Hartford Financial Services Group Inc. on Thursday reported third-quarter net income of $339 million, down 30% from a year earlier, as the company grapples with cat losses from Hurricane Ian, looming financial instability and more disciplined underwriting, company officials said in a results webcast on Friday.
“These inflationary pressures are likely to persist as the Fed continues to tighten monetary policy and despite some early signs of softening demand and economic output,” Christopher Swift, chairman and CEO of the Hartford, Connecticut-based insurer, said during the webcast.
“At the same time, changing weather patterns continue to drive increased frequency of events and associated claims,”; he said. “There is no silver bullet to solving this problem; ongoing efforts to build more resilient homes, communities and commercial properties should be a constant focus for policymakers, insurance agents and carriers. Taken together, these trends point to the need to maintain insurance discipline and ensure that pricing keeps pace with recent trends and reserve assumptions… We continue to apply incremental rate changes across our book to restore profitability.”
Still, Hartford’s core earnings for the third quarter were $471 million, up 7% from this time last year.
“Hartford produced a strong third quarter…which includes the impact of Hurricane Ian and the ongoing impact of a dynamic macroeconomic environment,” Mr. Swift. “These are great results that reflect Hartford’s performance-based culture despite the continued headwinds of inflation and economic uncertainty.”
Commercial Lines core earnings for the third quarter were $363 million, representing an increase of 6%. Property/casualty catastrophe losses in the third quarter of 2022 were $293 million, including $214 million from Hurricane Ian, compared to $300 million in the third quarter of 2021, which included $200 million from Hurricane Ida. Still, property/casualty premiums increased 9% in Q3 2022 to $3.6 billion. And the commercial lines combined ratio of 97.7 improved 2.8 points from the third quarter of 2021.
President Doug Elliot said Friday during the webcast that losses from Hurricane Ian will continue, to prepare for bigger disaster numbers.
“We’re coming off a significant natural disaster in the southeast of this country. So we expect the real estate market to go through some changes in the coming quarters, starting very soon,” Elliott said.
The economy overall is another area to watch, he added.
“I think between real estate and social and economic changes, it’s a really critical time to stay on top of your trends and we’re trying to do exactly that here at Hartford,” he said.