The Hartford Financial Services Group said its second-quarter profits jumped nearly 26%, despite incurring $251 million in catastrophe losses related to the COVID-19 pandemic.
However, the company also said it’s launching a cost-cutting initiative aimed at saving $500 million in annual savings by 2022. The savings will be achieved through “headcount reductions, IT investments and other activities,” the company said.
For the April-June period, the property-casualty insurer on Thursday posted net income of $468 million, or $1.29 a diluted share, up from $372 million, or $1.02 a share, in the second quarter of 2019.
The insurance and financial services company also reported net sales of $5.07 billion in the quarter as it met Wall Street expectations, according to Zacks Investment Research.
The Hartford said the profit increase was due, in part, to a surge in P&C underwriting compared to the prior year, among other factors.
That was partially offset by COVID-19-related losses of $251 million before tax, or $198 million after tax. The COVID-19 losses include reserves for business interruption insurance claims and workers’ compensation claims, as well as group life insurance claims, the company said.
“The second quarter has certainly presented some extraordinary challenges,” Doug Elliott, president of The Hartford said in Thursday’s earnings release. “COVID-19 has touched nearly all aspects of our business and has significantly impacted each of our stakeholders.”
On Tuesday, The Hartford announced it committed $1 million in grants to support small businesses during the COVID-19 pandemic. It donated the grants in partnership with nonprofit Main Street America, which says it’s focused on promoting communities via preservation-based economic development.
Under the partnership, Main Street America will administer the insurer’s grants ranging from $5,000 to $15,000. The funds are expected to be used for storefront modifications, technology to enable online sales and other operating adjustments as businesses cope with the pandemic.
Eligible businesses include those employing 20 or fewer employees in a brick-and-mortar location within a community’s commercial district. At least half of grants will be awarded to minority, women, veteran, disabled or LGBTQ-owned businesses.
