Tags: Hartford | Financial | Services | HIG

Hartford Financial Full Ahead on Reorganization

By    |   Tuesday, 29 May 2012 12:25 PM EDT

Hartford Financial Services Group (HIG), like many insurance companies, had a rough time in 2011, in part on the global economy and in part on weather impacts. The company also is in the midst of reorganizing itself financially, a process management says will proceed full ahead for the next year or two.

Hartford Financial Services Group is among the largest providers of investment products and life, property, and casualty insurance to both individual and business customers in the United States of America.

The Hartford also continues to administer business previously sold in Japan and the United Kingdom. As of Dec. 31, 2011, total assets and total stockholders’ equity of The Hartford were $304.1 billion and $22.9 billion, respectively.

The company is currently organized around four divisions: commercial markets, consumer markets, wealth management and runoff operations, management said in a recent filing.

In the last two years, the company announced the sales of businesses that are not core to its focus and strategy. The company continues to evaluate its strategy and business portfolio with the goal of delivering shareholder value, Hartford said in the filing.

“We are ... focused on driving greater efficiency at The Hartford and are making good progress toward our aggregate $450 million target by streamlining operations, rationalizing management layers and leveraging technology. This is a three-year effort. We reduced run-rate expenses by $150 million in 2011, and we'll continue to deliver on this objective in '12 and '13,” Liam McGee, the company’s president, chairman and CEO said in a recent earnings call.

Hartford Financial Services Group has a market cap of $7.64 billion in a sector, insurance, where the average company size is $11.89 billion. Its trailing 12-month P/E ratio is 29.37 and its five-year projected price-to-earnings-growth (PEG) ratio is 2.12, compared to 1.39 for the sector.

Its projected earnings per share growth for the coming year is 1.38 percent, compared to a sector average of 12.17 percent.

Under pressure

Analysts are divided on Hartford Financial. Stifel Nicolaus, Goldman Sachs, Friedman. Billings, Ramsey & Co., Credit Suisse and Standard and Poor’s all have buy or outperform ratings on the stock. Columbine Capital and Ned Davis Research are at sell or underperform.

“Our risk assessment reflects our view that HIG's margins in several core lines of business will likely remain under pressure,” S&P analysts wrote in a recent report on the stock.

“This is partially offset by our view of the relative earnings stability of HIG's P&C operations, and steps HIG is taking to restructure and improve its financial results.”

Hartford Financial Services Group next reports on Aug. 1.

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Tuesday, 29 May 2012 12:25 PM
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