Summary
The Hartford Financial Services Group, Inc. (HIG) reported a net loss of $241 million for the first quarter of 2013, a significant change from a net income of $96 million in the same period of the prior year. This downturn was largely driven by substantial "unlock" charges related to the Japan variable annuity business hedging program and a loss on debt extinguishment, which together outweighed significant realized capital gains. The company completed the divestiture of its Retirement Plans and Individual Life insurance businesses on January 1st and 2nd, 2013, respectively, which impacted revenues and operating results, including significant reinsurance losses on dispositions and accelerated amortization of deferred policy acquisition costs. Despite the net loss, the company's Property & Casualty segments showed improved underwriting results, primarily due to lower catastrophe losses and favorable prior accident year development compared to the prior year. However, the Talcott Resolution segment, which includes runoff business, reported a substantial loss due to the ongoing reduction in the size and risk of its in-force variable annuities. The company also announced a capital management plan, including an equity repurchase program and debt reduction, reflecting efforts to manage its capital structure amidst these strategic shifts.
Financial Highlights
34 data points| Revenue | $6.30B |
| Operating Expenses | $1.00B |
| Operating Income | -$240.00M |
| Interest Expense | $107.00M |
| Net Income | -$241.00M |
| EPS (Basic) | $-580000.00 |
| EPS (Diluted) | $-490000.00 |
| Shares Outstanding (Basic) | 436.30M |
| Shares Outstanding (Diluted) | 493.10M |
Key Highlights
- 1Net loss of $241 million for Q1 2013, compared to a net income of $96 million in Q1 2012.
- 2Completed the sale of Retirement Plans business on January 1, 2013, and Individual Life business on January 2, 2013.
- 3Reported a significant "unlock" charge of $541 million (after-tax) impacting the Talcott Resolution segment, versus a benefit in the prior year.
- 4Recognized a loss on extinguishment of debt of $138 million (after-tax) related to senior note repurchases.
- 5Property & Casualty Commercial segment saw an improvement in underwriting gain, driven by lower catastrophe losses and favorable prior accident year development.
- 6Total revenues increased by 20% to $9.2 billion, primarily due to substantial realized capital gains, largely from business dispositions, which offset the net loss.
- 7The company authorized an equity repurchase program of $500 million and announced plans to reduce approximately $1.0 billion of debt.