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EX-99.2 - EXHIBIT 99.2 - HARTFORD FINANCIAL SERVICES GROUP, INC. | c16131exv99w2.htm |
8-K - FORM 8-K - HARTFORD FINANCIAL SERVICES GROUP, INC. | c16131e8vk.htm |
Exhibit 99.1
CONFIDENTIAL
DISTRIBUTION #7
As of 5/2, 11:30 a.m.
DISTRIBUTION #7
As of 5/2, 11:30 a.m.
NEWS RELEASE |
THE HARTFORD REPORTS FIRST QUARTER 2011 NET INCOME OF
$511 MILLION OR $1.01 PER DILUTED SHARE
$511 MILLION OR $1.01 PER DILUTED SHARE
| Reports first quarter core earnings* of $588 million or $1.16 per diluted
share |
| Strong financial and operating results across lines of business |
| P&C Commercial written premiums* up 9% from prior year period, primarily
reflecting strong retentions, improved renewal written pricing and continued economic
exposure increases |
| Strong sales in retirement plans, mutual funds and life insurance businesses |
| Book value per common share was $45.93 at end of first quarter, up 18% from
March 31, 2010 |
HARTFORD, Conn., May 2, 2011 The Hartford Financial Services Group, Inc. (NYSE:HIG) reported
first quarter 2011 net income of $511 million, or $1.01 per diluted share. The first quarter of
2011 included a $150 million after-tax realized gain from the completion of the sale of Specialty
Risk Services, LLC (SRS). In the first quarter of 2010, the company reported net income of $319
million, or a loss of $0.42 per diluted share.
Core earnings for the first quarter of 2011 were $588 million, or $1.16 per diluted share, compared
to core earnings of $544 million, or $0.14 per diluted share in the first quarter of 2010. Core
earnings for the first quarter of 2010 included a $1.03 per diluted share charge related to the
companys repurchase of the CPP preferred shares.
I am pleased with The Hartfords strong performance this quarter, said Liam E. McGee, The
Hartfords chairman, president and chief executive officer. Our results demonstrate that we
continue to build on the momentum of last year. We are delivering more stable and consistent
financial and operating performance. In Japan, our hedging programs performed well, limiting the
impact of the equity market and currency volatility that followed the tragic events in March.
The Hartford is well positioned to benefit as the U.S. economy continues to recover in 2011. We
expect our disciplined execution, combined with rising payrolls, increasing
business investment and consumers renewed focus on retirement
savings, will generate sustained, profitable growth, said McGee.
FIRST QUARTER 2011 FINANCIAL RESULTS
Quarterly Results | ||||||||||||
(in millions except per share data) | 1Q 11 | 1Q 10 | Change | |||||||||
Net income |
$ | 511 | $ | 319 | 60 | % | ||||||
Net income (loss) available to common
shareholders per diluted share |
$ | 1.01 | $ | (0.42 | ) | NM | ||||||
Core earnings |
$ | 588 | $ | 544 | 8 | % | ||||||
Core earnings available to common
shareholders per diluted share* |
$ | 1.16 | $ | 0.14 | NM | |||||||
Book value per common share |
$ | 45.93 | $ | 38.94 | 18 | % | ||||||
Book value per common share (ex. AOCI)* |
$ | 47.65 | $ | 44.29 | 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.
The companys first quarter 2011 core earnings included the effect of the following items (all
numbers are after-tax):
| Positive DAC unlock of $61 million, or $0.12 per share, driven by strong U.S. equity
market appreciation and Yen weakening, which offset the impact of the decline in the
Japanese equity markets during the period. In the first quarter of 2010, the company reported
a $79 million positive DAC unlock, or $0.18 per share. |
| A benefit of $33 million, or $0.07 per share, from net prior year reserve development,
in property and casualty. In the first quarter of 2010, the company reported a benefit of
$57 million, or $0.13 per share, from net prior year reserve development. |
2
COMMERCIAL MARKETS
First Quarter 2011 Highlights:
| P&C Commercial written premiums up 9% from prior year period, primarily reflecting
strong retentions, improved renewal written pricing and continued economic exposure
increases |
| P&C Commercial combined ratio, excluding catastrophes and prior year development*, of
94.9% up 2.2 points from prior year period, primarily driven by non-cat property losses
from winter storm activity |
| Current accident year catastrophe ratio of 3.0 points, driven by the winter storm
activity |
| Group Benefits environment continues to be challenging with elevated disability loss
ratios and intense competition; the company remains committed to disciplined pricing |
P&C Commercial
1Q 11 | 1Q 10 | |||||||
Written Premiums (in millions) |
$ | 1,645 | $ | 1,512 | ||||
Combined Ratio** |
94.9 | % | 92.7 | % | ||||
** | Excludes catastrophes and prior year development |
Group Benefits
1Q 11 | 1Q 10 | |||||||
Fully Insured Premiums*** (in millions)
|
$ | 1,028 | $ | 1,052 | ||||
Loss Ratio***
|
79.3 | % | 75.7 | % | ||||
*** | Excludes buyout premiums |
Commercial Markets net income was $338 million in the first quarter of 2011, compared to $257
million for the prior year period.
P&C Commercial net income was $327 million in the first quarter of 2011, a 59% increase compared to
$206 million in the prior year period. The first quarter of 2011 included a $150 million after-tax
gain from the completion of the sale of SRS. The first quarter of 2011 also included a net $4
million in after-tax prior year reserve releases, compared to $53 million after-tax in the first
quarter of 2010.
Group Benefits net income was $11 million, a 78% decrease compared to $51 million in the prior year
period. The decline reflected a 2% reduction in fully insured premiums and an increase in long-term
disability loss costs.
3
CONSUMER MARKETS
First Quarter 2011 Highlights:
| Continuing to sharpen focus on targeted customer groups and to implement rate increases
where appropriate |
| Written premiums declined 6% from prior year period, reflecting underwriting and rate
actions and increasing competition for new and renewal business |
| Improved underwriting profitability, with a combined ratio of 88.7%, excluding
catastrophes and prior year development |
| Current accident year catastrophe ratio of 3.4 points, primarily driven by winter storm
activity |
1Q 11 | 1Q 10 | |||||||
Written Premiums (in millions) |
$ | 884 | $ | 943 | ||||
Combined Ratio** |
88.7 | % | 91.1 | % | ||||
** | Excludes catastrophes and prior year development |
Consumer Markets net income was $110 million for the first quarter of 2011, compared to $56
million for the prior year period. The first quarter of 2011 included net prior year reserve
releases of $32 million after-tax, primarily driven by lower auto liability severity, compared to
net prior year reserve releases in the first quarter of 2010 of $5 million after-tax.
Written premiums were $884 million, compared to $943 million in the prior year period. The 6%
decline reflects a continuation of disciplined rate and underwriting actions taken to improve
profitability as well as increased competition in the marketplace.
WEALTH MANAGEMENT
First Quarter 2011 Highlights:
| Strong sales in retirement plans, mutual funds and life insurance businesses |
| Assets under management* were $314.7 billion at March 31, 2011, up $13 billion from the
prior year period and $5.4 billion from December 31, 2010 |
| Retirement Plan sales up 24% over prior year period; deposits up 12% over prior year
period |
| Retail mutual fund deposits up 15% over prior year period |
| Individual Life sales up 13% over prior year period |
Wealth Management Assets Under Management
(in billions) | Mar. 31, 2011 | Mar. 31, 2010 | Change | |||||||||
Global Annuities |
$ | 150.5 | $ | 155.0 | (3 | )% | ||||||
Non-Proprietary Mutual Funds |
$ | 60.0 | $ | 53.3 | 12 | % | ||||||
Retirement Plans |
$ | 55.3 | $ | 46.5 | 19 | % | ||||||
Life Insurance |
$ | 48.9 | $ | 46.9 | 4 | % | ||||||
4
Wealth Management Deposits
(in billions) | 1Q 11 | 4Q 10 | 3Q 10 | 2Q 10 | 1Q 10 | |||||||||||||||
Total Deposits |
$ | 8.4 | $ | 7.1 | $ | 6.0 | $ | 7.2 | $ | 8.1 |
Wealth Management net income was $128 million for the first quarter of 2011, compared to $124
million for the prior year period. The first quarter of 2011 included net realized capital losses
of $201 million, largely driven by variable annuity hedging losses. Net realized capital losses
were $170 million in the first quarter of 2010, largely driven by impairment losses and net changes
to the mortgage loan loss reserve.
Total Wealth Management deposits were $8.4 billion in the first quarter of 2011, compared to $7.1
billion in the fourth quarter of 2010 and $8.1 billion in the prior year period.
Assets under management totaled $314.7 billion at March 31, 2011, compared to $301.7 billion at
March 31, 2010. The increase reflects equity market appreciation and positive net flows in
non-proprietary mutual funds and retirement plans.
INVESTMENTS
First Quarter 2011 Highlights:
| Pre-tax net investment income, excluding trading securities, increased 5% over the prior year period driven by 21% annualized returns on limited partnerships and other alternative investments |
| Impairment losses and net changes to the mortgage loan loss reserve totaled $58 million, reflecting the substantial de-risking actions taken in the investment portfolio over the course of 2010 |
| First quarter new money yield on fixed income securities of 4.23% was roughly equal to overall fixed income portfolio yield |
| Net unrealized loss of $161 million at March 31, 2011, compared to net unrealized loss of $600 million at December 31, 2010 |
Net investment income, excluding trading securities, was $1.1 billion, pre-tax, in the first
quarter of 2011, a 5% increase over the prior year period. Limited partnerships and other
alternative investments returned an annualized 21% in the first quarter of 2011, primarily driven
by strong results in private equity and real estate funds.
The new money yield in the first quarter of 2011 was 4.23%, which exceeded the yield on securities
that matured or were sold during the quarter. The increase in the new money yield was primarily
driven by higher interest rates.
The net unrealized loss on investments improved $439 million during the first quarter, as credit
spreads tightened, more than offsetting the impact of higher interest rates.
The Hartfords total invested assets, excluding trading securities, were $97.4 billion as of March
31, 2011, compared to $98.2 billion as of December 31, 2010.
* | 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. |
5
CONFERENCE CALL
The Hartford will discuss its first quarter 2011 results in a conference call on Tuesday, May
3rd at 9 a.m. EDT. The call, along with a slide presentation, can be simultaneously
accessed through The Hartfords website at http://ir.thehartford.com. The slide presentation will be
posted on The Hartfords website at 8 a.m. EDT, on May 3rd.
More detailed financial information can be found in The Hartfords Investor Financial Supplement
for the first quarter of 2011, which is available on The Hartfords website,
http://ir.thehartford.com.
2011 GUIDANCE
Consistent with the companys previously announced guidance practices, The Hartford will not update
the annual earnings per share guidance provided in early February. The company will continue to
update its key financial drivers for fiscal year 2011, which are set forth at the end of this
release.
ABOUT THE HARTFORD
Celebrating 200 years of helping its customers achieve whats ahead, The Hartford (NYSE: HIG) is an
insurance and wealth management company. Through its unique focus on customer needs, the company
serves businesses and consumers by providing the products and solutions they need to protect their
assets and income from risks and manage their wealth and retirement needs. A Fortune 100 company,
The Hartford is recognized widely for its service expertise and as one of the worlds most ethical
companies. More information on the company and its financial performance is available at
www.thehartford.com.
HIG-F |
||
Media Contacts:
|
Investor Contact: | |
Shannon Lapierre
|
Rick Costello | |
860-547-5624
|
860-547-8480 | |
shannon.lapierre@thehartford.com
|
richard.costello@thehartford.com | |
David Snowden
|
Ryan Greenier | |
860-547-3397
|
860-547-8844 | |
david.snowden@thehartford.com
|
ryan.greenier@thehartford.com |
6
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 companys operating performance for the periods presented herein. Because The
Hartfords calculation of these measures may differ from similar measures used by other companies,
investors should be careful when comparing The Hartfords non-GAAP and other financial measures to
those of other companies.
The Hartford uses the non-GAAP financial measure core earnings as an important measure of the
companys operating performance. The Hartford believes that the measure core earnings provides
investors with a valuable measure of the performance of the companys ongoing businesses because it
reveals trends in the companys insurance and financial services businesses that may be obscured by
the net effect of certain realized capital gains and losses and discontinued operations. 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 activities of the companys business.
Accordingly, core earnings 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 companys insurance operations, so core earnings
includes certain 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). Net income is the most directly comparable GAAP
measure. Core earnings should not be considered as a substitute for net income and does not reflect
the overall profitability of the companys business. Therefore, The Hartford believes that it is
useful for investors to evaluate both net income and core earnings when reviewing the companys
performance. A reconciliation of net income to core earnings for the three months ended March 31,
2010 and 2011 is set forth in the results by segment table.
Core earnings per share is calculated based on the non-GAAP financial measure core earnings. The
Hartford believes that the measure core earnings per share provides investors with a valuable
measure of the companys operating performance for many of the same reasons applicable to its
underlying measure, core earnings. Net income per share is the most directly comparable GAAP
measure. Core earnings per share should not be considered as a substitute for net income per share
and does not reflect the overall profitability of the companys business. Therefore, The Hartford
believes that it is useful for investors to evaluate both net income per share and core earnings
per share when reviewing the companys performance. A reconciliation of net income per share to
core earnings per share for the three months ended March 31, 2010 and 2011 is set forth on page 8
of The Hartfords Investor Financial Supplement for the first quarter of 2011.
Written premiums is a statutory accounting financial measure used by The Hartford as an important
indicator of the operating performance of the companys operations. Because written premiums
represents the amount of premiums 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
Hartfords sale of property and casualty insurance products. Earned premiums, the most directly
comparable GAAP measure, represents all premiums that are recognized as revenues during a fiscal
period. The difference between written premiums and earned premiums is attributable to the change
in unearned premiums reserves. A reconciliation of written premiums to earned premiums for P&C
Commercial and Consumer Markets for the three
months ended March 31, 2010 and 2011 is set forth on pages of 13 and 18 of The Hartfords Investor
Financial Supplement for the first quarter of 2011.
7
Book value per common share 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 companys net worth
that is primarily attributable to the companys 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
March 31, 2010 and 2011 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 companys 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 are comprised of account values for Global Annuity U.S., Global Annuity
International, Retirement Plans, Mutual Funds and Individual Life. Account values include
policyholders balances for investment contracts and reserves for future policy benefits for
insurance contracts. Mutual funds are owned by the shareholders of those funds and not by the
company. As such, the mutual fund assets and liabilities and related investment returns are not
reflected in the companys consolidated financial statements since they are not assets, liabilities
and operations of the company.
The Hartfords management evaluates profitability of the P&C Commercial and Consumer Markets
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 Hartfords
pricing. Underwriting profitability over time is also greatly influenced by The Hartfords
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 companys investing activities. Underwriting results are
presented for P&C Commercial and Consumer Markets in The Hartfords Investor Financial Supplement.
A reconciliation of underwriting results to net income is set forth on pages 13 and 18 of The
Hartfords Investor Financial Supplement for the first quarter of 2011.
The combined ratio is the sum of the loss and loss adjustment expense ratio, the expense ratio and
the policyholder dividend ratio. This ratio is a relative measurement that describes the related
cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100.0
demonstrates underwriting profit; a combined ratio above 100.0 demonstrates underwriting losses.
The combined ratio before catastrophes and prior accident year development represents the combined
ratio for the current accident year, excluding the impact of catastrophes. The company believes
this ratio is an important measure of the trend in profitability since it removes the impact of
volatile and unpredictable catastrophe losses and prior accident year development. Combined ratio
before catastrophes and prior accident year reserve development are presented for P&C Commercial
and Consumer Markets in The
Hartfords Investor Financial Supplement. A reconciliation of combined ratio before catastrophes
and prior year development to the combined ratio is set forth on pages 14 and 19 of The Hartfords
Investor Financial Supplement for the first quarter of 2011.
8
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, projects 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. 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 challenges related to the Companys current operating environment, including
continuing uncertainty about the strength and speed of the recovery in the United States and other
key economies and the impact of governmental stimulus and austerity initiatives, sovereign credit
concerns and other developments on financial, commodity and credit markets and consumer spending
and investment; the success of our initiatives relating to the realignment of our business in 2010
and plans to improve the profitability and long-term growth prospects of our key divisions,
including through opportunistic acquisitions or divestitures, and the impact of regulatory or other
constraints on our ability to complete these initiatives and deploy capital among our businesses as
and when planned; market risks associated with our business, including changes in interest rates,
credit spreads, equity prices, foreign exchange rates, and implied volatility levels, as well as
continuing uncertainty in key sectors such as the global real estate market; volatility in our
earnings resulting from our adjustment of our risk management program to emphasize protection of
statutory surplus and cash flows; the impact on our statutory capital of various factors, including
many that are outside the companys 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 negative
rating actions or downgrades in the companys financial strength and credit ratings or negative
rating actions or downgrades relating to our investments; the potential for differing
interpretations of the methodologies, estimations and assumptions that underlie the valuation of
the companys financial instruments that could result in changes to investment valuations; the
subjective determinations that underlie the companys 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 deferred policy acquisition cost amortization; the
potential for further impairments of our goodwill or the potential for changes in valuation
allowances against deferred tax assets; the possible occurrence of terrorist attacks and the
companys ability to contain its exposure, including the effect of the absence or insufficiency of
applicable terrorism legislation on coverage; the difficulty in predicting the companys potential
exposure for asbestos and environmental claims; the possibility of a pandemic, earthquake, or other
natural or man-made disaster that may adversely affect our businesses and cost and availability of
reinsurance; weather and other natural physical events, including the severity and frequency of
storms, hail, winter storms, hurricanes and tropical storms, as well as climate change and its
potential impact on weather patterns; 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 restrictions, oversight, costs and
other consequences of being a savings and loan holding company, including from the supervision,
regulation and examination by the Office of Thrift Supervision (the OTS), and in the future, as a
result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(the Dodd-Frank Act), The Federal Reserve as the companys regulator and the Office of the
Controller of the Currency as regulator of Federal Trust Bank; the cost and other effects of
increased regulation as a result of the enactment of the Dodd-Frank Act, which will, among other
effects, vest a newly created Financial Services Oversight Council with the power to designate
systemically important institutions, require central clearing of, and/or impose new margin and
capital requirements on, derivatives transactions, and may affect our ability as a savings and loan
holding company to manage our general account by limiting or eliminating investments in certain
private equity and hedge funds; the potential effect of other domestic and foreign regulatory
developments, including those that could adversely impact the demand for the companys 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 or changes in U.S. federal or other tax
9
laws that affect the relative
attractiveness of our investment products; the companys ability to distribute its products through distribution channels, both current and
future; the uncertain effects of emerging claim and coverage issues; regulatory limitations on the
ability of the company and certain of its subsidiaries to declare and pay dividends; the companys
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 companys ability to maintain the availability of its systems and safeguard the security of its
data in the event of a disaster or other unanticipated events; the risk that our framework for
managing business risks may not be effective in mitigating material risk and loss; 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 companys ability to protect its intellectual property and defend
against claims of infringement; unfavorable judicial or legislative developments; and other factors
described in The Hartfords Quarterly Reports on Form 10-Q, the 2010 Annual Report on Form 10-K and
other filings The Hartford makes with the Securities and Exchange Commission. Any forward-looking
statement made by the company in this release speaks only as of the date of this release. Factors
or events that could cause the companys actual results to differ may emerge from time to time, and
it is not possible for the company to predict all of them. The company undertakes no obligation to
publicly update any forward-looking statement, whether as a result of new information, future
developments or otherwise.
- financial tables follow -
10
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
RESULTS BY SEGMENT
($ in millions, except per share data)
RESULTS BY SEGMENT
($ in millions, except per share data)
THREE MONTHS ENDED | ||||||||||||
Mar. 31, | Mar. 31, | |||||||||||
2011 | 2010 | Change | ||||||||||
Property & Casualty Commercial |
181 | 240 | (25 | )% | ||||||||
Group Benefits |
19 | 50 | (62 | )% | ||||||||
Commercial Markets core earnings |
200 | 290 | (31 | )% | ||||||||
Consumer Markets core earnings |
113 | 63 | 79 | % | ||||||||
Global Annuity |
169 | 130 | 30 | % | ||||||||
Life Insurance |
55 | 49 | 12 | % | ||||||||
Retirement Plans |
17 | 10 | 70 | % | ||||||||
Mutual Funds |
27 | 27 | NM | |||||||||
Wealth Management core earnings,
Excluding DAC Unlock |
268 | 216 | 24 | % | ||||||||
DAC Unlock |
61 | 79 | (21 | )% | ||||||||
Wealth Management core earnings |
329 | 295 | 12 | % | ||||||||
Corporate and Other core losses |
(54 | ) | (104 | ) | (48 | )% | ||||||
CONSOLIDATED |
||||||||||||
Core earnings |
588 | 544 | 8 | % | ||||||||
Add: Net realized capital losses, net
of tax and DAC, excluded from core
earnings [1][2] |
(237 | ) | (225 | ) | (5 | )% | ||||||
Add: Income from discontinued operations |
160 | | NM | |||||||||
Net Income |
511 | 319 | 60 | % | ||||||||
PER SHARE DATA |
||||||||||||
Diluted Earnings Per Share |
||||||||||||
Net income (loss) |
$ | 1.01 | $ | (0.42 | ) | NM | ||||||
Core earnings |
$ | 1.16 | $ | 0.14 | NM | |||||||
Book value per common share (including
AOCI) |
$ | 45.93 | $ | 38.94 | 18 | % | ||||||
Per share impact of AOCI |
$ | (1.72 | ) | $ | (5.35 | ) | 68 | % | ||||
Book value per common share (excluding
AOCI) |
$ | 47.65 | $ | 44.29 | 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] | Consolidated, net realized capital gains (losses), after-tax and DAC, includes DAC benefit of $37 and $63 in the three months ended March 31, 2011 and 2010, respectively. Consolidated, net realized capital gains (losses), after-tax and DAC, includes tax expense (benefit) of $(131) and $18 for the three months ended March 31, 2011 and 2010, 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
11
The Hartford
2011 Fiscal Year Key Driver Guidance
2011 Fiscal Year Key Driver Guidance
Commercial Markets
P&C Commercial |
||
Combined Ratio1 |
92.5% 95.5% | |
Written Premium Growth |
3.0% 6.0% | |
Group Benefits |
||
Loss Ratio |
76% 79% | |
Fully Insured Ongoing Premiums2 |
$3.9 $4.1 Billion |
[1] | Excludes catastrophes and prior year development | |
[2] | Guidance for fully insured ongoing premiums excludes buyout premiums and premium equivalents |
Consumer Markets
Consumer Markets |
||
Combined Ratio3 |
89.0% 92.0% | |
Written Premium Growth |
(5.5)% (2.5)% |
[3] | Excludes catastrophes and prior year development |
Wealth Management
Deposits | Net Flows | Core Earnings ROA4 | ||||
Global Annuity |
||||||
U.S. Fixed and Variable Annuity |
$1.5 $2.5 Billion | $(13.5) $(11.5) Billion | 39 44 bps | |||
Retirement Plans |
$8.5 $10.0 Billion | $0.5 $1.5 Billion | 8 12 bps | |||
Mutual Funds5 |
$16 $18 Billion | $2.0 $4.0 Billion | 9 13 bps | |||
Life Insurance |
||||||
Sales |
$210 $260 Million | |||||
After-tax Margin, excl. DAC
Unlocks6 |
12.0% 15.0% |
[4] | ROA outlooks exclude impact of DAC unlocks | |
[5] | Mutual Fund Deposits and Net Flows guidance excludes proprietary mutual funds | |
[6] | Guidance on after-tax margin is core earnings divided by total core revenue |