Fitch Ratings raised its outlook on The Hartford Financial Services Group Inc. to “stable” from “negative,” citing the insurer’s improved net income and moves to reduce risk in its investment portfolio.
Analyst Brian C. Schneider noted that The Hartford has shifted its investment portfolio “to securities with more favorable risk profiles” and reduced its exposure to real estate related securities and hedge funds.
Citing the Hartford property-casualty insurer/financial services provider’s continued favorable underwriting performance, he also affirmed Hartford’s “BBB” issuer default ratings.
He noted that earnings growth will nevertheless be challenged in the near-to-intermediate term, in part because of The Hartford’s concentration in lower margin retirement savings businesses.
Earlier this month, The Hartford reported net income of $1.68 billion for all of 2010. That compared to a loss of $887 million in 2009 and a loss of $2.7 billion in 2008.
The improvement was driven by significantly reduced levels of net realized capital losses.
