HIG · Q4 2025 Earnings

Q: How long can Hartford sustain favorable renewal premium changes in small business? Will it remain resilient or face competitive pressures from large commercial? Also seeking color on property package pricing stabilization.

Management emphasized differentiated capabilities, long-standing relationships, and sophisticated filing strategy. Small business can sustain rate increases through steady incremental adjustments rather than shocks. Property pricing expected to flatten, GL still accelerating. All products meeting target margins in small business space.

Q: When will technology investments translate into better expense ratios, particularly given Hartford's expense ratio is couple hundred basis points higher than big peers? How will this play in a softening market?

Management expects expense ratio improvement through market share gains and continued technology investments. Provided specific targets: business insurance below 30% by end of 2027, personal insurance below 25% same timeframe, group benefits into 25% range. Emphasized need for ongoing AI/technology differentiation investments.

Q: How is Hartford thinking about mix shift toward property in 2026 given softening property environment? Also requesting breakdown of 4.3% all-in pricing into pure rate vs. exposure-as-rate.

Hartford targeting $3.6-3.7B property premium in 2026 (10-11% growth) with good margins. Workers comp still highly profitable. Watching E&S and shared/layered space closely due to rate softening. Exposure-as-rate represents ~30% of 6.1% ex-comp pricing, with roughly 70/30 split between pure rate and exposure.

Q: How is Hartford thinking about group benefits margin outlook given strong current margins but facing disability loss trend pressures? Also seeking perspective on Hartford Funds investment performance.

Management remains bullish on benefits with 16% tangible ROEs. Known sales up 45-50% YoY through January. Confident team will grow thoughtfully with good margins. Three new state paid family leave programs launching in 2026 will provide meaningful premium. Hartford Funds performing well with 40%+ ROEs, positive net flows returning, strong sub-advisors.

Q: Can management size the favorable non-CAT property experience (more than 1 point, less than 1 point)? Regarding technology as differentiator, will AI/digital-first cause M&A consolidation or differentiation?

Favorable non-CAT property approximately 1 point ahead of expectations for full year. Management believes AI is a game changer requiring scale and multi-year investment; expects analogy to life insurance where top 20 control 80-90% of flows. Sees potential P&C consolidation between 'haves' and 'have-nots' due to technology differentiation requirements.

Bullish

Hartford (The)

Reported January 29, 2026

30-second summary

Hartford closed FY2025 with Q4 revenue of $7.34B (+6.7% YoY) and core EPS of $4.06, a P&C combined ratio of 87.1%, and a 19.4% core ROE — the cleanest profitability print of the year. Management raised the quarterly buyback pace to $450M (from $400M), guided operating-company dividends up 16% to ~$2.9B, and reframed AI from "modernization" to "operating model." The absence of any quantified FY2026 revenue or EPS guidance — paired with explicit forward language that property pricing will "stabilize" — is the only soft spot worth flagging.

Headline numbers

EPS

Q4 FY2025

$4.06

Revenue

Q4 FY2025

$7.34B

+6.7% YoY

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$7.34B	+6.7%	$7.23B	+1.5%
EPS	$4.06	—	$3.78	+7.4%

Guidance

No quantified forward guidance issued for FY2026 or Q1 FY2026 revenue or EPS; company provided only qualitative commentary on dividends, buybacks, investment income, and policy growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Business Insurance Written Premium	FY 2025	Expected to exceed $6 billion in 2025, representing 10% growth over prior year	—	Guide targeted FY2025 (now closed); no current FY2025 guidance issued this quarter	Met

New guidance

Metric	Period	Guide	YoY
Net Dividends from Operating Companies	FY 2026	approximately $2.9 billion (16% increase over 2025)	+16% YoY vs 2025
Quarterly Share Repurchases	Q1 FY2026	$450 million per quarter (beginning Q1 FY2026)	—
Net Investment Income	FY 2026	Expected to increase, supported by higher invested assets from continued growth and improved LP returns	—
Agency Channel Policy Count Growth	FY 2026	Expected to grow for both auto and home in the agency channel	—
Property Pricing and Package Product Stabilization	FY 2026	Property pricing and package product expected to stabilize in 2026	—

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Business Insurance	$3.595B	+8.8%
Personal Insurance	$0.953B	+4.1%

Capital & returns

Q4 FY2025

Segment	Q4 FY2025
Core Earnings ROE	19.4%
Net Income ROE	22.0%
Book Value per Common Share	$67.33
Total Debt to Capitalization (excluding AOCI)	17.2%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Property & Casualty Combined Ratio	87.1%
Property & Casualty Underlying Combined Ratio	87.4%
Business Insurance Combined Ratio	83.6%
Personal Insurance Combined Ratio	79.6%

Management tone

Q1 2025 selective growth → Q2 2025 "now is the time to grow" → Q3 2025 "we set the industry standard" → Q4 2025 AI-first operating model + offensive capital return

AI moves from infrastructure project to operating model. Through 2024 and early 2025, Hartford described its tech spend as cloud migration and platform consolidation. Q3 quantified the spend ($1.3B IT budget, year 4 of 6) but still framed it as modernization. This quarter management declared the foundational phase complete: "With the foundational work across platforms, data, and cloud largely complete, we have moved to the next phase of our innovation agenda, reimagining our processes and workflows with an AI-first mindset." The shift signals management now expects AI to show up in the expense ratio and bindability metrics — not as a multi-year promise but as a 2026–2027 operating reality. The Q&A disclosure of explicit expense-ratio targets (business insurance <30% by end-2027, personal <25%, group benefits 25% range within two years) is the quantified version of that claim.

Personal insurance completes the arc from margin defense to share capture. Q2 was "now is the time to grow." Q3 confirmed personal auto underlying improved 3.6 points YoY. This quarter management is explicit about both channels and the long-term ambition: "In 2026, we expect to grow policy counts for both auto and home in the agency channel...The long-term objective is to expand market share while sustaining targeted profitability." The Q4 79.6% combined ratio is the cleanest evidence the underwriting cycle has fully turned, freeing management to lean offensive.

Property pricing tone softens — the one hedge in an otherwise confident print. Q3 acknowledged property pricing decelerating in E&S and package while GL kept accelerating. This quarter management committed to a stabilization view: "we expect that as we move into 2026, property pricing, and our package product will stabilize." The Q&A clarified property targets remain ambitious ($3.6–3.7B in FY2026, 10–11% growth from $3.3B in 2025), but the pricing tailwind is now expected to flatten rather than continue. Management's framing — "highly profitable area for growth" — is calibrated to defend margins against the inevitable competitor question.

Capital return cadence escalates again. Q3 raised the dividend 15% and held buybacks at $400M/quarter. This quarter buybacks step up to $450M, operating-company dividends guide +16%. The capital posture is no longer "consistent with sustained earnings power" — it is now explicitly stepped up. Paired with the AI-first framing and the explicit market-share-expansion language, the message is that Hartford believes its earnings algorithm has structurally reset higher.

Employee benefits momentum confirmed in numbers. Q3 was "code activity and known sales trending very favorably." This quarter management quantified: known sales up 45–50% YoY through January, plus three new state paid family leave programs launching in 2026. The 1/1/26 selling cycle delivered, and the new-state paid-leave programs are an unanticipated regulatory tailwind.

Recurring themes management leaned on this quarter:

AI-first operating model with practical applications across underwriting, claims, and operationsPersonal insurance pivot from profitability restoration to market share expansionBusiness insurance SME focus driving competitive advantage and market share gainsTechnology and digital capabilities as key differentiators across all segmentsStrong capital generation enabling increased shareholder returnsAgency channel expansion and retail distribution leverage

Risks management surfaced:

Asbestos reserve increases due to higher-than-expected frequency and increased settlement ratesEnvironmental reserve increases from higher cleanup costs and legal expensesShort-term disability incidence increasing among higher average wage earnersDirect channel personal insurance policy count growth challenged by market competitivenessCatastrophe exposure management complexity requiring disciplined underwriting and reinsurance strategy

Q&A highlights

Andrew Kligerman · TD Cohen

How long can Hartford sustain favorable renewal premium changes in small business? Will it remain resilient or face competitive pressures from large commercial? Also seeking color on property package pricing stabilization.

Management emphasized differentiated capabilities, long-standing relationships, and sophisticated filing strategy. Small business can sustain rate increases through steady incremental adjustments rather than shocks. Property pricing expected to flatten, GL still accelerating. All products meeting target margins in small business space.

6% ex-workers comp rate increase in small businessProperty pricing decelerating in E&S and package; GL portion still acceleratingSmall business pricing aligned with steady incremental increases to avoid customer shockPrevail platform: 10 states currently, on track for 30 by early 2027

Brian Meredith · UBS

When will technology investments translate into better expense ratios, particularly given Hartford's expense ratio is couple hundred basis points higher than big peers? How will this play in a softening market?

Management expects expense ratio improvement through market share gains and continued technology investments. Provided specific targets: business insurance below 30% by end of 2027, personal insurance below 25% same timeframe, group benefits into 25% range. Emphasized need for ongoing AI/technology differentiation investments.

Business insurance expense ratio target: below 30% by end of 2027Personal insurance expense ratio target: below 25% by end of 2027Group benefits expense ratio target: 25% range within two yearsManagement prioritizing technology/AI leadership and market share capture over near-term expense ratio improvement

David · Evercore ISI

How is Hartford thinking about mix shift toward property in 2026 given softening property environment? Also requesting breakdown of 4.3% all-in pricing into pure rate vs. exposure-as-rate.

Hartford targeting $3.6-3.7B property premium in 2026 (10-11% growth) with good margins. Workers comp still highly profitable. Watching E&S and shared/layered space closely due to rate softening. Exposure-as-rate represents ~30% of 6.1% ex-comp pricing, with roughly 70/30 split between pure rate and exposure.

$3.3B property premium achieved in 2025Target: $3.6-3.7B property in 2026 (10-11% growth)6.1% ex-comp pricing; 4.3% all-in pricingExposure-as-rate: 1.8 points of 6.1 pure rate (30/70 split)

Gregory Peters · Raymond James

How is Hartford thinking about group benefits margin outlook given strong current margins but facing disability loss trend pressures? Also seeking perspective on Hartford Funds investment performance.

Management remains bullish on benefits with 16% tangible ROEs. Known sales up 45-50% YoY through January. Confident team will grow thoughtfully with good margins. Three new state paid family leave programs launching in 2026 will provide meaningful premium. Hartford Funds performing well with 40%+ ROEs, positive net flows returning, strong sub-advisors.

Group benefits tangible ROE: ~16%Known sales up 45-50% vs. prior year through JanuaryThree new state paid family leave programs launching in 2026Hartford Funds ROEs: 40%+

Mike Zarameski · BMO Capital Markets

Can management size the favorable non-CAT property experience (more than 1 point, less than 1 point)? Regarding technology as differentiator, will AI/digital-first cause M&A consolidation or differentiation?

Favorable non-CAT property approximately 1 point ahead of expectations for full year. Management believes AI is a game changer requiring scale and multi-year investment; expects analogy to life insurance where top 20 control 80-90% of flows. Sees potential P&C consolidation between 'haves' and 'have-nots' due to technology differentiation requirements.

Favorable non-CAT property experience: ~1 point for full year 20252024 also had favorable non-CAT propertyManagement sees AI/tech requiring scale investment over multi-year periodAnalogy: life insurance top 20 control 80-90% of flows

Answers to last quarter's watch list

Business Insurance written premium clears $6B for FY2025 cleanly — Q4 Business Insurance written premium of $3.60B (+8.8% YoY) puts the FY result comfortably above the $6B target management quantified at 10% growth. Status: Resolved positively

Personal Insurance underlying combined ratio direction — Q3's 200bps QoQ deterioration to 90.0% — The Q4 headline combined ratio of 79.6% is exceptionally strong, helped by benign CAT. The press release does not isolate the Q4 underlying figure at the same granularity as Q3's disclosure, so the underlying-margin direction cannot be cleanly read from the print. The headline says margins are not deteriorating; the structural read awaits the transcript. Status: Continue monitoring

Personal auto combined ratio toward 95% underlying + 2% CAT target — Personal Insurance segment combined ratio of 79.6% is well inside the full-year construct, though Q4 is seasonally favorable on CATs. Personal auto specifically wasn't broken out in the press-release figures available; the segment-level print is consistent with the target being intact. Status: Continue monitoring

Consolidated underlying combined ratio reverting below 89% — Q4 P&C underlying combined ratio came in at 87.4%, materially below the 89.6% Q3 figure and back inside the sub-89% threshold. Status: Resolved positively

Initial 1/1/26 employee benefits renewal pricing and persistency data — Management disclosed in Q&A that known sales are up 45–50% YoY through January and three new state paid family leave programs launch in 2026. The verification window delivered. Status: Resolved positively

Prevail state-by-state cadence and the 30-vs-40 reconciliation — Management stated 10 states currently and reaffirmed the 30-by-early-2027 path; the Q3 Q&A "40 by early 27" appears not to have been reasserted, with 30 holding as the operative figure. Pace is on track. Status: Resolved positively

Capital return cadence — $400M buyback hold and FY2026 dividend reset — Q4 buybacks held at ~$400M ($3M shares for $400M repurchased). Forward: quarterly buyback raised to $450M beginning Q1 FY2026, and operating-company dividends guided to ~$2.9B (+16% YoY). Both deltas are positive vs. the watch question. Status: Resolved positively

What to watch into next quarter

Q1 FY2026 underlying combined ratio holding sub-88% as personal insurance shifts to policy-count growth in agency channel — the test of whether the offensive posture preserves the margin reset

Property segment written premium tracking toward the $3.6–3.7B FY2026 target (10–11% growth) — Q1 needs to clear ~$900M run-rate, especially given property pricing stabilizing rather than rising

Expense ratio trajectory across segments as management commits to <30% business insurance / <25% personal / 25% group benefits by 2027 — Q1 baseline matters because the path requires roughly 100–150bps of annual improvement

Personal Insurance segment underlying combined ratio with detail (not just headline) — the Q4 79.6% is CAT-favorable; investors need the Q1 underlying to confirm structural margin

Net investment income dollar progression vs. the qualitative "expected to increase" guide — LP returns and invested-asset growth are the two levers; sustained Q3-level LP returns are the bull case

Whether the $450M buyback pace holds across all four quarters of FY2026 — management hedged with "subject to market conditions and capacity remaining under our share repurchase authorization"

Prevail state launches: from 10 currently to 30 by early 2027 implies ~4 launches per quarter from Q1 onward — Q1 cadence is the early validation

Sources

Hartford Q4 2025 Investor Financial Supplement: https://www.sec.gov/Archives/edgar/data/874766/000087476626000006/ex992ifs12312025.htm
Hartford Q4 2025 earnings call Q&A
Tapebrief Q3 2025 brief (prior watch list, narrative arc baseline)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.