The Hartford has announced its financial results for the fourth quarter of 2024, reporting a net income of $848 million, which increased 11% from $766 million over the same period in 2023.
According to the firm, this growth was mainly driven by improvement in the P&C loss and loss adjustment expense ratio, earned premium growth in both Commercial and Personal Lines, and higher net investment income, partially offset by a higher expense ratio.
The P&C insurer also reported a 7% decrease in its core earnings, to $865 million in Q4 2024 from the $935 million seen in Q4 2023.
Driven by Commercial Lines and Personal Lines premium growth of 6% and 12%, P&C written premiums increased by 7% in the fourth quarter of 2024 compared to the same period in 2023.
The Hartford’s Chairman and CEO Christopher Swift, stated: “The Hartford delivered an outstanding year with a core earnings ROE of 16.7 percent. Results were driven by sustained momentum in Commercial Lines, which once again generated strong top-line growth at highly profitable margins, significant progress in Personal Lines toward restoring target profitability in auto, continued strong margins in Group Benefits, and a higher investment portfolio yield.”
Personal Lines saw its net income improve to $154 million in Q4 2024 from the net income of $34 million seen in Q4 2023, with a combined ratio of 85.8, which compares to the 101.2 reported in Q4 2023.
The increase in net income, the insurer stated, was primarily driven by improved underwriting results and, to a lesser extent, an increase in net investment income, The Hartford noted.
Contributing to the improved underwriting results was a lower loss and loss adjustment expense ratio of 59.3, improving by 17.3 points compared with 76.6 in Q4 023, and the impact of higher earned premium, partially offset by a higher expense ratio.
Personal Lines core earnings in the quarter also went up, to $155 million. Compared to Q4 2023. An underlying loss and loss adjustment expense ratio improved 11.2 points contributed to this result, as well as a 13% growth in earned premium, among other factors.
These lines also experienced CAY CAT losses of $13 million, before tax, in Q4 2024, primarily from Hurricane Milton losses of $13 million, as well as net reductions for CATs incurred earlier in the year of $11 million, down from $21 million of CAY CAT losses in Q4 2023.
For its Commercial Lines, The Hartford reported net income of $708 million for Q4 2024, compared with net income of $687 million seen in the same period the year prior. As well as a combined ratio of 87.4, which compares with the 84.7 seen in Q4 02023.
Commercial Lines core earnings for the quarter were $665 million, a 8% decrease from the $723 million reported in Q4 2023.
The Lines experienced a 9% growth in earned premiums with net investment income of $479 million, before tax, compared with $435 million in Q4 2023.
An underlying loss and loss adjustment expense ratio of 56.0 was reported for the fourth quarter 2024. Q4 2024 also experienced CAY CAT losses of $67 million, before tax, primarily from hurricanes and tropical storms.
CAY CAT losses included $55 million from Hurricane Milton, primarily in the Southeast region, as well as net reductions for CATs incurred earlier in the year of $7 million, up from CAY CAT losses of $60 million, before tax, in fourth quarter 2023.
The Hartford’s Q4 2024 net income also benefited from amortization of a deferred gain on retroactive reinsurance related to an adverse development cover for Navigators for 2018 and prior years, to the tune of $58 million.
However, the firm also booked an adverse development charge of $203 million related to asbestos and environmental reserves, and $62 million of this charge was ceded to the retroactive reinsurance treaty for A&E reserves and recognized as a deferred gain on retroactive reinsurance, which The Hartford notes exhausts the treaty limit.
Swift concluded: “Our outstanding results demonstrate the strength of our franchise, particularly our exceptional underwriting execution, extensive distribution relationships, and an unparalleled customer experience.
“With these capabilities and our high quality talent, we are well positioned to sustain our momentum, delivering profitable growth at industry-leading ROEs in 2025 and beyond.”
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