HARTFORD INSURANCE GROUP, INC. Q4 FY2025 earnings call

• Strategy and Innovation: Over the past decade, modernized core platforms, strengthened data and analytics, and advanced digital tools. Moving to AI-first mindset with investments in processes and workflows across the enterprise.
• Business Insurance Performance: Business Insurance had 8% top-line growth, small business as industry leader with Kinova Group ranking The Hartford as number one carrier for small business digital capabilities, middle and large with excellent growth, Global Specialty with strong margins.
• Personal Insurance Pivotal Year: 2025 was pivotal with auto achieving targeted profitability, home delivering strong results, and Prevail agency expanding to 10 states with plans for 30 by early 2027.
• Employee Benefits Strength: Strong core earnings margin of 8.2% led by life and disability results, focus on expanding in under 500 lives segments and investing in technology.
• Investment Portfolio: Solid performance with net investment income increasing $118 million or 17% from fourth quarter 2024.

Business Insurance: Delivered robust top-line growth of 8% with excellent underlying margins. Small business was the industry leader with written premium of $6 billion and underlying combined ratio of 88.9. Middle and large had excellent growth with solid underlying margins. Global Specialty had an excellent year maintaining underlying margins in the low to mid-eighties. Personal Insurance: 2025 was pivotal with auto achieving targeted profitability and home delivering strong results. Premium growth and strong underwriting profit. Prevail agency was live in 10 states with approximately 30 state launches planned by early 2027. Employee Benefits: Reported an impressive core earnings margin of 8.2%, led by strong life and disability results. Focus on expanding presence in under 500 lives segments and investing in technology to simplify administration and enhance benefits experience.

• 2026 priority is to sustain industry-leading ROEs in Business Insurance through disciplined underwriting and risk selection.
• Personal Insurance expects to grow policy counts for both auto and home in the agency channel, with direct channel policy count growth challenged but targeting market share expansion.
• Employee Benefits expects to extend market leadership with investments in technology and customer-facing tools.
• Beginning with the first quarter, expect to increase quarterly share repurchases to $450 million subject to market conditions.

• Catastrophe Exposure: Managed through disciplined underwriting and reinsurance, but events like Winter Storm Fern need monitoring for impact.
• Pricing Pressures: Property pricing moderation, competitive pressures in E and S and shared layer segments.
• Disability Loss Trends: Impact from economic changes such as layoffs and unemployment on group disability loss ratios.

Q: On AI impact on workforce and small business, potential net winner?

A: Christopher Swift believed The Hartford could take advantage of tech broadly defined in its SME orientation due to brand, capabilities, and presence in tech-related areas.

Q: On Winter Storm Fern impact, comparison to Yuri 2021?

A: Christopher Swift and Beth Costello stated it's a relatively minor event so far with less claim activity compared to recent storms like Yuri 2021.

Q: On technology and AI differentiation, bigger differentiator than past?

A: Christopher Swift and Morris Tooker agreed AI revolution is a game changer, scale matters in investing for multi-year reinvention, and could lead to differentiation and potential M&A or more separation between have and have not companies.

Q: On ENS binding growth and small commercial, fit into 2026 plans?

A: Christopher Swift and Morris Tooker mentioned ENS binding growth of over 30% quarter over quarter, strong submission flow in ENS finding space, and helping wholesale brokers make more money relative to peers.

Q: On casualty divergence in views and 2026 caution, Hartford's view?

A: Christopher Swift and Morris Tooker stated Hartford is highly focused on casualty execution, seeing elevated trends requiring discipline in rate, and feeling the market is fairly disciplined in 2026.

Q: On personal lines growth and margin profile, 2026 outlook?

A: Christopher Swift and Melinda Thompson mentioned growth-focused, pivoted to growth, seeing good opportunities in agency channel, auto rate moderation aiding retention, and implementing initiatives for new business while managing expenses.