The Hartford Financial Services Group, Inc. HIG benefits from premium growth, strong customer retention rates, innovative product offerings, acquisitions, cost-cutting initiatives and solid cash balance.

HIG’s Zacks Rank & Price Performance

Hartford Financial currently carries a Zacks Rank #3 (Hold).

The stock has gained 34.4% in the past year compared with the industry’s 12.4% growth. The Zacks Finance sector and the S&P 500 composite rose 21.2% and 26.1%, respectively, in the same time frame.

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Hartford Financial’s Favorable Style Score

HIG is well-poised for progress, as evidenced by its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.

HIG's Robust Growth Prospects

The Zacks Consensus Estimate for 2025 earnings is pegged at $11.53 per share, indicating 14.6% growth from the 2024 estimate. The estimate for revenues is $20 billion, which indicates a rise of 9.9% from the 2024 estimate.

Hartford Financial’s Decent Earnings Surprise History

HIG’s bottom line surpassed earnings estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.14%.

HIG’s Solid Return on Equity

The return on equity for Hartford Financial is currently 20.4%, which is higher than the industry’s average of 15.3%. This substantiates the company’s efficiency in utilizing shareholders’ funds.

Hartford Financial’s Business Tailwinds

Hartford Financial benefits significantly from the robust performance in its Commercial Lines and Group Benefits segments. The Commercial Lines unit thrives on sustained rate increases, new business growth and high customer retention, driving premium growth. 

Similarly, the Group Benefits segment has shown impressive results due to higher fully insured ongoing premiums, supported by strong sales and solid persistency. The company’s introduction of innovative products, such as critical illness insurance covering a diverse range of health conditions, highlights its efforts to enhance its group benefits offerings.

Premium growth from both segments significantly contributes to Hartford Financial’s revenues as premiums form a substantial portion of an insurer's income. While catastrophe losses remain a concern, they also boost policy renewal rates, thereby maintaining a steady inflow of premiums. Hartford Financial mitigates potential losses through reinsurance agreements, which help limit financial exposure.

The company continually strengthens its capabilities and national presence through product launches and strategic acquisitions. Additionally, divestitures aimed at focusing on U.S. operations and freeing up capital enhance its financial flexibility to pursue growth investments. Cost-cutting initiatives reflect Hartford Financial’s commitment to improving margins.

A strong financial foundation allows Hartford Financial to allocate capital strategically, including share repurchases and dividend payments. As of Sept. 30, 2024, the company had a cash balance of $223 million, which surged 77% from the 2023-end level. Furthermore, the 11% dividend increase approved in October 2024 underscores its focus on delivering value to shareholders.

Stocks to Consider

Some better-ranked stocks in the insurance space are United Fire Group, Inc. UFCS, W. R. Berkley Corporation WRB and Kinsale Capital Group, Inc. KNSL. United Fire Group currently sports a Zacks Rank #1 (Strong Buy), and W.R. Berkley and Kinsale Capital carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

United Fire Group’s earnings surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 58.79%. The Zacks Consensus Estimate for UFCS’ 2025 earnings indicates a rise of 19.6%, while the same for revenues implies an improvement of 11.3% from the respective 2024 estimates. The consensus mark for UFCS’ 2025 earnings has moved 46.7% north in the past 60 days. 

The bottom line of W.R. Berkley beat estimates in each of the trailing four quarters, the average surprise being 7.10%. The Zacks Consensus Estimate for WRB’s 2025 earnings indicates a rise of 9.6%, while the same for revenues implies an improvement of 8% from the respective 2024 estimates. The consensus mark for WRB’s 2025 earnings has moved 0.7% north in the past 30 days.

Kinsale Capital’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 9.41%. The Zacks Consensus Estimate for KNSL’s 2025 earnings indicates a rise of 17.1%, while the same for revenues implies an improvement of 16.4% from the respective year-ago estimates. The consensus mark for KNSL’s 2025 earnings has moved 0.6% north in the past 30 days. 

Shares of United Fire Group, W.R. Berkley and Kinsale Capital have gained 39.9%, 21% and 33.2%, respectively, in the past year.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report

W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

United Fire Group, Inc (UFCS) : Free Stock Analysis Report

Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report

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