The Hartford Financial Services Group, Hartford, Conn., reported net income of $265 million in third quarter 2002 on revenue of $3.96 billion compared with a loss of $103 million on $3.72 billion in revenue during the same 2001 time period.
Operating income for the quarter totaled $365 million up from an operating loss of $52 million during third quarter 2001.
The company says that the equity market during the third quarter affected annuity results. In third quarter, Hartford Financial’s net income for its life operations totaled $161 million compared with $250 million during the same 2001 time frame. Operating income for life operations was $156 million, down from $177 million in third quarter 2001. The weak equity market prompted a shift to fixed accumulation products from variable products resulted in a 42% decrease in sales for individual life products to $37 million compared with third quarter 2001.
But Hartford Financial adds that its investment product business, which includes mutual funds, grew 14% and its group benefits business had a 21% earnings growth.
Separately, CIGNA Corp., Philadelphia, has announced that it expects operating income for third quarter 2002 of approximately $205 million, excluding previously announced charges of $720 million after-tax and $315 million after-tax for the run-off of reinsurance operations. It also excludes a $9 million after-tax charge to increase reserves for a previously disclosed Medicare cost reporting issue.
The lower estimate cited is related to expectations that primarily affects weaker-than-expected health care results in its Employee Health Care, Life and Disability segment. CIGNA says that it anticipates third quarter operating income for the unit to be approximately $160 million. It attributed the anticipated decline in earnings for this segment to higher spending for technology and adverse claims experience in the company’s experience-rated and guaranteed cost indemnity business.