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HARTFORD INSURANCE GROUP, INC. (HIG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was resilient operationally despite elevated catastrophe losses: diluted EPS $2.15 and core EPS $2.20; EPS beat consensus, while revenue modestly missed due to $467M pre-tax catastrophe losses largely from the January California Wildfire event .
  • Property & Casualty underlying profitability held: P&C underlying combined ratio 88.8% (vs 90.1% in Q1 2024), with notable improvement in Personal Insurance underlying combined ratio to 89.7% (–6.4 pts YoY) driven by earned rate and lower auto physical damage frequency .
  • Business Insurance delivered 10% written premium growth and an 88.4% underlying combined ratio; Global Specialty posted >$1B written premium and an 84.0% underlying combined ratio .
  • Management reaffirmed key 2025 objectives: auto underlying combined ratio mid-90s by mid-2025, underlying margins in Business Insurance consistent with 2024, Employee Benefits LT core margin 6–7%, and continued $400M quarterly buybacks in Q2 .
  • Capital and investment remain supportive: net investment income $656M; book value per diluted share up to $57.07; trailing 12-month ROE 18.8% and core ROE 16.2% .

What Went Well and What Went Wrong

What Went Well

  • Business Insurance sustained strong underlying profitability with an 88.4% underlying combined ratio and 9% earned premium growth; CFO: “core earnings were $471M with written premium growth of 10%” .
  • Personal Insurance underlying combined improved 6.4 pts YoY to 89.7%, with auto underlying combined 96.1% (–8.3 pts YoY) and homeowners underlying combined 75.1%; CEO: “margins continue to improve…target profitability in auto by mid-2025” .
  • Employee Benefits delivered a 7.6% core earnings margin (up 1.5 pts YoY) on improved loss ratios in group life and disability; management highlighted digital tools like Leave Lens and >160 HR tech integrations .

What Went Wrong

  • Elevated catastrophes: P&C current accident year CAT losses were $467M pre-tax, including ~$325M net of reinsurance from the January California Wildfire event, materially impacting Q1 results .
  • Personal Insurance combined ratio deteriorated to 106.1% due to 14.4 pts higher CAY CAT losses and a 1.7 pt higher expense ratio (marketing, commissions) .
  • Consolidated P&C combined ratio rose to 96.9% (vs 92.1% in Q4 2024), reflecting the catastrophe burden; consolidated revenue slipped sequentially vs Q4 .

Financial Results

Consolidated revenues and EPS (comparisons)

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Billions)$6.752 $6.879 $6.810
Diluted EPS ($USD)$2.56 $2.88 $2.15
Core EPS ($USD)$2.53 $2.94 $2.20

Margins and underwriting metrics

MetricQ3 2024Q4 2024Q1 2025
P&C Combined Ratio (%)94.5 92.1 96.9
P&C Underlying Combined Ratio (%)89.7 87.8 88.8
Business Insurance Combined Ratio (%)92.2 87.4 94.4
Business Insurance Underlying Combined Ratio (%)88.6 87.1 88.4
Personal Insurance Combined Ratio (%)102.5 85.8 106.1
Personal Insurance Underlying Combined Ratio (%)93.7 90.2 89.7
Employee Benefits Core Earnings Margin (%)10.0 7.8 7.6

Q1 2025 versus Wall Street consensus (S&P Global)

MetricConsensusActualSurprise
Primary EPS ($USD)2.1475*2.20 +0.0525 (Beat)
Revenue ($USD Billions)6.966*6.810 –0.156 (Miss)

Values retrieved from S&P Global.*

Segment breakdown – Q1 2025

SegmentWritten Premiums ($MM)Combined Ratio (%)Underlying Combined Ratio (%)Core Earnings ($MM)Key Notes
Business Insurance3,686 94.4 88.4 471 Net inv. income $437M; CAY CATs 8.4 pts on loss ratio; favorable PYD (incl. Navigators ADC amortization)
Personal Insurance913 106.1 89.7 6 CAY CATs 20.8 pts; underlying loss ratio improved 8.1 pts; expense ratio +1.7 pts
Employee BenefitsN/A (premiums $1,612) N/AN/A136 Loss ratio 71.9%; core margin 7.6%; persistency >90%
Hartford FundsN/A (AUM daily avg $141,834) N/AN/A44 Net flows –$1.432B MF/ETF; AUM $138,098

KPIs – Q1 2025 highlights

KPIValueContext
P&C CAY CAT losses (pre-tax)$467M Includes ~$325M net of reinsurance from CA Wildfire event
Pricing – Business Insurance (ex WC)+9.9% CEO/CFO: ahead of loss trends; strong property pricing
Pricing – Personal Auto/Home+15.8% / +12.3% written; +20% / +14.4% earned
Net Investment Income (pre-tax)$656M Ex-LPs $617M; LP income $39M
Book Value per Diluted Share$57.07 Ex-AOCI $65.99
Trailing 12M ROE / Core ROE18.8% / 16.2% —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Personal Auto underlying combined ratioMid-2025Mid-90s during 2025 Mid-90s by mid-2025 Maintained / timing reiterated
Business Insurance underlying combined ratioFY 2025Consistent with 2024 Consistent underlying margins targeted Maintained
Employee Benefits core earnings marginLT6–7% LT target 6–7% LT target; Q1 at 7.6% Maintained
Net investment income (ex-LPs)FY 2025Marginally higher yields vs 2024 2025 NII ex-LPs higher than 2024; yields in-line with 2024 Maintained/clarified
Navigators ADC amortizationQ2 2025$64M remaining amortized in 2025 $32M expected in Q2 (remaining balance) Timing specified
Share repurchasesQ2 2025$400M run-rate in Q1 2025 Expect $400M in Q2; $2.75B authorization remaining Maintained run-rate
DividendQ1 2025$0.52 prior quarterDeclared $0.52 common dividend payable Apr 2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/data & digital investmentsModernized platforms (Guidewire, Prevail), cloud data; continued investment Leave Lens, absence dashboard; >160 HR tech integrations; focus on AI in claims, underwriting, ops Advancing execution
Tariffs/macro inflationElevated liability severity; pricing above trend Tariffs could raise autos/parts/materials costs; reaction function via pricing; prior approval vs file-use dynamics Monitoring; pricing agility
Social inflation/liability reservesGL reserve strengthening $130M; elevated attorney rep rates; low double-digit severity embedded Continued elevated severity assumption; pricing targeting above loss trends Persistent; priced in
Catastrophe risk/reinsuranceOccurrence program reset; cost down ~10% risk-adjusted; aggregate treaty renewed Wildfire exposure within program; layers attach at $200M and $350M; aggregate counts wildfire losses Robust coverage maintained
Personal lines profitability pivotAuto underlying improved >10 pts; homeowners strong underlying Auto to mid-90s by mid-2025; homeowners underlying mid-70s; marketing spend lifting growth Improving margins; growth focus
Employee Benefits PFMLPFML pressured margins; rate actions implemented ~20-pt improvement in PFML loss ratio via double-digit rate; core margin at 7.6% Improving

Management Commentary

  • “The Hartford is off to a strong start in 2025… even in the face of the most destructive wildfires in U.S. history… topline growth in Business Insurance of 10%… underlying combined ratio of 89.7% in Personal Insurance” (CEO) .
  • “Business Insurance had a strong quarter… underlying combined ratio of 88.4… Personal Insurance achieved 6.4 points of underlying combined ratio improvement… Employee Benefits continued to outperform with a core earnings margin of 7.6%” (CFO) .
  • “We will lead the AI implementation for the industry… focused on claims, underwriting and operations” (CEO) .
  • “P&C current accident year catastrophe losses were $467 million before tax, including $325 million related to the January California wildfire event” (CFO) .
  • “Holding company resources totaled $1.3 billion… repurchased $400 million of shares… expect to remain at that level of repurchases in the second quarter” (CFO) .

Q&A Highlights

  • Business Insurance market dynamics: retention pressure in workers’ comp but diversified growth across lines; strong SME growth with E&S binding up 29% .
  • Technology and data strategy: multi-year cloud migration; modern SaaS in personal lines; Guidewire in commercial; targeted AI initiatives across claims, underwriting, operations .
  • Tariffs impact: potential one-time step-up in costs for autos/parts/building materials; Hartford positioned to react via pricing and faster cycle time; prior approval constraints considered .
  • Reinsurance program specifics: wildfire losses likely within first per-occurrence layer ($200M attach); aggregate treaty counts wildfire losses; Global Re exposure below retrocession attachment .
  • Personal lines growth: homeowners bundled (~75%); agency channel reengagement; marketing spend lifting new business while rates moderate retention pressure .

Estimates Context

  • Q1 2025 EPS beat consensus as underlying margins held and net investment income remained strong despite catastrophe headwinds; revenue modestly missed on catastrophe loss load and Personal Insurance combined ratio pressure. EPS consensus $2.1475 vs actual $2.20 (beat); revenue consensus $6.966B vs actual $6.810B (miss). Values retrieved from S&P Global.*
  • Forward estimate implications: likely modest upward EPS revisions on improving Personal Insurance underlying loss ratios and Business Insurance pricing execution; revenue expectations may reflect catastrophe normalization rather than structural growth change given underlying trend stability .

Key Takeaways for Investors

  • Underlying P&C profitability intact; watch catastrophe volatility but note robust reinsurance program and aggregate coverage supporting property expansion .
  • Personal Auto turnaround is on track; expect mid-90s underlying combined by mid-2025; sustained earned rate and moderating severity drive margin expansion .
  • Business Insurance maintains pricing above loss trends (ex-WC 9.9%); SME and Global Specialty provide growth platforms with disciplined underwriting .
  • Liability social inflation remains a headwind; Hartford embedded low double-digit severity and is pushing rate to protect margins—monitor pricing realization and reserve adequacy .
  • Capital deployment remains shareholder-friendly: $400M quarterly buybacks in Q2; dividend maintained at $0.52; ROE and book value compounding continue .
  • Investment portfolio yields stable to higher ex-LPs; NII expected to rise in 2025 on invested asset growth, supporting EPS quality .
  • Near-term trading: EPS resilience vs catastrophe noise is a positive; medium-term thesis centers on sustained underwriting discipline, personal lines margin restoration, and capital returns.

Appendix Notes

  • Non-GAAP “core earnings” excludes realized gains/losses and ADC amortization; reconciliations provided in the 8-K and investor supplement .
  • Consensus data sourced from S&P Global; actuals cross-checked to company filings.