The Hartford and Infinity Report Tumbling Profits for Third Quarter

Hartford and Infinity profitsTwo more auto insurers have joined the growing ranks of companies declaring deep losses in recent months, with Infinity Property and Casualty announcing an 80 percent drop in profits and The Hartford reportedly breaking even during the third quarter of 2011.

Infinity officials said net earnings for July through September fell to $6.1 million, down from $30.8 million for the same period last year. Income for the year’s first nine months dipped 60.6 percent, from $62.7 million in 2010 to $24.7 million this year.

The company—which provides cheap car insurance for many policyholders with blemishes on their driving records—blamed the poor results on the increased severity  of personal injury protection (PIP) coverage claims in Florida and bodily injury coverage in California. Losses and loss adjustment expense reserves related to accidents in prior years led to a $4.8 million in pretax decline, compared with $16.8 million in pretax increase for the three-month period in 2010.

The losses came despite gains in some areas, including an 11.2 percent increase in gross written premiums, which rose from $243.8 million for the three months leading up to September 2010 to $271.1 million over the same time frame this year.

Infinity’s combined ratio—a measure of profitability that compares performance of multiple companies—was 99.3, down from 88.4 last year.

Stagnant Cash Flow for The Hartford

The Hartford reported zero net income for the third quarter, blaming capital markets volatility and large catastrophe claims for the 100 percent drop from last year, when the company reported $666 million in third-quarter profits.

Core earnings were down 96 percent between years for the three-month period, from $705 million to $33 million.

The Hartford was hit with $134 million in catastrophe losses from July through September, officials said.

Infinity and The Hartford join the long list of auto insurers—including Allstate Insurance, State Farm, Progressive and MetLife Auto & Home— to announce steep third-quarter losses, many of them resulting from Hurricane Irene and other weather-related catastrophes.

Insurance industry experts typically define catastrophes as events that cause $25 million or more in insured property losses and affect a large number of policyholders and coverage providers.

Allstate announced earlier this week that its third-quarter profits tumbled 55 percent, thanks in large part to catastrophe losses of $697 million, a 179 percent increase from the previous year.

Progressive reported a 42 percent dip in net income for the quarter.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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