(Reuters) - Insurer Hartford Financial Services Group (HIG.N) reported a quarterly profit that beat analysts’ expectations, helped by higher underwriting margins, but premium income fell slightly in its core property and casualty business.
Hartford shares fell 1 percent in after-hours trading. They closed at $27.21 on the New York Stock Exchange on Monday.
The Connecticut-based company’s core earnings in the property and casualty business, which now accounts for nearly 75 percent of its revenue, rose 12 percent to $318 million, although income from premiums earned fell by 1.7 percent to $2.43 billion.
Hartford has been trying to reshape into a property and casualty insurer after selling off many of its other businesses last year including individual life insurance, broker-dealer and retirement plans.
But it faces strong competition as there are over 2,000 property and casualty insurance companies in the United States vying for the same business.
Hartford is the 11th largest property and casualty insurer in the country with a market share of 2.05 percent, according to the National Association of Insurance Commissioners (NAIC), a multi-state insurance regulatory body.
Hartford posted a loss in the first quarter as it took an after-tax charge of $541 million related to an expansion of its annuities hedging program in Japan. The company warned of the charge earlier this month.
“During the quarter, we executed a major portion of our capital management plan and effectively eliminated the currency and equity market risk of the Japan variable annuity block with an expanded hedging program,” Chief Financial Officer Christopher Swift said in a statement, adding that the company’s capital flexibility was now significantly enhanced.
The company’s net loss was $241 million, or 58 cents per share, compared with net income of $96 million, or 18 cents per share, a year earlier.
On an operating basis, earnings were 92 cents per share, topping analysts’ estimates by 10 cents.
Price hikes in its property and casualty business averaged 9 percent, Chief Executive Liam McGee said.
Reporting by Avik Das and Anil D'Silva in Bangalore; Editing by Sriraj Kalluvila, Maju Samuel