowners insurance also saw improvement, dropping from 78.9 to 77.0 due to increased pricing and generally favorable weather conditions, although this was partially offset by higher marketing costs and increased severity in certain weather and non-weather events.
For small commercial accounts
In this sector, strong performance was noted during the first quarter of 2024, which contributed positively to the Commercial Lines segment overall. The combined ratio for Small Commercial accounts improved from 90.8 to 89.0 in the first quarter of 2024 due to decreased catastrophe losses for the current year.
The underlying combined ratio for Small accounts remained relatively steady at 89.6 compared to 89.5 in the same quarter of 2023.
Income and core earnings up
Hartford announced an increase in income and core earnings for the quarter of 2024. Net income available to stockholders rose by 41% to $748 million or $2.47 per share compared to the same period in 2023. Core earnings also saw an uptick of 32%, reaching $709 million or $2.34 per share.
Chairperson’s statement on first quarter results
Christopher Swift, the Chairman and CEO of The Hartford, expressed optimism in the company’s performance for the year. He stated that the strong first quarter results showcase their performance and stable margins, instilling confidence in their ability to grow and provide value for shareholders with an industry-leading return on equity.
“The Hartford’s first quarter 2024 financial results were excellent with a trailing 12-month core earnings ROE of 16.6 percent,” said The Hartford’s Chairman and CEO Christopher Swift. “Commercial Lines continues to generate strong top-line growth at highly profitable margins. Personal Lines results demonstrate progress towards restoring target profitability in auto and Group Benefits margins remained solid.”
“We are off to a strong start in 2024. First quarter results reflect the consistency of our performance and stability of our margins, which give me great confidence in our ability to grow our franchise and deliver enhanced value for shareholders with an industry-leading ROE.”
Meeting challenges
Like other large insurers, The Hartford has recently faced challenges from severe weather losses, high inflation, and inadequate pricing. However, The Hartford’s robust results in Personal Lines and Small Commercial accounts during the first quarter of 2024 may indicate that the company’s focus on profitability and shareholder value creation have beaten back these challenges for the time being.
