HARTFORD INSURANCE GROUP INC
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
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FY2024 · Filed Feb 21, 2025
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Business Insurance
REPORTABLE SEGMENT AND CORPORATE OPERATING SUMMARIES
|BUSINESS INSURANCE - RESULTS OF OPERATIONS
| 2024 | 2023 | 2022 | Increase (Decrease) From 2023 to 2024 | Increase (Decrease) From 2022 to 2023 | |
|---|---|---|---|---|---|
| Written premiums | $13,351 | $12,279 | $11,158 | 9% | 10% |
| Change in unearned premium reserve | 630 | 638 | 587 | (1%) | 9% |
| Earned premiums | 12,721 | 11,641 | 10,571 | 9% | 10% |
| Fee income | 43 | 41 | 39 | 5% | 5% |
| Losses and loss adjustment expenses | |||||
| Current accident year before catastrophes | 7,186 | 6,575 | 5,959 | 9% | 10% |
| Current accident year catastrophes [1] | 486 | 436 | 441 | 11% | (1%) |
| Prior accident year development [1] | (231) | (225) | (231) | (3%) | 3% |
| Total losses and loss adjustment expenses | 7,441 | 6,786 | 6,169 | 10% | 10% |
| Amortization of DAC | 1,993 | 1,779 | 1,563 | 12% | 14% |
| Insurance operating costs | 1,973 | 1,837 | 1,788 | 7% | 3% |
| Amortization of other intangible assets | 29 | 29 | 29 | —% | —% |
| Dividends to policyholders | 39 | 39 | 29 | —% | 34% |
| Underwriting gain | 1,289 | 1,212 | 1,032 | 6% | 17% |
| Net investment income [2] | 1,714 | 1,532 | 1,415 | 12% | 8% |
| Net realized losses [2] | (73) | (156) | (385) | 53% | 59% |
| Other income (expense) [3] | (5) | (1) | (12) | NM | 92% |
| Income before income taxes | 2,925 | 2,587 | 2,050 | 13% | 26% |
| Income tax expense [4] | 576 | 502 | 426 | 15% | 18% |
| Net income | $2,349 | $2,085 | $1,624 | 13% | 28% |
[1]For additional information on current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property and Casualty Insurance Product Reserves Development, Net of Reinsurance and Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.
[3]Includes integration costs in connection with the 2019 acquisition of Navigators Group.
[4]For discussion of income taxes, see Note 16 - Income Taxes of Notes to Consolidated Financial Statements.
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| Table of Contents | Index to MD&A |
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Premium Measures
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Small Business: | |||
| Net new business premium | $1,101 | $915 | $768 |
| Policy count retention | 84% | 85% | 86% |
| Renewal written price increases | 6.4% | 4.6% | 3.8% |
| Renewal earned price increases | 6.1% | 4.3% | 3.5% |
| Policies in-force as of end of period (in thousands) | 1,570 | 1,492 | 1,421 |
| Middle Market [1]: | |||
| Net new business premium | $717 | $617 | $531 |
| Premium retention | 84% | 83% | 83% |
| Renewal written price increases | 6.9% | 7.2% | 5.6% |
| Renewal earned price increases | 7.5% | 6.5% | 5.7% |
| Global Specialty: | |||
| Global specialty gross new business premium [2] | $944 | $883 | $825 |
| Renewal written price increases [3] | 5.8% | 4.4% | 5.9% |
| Renewal earned price increases [3] | 5.9% | 5.4% | 9.3% |
[1]Except for net new business premium, metrics for middle market exclude loss sensitive and programs businesses.
[2]Excludes Global Re and is before ceded reinsurance.
[3]Excludes Global Re, offshore energy policies, credit and political risk insurance policies, political violence and terrorism ("PV&T") policies, and any business under which the managing agent of our Lloyd's Syndicate delegates underwriting authority to coverholders and other third parties.
Underwriting Ratios
| 2024 | 2023 | 2022 | Increase (Decrease) From 2023 to 2024 | Increase (Decrease) From 2022 to 2023 | |
|---|---|---|---|---|---|
| Loss and loss adjustment expense ratio | 58.5 | 58.3 | 58.4 | 0.2 | (0.1) |
| Expense ratio | 31.1 | 31.0 | 31.6 | 0.1 | (0.6) |
| Policyholder dividend ratio | 0.3 | 0.3 | 0.3 | — | — |
| Combined ratio | 89.9 | 89.6 | 90.2 | 0.3 | (0.6) |
| Adjustment to reconcile combined ratio to underlying combined ratio: | |||||
| Current accident year catastrophes and prior year development | (2.0) | (1.8) | (2.0) | (0.2) | 0.2 |
| Underlying combined ratio | 87.9 | 87.8 | 88.3 | 0.1 | (0.5) |
| Underlying loss and loss adjustment expense ratio | 56.5 | 56.5 | 56.4 | — | 0.1 |
| Current accident year catastrophes | 3.8 | 3.7 | 4.2 | 0.1 | (0.5) |
| Prior accident year development | (1.8) | (1.9) | (2.2) | 0.1 | 0.3 |
| Total loss and loss adjustment expense ratio | 58.5 | 58.3 | 58.4 | 0.2 | (0.1) |
| Loss and loss adjustment expense ratio | 58.5 | 58.3 | 58.4 | 0.2 | (0.1) |
| Adjustment to reconcile loss and loss adjustment expense ratio to underlying loss and loss adjustment expense ratio: | |||||
| Current accident year catastrophes and prior year development | (2.0) | (1.8) | (2.0) | (0.2) | 0.2 |
| Underlying loss and loss adjustment expense ratio | 56.5 | 56.5 | 56.4 | — | 0.1 |
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Net income increased primarily due to higher net investment income, lower net realized losses and a higher underwriting gain. For further discussion of investment results, see MD&A - Investment Results.
Underwriting Gain
Underwriting gain increased due to the effect of earned premium growth and slightly higher favorable prior accident year development, including $145 of a benefit for amortization of a deferred gain on the Navigators ADC in the current year period.
Expense ratio increased modestlyas higher staffing costs, including higher incentive compensation and benefits costs, and higher commissions were largely offset by the impact of higher earned premium.
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[1]Other of $46, $52 and $57 for 2022, 2023 and 2024, respectively, is included in the total.
Written Premiums
[1]Other written premiums of $46, $52 and $58 for the year ended December 31, 2022, 2023 and 2024, respectively, is included in the total.
Earned premiums increased in 2024 due to written premium increases over the prior twelve months, including the effect of higher insured exposures, principally in workers’ compensation and property lines.
Written premiums increased in 2024 driven by growth across small business, middle & large business and global specialty.
Small business written premium increased driven by double-digit new business growth, renewal written price increases in all lines and higher insured exposures. Written premium grew in nearly all lines of business, including package business, excess and surplus and automobile.
Middle & large business written premium increased driven by double-digit new business growth, renewal written price increases in all lines and higher insured exposures. Written premium grew in nearly all lines across industry verticals, specialty markets, general industries and large property.
Global specialty written premium increased driven by written price increases across almost all lines as well as an increase in gross new business, primarily in U.S. and international casualty insurance lines. Written premiums also grew in global reinsurance, primarily in property and liability.
Renewal written price increases were recognized in most lines other than directors and officers ("D&O").
In small business, renewal written price increases were higher in 2024, with accelerating double-digit price increases in package business and automobile and moderating double-digit price increases in excess and surplus lines. Workers' compensation pricing was slightly positive and consistent with 2023.
In middle market, renewal written price increases were generally flat to 2023, with high single-digit to low double-digit price increases in most lines other than workers’ compensation, which was slightly positive. Property pricing has moderated from elevated levels in 2023 while automobile pricing has accelerated.
In global specialty, U.S. price increases were higher than prior year levels and we achieved mid single-digit renewal written price increases overall, with high single to low double-digit increases in marine, casualty and auto lines. D&O pricing continues to be negative, but to a lesser extent than the prior year.
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Underlying Loss and LAE Ratio
Underlying Loss and LAE ratio was flat in 2024 as a higher general liability loss ratio was offset by lower net non-catastrophe property losses.
Catastrophes and Unfavorable (Favorable) Prior Accident Year Development
Current accident year catastrophe losses for 2024 included losses from tornado, wind and hail events across several regions of the United States, as well as hurricanes and tropical storms primarily in the Southeast and South regions, and, to a lesser extent, winter storms mainly in the Pacific, Northeast and South regions.
Current accident year catastrophe losses for 2023 included losses from tornado, wind and hail events across several regions of the United States, and losses from winter storms along the East and West coasts.
Prior accident year developmentwas net favorable for 2024 and included reserve decreases for workers' compensation, catastrophes, bond and professional liability, partially offset by reserve increases for general liability, automobile liability and assumed reinsurance. Also included is a benefit of $145 related to amortization of the Navigators ADC deferred gain. For additional information regarding the ADC reinsurance agreement, refer to Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to the Consolidated Financial Statements.
Prior accident year development was net favorable for 2023 and included reserve decreases for workers' compensation, catastrophes, bond and package business, partially offset by reserve increases for general liability, assumed reinsurance and automobile liability.
In 2025, the Company expects written premium growth to arise from new business, including from expanding addressable markets and distribution, and increases in written pricing in nearly all lines of business. While we anticipate slight, pricing-related headwinds in workers’ compensation margins in 2025, we expect to generate earned pricing in excess of loss trends in the remainder of Business Insurance.
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