HIG Hartford Financial Services Group Inc

By Lisa Beilfuss 

Hartford Financial Services Group Inc. reported second-quarter earnings that fell far more than expected as it took an asbestos-related hit in its property and casualty business, catastrophe claims climbed, and investment income dropped.

Connecticut-based Hartford sells commercial and personal insurance as well as financial products, including property and casualty insurance, group benefits and mutual funds.

Analysts have cautioned that higher catastrophe costs stemming from wildfires in Canada and hail storms across part of the U.S. would hurt second-quarter results across the spectrum, and Hartford joins Travelers Cos. and Chubb Ltd. in confirming that this month. At the same time, still-low interest rates continue to pressure insurers' earnings, as many of them bring in a significant slice of income by investing customers' premiums until the money is needed to pay claims.

But for Hartford, weakness went beyond the anticipated net income and catastrophe headwinds.

"The second quarter bottom line was disappointing," said Chief Executive Christopher Swift, pointing to particular weakness in the company's property and casualty and auto businesses.

Hartford said greater-than-expected mesothelioma claim filings for certain defendants in asbestos cases helped push its loss in its property and casualty "other" category to $154 million from $111 million a year earlier. In the overall property and casualty unit, net income fell to $33 million from $189 million in last year's quarter.

Meanwhile, Hartford's auto business continued to deteriorate, with new business premiums there sliding 14% from a year earlier. Total written premiums declined 2%.

During the June quarter, Hartford's net investment income slid 8% to $735 million, dragged by private equity and real estate partnerships.

Over all, Hartford reported a profit of $216 million, or 54 cents, down from $413 million, or 96 cents, a year earlier. Excluding certain tax benefits and capital gains, per-share earnings fell to 31 cents from 91 cents.

Analysts projected 80 cents in adjusted per-share profit, according to Thomson Reuters.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

July 28, 2016 17:48 ET (21:48 GMT)

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