Hartford Financial Posts 4Q Loss

Associated Press
February 5, 2009

Hartford Financial Services Group Inc. on Thursday posted a loss for the fourth quarter, and announced plans to slash its dividend, after what its chief executive called the most challenging year in the company's 200-year history.

For the final three months of the year, the financial services company reported a net loss of $806 million, or $2.71 per share, compared with net income of $595 million, or $1.88 per share, a year earlier.

Hartford's latest quarter included a net realized capital loss of $610 million, up from $230 million in the prior-year period. The fourth quarter also included a $597 million write-off of goodwill.

Excluding the investment losses, the company reported a loss of $208 million, or 72 cents per share, compared with a profit of $840 million, or $2.66 per share, in the fourth quarter of 2007.

Analysts polled by Thomson Reuters, on average, expected earnings of $1.30 per share during the quarter. Analyst estimates typically exclude net realized capital losses.

"This was clearly the most challenging year in our company's nearly 200-year history," said Ramani Ayer, chairman and chief executive, in a statement. "The capital markets proved to be especially challenging during the latter half of 2008, particularly affecting our equity-based businesses and investment performance."

Hartford Financial (NYSE: HIG) said its property and casualty ongoing operations reported a combined ratio of 78 percent, excluding catastrophes. This compares with 88.4 percent in the year-ago quarter. The combined ratio measures the amount of money an insurer pays in claims and expenses compared with how much it receives from underwriting premiums. A ratio above 100 percent means the insurer is paying out more than it generates from premiums.

Assets under management totaled $346.9 billion as of Dec. 31, down 19 percent from $426.8 billion at Dec. 31, 2007.

The company said it plans to recommend that the board reduce its quarterly dividend to 5 cents from 32 cents, in order to help the company save about $350 million annually.

For the full year, Hartford reported a net loss of $2.75 billion, or $8.99 per share, compared with net income of $2.95 billion, or $9.24 per share, in 2007.

In after-hours trading, shares plunged $2.94, or 19 percent, to $12.19.

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