HARTFORD INSURANCE GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Summary

The Hartford Financial Services Group, Inc. (HIG) reported a net loss of $467 million, or $1.00 per diluted share, for the second quarter of 2014, a widening from a net loss of $190 million, or $0.39 per diluted share, in the prior year period. This increased loss was primarily driven by a significant after-tax loss of $659 million incurred from the sale of its Japan annuity business (Hartford Life Insurance KK) on June 30, 2014, which was classified as a discontinued operation. Excluding discontinued operations and certain other items, "core earnings" were $144 million for the quarter. The company's Property & Casualty segments showed improved underwriting results, with a combined ratio before catastrophes and prior year development of 91.1% for the quarter. However, net investment income declined due to lower asset levels and yields. The company also announced an increase in its equity repurchase program and entered into an accelerated share repurchase agreement, signaling a commitment to returning capital to shareholders.

Key Highlights

• 1Reported a net loss of $467 million for Q2 2014, compared to a net loss of $190 million in Q2 2013.
• 2The net loss was significantly impacted by a $659 million after-tax loss on the sale of the Japan annuity business (Hartford Life Insurance KK).
• 3Core earnings, a non-GAAP measure, were $144 million for the quarter.
• 4Property & Casualty Commercial segment's combined ratio before catastrophes and prior year development improved to 91.1% in Q2 2014 from 93.1% in Q2 2013.
• 5Net investment income decreased by 9% to $768 million in Q2 2014, primarily due to lower income from fixed maturities and limited partnerships.
• 6Announced an increase in its equity repurchase program by $775 million and entered into an accelerated share repurchase agreement.
• 7The company's total debt decreased by 7% to $6.1 billion as of June 30, 2014, compared to December 31, 2013.

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