The Hartford Insurance Group, Inc. · NYSE:HIG
The Hartford Insurance — The Hartford Financial Services Group — Q1 2015 Earnings Presentation
20 slides from The Hartford Insurance's earnings presentation, Apr 27, 2015
Slide 1: First Quarter 2015 Financial Results Presentation
The Hartford Financial Services Group, Inc. Investor Presentation April 27, 2015 FIRST QUARTER 2015 FINANCIAL RESULTS PRESENTATION
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford’s future results of operations. We caution investors that these forward-l
Slide 3: First Quarter 2015 Key Financial Highlights
First Quarter 2015 Key Financial Highlights • Core EPS1,2 of $1.04, or $1.03 excluding net favorable items Core Earnings • Core EPS up 11% over 1Q14 excluding CATs3 below outlook, PYD4 and NY Assessments5 • BVPS, ex-AOCI1,6, up 3% over March 31, 2014 to $41.47 BVPS and ROE • Twelve month core earnin
Slide 4: 1Q15 core earnings per diluted share of $1.04
1Q15 core earnings per diluted share of $1.04 • Core earnings per diluted share were Core Earnings (Loss) By Segment ($ in millions except per diluted share amounts) 1Q14 1Q15 Change 3 $1.04 versus $1.05 in 1Q14 which Commercial Lines $264 $234 (11%) included a $0.07 benefit from NY Personal Lines 1
Slide 5: Net favorable items totaled $6 million, or $0.01 per diluted share
Net favorable items totaled $6 million, or $0.01 per diluted share in 1Q15 versus $58 million, or $0.12 per diluted share in 1Q14 1Q15 core earnings included net favorable items totaling $6 million ($0.01 per diluted share): ($ in millions except per diluted share amounts) 1Q14 1Q15 − Current acci
Slide 6: 1Q15 P&C (Combined) core earnings flat excluding favorable items
1Q15 P&C (Combined)1 core earnings were flat compared with 1Q14, excluding favorable items in 1Q14 • P&C (Combined) core earnings of $329 million P&C (Combined) Written Premiums ($ in millions) were flat compared with 1Q14 excluding $2,603 $2,661 favorable items $2,597 $2,574 $2,470 − $32 million, a
Slide 7: Commercial Lines CAY underwriting margins improved slightly
1Q15 Commercial Lines CAY underwriting margins improved slightly • Written premiums rose 3% over 1Q14 Commercial Lines Written Premiums ($ in millions) $1,722 − Small Commercial rose 5% $1,669 $1,571 $1,583 $1,558 $219 − Middle Market rose 3% $223 $192 $201 $195 − Specialty Commercial declined 2%, d
Slide 8: Small Commercial: Strong top-line and underwriting results
Small Commercial: Strong top-line and underwriting results • Written premiums increased 5% over 1Q14 Small Commercial Written Premiums & Retention ($ in millions) $906 − New business premium totaled $140 million, $865 $833 $791 $140 up 7% from 1Q14 $131 $754 $140 $128 − Policy count retention increa
Slide 9: Middle Market: Focused on underwriting and pricing discipline
Middle Market: Remains focused on underwriting and pricing discipline • Written premiums rose 3% over 1Q14 Middle Market Written Premiums & Retention ($ in millions) − Renewal written price increases averaged 2% $572 $583 $601 $589 $537 − New business premium of $124 million, up $110 $107 $131 $124
Slide 10: Specialty Commercial: CAY combined ratio before CATs of 99.1%
Specialty Commercial: 1Q15 CAY combined ratio, before CATs, of 99.1% and within target range • Written premiums decreased 2% versus Specialty Commercial Written Premiums ($ in millions) 1Q14 driven by a 12% reduction in National $223 $219 Accounts, the largest product line, primarily $192 $201 $195
Slide 11: Personal Lines: Written premiums rose 1%
Personal Lines: Written premiums rose 1% • Written premiums increased 1% over 1Q14 Written Premiums ($ in millions) as higher renewal written price increases were $1,003 $1,019 offset by lower retention $927 $912 $939 − Auto renewal written pricing up 2 points over 1Q14 $329 $323 $268 to 7%; Homeown
Slide 12: Personal Lines: Auto written premiums up 2% in 1Q15
Personal Lines: Auto written premiums up 2% in 1Q15 • Auto written premiums increased 2% over Auto Renewal Written Price Increases and Policy Count Retention 1Q14 due to strong renewal written price 7% increases 6% − Renewal written price increases averaged 5% 5% 5% 7%, up from 5% in 1Q14 87% 86% 85
Slide 13: Personal Lines: Flat homeowners written premiums versus 1Q14
Personal Lines: Flat homeowners written premiums versus 1Q14 • Homeowners written premiums were flat Homeowners Renewal Written Price Increases and Policy Count Retention compared with 1Q14 as continued strong renewal written price increases were offset by 8% 8% 8% 8% lower retention 7% − Renewal wr
Slide 14: Group Benefits: 5.9% 1Q15 after-tax core earnings margin
Group Benefits: 5.9% 1Q15 after-tax core earnings margin • Core earnings were up 16% over 1Q14 due to Core Earnings & After-Tax Core Earnings Margin1 ($ in millions) improved group disability and group life results $52 $52 - 5.9% after-tax core earnings margin, excluding $45 $45 buyouts, versus 5.1%
Slide 15: Mutual Funds: Strong sales and positive net flows
Mutual Funds: Strong sales and positive net flows • Mutual Fund sales remained strong at $4.7 Mutual Fund2 Net Flows billion, up 28% over 1Q14 ($ in millions) $529 • Mutual Fund positive net flows of $529 million $271 versus $18 million in 1Q14 $93 $18 • Solid overall performance as 52%, 63% and 1Q1
Slide 16: Talcott Resolution: Annuity contract counts declined
Talcott Resolution: Variable and fixed annuity contract counts declined 13% and 16%, respectively, since March 31, 2014 Talcott Resolution Core Earnings • Core earnings of $111 million, flat with 1Q14 ($ in millions) − Lower expenses, including lower costs related to $112 $122 $111 contract holder i
Slide 17: High quality and well-diversified investment portfolio
High quality and well-diversified investment portfolio • Fixed maturities portfolio weighted Investment Portfolio Composition average credit rating of “A+” as of (Excluding equity securities, trading) March 31, 2015 Investment by sector (%) Dec. 31, 2014 Mar. 31, 2015 – 5.5% rated below investment g
Slide 18: P&C portfolio investment yield faces headwinds in low rate environment
P&C portfolio investment yield faces headwinds in low rate environment • Annualized investment yield, before Total Net Investment Income tax, was 4.5% for 1Q15 compared with ($ in millions) $326* $327* 3.9% in 4Q14, in part due to higher LP $292* $316* $282* yields $48 $18 $47 $16 $53 – 14% annualiz
Slide 19: Book value per share, ex-AOCI, of $41.47
Book value per share, ex-AOCI, of $41.47, up 2% from Dec. 31, 2014 • $41.47 BVPS, excluding AOCI, at March 31, Book Value Per Diluted Share, ex. AOCI 2015 $40.71 $41.47 $40.17 $39.82 − Up 2% from Dec. 31, 2014 $39.21 − Up 3% from March 31, 2014 • $44.13 BVPS, including AOCI, at March 31, 2015 − Up 3
Slide 20: 2014-2015 capital management plan
2014-2015 capital management plan • Capital management plan for 2014-2015 totals $3.931 billion 2014-2015 Capital Management Actions − Share repurchase program of $2.775 billion ($ in millions) − Debt management program of $1.156 billion $1,996 • Through April 24, 2015: $1,935 − $2.119 billion of sh
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