Liam E. McGee, The Hartford’s chief executive, says he is well following brain surgery and the company is on its way toward shifting its focusing primarily to its property and casualty business.
“I feel great and very blessed,” McGee told financial analysts during a conference call after receiving well wishes from one analyst. The call was to discuss the company’s fourth-quarter and year-end results.
In early January, the Hartford announced that McGee underwent brain surgery over the holidays for a tumor that was discovered during a routine physical.
Within days of the announcement, McGee attended an industry forum where there was no mention of his recent surgery.
For the insurer’s quarterly results, Superstorm Sandy took a big bite out of the Hartford, Conn.-based company’s earnings, leading to a fourth-quarter net loss of $46 million. Revenues for the quarter rose 37 percent, or $2 billion, to $7.74 billion.
For the year, net income dropped 51 percent, or $362 million, to $350 million. Revenues increased 21 percent, or $4.55 billion, to $26.4 billion.
Christopher J. Swift, executive vice president and chief financial officer, said Superstorm Sandy “generated more claims than any other cat event in our history.” The company has closed 80 percent of property claims and 90 percent of auto claims, he says.
Total pre-tax catastrophe losses were $335 million in the fourth quarter, which includes estimated losses of $350 million for Sandy, says Swift. That compares to last year’s fourth-quarter catastrophe losses of $14 million.
The quarter produced a combined ratio of 109.2, an increase of 6.5 points over the previous year.
For the year, the combined ratio was 101.9, an improvement of 4.9 points over 2011.
Most of the discussion with analysts centered on the company’s runoff of its life-annuity business, now classified as Talcott Resolution, as well as the company’s move to reduce debt.
One action McGee mentioned regarding the run-off business was the enhanced surrender value offer for U.S. variable-annuity policyholders that he says will result in an “increase in surrender activity in this block.”
McGee said the company intends to reduce its debt by $1 billion. That includes the repayment of debt maturities of $520 million for 2013 and 2014.
He noted that the company wants to reduce its debt in part to become “more consistent with the capital structure of other leading P&C companies.”
The company received permission from the Connecticut Insurance Department to pay an extraordinary dividend of $1.2 billion from its Connecticut-domiciled life insurance companies. It will also dissolve the company’s Vermont life-insurance captive and return approximately $300 million of surplus to the holding company.
McGee said the company saw good progress in its 2012 P&C commercial and homeowners insurance business. He said the company received 9 percent rate increases on P&C renewals in the fourth quarter and 8 percent for the year.
“We expect these positive pricing trends to continue through 2013,” said McGee.