The Hartford's Q1 2025 Earnings Call: Navigating Contradictions in Workers' Compensation and Investment Strategies

Workers' compensation pricing pressure and profitability, investment portfolio composition and interest rate risk, workers' compensation pricing environment, small commercial pricing and growth, workers' compensation pricing and market conditions are the key contradictions discussed in The Hartford's latest 2025Q1 earnings call.



Business Insurance Performance:
- Business Insurance reported written premium growth of 10% with a combined ratio of 88.4%. The small business segment showed a record-breaking quarterly written premium and double-digit new business growth, maintaining sub-90 underlying combined ratios.
- The growth was driven by strong quote flow, modestly higher average premium, and a 29% increase in excess and surplus (E&S) binding premium, leveraging a strong digital platform and competitive capabilities in the small business market.

Personal Insurance Improvement:
- Personal Insurance achieved an underlying combined ratio of 89.7%, improving by 8.1 points from the prior year, driven by a significant improvement in the loss and loss adjustment expense ratio.
- The improvement was attributed to strong renewal written pricing adjustments, particularly in auto with 15.8% earned pricing increases, and targeted investments in customer-centric technology and offerings.

Investment Portfolio Performance:
- The total annualized portfolio yield excluding limited partnerships was 4.4% before tax, which is 10 basis points above the year-ago period.
- The portfolio performance was supported by a balanced approach to risk management, strategic trading opportunities, and the reinvestment at higher rates.

Employee Benefits Success:
- Employee Benefits achieved a core earnings margin of 7.6%, exceeding the long-term target of 6% to 7%, with a disability loss ratio improvement of nearly 20 points in paid family and medical leave products.
- This success was driven by strong disability performance, improved claim recoveries, and strategic technology investments enhancing customer experience.