The Hartford(US:HIG)2026-01-30 15:02Financial Data and Key Metrics Changes - The Hartford reported Core Earnings of $3.8 billion for 2025, with a Core Earnings ROE of 19.4% [5][16] - Core earnings for Q4 2025 were $1.1 billion, or $4.06 per diluted share [16] - The business insurance segment achieved written premium growth of 7% with an underlying combined ratio of 88.1 [16] - The overall expense ratio for business insurance increased to 31.8, up 1 point from the prior year [17] Business Line Data and Key Metrics Changes - Business insurance delivered top-line growth of 8%, with small business written premium of $6 billion and an underlying combined ratio of 88.9 [4][9] - Personal insurance core earnings were $214 million, with an underlying combined ratio of 84.3, reflecting a 5.9-point improvement [18] - Employee benefits reported a Core Earnings margin of 8.2%, driven by strong life and disability results [4][14] Market Data and Key Metrics Changes - Business insurance renewal written pricing, excluding workers' compensation, was 6.1% for the quarter [10] - The personal insurance segment saw a 2% decline in written premium, although agency premium grew by 15% [18] - The investment portfolio generated net investment income of $832 million, a 17% increase from Q4 2024 [24] Company Strategy and Development Direction - The Hartford is focusing on technology and innovation, with investments in AI to enhance underwriting and claims processes [7][8] - The company aims to sustain industry-leading ROEs through disciplined underwriting and risk selection, particularly in the SME segment [11][15] - The strategy includes expanding market share in personal insurance while maintaining targeted profitability [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain favorable renewal premium changes in small business due to strong market positioning and relationships with agents [30][32] - The company anticipates continued growth in employee benefits, supported by investments in technology and expanding product offerings [14][62] - Management remains optimistic about the overall economic conditions and the potential for growth in 2026 [77] Other Important Information - The Hartford completed an A&E reserve study, resulting in an increase in reserves of $165 million [20] - The company issued a new catastrophe bond, increasing the total per occurrence program for peak perils to $1.9 billion [22] - The company repurchased approximately 3 million shares for $400 million during the quarter [24] Q&A Session Summary Question: How long can favorable renewal premium changes in small business be sustained? - Management believes the small business segment can continue to grow at healthy levels due to differentiated capabilities and strong agent relationships [29][30] Question: What is the outlook for the Prevail platform? - The Prevail platform is expected to grow significantly, with plans to expand to 30 states by early 2027, focusing on new business in both direct and agency channels [35][38] Question: What is the rationale behind the increase in dividends versus share buybacks? - The increase in dividends is balanced with share buyback levels to maintain flexibility while managing capital effectively [41][42] Question: How does the company view the impact of AI on the workforce? - Management sees potential for increased startup activity and small business formation, positioning The Hartford as a net winner in the evolving landscape [81][82] Question: What is the impact of Winter Storm Fern on claims? - Management considers the event manageable, with early claims activity indicating it is less severe than previous storms [84][86]