Summary of Hartford Q4 2020 earnings call

A summary of Hartford’s Q4 2020 earnings conference call (February 10).

  • No change in strategies
  • Group benefits – a cloudy area as Hartford had a high level of excess mortality in Q4 and expect that to continue into early 2021
  • Small commercial book concentrated more in the Small to Middle side with the recent acquisition of Navigators that are more of a specialty player
  • Largest margin contributor – going to continue to be Global Specialty in 2021; seeing a rate increase of 20% in the market
  • Middle market – been up “10%-ish the last two quarters”
  • Claim frequency trends coming down last few years; Hartford – 2 years in a row of sub 90 combined ratios, with workers’ comp being 60%, 65% of that overall book of business (WC is Hartford’s largest line of business in small commercial)
  • Benefits & California: California asking to avoid considering “anything COVID” in filing so all the presumptions in rules right now take a wait and see attitude despite frequency benefits flowing through “so it’s a little bit of a mismatch in California”
  • “I think we’re going to slowly grind back to normal” – CEO Chris Swift
  • AARP: Renewed a 30+ relationship till 2033. The program did need to be modernized hence investment in a digital platform administered by Duck Creek to be rolled out gradually – 2 auto states later in March – and then home in those same states by the middle of the year – finally, plans calls for 7 or 8 states in total by the end of ’21.
  • COVID Impact: STD (short-term disability) on average is a 2 to 3-week benefit and Hartford had a significant spike in volume in STD and leave claims but only had a handful migrate to LTD (long-term disability)
  • In response to whether The Hartford would sell properties “as real estate might be a source of savings,” CFO Beth Costello responded: “We really don’t own a lot of properties, a lot of our properties are leased. We have really 2 facilities that we own that are in Hartford and Windsor. So I would not look to the sale of real estate property that we use for operations as a source of significant change in our capitalization of our subsidiaries.”
  • “M&A is a lower priority right now” – CEO Chris Swift