The Hartford Financial Services Group, Inc. (NYSE:HIG) Q4 2015 Earnings Conference Call - Preliminary Transcript

Feb 05, 2016 • 09:00 am ET


The Hartford Financial Services Group, Inc. (NYSE:HIG) Q4 2015 Earnings Conference Call - Preliminary Transcript


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Good morning. My name is Jessa, and I will be your conference operator today. At this time, I would like to welcome everyone to The Hartford's Fourth Quarter 2015 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

[Operator Instructions]

Thank you.

Sabra Purtill, Head of Investor Relations, you may begin your conference.

Sabra Purtill

Thank you. Good morning and welcome to The Hartford's webcast for 2015 financial results and 2016 outlook.

The news release, investor financial supplement and fourth quarter slides were all released yesterday afternoon and are posted on our website. In addition, there is a slide deck for today's webcast that was posted this morning. I would note that we expect to file the 2015 10-K on February 26th.

Our speakers today include Chris Swift, Chairman and CEO of The Hartford; Doug Elliot, President; and Beth Bombara, CFO. Following their prepared remarks, we will have about 30 minutes for Q&A. Just a few notes before Chris begins, today's call includes forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

These statements are not guarantees of future performance and actual results could be materially different. We do not assume any obligation to update forward-looking statements and investors should consider the risks and uncertainties that could cause actual results to differ from these statements.

A detailed description of those risks and uncertainties can be found in our SEC filings, available on our website. Our presentation today also includes several non-GAAP financial measures. Explanations and reconciliations of these measures to the comparable GAAP measure are included in our SEC filings, as well as in the news release and the financial supplement.

I'll now turn the call over to Chris.

Chris Swift

Thanks, Sabra. Good morning, everyone, and thank you for joining the call.

2015 was a successful year for The Hartford. Core earnings per diluted share increased 15% over 2014. Core earnings ROE rose to 9.2% from 8.4%. Book value per diluted share, excluding AOCI, grew by 7%. We reduced debt by $750 million and we returned $1.6 billion of capital to our shareholders. Doug and Beth will go into further details of our 2015 performance.

But I'd like to touch on a few highlights. First, Property and Casualty had a very strong year. The underlying combined ratio improved a half a point to 91 and top line growth continued, reflecting an increase in new business and the benefit of pricing and underwriting actions we have made over the past few years.

Group Benefits had a very strong year. The business generated a 5.6% core earnings margin, exceeding our plan and pivoted to growth with a 2% increase in fully insured ongoing premiums. We continue to execute on our strategy at Talcott Resolution. The business is running off steadily, returning capital to the holding company and our hedge programs are working effectively.

Our mutual funds business generated $1.5 billion of positive net flows in