The Hartford(US:HIG)2025-10-28 14:02Financial 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% [6][16] - Written premium growth in business insurance was 9%, with an underlying combined ratio of 89.4, while personal insurance had an underlying combined ratio of 90, a 3.7 point improvement over the prior year [6][16] - Employee benefits achieved a core earnings margin of 8.3% [13] Business Line Data and Key Metrics Changes - Business insurance saw written premium growth of 11% in small business, with an underlying combined ratio of 89.8, and 10% growth in middle and large business with an underlying combined ratio of 91.4 [7][16] - Global Specialty reported net written premium growth of 5% with underlying margins in the mid-80s [8][16] - Personal insurance written premium increased by 2%, with homeowners achieving 10% written premium growth and an underlying combined ratio of 74.4 [11][17] Market Data and Key Metrics Changes - The Hartford's small business franchise delivered record-breaking new business premium, with E&S binding up 47% [7] - In the business insurance sector, renewal written pricing excluding workers compensation was 7.3% above overall loss trend [9][10] - The company anticipates written premium to exceed $6 billion in 2025, representing a 10% growth over the prior year [7] Company Strategy and Development Direction - The Hartford is focused on leveraging digital capabilities and advanced data science to enhance underwriting expertise and customer relationships [6][15] - The company is rolling out a new product, Prevail, to retail distribution, with plans for 30 state launches by early 2027 [12] - The Hartford aims to maintain strong margins while pursuing growth opportunities, particularly in the small business segment [37][41] 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 [15] - The company noted that while pricing competition is increasing, it remains disciplined in its pricing strategies [49][50] - Management anticipates fourth quarter results to be similar to the third quarter, with a focus on maintaining profitability [20][21] Other Important Information - The Hartford announced a 15% increase in the common quarterly dividend, reflecting confidence in sustained earnings power and capital generation [14][21] - 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 but no significant changes expected for 2026 [25][26] 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 [30][31] Question: Commentary on new business growth in small and mid-sized segments - Management highlighted strong growth in small business, with a focus on maintaining margins and leveraging technology [36][39] Question: Retention and shopping behavior in personal lines - Management observed that shopping behavior remains elevated, but retention is stable due to policyholder engagement initiatives [64][65] Question: Confidence in capital position and dividend increase - Management attributed the dividend increase to strong fundamentals and earnings power, indicating no change in focus on growth opportunities [66][67] Question: Impact of tariffs on personal auto results - Management stated that the impact of tariffs was negligible this quarter, with appropriate adjustments expected in 2026 [70] Question: Technology budget allocation and initiatives - Management shared that the IT budget is $1.3 billion, with over $500 million allocated for investments in new initiatives [58][60]