The Hartford(HIG) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The Hartford reported core earnings of $1.1 billion or $3.78 per diluted share, both records for the company, with a trailing twelve-month core earnings ROE of 18.4% [5][15] - Written premium growth in business insurance was 9%, with an underlying combined ratio of 89.4 [5][15] - Personal insurance had an underlying combined ratio of 90, a 3.7 point improvement over the prior year [5] - Employee benefits achieved a core earnings margin of 8.3% [12][18] Business Line Data and Key Metrics Changes - Business insurance core earnings were $723 million, with written premium growth of 9% and an underlying combined ratio of 89.4 [15] - Small business insurance saw written premium growth of 11% and an underlying combined ratio of 89.8 [15] - Middle and large business insurance had written premium growth of 10% and an underlying combined ratio of 91.4 [15] - Global Specialty reported written premium growth of 5% and an underlying combined ratio of 85% [15] Market Data and Key Metrics Changes - The Hartford's small business franchise delivered record-breaking new business premium with strong underlying combined ratios [6] - Written premium in personal insurance increased by 2% in the third quarter, with homeowners achieving 10% written premium growth [11][16] - The company expects written premium to exceed $6 billion in 2025, representing a 10% growth over the prior year [6] Company Strategy and Development Direction - The Hartford is focused on leveraging industry-leading tools, underwriting expertise, and advanced data science to sustain strong results [14] - The company is committed to helping business customers succeed by using digital capabilities and offering a comprehensive product suite [9] - The introduction of the Prevail product aims to enhance competitive positioning and drive growth in personal insurance [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic market cycle and deliver superior returns for shareholders [14] - The company anticipates fourth quarter results to be in a similar range to the third quarter [19] - Management noted that while pricing competition is increasing, they maintain a disciplined approach to pricing and underwriting [40][41] Other Important Information - The Hartford announced a 15% increase in the common quarterly dividend, reflecting confidence in sustained earnings power [13][20] - The company repurchased 3.1 million shares for $400 million during the quarter, with $1.95 billion remaining on its share repurchase authorization [21] Q&A Session Summary Question: Discussion on workers compensation pricing trends - Management indicated that the workers comp market remains stable, with slight price increases expected but no significant changes anticipated for 2026 [23][24] Question: Insights on underlying loss ratios in business insurance - Management noted that the underlying combined ratio is running at 88.6%, with no changes in workers comp strategies [25][26] Question: Commentary on new business growth in small and mid-sized segments - Management highlighted strong performance across various lines, with significant growth in small business and national accounts [30][31] Question: Pricing competition and market conditions - Management acknowledged increasing price competition but emphasized their disciplined pricing strategy and strong market position [40][41] Question: Technology investments and outlook - Management discussed a substantial IT budget focused on modernizing systems and enhancing customer experience through technology [45][48] Question: Retention and shopping behavior in personal lines - Management noted that shopping behavior remains elevated, but retention is stable due to various customer engagement initiatives [53][54] Question: Capital position and dividend increase rationale - Management attributed the dividend increase to strong fundamentals and earnings power, indicating confidence in continued growth [55][56]