Hartford Financial Services Group Inc. (HIG)
Q1 2010 Earnings Call Transcript
April 30, 2010 9:00 a.m. ET

Executives

Richard Costello – Investor Relations
Liam E. McGee – Chairman, President and Chief Executive officer
Christopher J. Swift – Executive Vice President and Chief Financial Officer
Juan C. Andrade – President and Chief Operating Officer of Property and Casualty Operations
Gregory McGreevey – Executive Vice President, Chief Investment Officer and President of The Hartford Investment Management Company
John C. Walters – President and Chief Operating Officer of Life Operations

Analysts

Andrew Kligerman – UBS
John Nadel – Sterne Agee
Jimmy Bhullar – J.P. Morgan
Randy Binner – FBR Capital Markets
Darin Arita – Deutsche Bank
Paul Sarran – Macquarie
Thomas Gallagher – Credit Suisse
Scott Frost – HSBC

Presentation

Operator

Good morning. My name is Conchita, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hartford First Quarter 2010 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers'' remarks, there will be a question-and-answer session. If you would like to ask a question at this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Mr. Rick Costello, you may begin your conference.

Richard Costello

Thank you, Conchita. Good morning and thank you for joining us for The Hartford''s first-quarter 2010 financial results conference call. Our earnings release and financial supplement were issued yesterday. The slide presentation for today''s call is available on the company''s website at TheHartford.com. CEO Liam McGee and CFO Chris Swift will provide prepared remarks this morning, and we will finish with Q&A. Also participating on today''s call are Juan Andrade, President of the Property and Casualty operations; John Walters, President of the Life operations; Greg McGreevey, Chief Investment Officer; and Alan Kreczko, General Counsel.

Turning to the presentation, on slide two please note that we will make certain statements during the call that should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford''s future results of operations. We caution investors that these forward-looking statements are not guarantees of future performance and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those discussed in our press release issued yesterday, our quarterly report on Form 10-Q for the first quarter of 2010, our 2009 annual report on Form 10-K and other filings we make with the Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today''s date.

Today''s discussion on The Hartford''s financial performance includes financial measures that are not derived from generally accepted accounting principles or GAAP. Information regarding these non-GAAP and other financial measures, including reconciliations to the most directly comparable GAAP measures, is provided in the investor financial supplement for the first quarter of 2010, in the press release we issued yesterday, and in the investor relations section of The Hartford''s website at www.TheHartford.com.

Now I will hand the call over to The Hartford''s Chairman, President, and CEO, Liam McGee.

Liam E. McGee

Thank you, Rick and good morning everyone and thank you again for joining us today. Before we get started, I want to welcome Chris Swift to his first Hartford earnings call. I am pleased to have him on board and appreciate his contributions to what the company has accomplished in the past 60 days.

I also want to thank those of you, who joined us earlier this month for our investor presentation, either in person in New York or on the webcast. We appreciate the positive feedback, as well as the questions we’ve received and we’re now focused on executing our strategy in achieving the financial targets we set, high single-digit core earnings growth and an 11% ROE by 2012.

I’ll provide some additional color on the strategy today and share some of our earlier progress. Obviously, success will not come in one quarter, and instead, will be measured by the results we generate over the next few years. As I’ve said since my arrival, our goal is to deliver superior shareholder returns over time, through sustained profitable growth and that is what we intend to do.

We made good progress in the first quarter. We continued to execute on our 2010 plans, strengthen the balance sheet with the successful capital raise and the TARP re-payment and launched our new strategy. While there is more to do, frankly, we got a lot done. I want to thank the Hartford team for all their hard work and efforts.

With net income of $319 million, the first quarter marked our second consecutive profitable quarter and as a company committed to driving sustained profitability, this is an important result. A strong equity market, our continued commitment to the underwriting discipline and improving credit markets, all contributed to our results.

Chris will go into more detail, but we did have a few one-time charges for the quarter relating to the TARP repurchase, the settlement of the litigation matter and the impact of new Federal healthcare legislation. Without these items, core earnings would have been over $1.30 per share.