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Hartford Financial Provides Q4 Catastrophe Loss Estimates

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Hartford Financial Services Group Inc. (HIG - Free Report) recently announced that it expects a fourth-quarter current accident year net catastrophe impact of $350-$365 million or an after-tax effect of $275-$290 million. The loss is due to the Camp Fire in California, which occurred in November this year, having destroyed thousands of residential and commercial properties. The company’s fourth-quarter results are anticipated to be affected by these losses.

The mentioned loss estimates also include the consequences of Woolsey fire in California and Hurricane Michael on the company.

Per credit rating agency Moody’s Investor Service, total insured losses are projected between $10 billion $15 billion for property & casualty insurers and reinsurers due to California Wildfires, which burnt more than 20,000 residential and commercial structures and damaged around 1,000 structures. The amount of property charred in 2018 is already almost double the total figure of 2017. Moody’s forecasts that insured losses would reduce fourth-quarter earnings for primary insurers and reinsurers although the suffered losses can be managed by the companies.

Hartford Financial’s current accident year catastrophe loss of $460 million, before tax, for the first nine months of 2018 decreased 30% year over year.

Despite the impact of wildfires, the company’s fourth-quarter results would likely be driven by its core fundamentals such as strategic initiatives, improving interest rate and lowering debt level.

Shares of this Zacks Rank #3 (Hold) have lost 21.8% in a year’s time, wider than its industry’s decline of 3.2%.

The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at $1.08, up 33.3% on a year-over-year basis. When it comes to Californian wildfires, Mercury General Corporation (MCY - Free Report) and Chubb Limited (CB - Free Report) recently issued pre-tax gross catastrophe loss projections of $253 million and $195 million, respectively, stemming from Camp Fire and Woolsey Fire in each case.

Key Pick

Investors looking for a better-ranked stock in the insurance multi-line industry might take a look at Cigna Corporation (CI - Free Report) .

Cigna provides insurance and related products and services in the United States and internationally. The company sports a Zacks Rank #1 (Strong Buy) and delivered average four-quarter beat of 13.46%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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