First Quarter 2025 The Hartford Financial Results Webcast Transcript

The Hartford Insurance Group, Inc. NYSE:HIG

FQ1 2025 Earnings Call Transcripts

Friday, April 25, 2025 1:00 PM GMT

S&P Global Market Intelligence Estimates

	-FQ1 2025-			-FQ2 2025-	-FY 2025-	-FY 2026-
	CONSENSUS	ACTUAL	SURPRISE	CONSENSUS	CONSENSUS	CONSENSUS
EPS Normalized	2.15	2.20	2.33	2.81	10.90	NA
Revenue (mm)	6965.85	6810.00	(2.24 %)	7052.23	28430.22	NA

Currency: USD

Consensus as of Apr-25-2025 7:55 PM GMT

Call Participants

EXECUTIVES

Adin Morris Tooker

President

Beth A. Costello

Chief Financial Officer

Christopher Jerome Swift

Chairman & CEO

Kate Jorens

SVP, Treasurer & Head of Investor Relations

Melinda Thompson

Head of Personal Lines

Michael Jeffrey Fish

Executive VP & Head of Employee Benefits

ANALYSTS

Andrew Scott Kligerman

TD Cowen, Research Division

Brian Robert Meredith

UBS Investment Bank, Research Division

Charles Gregory Peters

Raymond James & Associates, Inc., Research Division

David Kenneth Motemaden Evercore ISI Institutional Equities, Research Division

Elyse Beth Greenspan

Wells Fargo Securities, LLC, Research Division

Joshua David Shanker

BofA Securities, Research Division

Michael David Zaremski

BMO Capital Markets Equity Research

Robert Cox

Goldman Sachs Group, Inc., Research Division

Taylor Alexander Scott

Barclays Bank PLC, Research Division

Unknown Analyst

Presentation

Kate Jorens

SVP, Treasurer & Head of Investor Relations

Good morning, and thank you for joining us today for our first quarter 2025 earnings call and webcast.

Yesterday, we reported results and posted all earnings related materials on our website. Before we begin, please note that our presentation includes forward-looking statements, which are not guarantees of future performance and may differ materially from actual results. We do not assume any obligation to update these statements. Investors should consider the risks and uncertainties detailed in our recent SEC filings, news release and financial supplement, which are available on the Investor Relations section of thehartford.com. Our commentary includes non-GAAP financial measures with explanations and GAAP reconciliations available in our recent SEC filings, news release and financial supplements.

And now I'd like to introduce our speakers. Chris Swift, Chairman and Chief Executive Officer; and Beth Costello, Chief Financial Officer. After their remarks, we will take your questions assisted by several members of our management team.

And now I'll tuthe call over to Chris.

Christopher Jerome Swift

Chairman & CEO

Good morning, and thank you for joining us today.

The Hartford is off to a strong start in 2025, sustaining the momentum we have built over the past few years. Before I get into the details, let me take a moment to comment upon the macroeconomic environment. We are operating in dynamic times. However, as an underwriting-centric organization specializing in managing risk, we are well equipped to navigate this evolving environment. Our

teams are closely monitoring trends and are already taking action to address the impacts of this complex and dynamic policy landscape with solid fundamentals, a durable investment portfolio, and a balance sheet that is stronger than ever, we remain steadfast in our commitment to delivering strong returns for our shareholders.

Now let's transition to first quarter results. As I mentioned, the Hartford had a strong start to the year even in the face of the most destructive wildfires in U.S. history. Disciplined underwriting and pricing execution, exceptional talent, and innovative customer-centric technology continue to drive our performance. Highlights from the first quarter include topline growth in Business Insurance of 10% with a very strong underlying combined ratio of 88.4%. An underlying combined ratio of 89.7% in Personal Insurance representing a 6.4 point improvement over prior year, including over 8 points in auto, a core earnings margin of 7.6% in employee benefits which continue to outperform in a competitive environment and continued solid performance in our investment portfolio. All these items contributed to a trailing 12-month core earnings ROE of 16.2%.

As I dive into the details, let me start with P&C current accident year catastrophe losses which totaled $467 million before tax, including $325 million related to the January California wildfires. Catastrophe risk management strategies and reinsurance structure effectively contained exposure, keeping it well within our market share. While we are pleased with the performance of our overall book of business and risk management program, the losses were significant to first quarter results. In times like these, I am especially proud of the Hartford's claim handlers, adjusters and leaders. Excluding catastrophe losses, our businesses sustained strong performance in line with or exceeding expectations.

Turning to Business Insurance. Results were excellent driven by our industry-leading underwriting tools, pricing expertise and data science advancements. New business growth remained strong within small and middle market where the environment continues to be conducive for growth. As the leading small business carrier, our digital capabilities offer exceptional functionality and ease of use, providing us with a significant competitive advantage in the market. We have successfully leveraged these strengths to enhance the middle market and global specialty businesses.

We are going to market as one unified organization to serve diverse needs of customers and partners with a consistent and top-tier experience. In small business, first quarter financial performance was excellent with record-breaking quarterly written premium and double-digit new business growth while extending a 19-quarter trend of sub-90 underlying combined ratios. New business growth was driven in part by strong quote flow and modestly higher average premium as well as a 29% increase in E&S binding premium, a business where we continue to see tremendous opportunity. In short, small business continues to deliver excellent results with industry-leading products and digital capabilities. We are on track to surpass $6 billion in annual written premium in 2025.

Moving to middle and large, we are pleased with first quarter performance, including excellent topline growth, paired with a strong underlying margin in line with our expectations. New business growth remained strong with contributions from multiple lines

and market sectors. We continue to take advantage of healthy submissions driven in part by investments made to expand product capabilities and the efficiency of the broker and agent experience. Written premium growth reflects strong renewal rate execution across most lines, including double-digit increases in liability and auto.

Shifting to Global Specialty, results were outstanding with sustained underlying margins in the mid-80s and over $1 billion in quarterly written premium. This impressive topline performance reflects our strong competitive position, diverse product offerings and solid renewal written pricing including double-digit pricing in wholesale casualty.

Our wholesale business saw an 11% increase in gross written premium with significant contributions from U.S. inland marine, auto and casualty lines and the global reinsurance business also grew at a double-digit clip. With a diverse product set in a generally healthy pricing environment, we remain excited about the growth prospects in Global Specialty.

Across business insurance, combined emphasis on property expansion has resulted in written premium growth of approximately 15% this quarter. We are capitalizing on the favorable market conditions in the SME space with a disciplined approach and no change in our catastrophe risk appetite. As for pricing, business insurance renewal written pricing, excluding workers' compensation of 9.9%, increased 20 basis points from the fourth quarter. Our pricing execution remained strong, including low double-digit increases in general liability and auto with liability pricing continuing to rise. The team hit the ground running on 1/1 renewals, exceeding liability pricing targets, which are comfortably above loss cost trends.

In business insurance property, pricing remains healthy in the low double digits, driven by 18% pricing increases within our small business package product. In Personal Insurance, margins continue to improve, achieving an underlying combined ratio in the 80s for the first time in 3 years. We expect target profitability in auto by mid-2025, consistent with our expectations. Having navigated a

challenging loss cost environment, Personal Insurance is now focused on balancing profitability and a pivot to growth in a competitive environment.

Our homeowners business had a strong underlying quarter, highlighted by a mid-70s underlying combined ratio. Renewal written pricing of 12.3% driven by net rate and insured value increases continues to support healthy margins while reinforcing our strong position in the market.

Moving on to employee benefits. Core earnings margin of 7.6% exceeded prior year by 1.5 points, surpassing our long-term target of 6% to 7%. Group life and disability, both delivered excellent results. The disability loss ratio reflected nearly 20 points of improvement in paid family and medical leave products and the life loss ratio continued to improve. Modest fully insured ongoing premium growth reflects the competitive environment and strong book persistency which is above 90%. Sales were largely in line with expectations for the quarter.

I want to take a moment to highlight ongoing technology investments in employee benefits focused on superior customer experience and enabling growth. In absence and disability, we recently launched our patented Leave Lens platform empowering employees to confidently plan for their leave of absence through a comprehensive view of their benefits, available time and prospective pay while away from work. We also recently delivered a new absence dashboard tool which gives employers dynamic reporting capabilities regarding their employees' leaves of absence. These market differentiating tools in conjunction with recent investments in life claim digital intake provide a holistic suite of new digital capabilities for customers.

Additionally, we continue to focus on enhancing data exchanges and integration connections with benefit administration and human resource platforms to drive future growth. We now have over 160 integrations with HR technology partners servicing over 2/3 of our book, and we continue to build our leadership position in this space. For example, we have deepened our partnership with Workday to codesign their new Workday wellness platform, which will deliver faster integration, comprehensive implementation support and realtime data exchange. With these capabilities and continued investment in the benefits business, we expect to retain our #1 disability position and our top 5 life position while delivering an outstanding user experience for customers and their employees.

Attachments

• Original document
• Permalink

Disclaimer

The Hartford Insurance Group Inc. published this content on April 25, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2025 at 13:55 UTC.