Summary
The Hartford Financial Services Group, Inc. (HIG) reported a significant increase in net income for the first quarter of 2018, reaching $597 million, up from $378 million in the prior year's comparable period. This growth was driven by multiple factors including a lower corporate federal income tax rate, improved underwriting results in Property & Casualty, increased net investment income across segments, higher earnings in the Mutual Funds business, and a notable increase in income from discontinued operations. Total revenues also saw a healthy increase of 13% to $4.7 billion, primarily due to the acquisition of Aetna's U.S. group life and disability business, which boosted Group Benefits segment performance. Despite a decline in total investments, largely due to valuation adjustments in fixed maturities from rising interest rates and wider credit spreads, the company's overall financial position remains solid. The combined ratio for Property & Casualty improved to 93.1%, reflecting better claims management and favorable prior year development. The company also successfully managed its debt, issuing new senior notes while repaying existing ones. The divestiture of the life and annuity run-off business is on track for completion by June 30, 2018, a key strategic move to streamline operations.
Financial Highlights
34 data points| Revenue | $4.69B |
| Operating Expenses | $1.04B |
| Operating Income | $428.00M |
| Interest Expense | $80.00M |
| Net Income | $597.00M |
| EPS (Basic) | $1.67 |
| EPS (Diluted) | $1.64 |
| Shares Outstanding (Basic) | 357.50M |
| Shares Outstanding (Diluted) | 363.90M |
Key Highlights
- 1Net income surged 58% to $597 million ($1.67 basic EPS / $1.64 diluted EPS) from $378 million ($1.02 basic EPS / $1.00 diluted EPS) in Q1 2017.
- 2Total revenues increased 13% to $4.69 billion, largely driven by the acquisition of Aetna's U.S. group life and disability business.
- 3Property & Casualty combined ratio improved to 93.1% from 97.4% in Q1 2017, benefiting from lower catastrophes, favorable prior accident year development, and lower current accident year auto liability costs.
- 4Net investment income rose 10% to $451 million, primarily due to higher asset levels from the Aetna acquisition and improved performance from alternative investments.
- 5Income from discontinued operations increased significantly to $169 million, largely due to accounting adjustments related to tax reform and the sale of the life and annuity run-off business.
- 6Book value per diluted share decreased slightly to $36.06 from $37.11 at the end of 2017, primarily due to a decrease in accumulated other comprehensive income.
- 7The company issued $500 million in senior notes and repaid $320 million in maturing debt.