With the fresh spring breeze may come a breath of fresh air forThe Hartford Financial Services Group Inc., which this week reported a first-quarter profit and improved investment results. This is particularly good news for the insurer, which earlier this month repaid $3.4 billion in Troubled Asset Relief Funds.
Due to the repurchase of the government's CPP preferred shares, The Hartford also says it recorded a $440 million charge to retained earnings that impacts the calculation of net income per diluted share, contributing to a reported net loss per diluted share of $0.42. Last year, that net loss resulted in a drop of $3.77 per diluted share.
"The company's first quarter results reflect building momentum, with year-over-year top-line improvements in many businesses," Liam McGee, The Hartford's chairman, president and CEO, said in a statement. "We also benefited from capital market improvements, disciplined underwriting and a continued focus on execution across the organization. Our goal is to deliver superior shareholder value by generating sustained, profitable growth over time."
In terms of its property/casualty operations, The Hartford announced its net income was $257 million during Q1, compared with $112 million for the prior year period. The first quarter included a net realized capital loss of $49 million, after-tax, compared with a net realized capital loss of $211 million, after-tax, the year before.
The Hartford's Q1 P&C combined ratio for ongoing operations, including prior year development and catastrophes, was 91.7%, compared to 89.9% in Q1 2009. Excluding catastrophes, the current accident year combined ratio for ongoing operations for the first quarter of 2010 was 92.1%, compared with 90.0% last year.
As for The Hartford's life insurance operations, it recorded a net income of $186 million, compared to a net loss of $1.3 billion in Q1 2009. The year's Q1 net income included a $178 million after-tax net realized capital loss, an improvement over 2009's $113 million after-tax net realized capital gain. Additionally, Q1 2010 net income included a DAC unlock benefit of $85 million, after tax, versus a DAC unlock charge of $1.5 billion, after-tax, last year.
"In the first quarter, we made significant progress on our path forward," McGee said. "We completed a successful capital raise, which enabled us to strengthen the company's balance sheet and return the government's investment in The Hartford. We are now focused on executing our go-forward strategy, which leverages our product breadth, distribution strength and broad customer base."
