HIG Stock Overview
The Hartford Financial Services Group, Inc.
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The Hartford Financial Services Group, Inc. Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$65.76|
|52 Week High||US$78.17|
|52 Week Low||US$60.17|
|1 Month Change||1.19%|
|3 Month Change||-0.60%|
|1 Year Change||-9.21%|
|3 Year Change||13.22%|
|5 Year Change||17.70%|
|Change since IPO||164.36%|
Recent News & Updates
The Hartford president Doug Elliot to retire
The Hartford (NYSE:HIG) has announced on Wednesday the planned retirement of president Doug Elliot on Dec. 31, 2022. Elliot is stepping down after serving more than 11 years at the company. Effective Nov. 1, The Hartford will realign its leadership structure in preparation for Elliot’s retirement. Morris Tooker, who currently heads Middle & Large Commercial, will report directly to CEO Christopher Swift and take on expanded responsibility for Global Specialty and Sales & Distribution. Stephanie Bush will maintain her role as head of Small Commercial and Personal Lines, reporting directly to Swift. Ross Fisher, Global Chief Underwriting Officer, will continue to oversee underwriting across the enterprise, Global Reinsurance, Risk Engineering and the company's IoT operations.
Hartford Financial Continues To Outperform With Its Differentiated Model
Summary Hartford has continued to outperform, with two more quarters of better-than-expected underwriting profitability and strong premium growth. Commercial P&C pricing continues to slow, while personal auto is pressured by increasing loss severity and delayed rate actions from regulators. Hartford should be well-equipped to outperform in a normalizing cycle, as the company has key strengths in analytics and distribution for smaller commercial customers. Between 4%-plus long-term core earnings growth and a 10x multiple on my twelve-month EPS, I believe Hartford should trade closer to $80. I can understand if investors in The Hartford Financial Services Group (HIG) (“Hartford”) feel a little frustrated. While the company has continued to outperform expectations, delivering good premium growth and core P&C underwriting/core earnings growth, as well as bigger returns of capital (buybacks) than expected, the shares have muddled along. Down about 4% since my last update, Hartford has done slightly better than other comps like Chubb (CB), Selective (SIGI), and Travelers (TRV), more than slightly better than AIG (AIG), and not as well as W. R. Berkley (WRB). I do think the view on the Street that 2023 will be as good as it gets for commercial P&C insurance is weighing on shares, and I think that view is basically right. Still, I think what the Street may be overlooking is that lesser insurance companies need hard markets to rebuild their reserves, but companies like Hartford can outperform through the cycle when underwriting conditions aren’t as favorable. I still think Hartford is poised to generate 4%-plus long-term core earnings growth, and I still think the shares are undervalued, but investors will have to have some patience here. It’s Still Groundhog Day, With Strong Commercial P&C, But Challenges In Workers Comp And Auto Not too much has changed in the market since my last update on Hartford, with some further evidence of slowing/softening in what has been an exceptionally hard market. Hartford is still seeing mid-single-digit renewal rate increases, with overall industry pricing still up comfortably in the mid-single-digits, but with a slow quarter by quarter decline. Social inflation remains an ongoing threat, and now it’s combined with real inflation driving higher severity costs. Overall demand remains strong, though, and Hartford continues to leverage its strong (and differentiated) presence among smaller commercial clients and its growing specialty insurance operations to generate good growth. Commercial premiums rose almost 14% in the last quarter (after growing 12% in Q1’22 and 14% in Q4’21), with 17% growth in the small commercial segment, 11% growth in the middle market commercial, and 12% growth in specialty commercial. As far as individual markets, not much has really changed. Excess and surplus is still a very attractive market, especially as more businesses have to go to non-admitted markets to find coverage for more challenge business. Workers’ comp also remains a challenging market; loss trends aren’t bad and Hartford continues to see positive reserve development, but rates continue to decline, mitigated partly by growing payrolls (headcount and wages). The auto market, though, remains challenging. Loss ratios continue to be pressured by higher used car prices, as well as sharply higher repair and parts costs, and Hartford saw its Personal Auto core combined ratio worsen from 92.1% last year to 100% in the second quarter. Companies like Hartford are applying for, and generally getting, higher rates (renewal pricing was up about 4% in Q2), but states like California haven’t been allowing rate increases, so it’s uneven across the states. Opportunities To Grow Beyond This Hard Market I do expect to see the commercial P&C market peak in 2023. I don’t think 2024 or 2025 are going to be terrible, but it will likely be another 10 to 20 years before the industry sees an underwriting market like the one it has enjoyed recently. I don’t think that means Hartford’s growth opportunities are going to go away. First, while rates will soften, there are still opportunities for Hartford to organically grow its business. Small business formation supports a growing addressable market in the small commercial area, and there are also share growth opportunities outside of workers' comp (workers' comp is about half of the P&C business). Commercial auto, product liability, and professional liability should all offer growth potential, as well as fidelity & surety and commercial multi-peril. I also see meaningful growth opportunities in specialty insurance, which includes some of the aforementioned lines like liability. Hartford has had years to build its comfort and analytics capabilities in the specialty market, and I think the combination of that increased capability and capital creates opportunities to expand. I’m particularly curious to see what kind of long-term growth Hartford could see in specialty among its small commercial customer base – quoting/buying specialty insurance can be a headache for smaller businesses, but Hartford’s experience with serving this market should be a significant advantage. In the Personal business I expect to see improving underwriting margins in the auto business as rate hikes catch up with loss severity growth. I’m also looking forward to the full rollout of Prevail in 2023. Prevail is Hartford’s cloud-based platform for personal lines, and I think this could be a driver for better expense margins over time (and possibly some share growth on an improved/differentiated customer quoting/buying experience).
|HIG||US Insurance||US Market|
Return vs Industry: HIG underperformed the US Insurance industry which returned 1.5% over the past year.
Return vs Market: HIG exceeded the US Market which returned -18.2% over the past year.
|HIG Average Weekly Movement||3.4%|
|Insurance Industry Average Movement||4.6%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: HIG is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: HIG's weekly volatility (3%) has been stable over the past year.
About the Company
The Hartford Financial Services Group, Inc. provides insurance and financial services to individual and business customers in the United States, the United Kingdom, and internationally. Its Commercial Lines segment offers workers’ compensation, property, automobile, liability, umbrella, bond, marine, livestock, and reinsurance; and customized insurance products and risk management services, including professional liability, bond, surety, and specialty casualty coverages through regional offices, branches, sales and policyholder service centers, independent retail agents and brokers, wholesale agents, and reinsurance brokers. The company's Personal Lines segment provides automobile, homeowners, and personal umbrella coverages through direct-to-consumer channel and independent agents.
The Hartford Financial Services Group, Inc. Fundamentals Summary
|HIG fundamental statistics|
Is HIG overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|HIG income statement (TTM)|
|Cost of Revenue||US$14.53b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 28, 2022
|Earnings per share (EPS)||6.43|
|Net Profit Margin||9.34%|
How did HIG perform over the long term?See historical performance and comparison