The Hartford's First Quarter Operating Income Up 12%

Life and Property-Casualty Operations Achieve Solid Growth



Apr 26, 2001, 01:00 ET from The Hartford

    HARTFORD, Conn., April 26 /PRNewswire/ -- The Hartford Financial Services
 Group, Inc. (NYSE:   HIG) today reported a 12-percent increase in operating
 income to $253 million for the first quarter of 2001 compared to the same
 period in 2000.  Continued solid performance in the company's life operations
 and ongoing improvements in the property-casualty businesses contributed to
 the increase.  Operating income excludes net realized capital gains or losses
 (after-tax) and the cumulative effect of accounting changes.
     "The Hartford delivered another quarter of solid earnings growth despite
 the challenges presented by the volatile equity markets, " said Ramani Ayer,
 The Hartford's chairman and CEO.  "Our diverse portfolio of businesses,
 financial discipline and competitive advantages in our key markets allow us to
 produce consistent earnings growth.  Our property-casualty trends are positive
 and I believe they will continue.  I remain comfortable with our long-term
 earnings growth and ROE goals."
     On a per diluted share basis, operating income increased 3 percent to
 $1.07, compared with $1.04 for the same quarter a year ago.  The increase
 reflects operating income growth in life and property-casualty operations and
 the additional income related to the repurchase of the outstanding publicly
 held shares of Hartford Life, partially offset by an increase in diluted
 shares outstanding.  For the quarter ended March 31, 2001, weighted average
 diluted shares outstanding were 235.5 million, compared to 217.3 million in
 the same period a year ago, reflecting the February issuance of shares in
 connection with the acquisition of Fortis Financial Group and the June 2000
 repurchase of Hartford Life.
     For the quarter ended March 31, 2001, The Hartford's net income of $240
 million was comparable to the same period last year, as increased operating
 results were offset by a $23 million (after-tax) charge due to the
 implementation of SFAS 133, a new accounting standard which addresses
 derivative instruments and hedging activities.  Included in net income for
 both periods were after-tax net realized capital gains of $10 million and $12
 million, respectively.  Net income of $1.02 per diluted share was down 7
 percent from $1.10 for the same period last year, reflecting the increase in
 diluted shares outstanding.
     Revenues were $3.7 billion for the first quarter of 2001, up 6 percent
 from $3.5 billion for the same period a year ago.  The increase was due
 primarily to strong new business development in group benefits as well as
 earned premium growth across all North American property-casualty segments.
 
     Life Operations
     The Hartford's life operations reported operating income of $161 million
 for the first quarter, a 7 percent increase from $150 million for the same
 period last year, reflecting double-digit growth in individual life, group
 benefits and corporate owned life insurance.  Operating income for investment
 products, despite the performance of the equity markets, increased 9 percent
 to $111 million, as a result of favorable expense management and net
 investment income.  Excluding a state tax benefit of $8 million in the first
 quarter of 2000, total life operating income in the first quarter of 2001
 increased 13 percent over the prior year.
     Total sales and other deposits for investment products declined slightly
 in the quarter to $4.8 billion, as declines in the equity markets, combined
 with the low interest rate environment, negatively affected sales of variable
 and fixed annuity products.  Sales of variable annuities were down 5 percent
 over the prior year.  However, on a sequential basis, variable annuity sales
 increased 12 percent to $2.3 billion.  Retail mutual fund sales were up
 slightly over the first quarter of 2000 and increased 12 percent from the
 fourth quarter of last year.
     The group benefits segment reported a 21 percent increase in income to $23
 million in the first quarter, as total fully insured ongoing premiums rose 12
 percent to $475 million.  This growth primarily reflects increased sales
 within the small-case and large-group employer markets.  Individual life
 income increased 11 percent to $20 million as variable life sales increased 6
 percent and assets remained level with the prior year.
     Last December The Hartford began selling variable annuities in Japan
 through Nikko Securities, one of Japan's largest brokers.  In its first full
 quarter, the company sold nearly $100 million of  variable annuities in Japan.
 "This is a tremendous start, and although it will take time for the market to
 mature, this is an excellent opportunity for us," said Ayer.
 
     Property-Casualty Operations
     Operating income for North American property-casualty operations increased
 7 percent to $107 million in the first quarter, compared with $100 million for
 the first quarter of 2000. The increase was driven by significant price
 increases, strong new business growth and improved renewal retention.
 Partially offsetting this increase was a decline in the reinsurance segment,
 which, despite double-digit rate increases in the January reinsurance renewal
 season, was negatively affected by unfavorable prior-year loss development.
     North American net written premiums for the quarter were $2.0 billion, a
 16 percent increase over the same period last year. Premium growth was
 particularly strong within the company's business insurance segment, where key
 accounts (middle market) and select customer (small commercial) increased 21
 percent and 20 percent, respectively. Premiums in the company's reinsurance
 segment grew 36 percent. The company also benefited from significant price
 increases, which were implemented across nearly all business segments.
 Property-casualty operations continued to generate solid new business growth
 within several divisions, particularly key accounts, which realized a
 significant increase over the prior year levels.  Written premiums for
 personal auto and homeowners insurance sold to members of AARP and other
 affinity groups increased 9 percent, with renewal retentions remaining within
 historically high ranges.
     Property-casualty results also benefited from favorable auto loss costs
 and a reduced level of catastrophe activity.  Catastrophe losses for the
 quarter were $19 million (after-tax) versus $33 million (after-tax) a year
 ago.  The combined ratio, including policyholder dividends, for the first
 quarter improved 1.3 points to 101.8, compared to 103.1 in the same period
 last year.
     As of March 31, 2001, The Hartford's total assets were $165.5 billion, a 4
 percent decrease from a year ago, primarily the result of lower separate
 account assets, reflecting the decline in the equity markets.  The company's
 total assets under management, which include the company's mutual fund assets,
 decreased 2 percent to $176.8 billion from a year ago.
     The Hartford's book value, excluding unrealized gains and losses, rose 22
 percent to $32.85 per share as of March 31, 2001, compared with $26.91 per
 share as of March 31, 2000.
     "Looking forward, we are committed to generating consistently high
 performance in areas where we see the greatest potential for returns,
 primarily business insurance and personal lines, as well as in investment
 products, individual life and group benefits," said Ayer.  "At the same time
 we remain disciplined and prudent in our underwriting and pricing of business
 in those areas which remain highly competitive."
 
     Among the highlights this year, the company:
     -- Completed the purchase of the individual life insurance, annuity and
        mutual fund businesses of Fortis, Inc. (operating as Fortis Financial
        Group) for $1.12 billion in cash;
     -- Completed the sale of Hartford Seguros in Spain to Liberty Mutual,
        reflecting The Hartford's strategic shift in its international
        operations to emphasize growth opportunities in the asset accumulation
        business in Asia and Latin America;
     -- Earned an unprecedented fifth consecutive Dalbar award for excellence
        in annuity customer service; and
     -- Moved from a #5 ranking in variable life sales to #4 in the fourth
        quarter of 2000, according to the Tillinghast VALUE Survey.
 
     The Hartford (NYSE:   HIG) is one of the nation's largest insurance and
 financial services companies, with 2000 revenues of $14.7 billion.  As of
 March 31, 2001, The Hartford had assets of $165.5 billion and shareholders'
 equity of $8.4 billion.  The company is a leading provider of investment
 products, life insurance and group benefits; automobile and homeowners
 products; commercial property and casualty insurance; and reinsurance.
     More detailed financial information can be found in The Hartford's
 Investor Financial Supplement available on the company's Web site.
     The Hartford's Internet address is www.thehartford.com.
     Certain statements made in this release should be considered forward
 looking information as defined in the Private Securities Litigation Reform Act
 of 1995.  The Hartford cautions investors that any such forward-looking
 statements are not guarantees of future performance, and actual results may
 differ materially.  Investors are directed to consider the risks and
 uncertainties in our business that may affect future performance and that are
 discussed in readily available documents, including the company's annual
 report and other documents filed by The Hartford with the Securities and
 Exchange Commission.  These uncertainties include the possibility of less
 success in integrating the Fortis operations than anticipated, general
 economic and business conditions that are less favorable than anticipated, as
 well as changes in interest rates or the stock markets, stronger than
 anticipated competitive activity, unfavorable legislative developments and
 more frequent or severe natural catastrophes than anticipated.
 
                    THE HARTFORD FINANCIAL SERVICES GROUP, INC.
                           CONSOLIDATED FINANCIAL RESULTS
 
                                                      FIRST QUARTER ENDED
                                                           MARCH 31,
                                                  2001          2000   Change
 
 HIGHLIGHTS     Net income                        $240          $238        1%
                Operating income                  $253          $226       12%
                Total revenues                  $3,722        $3,499        6%
                Total assets                  $165,506      $172,401       (4%)
                Total assets under
                 management [1]               $176,777      $180,370       (2%)
 
 
 PER SHARE       Basic earnings per share
 AND SHARES
 DATA             Net income                     $1.04         $1.10       (5%)
                  Operating income               $1.09         $1.05        4%
                Diluted earnings per share
                  Net income                     $1.02         $1.10       (7%)
                  Operating income               $1.07         $1.04        3%
                Weighted average
                 common shares
                 outstanding                     231.5         215.8      15.7
                Weighted average common
                 shares outstanding
                     and dilutive
                      potential common
                      shares                     235.5         217.3      18.2
                Common shares outstanding        236.9         214.8      22.1
                Book value (including
                 unrealized)                    $35.65        $26.42       35%
                Book value (excluding
                 unrealized)                    $32.85        $26.91       22%
 
     NOTE [1]:  Includes mutual fund assets.
 
                    THE HARTFORD FINANCIAL SERVICES GROUP, INC.
                               EARNINGS AND REVENUES
 
                                                      FIRST QUARTER ENDED
                                                           MARCH 31,
                                                  2001         2000    Change
 
 OPERATING     Life                               $161         $150         7%
 INCOME        Property & Casualty [1]             108          104         4%
               Corporate                           (16)         (28)       43%
                 Operating income                  253          226        12%
 
               Cumulative effect of
                accounting change, net
                of tax [2]                         (23)           -         -
               Net realized capital gains,
                after-tax                           10           12       (17%)
                 Net income                       $240         $238         1%
 
 
 NET INCOME    Life                               $138         $150        (8%)
               Property & Casualty [1]             118          116         2%
               Corporate                           (16)         (28)       43%
                 Net income                       $240         $238         1%
 
 
 REVENUES      Life                             $1,590       $1,446        10%
               Property & Casualty               2,128        2,053         4%
               Corporate                             4            -         -
                 Total revenues                 $3,722       $3,499         6%
 
     NOTE [1]: Includes incurred catastrophes after-tax of $19 and $33 for the
 first quarter of 2001 and 2000, respectively.
     NOTE [2]:  Represents the cumulative impact of the Company's adoption of
 Statement of Financial Accounting Standard No. 133, as amended, "Accounting
 for Derivative Instruments and Hedging Activities".
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE The Hartford
    HARTFORD, Conn., April 26 /PRNewswire/ -- The Hartford Financial Services
 Group, Inc. (NYSE:   HIG) today reported a 12-percent increase in operating
 income to $253 million for the first quarter of 2001 compared to the same
 period in 2000.  Continued solid performance in the company's life operations
 and ongoing improvements in the property-casualty businesses contributed to
 the increase.  Operating income excludes net realized capital gains or losses
 (after-tax) and the cumulative effect of accounting changes.
     "The Hartford delivered another quarter of solid earnings growth despite
 the challenges presented by the volatile equity markets, " said Ramani Ayer,
 The Hartford's chairman and CEO.  "Our diverse portfolio of businesses,
 financial discipline and competitive advantages in our key markets allow us to
 produce consistent earnings growth.  Our property-casualty trends are positive
 and I believe they will continue.  I remain comfortable with our long-term
 earnings growth and ROE goals."
     On a per diluted share basis, operating income increased 3 percent to
 $1.07, compared with $1.04 for the same quarter a year ago.  The increase
 reflects operating income growth in life and property-casualty operations and
 the additional income related to the repurchase of the outstanding publicly
 held shares of Hartford Life, partially offset by an increase in diluted
 shares outstanding.  For the quarter ended March 31, 2001, weighted average
 diluted shares outstanding were 235.5 million, compared to 217.3 million in
 the same period a year ago, reflecting the February issuance of shares in
 connection with the acquisition of Fortis Financial Group and the June 2000
 repurchase of Hartford Life.
     For the quarter ended March 31, 2001, The Hartford's net income of $240
 million was comparable to the same period last year, as increased operating
 results were offset by a $23 million (after-tax) charge due to the
 implementation of SFAS 133, a new accounting standard which addresses
 derivative instruments and hedging activities.  Included in net income for
 both periods were after-tax net realized capital gains of $10 million and $12
 million, respectively.  Net income of $1.02 per diluted share was down 7
 percent from $1.10 for the same period last year, reflecting the increase in
 diluted shares outstanding.
     Revenues were $3.7 billion for the first quarter of 2001, up 6 percent
 from $3.5 billion for the same period a year ago.  The increase was due
 primarily to strong new business development in group benefits as well as
 earned premium growth across all North American property-casualty segments.
 
     Life Operations
     The Hartford's life operations reported operating income of $161 million
 for the first quarter, a 7 percent increase from $150 million for the same
 period last year, reflecting double-digit growth in individual life, group
 benefits and corporate owned life insurance.  Operating income for investment
 products, despite the performance of the equity markets, increased 9 percent
 to $111 million, as a result of favorable expense management and net
 investment income.  Excluding a state tax benefit of $8 million in the first
 quarter of 2000, total life operating income in the first quarter of 2001
 increased 13 percent over the prior year.
     Total sales and other deposits for investment products declined slightly
 in the quarter to $4.8 billion, as declines in the equity markets, combined
 with the low interest rate environment, negatively affected sales of variable
 and fixed annuity products.  Sales of variable annuities were down 5 percent
 over the prior year.  However, on a sequential basis, variable annuity sales
 increased 12 percent to $2.3 billion.  Retail mutual fund sales were up
 slightly over the first quarter of 2000 and increased 12 percent from the
 fourth quarter of last year.
     The group benefits segment reported a 21 percent increase in income to $23
 million in the first quarter, as total fully insured ongoing premiums rose 12
 percent to $475 million.  This growth primarily reflects increased sales
 within the small-case and large-group employer markets.  Individual life
 income increased 11 percent to $20 million as variable life sales increased 6
 percent and assets remained level with the prior year.
     Last December The Hartford began selling variable annuities in Japan
 through Nikko Securities, one of Japan's largest brokers.  In its first full
 quarter, the company sold nearly $100 million of  variable annuities in Japan.
 "This is a tremendous start, and although it will take time for the market to
 mature, this is an excellent opportunity for us," said Ayer.
 
     Property-Casualty Operations
     Operating income for North American property-casualty operations increased
 7 percent to $107 million in the first quarter, compared with $100 million for
 the first quarter of 2000. The increase was driven by significant price
 increases, strong new business growth and improved renewal retention.
 Partially offsetting this increase was a decline in the reinsurance segment,
 which, despite double-digit rate increases in the January reinsurance renewal
 season, was negatively affected by unfavorable prior-year loss development.
     North American net written premiums for the quarter were $2.0 billion, a
 16 percent increase over the same period last year. Premium growth was
 particularly strong within the company's business insurance segment, where key
 accounts (middle market) and select customer (small commercial) increased 21
 percent and 20 percent, respectively. Premiums in the company's reinsurance
 segment grew 36 percent. The company also benefited from significant price
 increases, which were implemented across nearly all business segments.
 Property-casualty operations continued to generate solid new business growth
 within several divisions, particularly key accounts, which realized a
 significant increase over the prior year levels.  Written premiums for
 personal auto and homeowners insurance sold to members of AARP and other
 affinity groups increased 9 percent, with renewal retentions remaining within
 historically high ranges.
     Property-casualty results also benefited from favorable auto loss costs
 and a reduced level of catastrophe activity.  Catastrophe losses for the
 quarter were $19 million (after-tax) versus $33 million (after-tax) a year
 ago.  The combined ratio, including policyholder dividends, for the first
 quarter improved 1.3 points to 101.8, compared to 103.1 in the same period
 last year.
     As of March 31, 2001, The Hartford's total assets were $165.5 billion, a 4
 percent decrease from a year ago, primarily the result of lower separate
 account assets, reflecting the decline in the equity markets.  The company's
 total assets under management, which include the company's mutual fund assets,
 decreased 2 percent to $176.8 billion from a year ago.
     The Hartford's book value, excluding unrealized gains and losses, rose 22
 percent to $32.85 per share as of March 31, 2001, compared with $26.91 per
 share as of March 31, 2000.
     "Looking forward, we are committed to generating consistently high
 performance in areas where we see the greatest potential for returns,
 primarily business insurance and personal lines, as well as in investment
 products, individual life and group benefits," said Ayer.  "At the same time
 we remain disciplined and prudent in our underwriting and pricing of business
 in those areas which remain highly competitive."
 
     Among the highlights this year, the company:
     -- Completed the purchase of the individual life insurance, annuity and
        mutual fund businesses of Fortis, Inc. (operating as Fortis Financial
        Group) for $1.12 billion in cash;
     -- Completed the sale of Hartford Seguros in Spain to Liberty Mutual,
        reflecting The Hartford's strategic shift in its international
        operations to emphasize growth opportunities in the asset accumulation
        business in Asia and Latin America;
     -- Earned an unprecedented fifth consecutive Dalbar award for excellence
        in annuity customer service; and
     -- Moved from a #5 ranking in variable life sales to #4 in the fourth
        quarter of 2000, according to the Tillinghast VALUE Survey.
 
     The Hartford (NYSE:   HIG) is one of the nation's largest insurance and
 financial services companies, with 2000 revenues of $14.7 billion.  As of
 March 31, 2001, The Hartford had assets of $165.5 billion and shareholders'
 equity of $8.4 billion.  The company is a leading provider of investment
 products, life insurance and group benefits; automobile and homeowners
 products; commercial property and casualty insurance; and reinsurance.
     More detailed financial information can be found in The Hartford's
 Investor Financial Supplement available on the company's Web site.
     The Hartford's Internet address is www.thehartford.com.
     Certain statements made in this release should be considered forward
 looking information as defined in the Private Securities Litigation Reform Act
 of 1995.  The Hartford cautions investors that any such forward-looking
 statements are not guarantees of future performance, and actual results may
 differ materially.  Investors are directed to consider the risks and
 uncertainties in our business that may affect future performance and that are
 discussed in readily available documents, including the company's annual
 report and other documents filed by The Hartford with the Securities and
 Exchange Commission.  These uncertainties include the possibility of less
 success in integrating the Fortis operations than anticipated, general
 economic and business conditions that are less favorable than anticipated, as
 well as changes in interest rates or the stock markets, stronger than
 anticipated competitive activity, unfavorable legislative developments and
 more frequent or severe natural catastrophes than anticipated.
 
                    THE HARTFORD FINANCIAL SERVICES GROUP, INC.
                           CONSOLIDATED FINANCIAL RESULTS
 
                                                      FIRST QUARTER ENDED
                                                           MARCH 31,
                                                  2001          2000   Change
 
 HIGHLIGHTS     Net income                        $240          $238        1%
                Operating income                  $253          $226       12%
                Total revenues                  $3,722        $3,499        6%
                Total assets                  $165,506      $172,401       (4%)
                Total assets under
                 management [1]               $176,777      $180,370       (2%)
 
 
 PER SHARE       Basic earnings per share
 AND SHARES
 DATA             Net income                     $1.04         $1.10       (5%)
                  Operating income               $1.09         $1.05        4%
                Diluted earnings per share
                  Net income                     $1.02         $1.10       (7%)
                  Operating income               $1.07         $1.04        3%
                Weighted average
                 common shares
                 outstanding                     231.5         215.8      15.7
                Weighted average common
                 shares outstanding
                     and dilutive
                      potential common
                      shares                     235.5         217.3      18.2
                Common shares outstanding        236.9         214.8      22.1
                Book value (including
                 unrealized)                    $35.65        $26.42       35%
                Book value (excluding
                 unrealized)                    $32.85        $26.91       22%
 
     NOTE [1]:  Includes mutual fund assets.
 
                    THE HARTFORD FINANCIAL SERVICES GROUP, INC.
                               EARNINGS AND REVENUES
 
                                                      FIRST QUARTER ENDED
                                                           MARCH 31,
                                                  2001         2000    Change
 
 OPERATING     Life                               $161         $150         7%
 INCOME        Property & Casualty [1]             108          104         4%
               Corporate                           (16)         (28)       43%
                 Operating income                  253          226        12%
 
               Cumulative effect of
                accounting change, net
                of tax [2]                         (23)           -         -
               Net realized capital gains,
                after-tax                           10           12       (17%)
                 Net income                       $240         $238         1%
 
 
 NET INCOME    Life                               $138         $150        (8%)
               Property & Casualty [1]             118          116         2%
               Corporate                           (16)         (28)       43%
                 Net income                       $240         $238         1%
 
 
 REVENUES      Life                             $1,590       $1,446        10%
               Property & Casualty               2,128        2,053         4%
               Corporate                             4            -         -
                 Total revenues                 $3,722       $3,499         6%
 
     NOTE [1]: Includes incurred catastrophes after-tax of $19 and $33 for the
 first quarter of 2001 and 2000, respectively.
     NOTE [2]:  Represents the cumulative impact of the Company's adoption of
 Statement of Financial Accounting Standard No. 133, as amended, "Accounting
 for Derivative Instruments and Hedging Activities".
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X95050415
 
 SOURCE  The Hartford