The Hartford (NYSE: HIG) Q3 net income rises 23% to $1.32 bn as core earnings fall

The Hartford (NYSE: HIG) reported a 23% increase in third-quarter 2026 net income available to common stockholders to $1.32 bn, supported by premium growth, higher investment income and a substantial reserve-related gain, even as catastrophe losses and underlying claims costs weighed on underwriting profitability.

Net income available to common stockholders reached $1.317 bn, or $4.82 per diluted share, compared with $1.074 bn, or $3.77 per share, in the third quarter of 2025. Diluted earnings per share increased 28%.

• The Hartford’s third-quarter 2026 net income available to common stockholders increased 23% to $1.32 bn, or $4.82 per diluted share, while core earnings declined 6% to $956 mn.
• Business Insurance written premiums grew 6% to $3.77 bn, although its combined ratio deteriorated to 91.3 as catastrophe losses increased. Groupwide P&C catastrophe losses rose to $198 mn.
• The insurer announced a 12% increase in its quarterly common dividend and confirmed that Mo Tooker will succeed Christopher Swift as CEO on March 1, 2027.

Core earnings, which exclude certain items included in reported net income, declined 6% to $956 mn from $1.022 bn a year earlier. Core earnings per diluted share fell 3% to $3.50 from $3.59.

The difference between reported and core earnings primarily reflected a $497 mn gain associated with commuting an asbestos and environmental adverse development cover (A&E ADC).

The insurer also reported higher catastrophe losses, although premium growth across its Property and Casualty (P&C) businesses and increased investment income provided support.

The Hartford delivered another quarter of strong results in an increasingly competitive market.

Chairman and CEO Christopher Swift

Swift said the company continued investing in technology, data, artificial intelligence and customer-focused risk insights to develop its capabilities across Property and Casualty and Employee Benefits.

The Hartford also announced a 12% increase in its quarterly common stock dividend.

The Hartford’s Q3 earnings reflect premium growth and reserve gains

Income from continuing operations, net of tax, increased 24% to $1.262 bn from $1.021 bn in the third quarter of 2025. On a diluted per-share basis, income from continuing operations rose 29% to $4.60 from $3.56.

The insurer attributed its earnings performance partly to 4% growth in P&C earned premiums and a 4% increase in fully insured ongoing premiums within Employee Benefits.

Net favorable prior accident year development (PYD) totaled $594 mn before tax, including the $497 mn net gain related to the A&E ADC commutation.

Excluding that transaction, net core favorable PYD was $97 mn, broadly consistent with the $95 mn reported a year earlier.

Catastrophe losses increased substantially. Current accident year catastrophe (CAY CAT) losses across P&C reached $198 mn before tax, compared with $70 mn in the third quarter of 2025, primarily reflecting tornado, wind and hail events.

The overall P&C expense ratio improved to 29.2 from 30.0, driven largely by a 1.1-percentage-point reduction in the Business Insurance expense ratio.

Investment income provided an additional contribution. Net investment income before tax increased to $850 mn from $755 mn, supported by higher returns from limited partnerships and other alternative investments and a larger invested asset base.

Net realized investment losses widened to $116 mn before tax from $17 mn a year earlier. Income from discontinued operations remained relatively stable at $61 mn before tax, compared with $59 mn in the prior-year quarter.

Core earnings reflected the underlying operating developments without the $497 mn non-core reserve-related gain, realized investment gains and losses, and income from discontinued operations.

Business Insurance premiums rise 6% to $3.77 bn

The Hartford’s Business Insurance segment generated written premiums of $3.772 bn in the third quarter, increasing 6% from $3.573 bn a year earlier.

Premium growth was recorded across all major businesses. Small Business and Global Specialty each delivered 7% written premium growth, while Middle & Large Business increased 3%, including 5% growth in Middle Market.

Earned premiums increased 7% year over year. Business Insurance net income declined 10% to $637 mn from $710 mn, reflecting higher catastrophe losses, changes in underlying claims performance and increased realized investment losses.

Core earnings edged up 1% to $731 mn from $723 mn. Net investment income within the segment increased to $589 mn before tax from $519 mn, providing support to earnings.

Net realized investment losses, however, widened to $117 mn before tax from $26 mn in the third quarter of 2025.

Business Insurance reported net favorable prior accident year reserve development of $61 mn before tax, compared with $60 mn a year earlier. The favorable development primarily reflected reserve reductions in workers’ compensation and commercial property.

Current accident year catastrophe losses increased to $106 mn before tax from $39 mn, with tornado, wind and hail events accounting for much of the increase.

The segment’s underwriting gain declined 18% to $327 mn from $397 mn, while underlying underwriting gain decreased 1% to $372 mn from $376 mn.

Business Insurance combined ratio deteriorates to 91.3

The Business Insurance combined ratio increased to 91.3 from 88.8 in the third quarter of 2025, a deterioration of 2.5 percentage points.

The increase included 1.7 percentage points of higher current accident year catastrophe losses and 0.1 percentage points of less favorable prior accident year development.

The underlying combined ratio, which excludes catastrophe losses and prior accident year reserve development, increased to 90.1 from 89.4.

The underlying loss and loss adjustment expense ratio rose 2.0 percentage points to 59.9 from 57.9.

The reported loss and loss adjustment expense ratio increased to 61.1 from 57.3, reflecting higher catastrophe costs and underlying claims pressure.

Current accident year catastrophes contributed 2.8 points to the loss ratio, compared with 1.1 points a year earlier. Favorable prior accident year development reduced the ratio by 1.6 points, compared with a 1.7-point reduction in 2025.

The segment’s expense ratio improved to 30.0 from 31.1, benefiting from premium growth and lower staffing expenses, partially offset by increased technology spending.

Policyholder dividends accounted for 0.3 points of the combined ratio, unchanged from the prior-year period.

Chief Financial Officer Beth Costello described Business Insurance performance as solid, citing 6% written premium growth and an underlying combined ratio of 90.1.

Small Business improves as Middle & Large Business faces claims pressure

Underwriting results differed significantly across The Hartford’s commercial insurance businesses. Small Business reported a combined ratio of 84.5, improving from 87.9 in the third quarter of 2025. Its underlying combined ratio improved to 85.2 from 89.8, primarily because of lower property losses excluding catastrophes and a reduced expense ratio.

The reported result included 1.2 percentage points of higher catastrophe losses, while prior accident year development remained unchanged.

Middle & Large Business experienced a deterioration in underwriting performance, with its combined ratio rising to 101.7 from 90.8.

Catastrophe losses contributed an additional 2.5 percentage points, while prior accident year development was 0.3 percentage points less favorable.

The underlying combined ratio increased to 99.5 from 91.4, reflecting a higher workers’ compensation loss ratio and increased non-catastrophe property losses. A lower expense ratio partly offset those pressures.

Global Specialty reported a combined ratio of 89.1, compared with 86.9 a year earlier. The increase included 1.7 percentage points of higher catastrophe losses and 0.3 percentage points of less favorable prior accident year development.

The 2025 comparison also benefited from 0.8 percentage points of favorable reserve development associated with amortization of the deferred gain under the Navigators adverse development cover.

Global Specialty’s underlying combined ratio was 86.1, broadly consistent with the third quarter of 2025.

These results show a divergence within Business Insurance, with improved Small Business underwriting profitability contrasting with higher underlying claims costs in Middle & Large Business.

Personal Insurance underlying combined ratio improves 2.9 points

The Hartford’s Personal Insurance operations recorded an improvement in underlying underwriting profitability, although catastrophe losses increased.

The segment’s underlying combined ratio improved by 2.9 percentage points from the third quarter of 2025, according to management.

Its underlying loss and loss adjustment expense ratio declined 3.1 percentage points to 61.1. The reported loss and loss adjustment expense ratio nevertheless increased to 67.2 from 62.9. That deterioration included 6.8 percentage points of higher current accident year catastrophe losses and 0.6 percentage points of less favorable prior accident year reserve development.

The contrast between reported and underlying results reflects the impact of catastrophe losses on the quarter’s underwriting performance.

Costello said Personal Insurance growth was affected by increased competition, despite improvements in the underlying combined ratio.

Employee Benefits premiums grow 4% as loss ratio increases

The Hartford’s Employee Benefits segment reported 4% growth in fully insured ongoing premiums during the third quarter.

The segment’s loss ratio increased to 74.9 from 70.1 in the third quarter of 2025, reflecting higher group disability and group life loss ratios.

The increase of 4.8 percentage points indicates a larger share of premium income was absorbed by claims. The expense ratio improved to 25.4 from 26.7, partly offsetting the deterioration in claims experience.

Costello cited premium growth and the 6.4% core earnings margin as important components of the segment’s quarterly performance.

Investment income supports earnings and book value growth

The Hartford’s increased investment income helped offset underwriting pressures during the quarter.

The $850 mn in groupwide net investment income before tax represented an increase of $95 mn from the corresponding period in 2025.

Management attributed the improvement to higher income from limited partnerships and other alternative investments, together with growth in invested assets.

Book value per diluted share reached $68.31 at September 30, 2026, increasing 7% from $63.86 a year earlier. Compared with December 31, 2025, book value per diluted share increased 3.0% from $66.31.

The increase reflected net income exceeding stockholder dividends during the first nine months of 2026, partially offset by the dilutive effect of share repurchases and a decline in accumulated other comprehensive income (AOCI).

The reduction in AOCI was primarily associated with increased net unrealized losses on available-for-sale securities. Excluding AOCI, book value per diluted share increased 16% year over year to $82.47 from $70.92.

The same measure rose 12.0% from $73.62 at December 31, 2025, as retained earnings growth exceeded the offsetting dilution associated with share repurchases.

Book value excluding AOCI is a non-GAAP financial measure, as are core earnings and the company’s underlying underwriting measures.

The Hartford’s return on equity increases to 25%

The insurer’s trailing 12-month net income return on equity reached 25.0% at September 30, 2026, compared with 20.3% a year earlier. The increase of 4.7 percentage points was primarily attributable to higher net income available to common stockholders.

Core earnings return on equity rose to 17.9% from 17.3%, an improvement of 0.6 percentage points, primarily reflecting increased core earnings over the trailing 12-month measurement period.

The Hartford calculates net income ROE using common stockholders’ equity including AOCI, while core earnings ROE uses equity excluding AOCI.

The difference between the two measures reflects the financial effects of items excluded from core earnings and the different equity bases used in their calculations.

The company also announced a 12% increase in its quarterly common dividend, continuing its pattern of annual dividend increases.

Mo Tooker to succeed Christopher Swift as CEO in March 2027

Alongside its financial results, The Hartford confirmed a previously announced leadership transition.

Mo Tooker will succeed Christopher Swift as chief executive officer on March 1, 2027. Swift will move into the role of Executive Chair at that time and plans to step down from that position in the second half of 2027.

The transition follows Swift’s nearly 13 years of service in senior leadership roles at the company, including chief financial officer and chief executive officer.

“It has been an honor to serve this iconic company, first as CFO and then as CEO for nearly 13 years,” Swift said.

He expressed confidence in Tooker’s ability to lead the business and said the company’s strategy, priorities and commitment to disciplined execution would remain unchanged.

The succession comes as The Hartford continues investing in technology, artificial intelligence, data capabilities and risk insights across its insurance operations.

Management expects those investments to support its competitive position in Property and Casualty and Employee Benefits, while maintaining its focus on underwriting discipline and shareholder returns.

The leadership change follows a quarter in which reported profitability increased despite higher catastrophe losses, weaker underlying claims results in parts of Business Insurance and competitive pressure in Personal Insurance.

The Hartford enters the transition with trailing net income ROE of 25%, core earnings ROE of 17.9% and an increased quarterly dividend, alongside continued investment in its insurance and technology capabilities.