The Hartford Estimates Impacts Of U.S. Corporate Tax Law And Catastrophe Losses On Fourth Quarter 2017 Financial Results
January 08 2018 - 4:15PM
Business Wire
- Estimated $850 million charge
principally due to the impact of lower U.S. corporate tax rates
beginning in 2018 on the company’s net deferred tax assets
- Catastrophe losses in fourth quarter
2017 estimated at approximately $180 million, before tax, largely
due to California wildfires
- Fourth quarter 2017 financial results
and 2018 outlook to be released after market close on Feb. 8
The Hartford today announced that it estimates fourth quarter
2017 financial results will be reduced by approximately $850
million due to the impact of the new U.S. tax law and $117 million,
after tax, for catastrophe losses.
The approximately $850 million charge from the new U.S. tax law
is primary due to the reduction in the U.S. corporate tax rate from
35 percent to 21 percent effective Jan. 1, 2018 and its impact on
the company’s net deferred tax asset position. The estimate is
based on current accounting guidance and the company’s net deferred
tax assets as of Sept. 30, 2017, and the final amount will depend
on fourth quarter 2017 financial results. The charge will not
affect core earnings, a non-GAAP financial measure. Although the
new U.S. tax law reduces the company’s net deferred tax asset
position, the company expects a net favorable future economic
impact from both the lower corporate income tax rate and the repeal
and refunding of the corporate alternative minimum tax credits.
In addition, the company estimates that fourth quarter financial
results will include approximately $180 million of net catastrophe
losses, before tax, or $117 million, after tax. This estimate
includes the benefit of favorable loss reserve development on prior
quarter 2017 catastrophes and anticipated reinsurance recoveries
for fourth quarter 2017 catastrophe losses ceded to the company’s
2017 property catastrophe aggregate reinsurance treaty. Catastrophe
losses in fourth quarter 2017 were primarily in the Personal Lines
segment and from wildfires in California, with total estimated
gross losses of $307 million, before tax, and before expected
reinsurance recoveries.
The Hartford will release its fourth quarter 2017 financial
results, as well as its 2018 outlook for selected business metrics,
following the close of the market on Thursday, Feb. 8, 2018. The
company will host a webcast at 9 a.m. EST on Friday, Feb. 9, to
discuss the results and 2018 outlook. The webcast, along with an
audio replay and transcript, will be available for at least one
year on the investor relations section of the company’s website,
https://ir.thehartford.com.
About The Hartford
The Hartford is a leader in property and casualty insurance,
group benefits and mutual funds. With more than 200 years of
expertise, The Hartford is widely recognized for its service
excellence, sustainability practices, trust and integrity. More
information on the company and its financial performance is
available at https://www.thehartford.com. Follow us on Twitter
at www.twitter.com/TheHartford_PR.
The Hartford Financial Services Group, Inc., (NYSE: HIG)
operates through its subsidiaries under the brand name, The
Hartford, and is headquartered in Hartford, Conn. For additional
details, please read The Hartford’s legal notice.
HIG-F
Some of the statements in this release may be considered
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. These forward looking statements
include statements on the financial impact of tax reform. We
continue to assess the tax accounting effects of tax reform. In
addition, forward looking statements include statements on fourth
quarter 2017 catastrophe losses. 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. These important risks and
uncertainties include those discussed in our 2016 Annual Report on
Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the
other filings we make with the Securities and Exchange Commission.
We assume no obligation to update this release, which speaks as of
the date issued.
From time to time, The Hartford may use its website to
disseminate material company information. Financial and other
important information regarding The Hartford is routinely
accessible through and posted on our website at
https://ir.thehartford.com. In addition, you may automatically
receive email alerts and other information about The Hartford when
you enroll your email address by visiting the “Email Alerts”
section at https://ir.thehartford.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180108006832/en/
The HartfordMedia Contact:Michelle Loxton,
860-547-7413michelle.loxton@thehartford.comorInvestor
Contact:Sabra Purtill, CFA,
860-547-8691sabra.purtill@thehartford.com
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