Will Rising Costs Dampen Hartford Financial's Q4 Earnings Growth?

Core Viewpoint - Hartford Financial Services Group, Inc. (HIG) is expected to report a decline in fourth-quarter 2024 earnings per share (EPS) by 12.8% year-over-year, with a consensus estimate of $2.67, while revenues are projected to grow by 10.6% to $4.8 billion [1][2]. Financial Performance Estimates - The fourth-quarter EPS estimate has decreased by 3 cents over the past month, with the current consensus for revenues at $4.8 billion, indicating a 10.6% increase from the previous year [2]. - For 2025, the revenue estimate is $18.2 billion, reflecting a year-over-year increase of 10.4%, and the current-year EPS is estimated at $10.06, suggesting a 13.3% rise year-over-year [3]. Earnings History and Predictions - Hartford Financial has beaten earnings estimates in three of the last four quarters, with an average surprise of 9.1%. However, the current model does not predict a beat for the upcoming quarter [4]. - The Earnings ESP for Hartford Financial is -3.21%, with the most accurate estimate at $2.58 per share, lower than the consensus estimate [5]. Business Segment Performance - The top line is expected to grow due to increased premiums across Commercial Lines, Personal Lines, and Group Benefits, with total net premiums estimated at $5.9 billion, a 7.7% increase year-over-year [6]. - Personal Lines are projected to see earned premiums of $889.1 million, a 10.6% increase, with income before taxes expected to rise by 54.8% to $65 million [7]. - The Commercial Lines segment is estimated to generate earned premiums of $3.3 billion, reflecting a 9.7% increase, despite potential offsets from catastrophe losses [8]. - The Group Benefits segment is expected to report revenues of $1.8 billion, nearly a 1% increase from the prior year [9]. Investment Performance - The fourth-quarter investment performance may benefit from higher returns in private equity and real estate portfolios, potentially aiding overall results [10]. Cost Pressures - The bottom line is anticipated to face pressure from rising benefits, losses, and higher insurance operating costs, with deteriorating expense ratios across Commercial, Personal, and Group Benefits segments [11].