The Hartford Posts First Profitable Quarter In More Than A Year
February 09, 2010
The Hartford posted its first profitable quarter in more than a year, benefiting from a relatively weak hurricane season, better income on investments, slashed expenses that included layoffs and improvements to its underwriting.
The Hartford Financial Services Group Inc. released earnings Monday for the fourth quarter of 2009, posting net income of $557 million for the quarter, compared with a net loss of $806 million in the fourth quarter of 2008. It was the first time that the company had posted a profit since the second quarter of 2008, when net income was $543 million, said company spokeswoman Shannon Lapierre.
Company stock fell 7 cents to $23.46 a share Monday, although earnings were released after the close of business.
In the fall of 2008, the company started a plan to reduce expenses. The number of people laid off last year is expected to be disclosed today, including changes to the number of people that The Hartford employs in Connecticut.
Core earnings for the quarter were $689 million, or $1.51 per diluted share, compared with a core loss of $208 million, or 72 cents per diluted share, during the fourth quarter of 2008. Core earnings excludes some realized gains and losses from the sale of securities.
Net investment income was $1 billion before taxes, excluding trading securities, during the quarter — up 29 percent from the same quarter a year before.
The company raised $2.4 billion in property and casualty premiums during the fourth quarter, down from $2.5 billion for the fourth quarter of 2008.
The recession was to blame for less premium revenue generally. For example, companies are employing fewer people, which drives down the amount those companies pay The Hartford in premiums for workers' compensation insurance. Additionally, some companies have cut back their plans during the recession.
It's still not clear when The Hartford plans to repay $3.4 billion that it received last summer from the U.S. Treasury in the form of Troubled Asset Relief Program, or TARP, funds. The company also received $2.5 billion from German insurer Allianz in return for the right to acquire 24 percent of the company.
Reprinted with permission of the Hartford Courant.
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