Hartford Financial Services Group Inc (HIG) Tuesday reported a sharply lower fourth-quarter profit, incurring higher benefits and expenses in Commercial Markets, weaker Wealth Management segment, offsetting improved performance in Consumer segment. Core earnings for the quarter, a measure of the company's operating performance, also dropped from last year, but came in ahead of Street estimates.
Hartford's net income in the fourth quarter dropped to $127 million or $0.24 per share from $619 million or $1.24 per share in the year-ago quarter.
Core earnings for the quarter dropped to $339 million or $0.69 per share from $529 million or $1.06 per share last year.
On average, 17 analysts polled by Thomson Reuters expected earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the quarter included $64 million or $0.13 per share in net prior year reserve strengthening, in Commercial Markets, Consumer Markets and P&C Other Operations, and $57 million or $0.12 per share in current accident year reserve strengthening in Commercial Markets.
Total revenues for the quarter dropped to $5.638 billion from $5.930 billion in the year-ago quarter. Total earned premiums for the quarter were almost flat at $3.506 billion versus $3.509 billion last year. Total net investment income grew to $1.323 billion from $1.220 billion last year.
Total benefits and expenses increased to $5.546 billion from $5.171 billion last year.
P&C Commercial core earnings were $25 million for the quarter compared with $201 million last year. P&C Commercial combined ratio, excluding catastrophes and prior year development, was 101.5 percent as compared to 95.0 percent in the year-ago quarter.
Group Benefits core earnings halved to $15 million from $30 million last year. Loss ratio increased to 80.5 percent from 79.1 percent last year reflecting unfavorable disability results.
Consumer Markets segment saw an improvement in combined ratio, excluding catastrophes and prior year development, to 93.0 percent from 96.8 percent last year.
Consumer Markets Core earnings for the quarter surged to $83 million from $28 million in the fourth quarter of 2010.
Wealth Mangement segment reported a favorable DAC unlock of $73 million for the quarter, compared with $85 million last year. Total Wealth Management assets under management declined 11 percent to $193.8 billion at year-end 2011 compared with $216.9 billion a year ago.
Net investment income, excluding trading securities, was $998 million for the quarter compared with $1.1 billion in the year-ago quarter.
In the fourth quarter, Hartford purchased 3.2 million shares of its common stock at $15.93 per share and an additional 2.6 million shares at $16.58 per share, through February 7, 2012. The company has $406.3 million remaining under the August 2011 purchase authorization.
HIG closed Tuesday's regular trading at $19.12, down $0.21 or 1.09%, on the NYSE. In the after-hours, the stock gained $0.24 or 1.26%.
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