The Hartford said second quarter net income was $542 million, an increase of 23% compared with the same period a year ago, driven by written premium growth of 12% in commercial lines.
Net income from commercial lines was $458 million, up 18% from the prior year quarter. The combined ratio in the segment increased to 91.2 from 87.3 in Q2 2022 due largely to pre tax catastrophe losses of $123 million from mostly tornado, wind, and hail events. A year ago catastrophe losses were $67 million in Q2.
“Momentum is strong in commercial lines,” said CEO Christopher Swift during a conference call late last week. “I expect continued top line growth at highly profitable margins during the second half of 2023. In small commercial, written premium of $1.3 billion and new business of $237 million continue near record high levels.”
Swift added that The Hartford’s cross-selling initiatives are driving new business results. He said written premium grew across almost all lines with “excellent growth in our construction, energy, and entertainment verticals,” and middle-market property saw 24% top -line growth in Q2.
Results were much less favorable in Hartford’s personal lines business, where there was a second quarter net loss of $60 million and un underwriting loss of $113 million. The combined ration increased more than 13 points to about 115.
The auto combined ratio was 116.4. Hartford cited an increase in auto liability and physical damage severity. The combined ratio for the homeowners insurance business was 115.1.
“Persistent severity loss increases in auto have had a meaningful influence on overall industry results. We continue to respond with significant pricing actions,” said CEO Christopher Swift during a conference call late last week. “During the quarter, we achieved renewal written price increases of 13.8% and expect acceleration to above 20% by the fourth quarter. As loss cost trends emerge, we will aggressively push for appropriate rate actions.”
Swift said Hartford is “executing well on our rate plans.”
“We’re really proactive with making the needed adjustments in a timely fashion. And that will continue into 2024 aggressively to get our book to target profitability probably in early 2025,” he added.
Swift said renewals in homeowners of 14.4% in Q2 outpaced underlying loss cost trends.
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