The Hartford Financial Services Group, Inc. (NYSE:HIG):
- Both Life and Property and
Casualty Businesses Generate Net Income
- Core Earnings* of $689 Million,
or $1.51 per Diluted Share, Marks Third Quarter of Improving Core
Earnings Results
- Company Ends 2009 in a Strong
Capital Position
- Hartford Life** Ends Year with
Estimated RBC Ratio Between 375% and 390%
- P&C Statutory Surplus
Increased $1.4 Billion in 2009
- Company Announces 2010 Core
Earnings per Diluted Share Guidance of $3.70 to $4.00
The Hartford Financial Services Group, Inc. (NYSE:HIG) today
reported fourth quarter 2009 net income of $557 million, or $1.19
per diluted share, compared with a fourth quarter 2008 net loss of
$806 million, or $2.71 per diluted share. Core earnings for the
fourth quarter of 2009 were $689 million, or $1.51 per diluted
share, compared with a core loss of $208 million, or $0.72 per
diluted share, in the prior year period.
“The Hartford’s fourth quarter results represent a return to
profitability,” said Liam E. McGee, The Hartford’s Chairman,
President and Chief Executive Officer. “Both life and property and
casualty businesses reported net income, and this is the third
sequential quarter of improving core earnings. Additionally, we
ended the year in a strong capital position.”
“Although the company posted strong earnings in the fourth
quarter, the economy and market conditions remain uncertain. In
this environment, The Hartford team is focused on execution. In the
fourth quarter, we delivered strong underwriting results, completed
the expense initiatives announced in late 2008 and launched a new
marketing campaign that reinforces the company’s strong, trusted
brand with businesses and consumers,” added McGee.
In addition, the company announced today that it will host an
investor presentation in New York on Thursday, April 1, 2010, from
9 a.m. to noon EDT. At the meeting, The Hartford’s Chairman,
President and Chief Executive Officer Liam E. McGee will discuss
the company’s business, capital and financial outlook.
FOURTH QUARTER 2009 FINANCIAL RESULTS
(in millions except per share
data)
Quarterly Results 4Q '09
4Q '08
Change Net income (loss) $557
$(806) NM
Net income (loss) available to
common shareholders per diluted share
$1.19 $(2.71)
NM Core earnings (losses)
$689 $(208)
NM Core earnings (losses) available tocommon shareholders
per diluted share* $1.51
$(0.72) NM Assets under
management* $380,834
$345,451 10% Book value per
common share $38.92
$28.53 36% Book value per common
share (ex. AOCI)* $47.56
$51.69 (8%)
The Hartford defines increases or decreases greater than or
equal to 200%, or changes from a net gain to a net loss position,
or vice versa, as “NM” or not meaningful.
REVIEW OF BUSINESS RESULTS
PROPERTY AND CASUALTY OPERATIONS
Fourth Quarter Highlights:
- Strong profitability, with net
income of $508 million and an ongoing operations current accident
year combined ratio of 92.6% (excluding catastrophes)
- Significant capital creation,
with P&C earnings contributing to a $1.4 billion increase in
statutory surplus in full year 2009
- Continued to gain traction with
new business written premium growth of 21% in small commercial and
7% in middle market over the prior year period
- Effective execution across all
lines of business with new product rollouts and retention
initiatives driving new business growth and stable retention
Property and casualty net income was $508 million for the fourth
quarter of 2009 compared with $291 million in the prior year
period. The fourth quarter of 2009 included a net realized capital
gain of $128 million, after-tax, compared with a net realized
capital loss of $162 million, after-tax, in the prior year period.
Core earnings were $378 million compared with $452 million in the
prior year period. The fourth quarter of 2009 included $128
million, pre-tax, of net prior year reserve releases across a
number of lines of business, compared with $192 million in the
fourth quarter of 2008.
Written premiums* for The Hartford’s property and casualty
operations in the fourth quarter were $2.4 billion, compared with
$2.5 billion in the fourth quarter of 2008. The decline in premium
was due to macroeconomic-driven exposure reductions and soft
pricing in commercial lines.
The current accident year combined ratio for ongoing operations
in the fourth quarter of 2009, excluding catastrophes, was 92.6%,
compared with 85.3% in the prior year period. The fourth quarter of
2008 included $95 million, or 3.7 points, of current accident year
reserve releases related to the first 9 months of 2008, and the
fourth quarter of 2009 included $5 million, or 0.2 points, of net
current accident year reserve strengthening related to prior
quarters in 2009.
Combined Ratio for Ongoing
Operations (including prior year development and
catastrophes):
4Q ‘09 4Q ‘08 Personal Lines 93.4 79.5 Small
Commercial 77.6 75.4 Middle Market 85.8 73.7 Specialty Commercial
72.4 83.0 Total 85.1 77.6
LIFE OPERATIONS
Fourth Quarter Highlights:
- Return to profitability with net
income of $118 million
- Core earnings, excluding DAC
unlock, of $307 million marks the fourth consecutive quarterly
increase
- Record retirement plan sales of
$1.2 billion
- Third consecutive quarter of
over $3 billion of mutual fund deposits
Life reported net income of $118 million in the fourth quarter
of 2009, compared with a net loss of $807 million in the prior year
period. Fourth quarter of 2009 net income included a $273 million
after-tax net realized capital loss compared with a $557 million
after-tax net realized capital loss in the prior year period.
Fourth quarter of 2009 net income included a DAC unlock benefit of
$37 million, after tax, compared with no DAC unlock in the fourth
quarter of 2008.
Core earnings for the fourth quarter of 2009 were $385 million
as compared with core losses of $261 million in the prior year
period. Fourth quarter of 2009 core earnings included a $78 million
after-tax DAC unlock benefit. The fourth quarter of 2008 included a
$274 million after-tax goodwill impairment and a $152 million
after-tax charge related to redemption triggers in the company’s
Japanese 3WIN product.
Assets Under Management (in
billions)
4Q
‘09 4Q ‘08
Change Individual
Annuity $96.8
$85.9
13% Retail Mutual Funds
$42.8
$31.0 38%
Retirement Plans $44.0
$37.0
19% Japan
$34.9 $34.5
1% Institutional
$60.0
$59.1
1%
INVESTMENTS
Fourth Quarter Highlights:
- Continued to reduce risk in the
investment portfolio with more than $1 billion of real
estate-related securities sold
- Net pre-tax unrealized loss
ended the year at $5.0 billion, down from $13.2 billion at December
31, 2008
The Hartford's total investments, excluding trading securities,
were $93.2 billion as of December 31, 2009, compared to $89.3
billion as of December 31, 2008. Net investment income, excluding
trading securities, was $1.0 billion, pre-tax, in the fourth
quarter of 2009, a 29% increase from the prior year period.
Impairments were $434 million, pre-tax, in the fourth quarter of
2009. The majority of the impairments were the result of collateral
deterioration on real estate-related assets, primarily CMBS, CRE
CDOs and RMBS.
The Hartford continued to reduce investment portfolio risk in
the fourth quarter, selling more than $1 billion of real
estate-related securities. The company also reduced its excess
liquidity position in the fourth quarter by over $2 billion,
primarily through purchases of investment-grade corporate
bonds.
The net pre-tax unrealized loss on investments was $5.0 billion
as of December 31, 2009, compared with $13.2 billion as of December
31, 2008. The improvement was driven by significant spread
tightening across virtually all fixed maturity asset classes.
2010 GUIDANCE
Based on the assumptions below, The Hartford currently expects
2010 core earnings per diluted share to be between $3.70 and $4.00.
The guidance contained within this news release is subject to
unusual or unpredictable benefits or charges that might occur in
2010, as well as factors noted below. Historically, the company has
frequently experienced unusual or unpredictable benefits and
charges that were not anticipated in previously provided
guidance.
This guidance assumes the following:
-- U.S. equity markets produce an annualized return of 9.0%
(including 7.2% stock appreciation and 1.8% dividends) from the
S&P 500 level of 1,115 on December 31, 2009;
-- This guidance incorporates no estimate of the effect of any
2010 unlocks of the account values and related assumptions
underlying the company's estimate of future gross profits used in
the determination of certain asset and liability balances,
principally life deferred acquisition costs;
-- Preferred dividends and amortization of discount of $255
million on the cumulative perpetual preferred stock issued under
the Capital Purchase Program;
-- A pre-tax underwriting loss of $160 million from other
operations in property and casualty. In the last several years,
underwriting losses in other operations have differed materially
from the assumptions incorporated in guidance;
-- A property and casualty catastrophe ratio of 3.0% to
3.5%;
-- An annualized yield on limited partnerships and other
alternative investments of 0%. In the last several years, yields
have differed materially from the assumptions incorporated in
guidance; and
-- Diluted weighted average shares outstanding of 415 million
for 2010.
The economy and market conditions remain uncertain and
persistent stress in financial markets and recessionary global
economic conditions increase the likelihood that the company’s 2010
earnings guidance will turn out to be incorrect. The company’s
actual experience in 2010 will almost certainly differ from many of
the assumptions described above, and investors should consider the
risks and uncertainties that may cause the company’s actual results
to differ, potentially materially, from the 2010 earnings guidance,
including, but not limited to, those set forth in the discussion of
forward looking statements at the end of this release and the risk
factors included in the company’s quarterly report on Form 10-Q for
the quarters ended March 31, 2009, June 30, 2009, and September 30,
2009, and annual report on Form 10-K for the year ended December
31, 2008.
CONFERENCE CALL
The Hartford will discuss its fourth quarter 2009 results in a
conference call on Tuesday, February 9 at 9:00 a.m. EST. The call,
along with a slide presentation, can be simultaneously accessed
through The Hartford's Web site at ir.thehartford.com.
More detailed financial information can be found in The
Hartford's Investor Financial Supplement for the fourth quarter of
2009, which is available on The Hartford's Web site,
ir.thehartford.com.
ABOUT THE HARTFORD
Celebrating nearly 200 years, The Hartford (NYSE: HIG) is an
insurance-based financial services company that serves households,
businesses and employees by helping to protect their assets and
income from risks, and by managing wealth and retirement needs. A
Fortune 500 company, The Hartford is recognized widely for its
service expertise and as one of the world's most ethical companies.
More information on the company and its financial performance is
available at www.thehartford.com.
HIG-F
*Denotes financial measures not calculated based on generally
accepted accounting principles ("non-GAAP"). More information is
provided in the Discussion of Non-GAAP and Other Financial Measures
section below.
** Hartford Life and Accident Insurance Company
DISCUSSION OF NON-GAAP AND OTHER FINANCIAL MEASURES
The Hartford uses non-GAAP and other financial measures in this
press release to assist investors in analyzing the company's
operating performance for the periods presented herein. Because The
Hartford's calculation of these measures may differ from similar
measures used by other companies, investors should be careful when
comparing The Hartford's non-GAAP and other financial measures to
those of other companies.
The Hartford uses the non-GAAP financial measure core earnings
(loss) as an important measure of the company's operating
performance. The Hartford believes that the measure core earnings
provides investors with a valuable measure of the performance of
the company's ongoing businesses because it reveals trends in the
company's insurance and financial services businesses that may be
obscured by the net effect of certain realized capital gains and
losses. Some realized capital gains and losses are primarily driven
by investment decisions and external economic developments, the
nature and timing of which are unrelated to the insurance and
underwriting aspects of the company's business.
Accordingly, core earnings (loss) excludes the effect of all
realized gains and losses (net of tax and the effects of deferred
policy acquisition costs) that tend to be highly variable from
period to period based on capital market conditions. The Hartford
believes, however, that some realized capital gains and losses are
integrally related to the company's insurance operations, so core
earnings (loss) includes net realized gains and losses such as net
periodic settlements on credit derivatives and net periodic
settlements on the Japan fixed annuity cross-currency swap. These
net realized gains and losses are directly related to an offsetting
item included in the statement of operations such as net investment
income (loss). Core earnings (loss) is also used by management to
assess the company's operating performance and is one of the
measures considered in determining incentive compensation for the
company's managers. Net income (loss) is the most directly
comparable GAAP measure. Core earnings (loss) should not be
considered as a substitute for net income (loss) and does not
reflect the overall profitability of the company's business.
Therefore, The Hartford believes that it is useful for investors to
evaluate both net income (loss) and core earnings (loss) when
reviewing the company's performance. A reconciliation of net income
(loss) to core earnings (loss) for the three months and year ended
December 31, 2008 and 2009 is set forth in the results by segment
table. The 2010 earnings guidance presented in this release is
based in part on core earnings (loss). A quantitative
reconciliation of The Hartford's net income (loss) to core earnings
(loss) is not calculable on a forward-looking basis because it is
not possible to provide a reliable forecast of realized capital
gains and losses, which typically vary substantially from period to
period.
Core earnings (loss) per share is calculated based on the
non-GAAP financial measure core earnings (loss). The Hartford
believes that the measure core earnings (loss) per share provides
investors with a valuable measure of the company's operating
performance for many of the same reasons applicable to its
underlying measure, core earnings (loss). Net income (loss) per
share is the most directly comparable GAAP measure. Core earnings
(loss) per share should not be considered as a substitute for net
income (loss) per share and does not reflect the overall
profitability of the company's business. Therefore, The Hartford
believes that it is useful for investors to evaluate both net
income (loss) per share and core earnings (loss) per share when
reviewing the company's performance. A reconciliation of net income
(loss) per share to core earnings (loss) per share for the three
months and year ended December 31, 2008 and 2009 is set forth on
page C-8 of The Hartford's Investor Financial Supplement for the
fourth quarter of 2009.
Written premium is a statutory accounting financial measure used
by The Hartford as an important indicator of the operating
performance of the company's property and casualty operations.
Because written premium represents the amount of premium charged
for policies issued, net of reinsurance, during a fiscal period,
The Hartford believes it is useful to investors because it reflects
current trends in The Hartford's sale of property and casualty
insurance products. Earned premium, the most directly comparable
GAAP measure, represents all premiums that are recognized as
revenues during a fiscal period. The difference between written
premium and earned premium is attributable to the change in
unearned premium reserves. A reconciliation of written premium to
earned premium for the three months and year ended December 31,
2008 and 2009 is set forth on page PC-2 of The Hartford's Investor
Financial Supplement for the fourth quarter of 2009.
Book value per share common excluding accumulated other
comprehensive income ("AOCI") is calculated based upon a non-GAAP
financial measure. It is calculated by dividing (a) stockholders'
equity excluding AOCI, net of tax, by (b) common shares
outstanding.
The Hartford provides book value per common share excluding AOCI
to enable investors to analyze the amount of the company's net
worth that is primarily attributable to the company's business
operations. The Hartford believes book value per common share
excluding AOCI is useful to investors because it eliminates the
effect of items that can fluctuate significantly from period to
period, primarily based on changes in interest rates. Book value
per common share is the most directly comparable GAAP measure. A
reconciliation of book value per common share to book value per
common share excluding AOCI as of December 31, 2008 and 2009 is set
forth in the results by segment table.
Assets under management is an internal performance measure used
by The Hartford because a significant portion of the company's
revenues are based upon asset values. These revenues increase or
decrease with a rise or fall, correspondingly, in the level of
assets under management. Assets under management is the sum of The
Hartford's total assets, mutual fund assets, and third-party assets
managed by Hartford Investment Management Company.
The Hartford's management evaluates profitability of the
Personal Lines, Small Commercial, Middle Market and Specialty
Commercial underwriting segments primarily on the basis of
underwriting results. Underwriting results is a before-tax measure
that represents earned premiums less incurred losses, loss
adjustment expenses and underwriting expenses. Net income (loss) is
the most directly comparable GAAP measure. Underwriting results are
influenced significantly by earned premium growth and the adequacy
of The Hartford's pricing. Underwriting profitability over time is
also greatly influenced by The Hartford's underwriting discipline,
which seeks to manage exposure to loss through favorable risk
selection and diversification, its management of claims, its use of
reinsurance and its ability to manage its expense ratio, which it
accomplishes through economies of scale and its management of
acquisition costs and other underwriting expenses. The Hartford
believes that underwriting results provides investors with a
valuable measure of before-tax profitability derived from
underwriting activities, which are managed separately from the
company's investing activities. Underwriting results are presented
for Ongoing Operations, Other Operations and total Property and
Casualty in The Hartford's Investor Financial Supplement. A
reconciliation of underwriting results to net income (loss) for
total Property and Casualty, Ongoing Operations and Other
Operations is set forth on pages PC-2, PC-3 and PC-11 of The
Hartford's Investor Financial Supplement for the fourth quarter of
2009.
A catastrophe is a severe loss, resulting from natural or
man-made events, including fire, earthquake, windstorm, explosion,
terrorist attack and similar events. Each catastrophe has unique
characteristics. Catastrophes are not predictable as to timing or
loss amount in advance, and therefore their effects are not
included in earnings or losses and loss adjustment expense reserves
prior to occurrence. The Hartford believes that a discussion of the
effect of catastrophes is meaningful for investors to understand
the variability of periodic earnings.
Some of the statements in this release should be considered
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as “anticipates,” “intends,” “plans,”
“seeks,” “believes,” “estimates,” “expects” and similar references
to the future. Examples of forward-looking statements include, but
are not limited to, statements we make regarding our future results
of operations and our guidance for 2010 core earnings per diluted
share. The Hartford cautions investors that these forward-looking
statements are not guarantees of future performance, and actual
results may differ materially. Investors should consider the
important risks and uncertainties that may cause actual results to
differ. These important risks and uncertainties include significant
risks and uncertainties related to the Company’s current operating
environment, which reflects continued volatility in financial
markets, constrained capital and credit markets and uncertainty
about the timing and strength of an economic recovery and the
impact of governmental budgetary and regulatory initiatives and
whether management’s initiatives to address these risks will be
effective; risks associated with our continued execution of steps
to realign our business and reposition our investment portfolio,
including the potential need to adjust our plans to take other
restructuring actions, such as divestitures; market risks
associated with our business, including changes in interest rates,
credit spreads, equity prices, foreign exchange rates, as well as
challenging or deteriorating conditions in key sectors such as the
commercial real estate market, that have pressured our results and
are expected to continue to do so in 2010; potential volatility in
our earnings resulting from our recent adjustment of our risk
management program to emphasize protection of statutory surplus;
the impact on our statutory capital of various factors, including
many that are outside the Company’s control, which can in turn
affect our credit and financial strength ratings, cost of capital,
regulatory compliance and other aspects of our business and
results; risks to our business, financial position, prospects and
results associated with downgrades in the Company’s financial
strength and credit ratings or negative rating actions relating to
our investments; the potential for differing interpretations of the
methodologies, estimations and assumptions that underlie the
valuation of the Company’s financial instruments that could result
in changes to investment valuations; the subjective determinations
that underlie the Company’s evaluation of other-than-temporary
impairments on available-for-sale securities; losses due to
nonperformance or defaults by others; the potential for further
acceleration of DAC amortization; the potential for further
impairments of our goodwill and the potential for establishing
valuation allowances against deferred tax assets; the possible
occurrence of terrorist attacks and the Company’s ability to
contain its exposure, including the effect of the absence or
insufficiency of applicable terrorism legislation on coverage; the
difficulty in predicting the Company’s potential exposure for
asbestos and environmental claims; the possibility of a pandemic or
other man-made disaster that may adversely affect the Company’s
businesses and cost and availability of reinsurance; weather and
other natural physical events, including the severity and frequency
of storms, hail, snowfall and other winter conditions, natural
disasters such as hurricanes and earthquakes, as well as climate
change, including effects on weather patterns, greenhouse gases,
sea, land and air temperatures, sea levels, rain and snow; the
response of reinsurance companies under reinsurance contracts and
the availability, pricing and adequacy of reinsurance to protect
the Company against losses; the possibility of unfavorable loss
development; actions by our competitors, many of which are larger
or have greater financial resources than we do; the costs,
compliance and other consequences of the Company’s participation in
the Capital Purchase Program under the Emergency Economic
Stabilization Act of 2008 and the eventual repayment thereof;
unfavorable judicial or legislative developments; the potential
effect of domestic and foreign regulatory developments, including
those that could adversely impact the demand for the Company’s
products, operating costs and required capital levels, including
changes to statutory reserves and/or risk-based capital
requirements related to secondary guarantees under universal life
and variable annuity products; the Company’s ability to distribute
its products through distribution channels, both current and
future; the uncertain effects of emerging claim and coverage
issues; the ability of the Company’s subsidiaries to pay dividends
to the Company; the Company’s ability to effectively price its
property and casualty policies, including its ability to obtain
regulatory consents to pricing actions or to non-renewal or
withdrawal of certain product lines; the Company’s ability to
maintain the availability of its systems and safeguard the security
of its data in the event of a disaster or other unanticipated
event; the potential for difficulties arising from outsourcing
relationships; the impact of potential changes in federal or state
tax laws, including changes affecting the availability of the
separate account dividend received deduction; the impact of
potential changes in accounting principles and related financial
reporting requirements; the Company’s ability to protect its
intellectual property and defend against claims of infringement;
and other risks and uncertainties discussed in The Hartford's
Quarterly Reports on Form 10-Q, the 2008 Annual Report on Form 10-K
and other filings The Hartford makes with the Securities and
Exchange Commission. Any forward-looking statement made by us in
this release speaks only as of the date on which it is made.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
THE HARTFORD FINANCIAL SERVICES
GROUP, INC.
RESULTS BY SEGMENT
(in millions except per share
data)
Three Months Ended
December 31
Year Ended
December 31
LIFE 2008 2009
Change 2008
2009 Change Retail Products Group $
(670 ) $ 314 NM $ (1,399 ) $ (410 ) 71
% Individual Life 9 13 44 % (43 ) 15 NM Group Benefits 72 45 (38 %)
(6 ) 193 NM Retirement Plans (23 ) (60 ) (161 %) (157 ) (222 ) (41
%) International (298 ) 23 NM (325 ) (183 ) 44 % Institutional 41
(174 ) NM (502 ) (515 ) (3 %) Other 62
(43 ) NM (11 )
(165 ) NM
Total Life net income (loss)
(807 ) 118 NM (2,443 )
(1,287 ) 47 % Less: Net realized
capital losses, after-tax and DAC [1] [2] (546 )
(267 ) 51 % (2,484 )
(1,283 ) 48 %
Total Life core earnings
(losses) (261 ) 385
NM
41 (4 ) NM
PROPERTY & CASUALTY Ongoing
Operations Ongoing Operations Underwriting Results Personal
Lines 202 66 (67 %) 280 120 (57 %) Small Commercial 167 144 (14 %)
437 395 (10 %) Middle Market 148 72 (51 %) 169 258 53 % Specialty
Commercial 58 81 40 %
71 170
139 % Total Ongoing Operations underwriting results 575 363
(37 %) 957 943 (1 %) Net servicing income 10 12 20 % 31 37 19 % Net
investment income 127 265 109 % 1,056 943 (11 %) Other expenses (39
) (78 ) (100 %) (219 ) (223 ) (2 %) Net realized capital gains
(losses) (214 ) 182 NM (1,669 ) (266 ) 84 % Income tax (expense)
benefit (162 ) (246 ) (52 %)
33 (374 ) NM
Ongoing Operations net income 297 498
68 % 189 1,060 NM
Other Operations Other Operations net income (loss)
(6 ) 10
NM (97 )
(77 ) 21 %
Total Property & Casualty net income 291
508 75 % 92 983 NM Less:
Net realized capital gains (losses), after-tax [1] [2] (161
) 130 NM
(1,225 ) (174 ) 86 %
Total Property
& Casualty core earnings 452
378 (16 %)
1,317 1,157
(12 %) CORPORATE Total Corporate net
loss (290 ) (69
) 76 %
(398 ) (583 )
(46 %) CONSOLIDATED
Net income (loss)
(806 ) 557 NM (2,749 )
(887 ) 68 % Less: Net realized capital
losses, after-tax and DAC [1][2] (598 ) (132 )
78 % (3,607 )
(1,683 ) 53 %
Core earnings (losses) $
(208 ) $ 689
NM $ 858
$ 796 (7 %)
PER SHARE DATA Diluted earnings per share
Net income
(loss) $ (2.71 ) $ 1.19
NM $ (8.99 ) $ (2.93
) 67 % Core earnings (losses) $
(0.72 ) $ 1.51 NM $
2.74 $ 1.85 (32 %) Book value
per common share Book value per common share (including AOCI) $
28.53 $ 38.92 36 % Per share impact of AOCI $ (23.16 ) $ (8.64 ) 63
% Book value per common share (excluding AOCI) $ 51.69
$ 47.56 (8 %)
[1] Includes those net realized capital gains and losses not
included in core earnings. See discussion of Non-GAAP and Other
Financial Measures section of this release.
[2] In Life, net realized capital losses, after-tax and DAC
includes DAC amortization (benefit) of $147, $(3), $(337) and $521
for the three months ended December 31, 2008 and 2009 and the years
ended December 31, 2008 and 2009, respectively. In Life, net
realized capital losses, after-tax and DAC includes tax benefit of
$(276),$(120), $(1,313) and $(680) for the three months ended
December 31, 2008 and 2009 and the years ended December 31, 2008
and 2009, respectively. In P&C, net realized capital gains
(losses), after-tax includes tax expense (benefit) of $(82), $69,
$(654) and $(108) for the three months ended December 31, 2008 and
2009 and the years ended December 31, 2008 and 2009, respectively
Consolidated net realized capital losses, after-tax and DAC
includes DAC amortization(benefit) of $147, $(3), $(337) and $521
for the three months ended December 31, 2008 and 2009 and the years
ended December 31, 2008 and 2009, respectively. Consolidated net
realized capital losses, after-tax and DAC includes tax benefits of
$(359) , $(49),$(1,972) and $(790) for the three months ended
December 31, 2008 and 2009 and the years ended December 31, 2008
and 2009, respectively.
The Hartford defines increases or decreases greater than or
equal to 200%, or changes from a net gain to a net loss position,
or vice versa, as “NM” or not meaningful
The Hartford 2010 Fiscal Year Guidance
Core Earnings Per Diluted Share
of $3.70 - $4.00*
Property and Casualty
2010 Written Premium
Growth Compared to 2009
2010Combined Ratio*
Ongoing Operations
Flat - 4.0%
91.5% - 94.5%
Personal Lines
(1%) - 3%
90.5% - 93.5%
Auto
(1%) - 3%
Homeowners
(1%) - 3%
Small Commercial
Flat - 4%
86.5% - 89.5%
Middle Market
Flat - 4%
95% - 98%
Specialty Commercial
1% - 5%
99% - 102%
*Excludes catastrophes and prior-year development
Life
Deposits
Net Flows
Core Earnings ROA1
U.S. Individual Annuity
38 - 42 bps
Variable Annuity $1.4 - $3.4 Billion
($8.25) - ($6.25) Billion
Fixed Annuity $0.750 - $1.25 Billion ($0.125)
- $0.375 Billion
Japan Annuity
51 - 59 bps
Retail Mutual Funds
$12.0 - $14.0 Billion $2.5 - $4.5 Billion
12 - 16 bps
Retirement Plans
$8.0 - $9.0 Billion $1.0 - $1.5 Billion
6 - 11 bps
Group Benefits
Fully Insured Premiums* $4.2 - $4.4 Billion Loss Ratio 72% - 75%
Expense Ratio 26% - 28%
* Guidance for fully insured
premiums excludes buyout premiums and premium equivalents.
Individual Life
After-tax Margin, excluding DAC unlocks* 11% - 13%
* Guidance on after-tax margin is
core earnings divided by total core revenue.
1ROA outlooks exclude impact of DAC unlocks
* Based on 2010 guidance assumptions outlined in the “2010
GUIDANCE” section of the news release.
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