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HARTFORD INSURANCE GROUP INC earnings calls

HIG · every analyst question and management's answer

Oct 27, 2026 earnings call — Leadership change and strong operating results

Third quarter core earnings were $956 million, with business insurance written premium growth of 6% and strong small business margins.

Revenue $7.2B (est $7.4B) · EPS $3.50 (est $3.17)

Key quotes

"I have tremendous confidence in Adin's leadership. Since joining The Hartford in 2015, he has strengthened our underwriting and has expanded our products and risk appetite."

— Christopher Jerome Swift (CEO·CHAIR) · Leadership transition

"In addition, Kinova recently shared with us that the Hartford ranked first for small business digital experience for the 8th year in a row with a 20-point lead over the next carrier."

— Christopher Jerome Swift (CEO·CHAIR) · Small business digital edge

"The acquired business brings approximately $500 million in annual premium and expands the product portfolio to include dental and vision."

— Christopher Jerome Swift (CEO·CHAIR) · Employee benefits acquisition

Analyst Q&A 9

workers' comp and loss drivers

Q (Brian Meredith · UBS): How much did unusual losses affect the middle market combined ratio, and what actions are you taking on workers' compensation frequency and underwriting?

A: Management said comp (workers' compensation) and non-CAT property each added a little less than 4 points to the change versus prior year in middle market. They see non-CAT property as normal volatility and have been increasing loss picks for comp after observing higher frequency; underwriting actions and pricing filings for 2027 are underway.

"And then on the comp side, as I said, we have been seeing an increase in frequency during the course of the year." — Beth A. Costello (CFO)

reserves and small business performance

Q (Andrew Kligerman · TD Cowen): Did you change reserves for general liability or commercial auto in the quarter, and can the small business combined ratio persist amid pricing pressure?

A: They said the reserve review was done and they did not change booked reserves for GL or commercial auto because activity matched prior expectations. On small business, they said strong performance has been consistent quarter after quarter; favorable non-CAT property helped this quarter but underlying performance is solid and they will keep investing in digital capabilities.

"We did conduct our reserve review during the quarter. And we did not adjust our booked reserves as we looked at the activity." — Beth A. Costello (CFO)

benefits margin and disability trends

Q (Elyse Greenspan): With Equitable being dilutive in 2027 and disability trends, can benefits still be a 6%–7% margin business? Also are disability trends continuing (mental health, FMLA)?

A: They reiterated the long-term view that benefits is a 6% to 7% business, noting modest dilution in 2027 from integration and amortization but expecting to earn into it. On disability, they see elevated behavioral health claims and higher-wage claimants; they are putting mid double-digit rate increases into paid family and medical leave as utilization rises.

"Still think in terms of this business as 6% to 7%." — Christopher Jerome Swift (CEO·CHAIR)

benefits core margin and small commercial competition

Q (Taylor Scott): How should we think about core margin in benefits given the acquisition and disability trends? And can you sustain small commercial growth in a more competitive market?

A: They again said benefits targets remain 6% to 7% and the Equitable deal should be accretive over time as they scale, noting the business is showing higher returns on tangible capital. For small commercial, they expect to keep growing via digital and tech advantages, but noted increased competitiveness this quarter; underwriting discipline and retention focus will guide growth in middle and global.

"I still think this is a 6% to 7% business for us." — Christopher Jerome Swift (CEO·CHAIR)

contingent commissions and personal lines growth

Q (Gregory Peters · Raymond James): Could contingent commissions pressure expense ratio? And how competitive are you on auto and home for future growth?

A: They said they expect stability in contingent commission arrangements and have negotiated equitable deals with partners. On personal lines, margins and retention have improved; agency growth supports top line and they will pursue disciplined, thoughtful growth rather than forcing volume.

"I would say our growth trajectory has been improving as retention benefits from lower rate and through the customer experience efforts that we have been deploying in market." — Melinda Thompson

where small commercial growth is coming from and expenses

Q (Robert Cox · Goldman Sachs): Is small commercial growth concentrated by industry or geography? And what drove the decrease in staffing costs and expense ratio?

A: They said small commercial growth is broad based across industries and they expect continued small business formation aided by technology. On expenses, management called it broad based efficiency gains, with lower salary and total compensation per head reducing cost per employee as investments show returns.

"it is just our overall I will call it, cost per head is coming down." — Christopher Jerome Swift (CEO·CHAIR)

mix impact and small ongoing effects

Q (David Motemaden · Evercore): Can you unpack the mix and other small items that caused roughly 100 basis points of the BI deterioration beyond comp? Will mix continue as written premium earns in?

A: They said the mix impact on total BI is modest (roughly 0.3-0.4 points) not a full point, and the remaining difference is many small items across lines like pricing environment effects in financial lines. Some mix impact should continue as higher written national accounts earn into the book.

"And then the other items that make up the difference really is just a lot of little tens of points here and there." — Beth A. Costello (CFO)

medical severity and AI impact on small commercial

Q (Autonomous): Has medical severity changed from prior 5% assumptions and is agentic AI changing how you source small commercial risks?

A: They said their starting medical severity assumption remains 5% and has not changed, though frequency shifts can affect outcomes. On agentic AI, they see it as early days, monitor adoption and issues, have not seen adoption shift distribution channels, and believe agents remain important for small business customers.

"So our starting point still is, as we think about, you know, severity and you are referring to the medical severity, still starts with that 5%." — Beth A. Costello (CFO)

absolute frequency and links between comp and disability

Q (Ryan Tunis · Cantor): Given low absolute frequency, could reversion be hard and where are frequencies now in comp and disability? Are claim types rhyming across the two books?

A: They said disability had several strong years and is now mean-reverting; they view the 2026 frequency change as a 1-time step change and do not expect another year of elevated frequency at this time. They do not see the same claim types linking comp and disability; health care cost and ACA subsidy expiration are possible drivers and they will use data and AI to study state-level patterns.

"I do think it is a-- right now, our belief is it is a 1-time step change here in 2026, and we will have to see how things play out in 2027." — Christopher Jerome Swift (CEO·CHAIR)

AI-generated notes on the earnings call transcript. Quotes are taken from the transcript. This is not a FolioObs investment view.

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