Hartford Financial Q2 Loss Widens - Update

(RTTNews) - Hartford Financial Services Group Inc. (HIG), Wednesday said its second-quarter loss widened, hurt mainly on a hefty loss from discontinued operations related to the sale of Japan annuity business.

The Hartford, Connecticut-based company's second quarter loss widened to $467 million or $1.00 per share from $190 million or $0.39 per share last year.

Second-quarter included a loss on discontinued operations of $617 million related to the sale of Hartford's Japan annuity business.

Excluding special items, core earnings for the second quarter dropped to $144 million or $0.31 per share from $231 million or $0.47 per share last year.

Analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.

The company said its "core earnings declined as the increase in core earnings from Property & Casualty Commercial, Group Benefits and Mutual Funds were more than offset by higher prior year loss and loss adjustment expense reserve development for asbestos and environmental."

Revenues for the second quarter dropped to $4.62 billion from $4.73 billion a year ago. Analysts had a consensus revenue estimate of $5.40 billion for the second quarter.

Core earnings at the Property and Casualty business for the quarter dropped 71 percent from last year to $40 million. Combined ratio at the segment, the percentage of premiums the insurer pays out in claims and expense, was 108.6 percent compared with 105.4 percent last year. A figure over 100 indicates that underwriting was unprofitable.

Core earnings at Group Benefits segment climbed to $52 million from $37 million a year ago. Mutual funds core earnings were $21 million, up from $20 million last year.

Hartford has been weaning itself from non-core businesses in order to focus on property and casualty, group benefits and mutual fund businesses. In April, Hartford agreed to sell its Japanese operations to Orix Corp. for about $895 million. The company sold its individual life insurance business to Prudential Financial Inc. in 2012. The company also sold its UK variable annuity unit to Warren Buffett's Berkshire Hathaway Inc.

CEO Christopher Swift said, "With the completion of the sale of the Japan annuity business, we have significantly reduced the size and risk of Talcott Resolution and expanded our 2014-2015 capital management plan, including a 20% increase in the quarterly common dividend. Going forward, we will continue to emphasize profitable growth in P&C, Group Benefits and Mutual Funds and improved operating effectiveness and efficiency."

At the end of the quarter, Hartford had a book value per share of $41.70, compared with $39.14 at the end of December 31, 2013.

HIG closed Wednesday's trading at $34.53, down $0.57 or 1.62%, on the NYSE. The stock further dropped $0.93 or 2.69% in after-hours trade.