- 2025 Core Earnings & ROE: $1.1 billion (Q4) or $4.6/share; full-year ROE of 19.4%
- Business Insurance Growth: 7% top-line growth with 88.1 underlying combined ratio
- Employee Benefits Margin: 8.2% core earnings margin driven by life/disability performance
- Investment Income Boost: $832 million net investment income (+17% YoY); 4.6% annualized yield
- Capital Returns Plan: $450M quarterly share repurchases and $2.9B net dividends expected in 2026 (+16%)
Segment Performance
The Business Insurance segment reported strong written premium growth across all three units, driven by new business, stable retention, and pricing increases. The underlying margin was 88.5% for 2025, reflecting disciplined underwriting. Renewal written pricing excluding workers' compensation was 6.1% for the quarter. The company expects to sustain industry-leading ROEs through disciplined underwriting and risk selection. In the personal lines, the company is growth-focused, having pivoted to growth in the third quarter of last year, and expects margin improvement in 2026.
Investment Portfolio and Capital Management
The investment portfolio generated solid performance, with net investment income of $832 million, up 17% from fourth-quarter 2024. The total annualized portfolio yield, excluding limited partnerships, was 4.6% before tax. The company increased its dividend by $400 million and share buybacks by $50 million a quarter, or $200 million for the full year, demonstrating a balanced approach to capital management. Holding company resources totaled $1.5 billion as of December 31.
Outlook and Valuation
Looking ahead to 2026, the company expects net dividends from operating companies of approximately $2.9 billion, a 16% increase over 2025. Analysts estimate next year's revenue growth at 4.6%. With a Price-to-Book Ratio of 1.98, the stock appears reasonably valued. The Dividend Yield stands at 1.6%, providing a relatively stable return. The company's ROE of 21.37% and ROIC of 28.21% indicate strong profitability. Overall, The Hartford Financial Services Group, Inc. is well-positioned for continued growth and profitability.