Posted on 17 Jul 2012 by Neilson
Hartford Financial Services Group Inc. expects catastrophe charges of $280 million to $300 million, before taxes, in the second quarter, reflecting widespread losses from the June 28 storms that swept across the Ohio River Valley and the mid-Atlantic states.
The charges resulted from 13 catastrophic events, including several hailstorms, and are down from $447 million a year earlier.
The company also said its second-quarter results will include around $45 million to $55 million, before taxes, that the company is setting aside for property-and-casualty losses tied to prior years. The additional reserve includes $50 million in its asbestos-and-environmental reserve, reflecting higher estimates for certain asbestos policyholders, compared with an unfavorable asbestos-loss-reserve development of $290 million pretax in the second quarter of 2011.
The 200-year-old insurer is embarking on a radical overhaul of its business. In March, the company revealed plans to refocus itself around its property-casualty operations, while shutting down its annuity business and putting its life- insurance business unit up for sale.
Earlier in the year, hedge-fund manager John Paulson, whose firm, Paulson & Co., is Hartford's largest shareholder, demanded Hartford "do something drastic" to stem a slide in the company's stock price.
Shares were unchanged in recent after-hours trading. The stock is down nearly 18% in the three months through Monday's close.