November 04, 2004
HARTFORD, Conn. -- Hartford Financial Services Group Inc.'s (HIG) net income jumped 44% in the third quarter amid a sizable tax benefit.
The insurance and financial-services company, which has been subpoenaed by several states as part of a probe into insurance practices, late Thursday reported net income of $494 million, or $1.66 a share, compared with $343 million, or $1.20 a share, a year earlier.
The latest results included $263 million in catastrophe losses and related reinstatement premiums for reinsurance, of which $65 million was for Hurricane Jeanne. Third-quarter results also included a tax benefit of $216 million, a $49 million increase in prior-earlier environmental reserves and $29 million in net realized capital gains.
Year-earlier results included net realized capital gains of $15 million and a $40 million charge for an increase in litigation reserves.
Revenue increased 9.5% to $5.42 billion from $4.95 billion a year earlier.
Hartford said results were strong considering significant losses from hurricanes.
"Our underlying property-casualty and life businesses each executed well during a quarter that included both significant catastrophe losses and tax benefits," Chief Executive Ramani Ayer said in a prepared statement.
Mr. Ayer added that written premium for ongoing property-casualty operations was up 12%, reflecting strong growth in business insurance and personal lines.
Hartford received a subpoena in June from the New York Attorney General's office in connection with its inquiry into compensation arrangements between brokers and carriers. In September, it got two more subpoenas seeking data on possible anticompetitive activity among brokers and insurers.
Since then, Hartford received additional subpoenas from the New York Attorney General's Office, the Connecticut Attorney General's Office, the Massachusetts Attorney General's Office, the Minnesota Department of Commerce and the Ohio Attorney General's Office regarding broker compensation and possible anticompetitive activity, the company said in a Securities and Exchange Commission filing Thursday.
As for 2004, Hartford projected earnings, excluding items, of $5.60 to $5.75 a share, below its August forecast of $6.50 to $6.80 a share. In 2003, the company reported a net loss of $91 million, or 33 cents a share, hit by expenses of $1.7 billion for an increase in asbestos reserves.
For 2005, Hartford sees earnings, excluding items, of $7.15 to $7.45 a share.
The company reported its results after the market close. As of 4 p.m. EST in New York Stock Exchange composite trading, shares of Hartford were up 81 cents, or 1.4%, at $60.41 .
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