It seems like the economic is getting better for Hartford Financial Services Group Inc. On Wednesday, this company reported larger profit on fourth-quarter of 2010. Thanks to the varieties of cost pressures offset on their property and casualty insurance business leading to improving results for the wealth management unit. It allows the company doubled its quarterly dividend and based on Wall Street expectations, it is forecasted that the company will get higher profit this year. The effect is improving shares value by 3.1 percent after-hours trading.
As information, Hartford Financial Services is among only three insurers to get bailout from US Government throughout the financial crises. To streamline and improve company focus, reorganization was initiated in 2010. According to Liam McGee, the Chief Executive, the improvement on the company execution and expanding distribution gave more benefits instead of the improving economic environment. A new strategy to use property insurance division forselling life insurance from wealth management unit to business owner is one of the examples how the improvement is made.
The fourth-quarter report mentioned $619 million profit, $1.24 per share. It was an improvement compared to $557 million, or $1.19 per share made earlier year. When the investment gains and losses excluding but still include market-related accounting gains and benefits from releasing reserves, profit of $1.06 per share was reported on that core basis, expected as 96 cents per share. 401(k) sales strength prevented annuity business from continuous decline and led wealth management profits tripled. As the acquisitions integration is finalized, the company retirement business is improving, according to McGee. New products for annuities launched in the second quarter, part of a broader business strategy, will be shrunk two thirds from the peak value. It is also reported that wealth management total deposit rebounded almost entirely from massive decline on the third quarter. Retail mutual funds performance helped it happens. Combination of improved market and inflows in non-annuities business rose under management asset by 5 percent.
In other hand, the company faced significant profit declining on property and casualty insurance business in both commercial and consumer lines. Lower capital gains combined with huge losses and reverses positive released became the reasons. However, as the company has narrowed its focus on consumer side, there was a decline on written premiums but the increasing of auto and homeowners policies could cover it. While on commercial side, written premiums were increasing faintly as the retention remained steady. Hartford Financial Services Group forecasted its 2011 earnings of $3.70 to $3.90 per share while $3.78 per share is the number expected by the analyst.
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