The Hartford Financial Services Group Inc. (HIG) has doubled its earnings outlook for the fourth quarter of 2009, primarily based on lighter catastrophes, sturdy performances of its property and casualty operations and favorable reserve development from prior years across several lines.
Hartford announced yesterday that it expects fourth quarter core earnings per share to range between $1.45 and $1.60, compared to its previous guidance of 65 cents to 80 cents.
Hartford experienced strong current accident year underwriting profitability at its property and casualty operations, primarily due to risk management and benign catastrophes. Its life insurance operations also saw improved margins, driven by growing account values and reduced expense levels.
Hartford earnings outlook reflects positive prior-year reserve development of about $85 million, or 20 cents per share. Additionally, the earnings outlook includes an after-tax DAC unlock benefit of $110 million, or 26 cents per share, primarily resulting from strong equity market returns. These estimates are preliminary and are subject to change.
Hartford also anticipates a loss of only $5 million or 1 cent a share on limited partnerships and other alternative investments, due to strong hedge fund and private equity results and smaller losses on real estate-oriented funds. This is also included in the core earnings estimate.
The financial crisis has severely impacted Hartford. The company was compelled to accept a $3.4 billion government bailout last year. Its annuity business and other investment products that are sensitive to equity market movements were the hardest hit. However, the equity market rebound has helped the company to recover.
Hartford is expected to release its fourth quarter and full year financial results after the market closes on Feb. 8, 2010.
On Tuesday, shares of Hartford closed at $27.12, up 95 cents or 3.6% on the New York Stock Exchange.
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