Hartford Beats Epectations

By Steve Tuckey

November 04, 2005 at 07:00 PM

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Overseas operations and domestic life operations contributed to a solid increase in earnings at Hartford Financial Services Group Inc. during the third quarter.[@@]

Hartford Financial, Hartford, is reporting $539 million in net income on $7.3 billion in revenue for the latest quarter, up from $494 million in net income on $5.4 billion in revenue for the third quarter of 2004.

Brian Meredith, a securities analyst at a unit of Bank of America Corp., Charlotte, N.C., says the company's $1.82 per share profit beat the analysts' consensus of $1.60 while the company's operating earnings of $368 million for life insurance exceeded his estimate by $31 million.

"The upside was driven by earnings from the company's Japan operation, as well as stronger than expected individual life earnings," Meredith writes.

But competition in the variable annuity market remained intense in the third quarter, and VA deposits slowed, Meredith says.

Andrew Kligerman, an analyst at UBS Investment Research, New York, also is emphasizing the health of Hartford's operations in Japan, pointing to a 23% increase in VA sales in Japan at a time when VA sales are falling in the United States.

Hartford says new benefits and features count in the U.S. VA market. The company's new Lifetime Income Builder product, which provides investors with a lifetime income stream and guarantee of principal, has gotten good early feedback from advisors, Hartford says.

At Hartford's group benefits unit, group life sales were up 67% and group disability sales were up 38%.

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