Podcast Center
Video Center
Webcasts
Resource Center
Events
July 29, 2016 at 08:04 AM
The Hartford (HIG) reported net income of $216 million in second quarter 2016 ended June 30, a decrease of $197 million from second quarter 2015, principally due to lower P&C underwriting results and lower net investment income.
Property and casualty (P&C) underwriting losses deteriorated $159 million, after-tax, compared with second quarter 2015, largely due to higher unfavorable PYD for the personal lines automobile and run-off asbestos and environmental (A&E) lines, higher catastrophe losses and lower current accident year Personal Lines automobile results.
Related: Tidal wave of insurance cash pointed toward junk bonds
Net investment income declined $40 million, after-tax, compared with second quarter 2015 primarily due to a $35 million, after-tax, decline in investment income from limited partnerships and other alternative investments (LPs). These items, in addition to a $48 million tax benefit in second quarter last year, were the principal drivers of the decrease in core earnings from $389 million in second quarter 2015 to $122 million in second quarter 2016.
Second quarter 2016 net income per diluted share was $0.54, a decrease of 44 percent compared with net income per diluted share of $0.96 in second quarter 2015 due to the decrease in net income slightly offset by fewer shares outstanding. Second quarter 2016 weighted average diluted common shares outstanding declined 7 percent from second quarter 2015 as a result of the company’s equity repurchases over the last year. Second quarter 2016 core earnings per diluted share decreased 66 percent to $0.31 compared with $0.91 in second quarter 2015.
“Although many of our segments continued to generate solid results, the second quarter bottom line was disappointing, principally due to personal lines auto, P&C, other operations, asbestos and environmental,” said The Hartford’s Chairman and CEO Christopher Swift. “While underlying margins remain strong in commercial lines and group benefits, competition is increasingly aggressive and we continue to feel pressure on investment income due to lower interest rates.”
