Hartford Financial Delivering On A Model With Both Growth And Defensive Traits

I let Hartford Financial (HIG) fall off my regular paper route, but a lot of the things I liked about the company when I last wrote about it, including its Navigators acquisition, have worked out and my bullish stance has been rewarded with a decent 25% or so total return since then – pretty good next to Chubb (CB) and Travelers (TRV), though not quite as good as W.R. Berkley (WRB) and Arch Capital (ACGL) (another one I’ve long been fond of).

Re-examining the story again today, I like the company’s comparatively healthy reserve position and disciplined underwriting strategy – two factors that should let the company benefit from a very hard market where pricing is being driven by underwriting mistakes made by other insurers and claims inflation. I also like the potential for ongoing growth in the small business category, not to mention the potential to continue leveraging the Navigators deal to expand its product line-up.

As far as valuation goes, though, I’m not as bullish as I was. Between discounted core earnings and ROE-driven price/book, Hartford should be trading between the low and mid $60’s and that’s where the shares are today.

Read the full article:
Hartford Financial Delivering On A Model With Both Growth And Defensive Traits