The Hartford Watches Closely for COVID-19 Financial Impact After Relatively Sane Q1

April 29, 2020

The Hartford’s 2020 first-quarter numbers are yet another example of the coronavirus pandemic not yet affecting underwriting results in a major way. But net income took a big hit.

First-quarter net income came in at $268 million, or $0.74 per diluted share. That’s down 57 percent from the same period in 2019. The Hartford blamed the result largely on realized and unrealized losses from its equity investment portfolio versus net realized capital gains in 2019.

Another factor that dinged income: net unfavorable prior accident year development on legacy Navigators reserves. The Hartford noted that this is covered by reinsurance but was recognized as a deferred gain on retroactive reinsurance.

COVID-19 will make a much bigger financial impact later in the year, The Hartford said, versus a relatively small $50 million pretax hit to the company’s underwriting operations for Q1 2020. During the quarter, The Hartford returned $258 million to shareholders as part of a $1 billion share repurchase reauthorization. The company has $650 million to go under the agreement but said it has paused share repurchases as it monitors coronavirus pandemic impacts.

The Hartford said it “continues to monitor the effects of COVID-19 and will work closely” with its impacted customers as the crisis evolves.

Results beyond that were relatively stable. The Hartford reported a personal lines combined ratio of 86.7 during Q1 versus 93.2 in the 2019 first quarter. Its commercial lines combined ratio was 99.1, up from 96.1 a year ago, something The Hartford said came, in part, from workers compensation rate pressure, though this was partially offset by lower non-catastrophe property losses in the small commercial package business.

Here are other Q1 2020 result highlights:

Source: The Hartford