The Hartford Reports Surge In 2Q Profits

July 28--HARTFORD -- The Hartford on Monday reported a surge in second-quarter profits -- handily beating Wall Street expectations -- an increase in the quarterly shareholder dividend and a stepped-up stock buyback program.

Net income at The Hartford Financial Services Group was $413 million, or 96 cents a diluted share, in the quarter ended June 30, compared with a net loss of $467 million, or $1 a share, a year earlier.

Core earnings -- which generally don't include one-time gains and losses -- were $389 million, or 91 cents a diluted share, for the second quarter, compared with $144 million, or 31 cents a diluted share, a year ago. The gains reflected both stronger earnings and a 9 percent decrease in the number of outstanding common shares.

The results in the most recent quarter blew past a consensus estimate of 76 cents a share, in a survey of analysts by ThomsonOneAnalytics.

The quarterly dividend will rise by 3 cents a share, to 21 cents, a 17-percent increase. The dividend is payable on Oct. 1 to shareholders of record as of Sept. 1.

Shares in The Hartford closed at $45.66 Monday on the New York Stock Exchange, down 81 cents. The insurer's stock has risen nearly 11 percent since the end of June amid speculation the insurer could be a takeover target.

In late June, Ace Ltd. said it would acquire Chubb, stoking speculation that more mergers could be coming in the property casualty business, just as they have among health insurers.

The Hartford reported total revenues of $4.7 billion for the second quarter, up from $4.6 billion for the same quarter a year ago. The property and casualty division reported revenues of $2.9 billion, compared with $2.8 billion, a year ago.

The overall gains in the most recent quarter were driven by improved results in property-casualty underwriting and higher core earnings in its variable annuity business.

A well-watched indicator for property-casualty underwriting is the combined ratio, the sum of losses and expenses divided by earned premiums from customers. Expressed as a percentage, a lower number is more favorable for the insurer.

The company's combined ratio was 102.8 percent during the quarter ended June 30, compared with 110.4 percent during the same period a year earlier, the company said.

The Hartford said it would increase its stock buyback plan by $1.6 billion and extend it through the end of 2016. A company signals confidence in its stock when it buys its own shares.

"With our strategic and financial transformation essentially complete, we are focused on profitably expanding our businesses," Christopher Swift, The Hartford's chairman and chief executive, said in a release.

Swift said the insurer will look for opportunities to "accelerate our premium growth and operating capabilities" with an eye also trained on returning capital to shareholders.

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