Key highlights from The Hartford’s Q3’23 earnings call

The Hartford hosted its Q3’23 earnings call on Oct 27, 2023. Select highlights:

• Commercial Lines and Group Benefits contributed over 85% of earned premium.
• Commercial Lines experienced 8% top-line growth with an underlying combined ratio of 87.8%.
• Strong pricing was observed across P&C, with double-digit increases in commercial property, Personal Lines auto, and home.
• Group Benefits saw 8% growth in fully insured premiums and maintained a core earnings margin of 9.8%.
• Investment performance was robust, with reinvestment rates at 6%, resulting in higher portfolio yield.
• Small Commercial achieved written premiums of $1.2 billion.
• Notable growth in new business at 16% with a sub-90 underlying margin.
• The Spectrum package product contributed approximately $100 million in new business premium, marking a 20% increase over the previous year.
• Excess and surplus lines experienced remarkable growth of 34% in the quarter, driven by new business growth exceeding 50%.
• The full-year E&S premium is anticipated to reach nearly $200 million.
• Small Commercial is poised to exceed $5 billion of written premium this year.
• Middle & Large Commercial – the general industry’s property book witnessed a 13% growth, while large property experienced a 15% increase.
• The strategic focus is on growing property premiums within favorable market conditions, aiming for approximately $2.5 billion for the full year, a 25% increase.
• Global Specialty delivered outstanding results, with an 11% increase in net written premiums due to new business growth and strong renewal pricing in key lines.
• Submission flow in the U.S. increased by 11% in the quarter, including 15% growth in wholesale, and international markets saw strong new business growth in marine and energy.
• Renewal written pricing in Commercial Lines remained strong at 5.4%, with property, auto, and general liability showing robust pricing.
• Property pricing exceeded 10%, with auto and general liability approaching that level.
• In Personal Lines, auto renewal written price increases reached nearly 20%, expected to continue at this rate into the fourth quarter.
• Renewal written pricing in homeowners insurance was 14.1%, driven by net rate and insured value increases, outpacing underlying loss cost trends.
• Prevail, the preferred market-focused product in Personal Lines, is expanding and expected to be available in 39 states, contributing to future growth prospects.
• Commercial Lines achieved core earnings of $542 million.
• The underlying combined ratio for Commercial Lines stood at 87.8%, reflecting strong operational efficiency.
• Small Commercial demonstrated outstanding results with premium growth of 9%.
• The underlying combined ratio for Small Commercial was 89.7%, which includes some elevated non-CAT property losses.
• Notably, Small Commercial has maintained an underlying combined ratio below 90 for 13 consecutive quarters.
• Hartford expressed its pride in the longstanding 35-year relationship with AARP. As previously announced, the contract was renewed and extended to 2033. In conjunction with this renewal, Hartford introduced the Prevail product and platform. It’s worth noting that existing in-force business, encompassing both auto and home insurance, maintains lifetime continuity agreements. These agreements prevent Hartford from canceling a customer unless there is a significant change in their risk profile, especially in the homeowners’ line. That’s different with Prevail, but only 50% of Hartford’s new written premium is on the Prevail product – that is “a very small portion” of its in-force.