The Hartford says it recorded a second-quarter net loss of $190 million due to steps the insurer has taken in non-P&C operations.
Hartford booked more than $540 million in losses related to the sell-off of its life operations, as well as capital losses from variable annuity (VA) hedging programs.
The so-called Talcott resolution, which constitutes the company’s run-off of U.S., international and institutional annuity books was in full swing in the second quarter.
With Hartford reaching an agreement to sell their U.K. VA business to a Berkshire Hathaway subsidiary for $285 million, their Japan VA full surrender rate rising 25.2 percent compared with the first quarter of the year and their U.S. VA full surrender rate, which includes the effect of their Enhanced Surrender Program (ESV), rising to an annual rate of 17.5 percent compared with 14.5 percent in the first quarter of the year, there was flurry of activity.
Since it was rolled out in the first quarter of 2013, the EVS—which gives legacy contract holders with a lifetime income builder benefit II rider cash in return for lowering their balance—has cost the company $48 million after-tax and deferred acquisition costs.
The Talcott Resultion second quarter 2012 net loss was $332 million.
Consolidated P&C operations took a second-quarter underwriting loss of $132 million compared to a loss of $183 million the prior year but net income jumped nearly 62 percent to $136 million, as core earnings improved to $140 million this year from $101 million in 2012’s second quarter.
Second-quarter pretax catastrophe losses were $186 million compared to $290 million during the same period in 2012.