Hartford Q2 profit rises 31% on tax benefit, investment income
The Hartford on Thursday reported second-quarter profit of $1.29 billion, up 31% from the same period last year, boosted by a tax benefit tied to an agreement to sell Hartford Funds and higher investment income.
“The current market conditions highlight the importance of underwriting discipline, pricing rigor and risk selection,” Chairman and CEO Christopher Swift said during Friday’s earnings webcast. “In business insurance, a diversified portfolio, strong distribution relationships, disciplined underwriting and technology-enabled execution continue to drive profitable growth at attractive returns.”
The Hartford continued to outpace the market in small business while remaining disciplined and selective in middle and large business and specialty lines, he said.
Hartford posted its results after markets closed Thursday. Core earnings totaled $945 million, up 1% from $932 million in the year-earlier quarter, while core earnings per diluted share increased 6% to $3.42.
The insurer recorded a $251 million income tax benefit associated with its agreement to sell Hartford Funds Management. The benefit was included in discontinued operations and excluded from core earnings.
Net investment income rose 22% to $800 million, before tax, driven largely by higher income from limited partnerships and other alternative investments and a larger invested asset base.
“Our diversified portfolio delivered strong results in the second quarter,” said Beth Costello, chief financial officer, during the webcast. She said the insurer continued to balance investment risk while pursuing trading opportunities that could add to returns.
Commercial lines net income increased 1% to $704 million, while core earnings edged down to $695 million from $697 million.
Written premiums in the business insurance segment rose 5% to $4.02 billion. Small business written premiums increased 7%, supported by double-digit growth in package business and excess and surplus lines binding business. Middle and large business and global specialty each reported 4% premium growth.
Business insurance renewal written pricing, excluding workers compensation, was 5.8% during the quarter. Pricing in commercial auto and general liability remained above loss-cost trends, with umbrella and excess lines recording some of the insurer’s highest rate increases, Mr. Swift said.
The commercial lines combined ratio worsened to 91.4% from 87.0% in the second quarter of 2025. Its underlying combined ratio increased 1.3 percentage points to 89.3%.
Current accident year catastrophe losses in commercial lines totaled $129 million, before tax, primarily from tornado, wind and hail events, compared with $114 million in the year-earlier period.
Favorable prior-year reserve development declined to $52 million from $146 million. The favorable development included reserve reductions in workers compensation, catastrophe and bond lines, partially offset by increases in general liability and commercial auto liability reserves.
Ms. Costello said general liability reserves were increased primarily because of a higher frequency of large losses in excess casualty and umbrella lines across multiple accident years.
Commercial auto liability reserves were increased because of adverse development in the 2023 and 2024 accident years, driven by higher-than-expected severity, increasing attorney involvement and more time-limit settlement demands, she said.
Middle and large business reported a combined ratio of 101.9%, compared with 86.6% a year earlier, reflecting a shift from favorable to unfavorable prior-year reserve development and higher catastrophe losses. Its underlying combined ratio rose to 95.3% from 89.1%, driven in part by higher noncatastrophe property losses and a change in business mix.
Small business results improved, with the combined ratio falling to 85.9% from 89.7% and the underlying combined ratio improving to 86.5% from 89.0%.
Global specialty’s combined ratio increased to 89.5% from 85.9%, while its underlying combined ratio rose to 85.8% from 84.8%.
The Hartford’s board also authorized a new $4.2 billion share repurchase program through the end of 2028, a 27% increase from the prior authorization. The insurer expects to increase quarterly share repurchases to $475 million for the remainder of 2026.