Hartford Financial Services Group Inc., the insurer that sold life units to focus on property-casualty coverage, said first-quarter profit fell 5.7 percent as results deteriorated at P&C units.
Net income dropped to $467 million, or $1.08 a share, from $495 million, or $1.03, a year earlier when there was more stock outstanding, according a statement Monday from Hartford, which is based in the Connecticut city of the same name. Operating profit, which excludes some investment results, was $1.04 a share, beating the 97-cent average estimate of 15 analysts surveyed by Bloomberg.
The Hartford’s property/casualty combined ratio for the quarter was 91.7 before catastrophes and prior year favorable loss development were factored in, basically flat compared to the same period a year ago.
Hartford joins Chubb Corp. and Travelers Cos. in posting a profit decline for the period. Low bond yields have squeezed income from investment portfolios, and the industrywide search for new premium revenue has pressured attempts to charge more for commercial coverage.
The insurer faces “continued low interest rates and a U.S. P&C pricing cycle that is increasingly competitive,” Chief Executive Officer Chris Swift said in the statement. “We are well-positioned to navigate these challenges, as we remain a disciplined underwriter.”
Hartford declined 1.1 percent to $41.40 at 4:01 p.m. in New York Monday, erasing the insurer’s gain for the year. Results were released after the close of regular trading.
Swift, who was promoted last year, is investing in coverage for homes, cars and small businesses after Hartford divested life units to limit risk. Hartford was upgraded to BBB+ this month by Standard & Poor’s, which cited deals to cut obligations on retirement products. Book value, a measure of assets minus liabilities, climbed 3 percent to $44.13 a share from $42.84 as of Dec. 31.
Operating earnings slipped 11 percent in commercial insurance to $234 million and 26 percent at personal insurance to $75 million. Results were helped in the year-earlier period by a $32 million benefit tied to workers’ compensation coverage in New York State.
Travelers’ first-quarter profit fell 21 percent to $833 million as investment income declined and the pace slowed for rate increases to commercial clients. Chubb’s net income slipped 16 percent to $375 million on claims costs tied to winter
*Carrier Management added data regarding The Hartford’s property/casualty combined ratio to this story.