Loading...
•
Jun 30, 2020
The Hartford Q2 2020 Earnings Report
The Hartford's financial results for Q2 2020 were announced, revealing a mix of challenges and underlying strength amidst the COVID-19 pandemic.
Key Takeaways
The Hartford reported a 24% increase in net income available to common stockholders, reaching $463 million, or $1.29 per diluted share, compared to Q2 2019. However, core earnings declined by 10% to $438 million, or $1.22 per diluted share, primarily due to COVID-19 incurred losses and lower investment income.
Net income available to common stockholders increased 24% year-over-year to $463 million.
Core earnings decreased 10% year-over-year to $438 million.
The company incurred $248 million in pre-tax catastrophe losses, including $110 million related to civil unrest.
COVID-19 incurred losses totaled $251 million before tax, or $198 million after tax.
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 launched Hartford Next, an operational transformation and expense reduction plan that will contribute to The Hartford's goal of reducing the 2022 P&C expense ratio by about 2.0 to 2.5 points and reducing the 2022 Group Benefits expense ratio by about 1.5 to 2.0 points. Through headcount reductions, IT investments, and other activities, annual expense savings of $500 million are expected by 2022. In order to achieve the savings, The Hartford plans to spend $320 million from now through 2022 and $40 million thereafter, with approximately $120 million over the remaining two quarters of 2020.
Positive Outlook
- Expense savings of $500 million are expected by 2022.
- Operational transformation and expense reduction plan launched.
- Reducing the 2022 P&C expense ratio by about 2.0 to 2.5 points
- Reducing the 2022 Group Benefits expense ratio by about 1.5 to 2.0 points
- Headcount reductions, IT investments, and other activities are planned
Challenges Ahead
- The Hartford plans to spend $320 million from now through 2022
- $40 million thereafter
- Approximately $120 million over the remaining two quarters of 2020
- Expense savings are not expected until 2022
- Operational transformation may cause disruption
Revenue & Expenses
Visualization of income flow from segment revenue to net income