Hartford Financial posts 4Q loss on storm losses
HARTFORD, Conn. (AP) — The Hartford Financial Services Group Inc. on Monday reported a $46 million net loss for the fourth quarter, primarily due to losses from Superstorm Sandy in its property insurance operations.
The financial services company also announced plans to reduce debt by $1 billion, and its board authorized a $500 million stock repurchase program.
Hartford Financial's loss in the October-December period amounted to 13 cents per share, compared with net income of $118 million, or 23 cents per share, in the same period a year earlier.
Catastrophe losses totaled $335 million before taxes, almost entirely due to Superstorm Sandy, which hit the East Coast in late October.
Hartford Financial reported several other charges in the latest quarter from restructuring and other costs. Excluding those items, Hartford Financial reported adjusted earnings of $265 million, or 54 cents per share.
That topped the consensus forecast of analysts surveyed by FactSet, who expected adjusted earnings of 34 cents per share, on average.
Net income for all of 2012 was $350 million, or 66 cents per share, compared with $712 million, or $1.40 per share, in 2011.
Hartford Financial expects to reduce debt by about $1 billion, including repaying a total of $520 million in debt that matures this year and next year. The company's board authorized management to buy back shares worth $500 million. The authorization expires Dec. 31, 2014.
Hartford also said on Monday that it won approval from state insurance regulators to pay a $1.2 billion extra dividend by the end of the current quarter from Connecticut-based life insurance units to the parent company.
Hartford Financial Chairman, President and CEO Liam McGee said the plans will "effectively balance a number of critical goals." Those include paying down debt, returning capital to shareholders and further strengthening financial flexibility to reduce risk from liabilities due to past sales of annuities.
In November Hartford offered some of its annuity clients cash for their contracts. Shedding variable annuities would help Hartford reduce risk because the financial contracts pay out according to market performance, but often include guarantees of minimum payouts. That means declining stock markets can put a cash pinch on insurance companies that wrote too many of those policies.
Hartford, which is based in Hartford, Conn., is focusing on property and casualty insurance, group benefits and mutual funds, and has been streamlining its business. During the July-September quarter, it signed deals to sell an individual life insurance division, a retirement plans unit and a securities brokerage.
Hartford shares closed down 51 cents, or 2 percent, in the regular session amid a broad market decline. The stock remains near the upper end of its 52-week range of $15.65 to $25.37.