How Will Hartford Financial Perform In Its First Quarter?
Hartford Financial (NYSE: HIG) is scheduled to announce first-quarter earnings on April 26, after the market closes. We expect Hartford to report another robust quarter driven by solid performance from the Commercial Lines and Personal Lines businesses. Additionally, the acquisition of Aetna’s group life and disability business will likely boost the Group Benefits business. Below we take a look at some of the key trends that we will be watching when the company reports earnings. You can also use our interactive dashboard to see our expectations for the quarter, and see how changes in our forecasts can impact the company’s earnings and valuation.
Growth In Property & Casualty Segment Will Likely Continue
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The company’s P&C business delivered stable results in 2017, despite the higher catastrophe losses. P&C Commercial Lines benefited from higher renewal written pricing, which provided a boost to the premiums generated per policy. In this sub-segment, we expect the top line to be driven by growth in the Small Commercial, Middle Market, and Specialty Commercial business. The company has also made progress on the technology front by expanding the functionalities of the ICON quoting platform. Also, underwriting improvements and optimal pricing strategies will likely drive growth in the Personal Lines sub-segment. Moreover, HIG has access to Aetna’s customer base to cross-sell its P&C products. However, worker’s compensation business will likely witness some pressure, due to weakness in pricing.
Acquisition Of Aetna’s Group Life And Disability Business To Boost Group Benefits
In 2017, Hartford executed two important deals that could shape the future of the company. It got rid of Talcott, a declining business, and acquired Aetna’s group life and disability business. The Aetna acquisition has made Hartford one of the biggest players in the Life and Disability business and has deepened Hartford’s penetration in mid-size and large companies. With complete integration, we expect the company to realize the full potential of the deal in 2018, which will drive growth in earned premiums. Furthermore, Aetna’s expertise in the business should help the renewal retention rate.
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