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HARTFORD INSURANCE GROUP, INC. (HIG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was an outstanding quarter: GAAP diluted EPS rose 41% YoY to $3.44 and core diluted EPS rose 36% YoY to $3.41, with total revenues up 8% to $6.99B .
  • EPS beat S&P Global consensus by ~20% while revenue was a slight miss versus consensus ($3.41 vs $2.83 EPS; $6.99B vs $7.03B revenue)*.
  • P&C profitability strengthened: Business Insurance combined ratio improved to 87.0 (−2.8 pts YoY) and Personal Insurance to 94.1 (−13.3 pts YoY); P&C expense ratio fell to 29.5% (−0.6 pts) .
  • Notable operational drivers: lower CAY CATs ($212M), net favorable PYD ($163M), strong earned premium growth (+10% in P&C), and higher net investment income ($664M) .
  • Capital returns remained robust with $549M returned in Q2 ($400M buybacks + $149M dividends); CFO signaled ~$400M share repurchases expected again in Q3 .

What Went Well and What Went Wrong

What Went Well

  • Business Insurance delivered strong profitability and growth: combined ratio 87.0 (−2.8 pts YoY), written premiums +8% to $3.8B, and core earnings +26% to $697M .
  • Personal Insurance turned notably profitable: combined ratio 94.1 (−13.3 pts YoY), underlying combined ratio 88.0 (−8.7 pts), with auto underlying combined ratio improving 9.7 pts and homeowners underlying combined ratio improving 5.1 pts .
  • Employee Benefits maintained exceptional margins: core earnings margin 9.2%, supported by improved group life loss ratio and higher net investment income .
    • CEO: “The Hartford’s second quarter results were outstanding, with core earnings reaching nearly $1 billion…reflects the effectiveness of our strategy and consistent execution.” .
    • CFO: “Business Insurance had an excellent quarter…Underlying combined ratio of 88.0…Personal Insurance achieved 8.7 points of underlying combined ratio improvement…Investment performance was strong.” .

What Went Wrong

  • Pressure in certain BI lines: underlying loss ratio in general liability was higher “as expected,” leading to a 0.9 pt increase in BI underlying loss & LAE ratio YoY .
  • Employee Benefits expense ratio rose 1.3 pts to 25.7% due to higher technology investments and staffing costs .
  • Homeowners PYD was less favorable (still favorable but modest), and large property/wholesale pricing moderated vs Q1; management highlighted declines from Q1 in large property and wholesale pricing despite adequate margins .

Financial Results

MetricQ2 2024Q1 2025Q2 2025Q2 2025 ConsensusVariance vs Consensus
Total Revenues ($USD Billions)$6.49 $6.81 $6.99 $7.03*−$0.04B*
GAAP Diluted EPS ($)$2.44 $2.15 $3.44 $2.83*+$0.61*
Core Diluted EPS ($)$2.50 $2.20 $3.41 $2.83*+$0.58*
  • Values with asterisk (*) are retrieved from S&P Global.

Segment Performance (Q2 2025 vs Q2 2024)

SegmentNet Income ($MM)Core Earnings ($MM)Written Premiums ($MM)Combined RatioUnderlying Combined Ratio
Business Insurance$696 vs $540 $697 vs $551 $3,816 vs $3,540 87.0 vs 89.8 88.0 vs 87.4
Personal Insurance$91 vs −$11 $94 vs −$4 $980 vs $913 94.1 vs 107.4 88.0 vs 96.7
Employee Benefits$150 vs $171 $163 vs $178 $1,602 (fully insured ongoing) vs $1,607 Loss 69.1% vs 68.9% Core margin 9.2% vs 10.0%
Hartford Funds$54 vs $44 $46 vs $43 AUM daily avg $138,195 Net flows $(1,515) N/A

KPIs

KPIQ2 2024Q1 2025Q2 2025
P&C CAY CAT losses ($MM)$280 $467 $212
Net Prior-Year Development (core, $MM)$78 $90 $163
P&C Expense Ratio (%)30.1 30.4 29.5
Personal Auto renewal written price (%)23.4 15.8 14.0
Homeowners renewal written price (%)14.9 12.3 12.7
Small Business net new business premium ($MM)$291 $298 $305
Capital returned ($MM)$537 (Q4 2024) $550 (Q1 2025) $549 (Q2 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Share repurchasesQ3 2025n/a~$400M expected in Q3 Maintained pace
Navigators ADC amortization (remaining)Q3 2025n/a~$8M remaining to be amortized in Q3 Will complete amortization
Aggregate CAT cover attachmentFY 2025n/a$200M cover attaches at $750M; subject losses ~$690M → ~$60M remaining as of 6/30 Near attachment
Quarterly dividend (common)Q2 2025n/a$0.52 per share declared May 21, payable July 2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology in underwritingEmphasis on underwriting execution; steady investment 75% of Small Business quotes bound within minutes via AI; extending automation to Middle Market Accelerating deployment, expanding scope
Pricing momentum (ex-WC)9.7% in Q4 2024 9.9% in Q1 2025 ; 8.1% in Q2 2025 Moderating but above loss trend
Personal Lines profitability and growthUnderlying improvement in Q4 2024 Auto and Home underlying improved; rate moderation ahead; agency “Prevail” rollout Profitability restored; pivoting to growth
Property market dynamicsStrong in Q4/Q1; watch large/wholesale Large property and wholesale pricing declined vs Q1, still adequate margins; small package +15% pricing Mixed: small/middle strong, large/wholesale moderating
Tariffs/macroLimited commentaryTariffs impact modest for 2025; improved outlook post Japan/EU agreements Risk easing short term
Social inflation/litigation financeOngoing industry challengeCEO highlights continued pressure from litigation finance; reform efforts underway Persistent headwind

Management Commentary

  • CEO: “We are expanding our market presence and growing with purpose…confident in our ability to deliver profitable growth and capitalize on the opportunities ahead.” .
  • CFO: “Personal Insurance achieved 8.7 points of underlying combined ratio improvement…Employee Benefits delivered an exceptional core earnings margin of 9.2 percent. Investment performance was strong…” .
  • CFO on capital returns: “We repurchased 3.2 million shares for $400 million and expect to remain at that level of repurchases in the third quarter.” .
  • CFO on CAT aggregate: subject losses ~$690M by June 30, leaving ~$60M before attachment to $200M aggregate cover (ex-Global Re) .

Q&A Highlights

  • Personal Lines growth timing: Management aims to grow now post margin restoration; expects auto policy count to pivot to growth in 2026 while home is growing responsibly (low-70s homeowners underlying combined ratio) .
  • Property pricing/market: Rates trending down in large/wholesale; core small/middle property pricing remains strong and above loss trends; Spectrum property +14.7% .
  • E&S vs admitted dynamics: Continued strong flow into E&S binding and wholesale; limited flow-back to admitted; MGAs creating pockets of disruption but not a major core impact .
  • Retention: Small Business policy count retention mid-80s; middle market somewhat lower as expected—current levels in plan .
  • Employee Benefits: Strong margins; management plans to compete aggressively on new business without sacrificing prudent pricing; PFML rates up ~20 pts in H1 with strong persistency .

Estimates Context

  • EPS and revenue vs S&P Global consensus: Q2 2025 EPS $3.41 vs $2.83 (beat), revenue $6.99B vs $7.03B (slight miss)*.
  • Implication: Model revisions likely upward for EPS; revenue near in-line.
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Broad-based beat driven by underwriting, lower CATs, and stronger investment income; core EPS momentum supports continued buybacks and capital returns .
  • Personal Lines profitability has turned; with agency “Prevail” rollout and moderating rate actions, growth should accelerate into 2026 without sacrificing margins .
  • Business Insurance remains a margin engine; watch general liability loss trends and property pricing moderation in large/wholesale—small/middle segments remain robust .
  • Near-term CAT aggregate attachment risk (~$60M to attach) could cushion subsequent events in H2 (ex-Global Re); monitor catastrophe seasonality .
  • Investment income tailwinds from higher reinvestment rates should persist; LP returns expected to improve in second half per CFO commentary .
  • Continued $400M/qtr repurchases signal confidence; dividend maintained at $0.52/share (paid in Q3) enhances total shareholder return .
  • Policy narratives (tariffs easing, social inflation persistence) suggest manageable macro headwinds with focus on pricing discipline and AI-driven productivity .