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Mar 31, 2021
The Hartford Q1 2021 Earnings Report
The Hartford reported mixed results for Q1 2021, with net income impacted by significant settlement and catastrophe losses, but underlying performance remained strong.
Key Takeaways
The Hartford's Q1 2021 net income was $244 million, or $0.67 per diluted share, while core earnings were $203 million, or $0.56 per diluted share. Results were impacted by a $650 million settlement with the Boy Scouts of America, $214 million in catastrophe losses, and $185 million in COVID-19 related excess mortality losses. The company is increasing its share repurchase authorization to $2.5 billion and expects to achieve a return on equity of 13-14% in 2022 and 2023.
Net income available to common stockholders was $244 million, or $0.67 per diluted share.
Core earnings were $203 million, or $0.56 per diluted share.
Commercial Lines combined ratio was 109.7% with an underlying combined ratio of 91.2%.
Net investment income grew 11% to $509 million, driven by strong partnership returns.
The Hartford
The Hartford
The Hartford Revenue by Segment
Revenue by Segment
Commercial Lines Revenue
CapyFin.comPersonal Lines Revenue
CapyFin.comGroup Benefits Revenue
CapyFin.comHartford Funds Revenue
CapyFin.comCorporate Revenue
CapyFin.com Forward Guidance
The Hartford expects 'Hartford Next' savings to reach $540 million in 2022 and $625 million in 2023. The company is increasing its share repurchase authorization to $2.5 billion, expecting to utilize $1.5 billion in 2021, and targets a 13-14% ROE in 2022 and 2023.
Positive Outlook
- Expects ‘Hartford Next’ savings to reach $540 million in 2022 and $625 million in 2023
- Increases share repurchase authorization to $2.5 billion
- Targets 13-14% ROE in 2022 and 2023
- Small Commercial new business premiums were up 12% in the first quarter of 2021 driving record quarterly premium in this business
- Improving operating efficiencies and a lower expense ratio from ‘Hartford Next’, the company’s cost transformation program, have been a contributor to margin expansion.
Challenges Ahead
- Reported results include the impact of the $650 million settlement with the Boy Scouts of America (BSA)
- $214 million in pre-tax net catastrophe (CAT) losses, mainly due to winter storms in Texas and other areas
- $185 million in COVID-19 related excess mortality losses in Group Benefits
- Commercial Lines combined ratio of 109.7%
- Group Benefits net income margin was 0.6% while the core earnings margin was (0.2)%*; both the net income margin and core earnings margin included approximately 10.0 points in excess mortality and COVID-19 short-term disability losses
Revenue & Expenses
Visualization of income flow from segment revenue to net income