Hartford Financial Services Group Inc. ( HIG - Analyst Report ) has announced its pre-tax current accident year catastrophe (CAT) loss estimate of $280–300 million for the second quarter of 2012, which is considerably lower than $447 million recorded in the year-ago quarter.

The post-tax CAT loss is projected to be around $180–195 million, compared with $290 million in the second quarter of 2011. The CAT loss estimates are based on losses caused by 13 catastrophes.

Moreover, Hartford’s property and casualty (P&C) prior accident year loss reserve development for the second quarter of 2012 is expected to be an unfavorable $45–55 million pre-tax (or $30–35 million post-tax). The estimate includes unfavorable asbestos and environmental loss reserve development of $50 million pre-tax (or $33 million post-tax).

Higher loss estimate for some asbestos policyholders resulted in the unfavorable estimate of asbestos and environmental loss reserve development for the quarter. Nevertheless, the unfavorable asbestos loss reserve development stood significantly higher than $290 million pre-tax (or $189 million post-tax) in the second quarter of 2011.

While Hartford’s CAT loss is expected to plunge year over year, yet the estimate is substantially high as the quarter witnessed many large hailstorms in the U.S. However, the catastrophes in the current year were dwarfed by the tornadoes in the second quarter of 2011, resulting in lower estimates for the second quarter of 2012.

Hartford, which competes with insurance companies like American International Group ( AIG - Analyst Report ) and MetLife Inc. ( MET - Analyst Report ) , is expected to announce its second-quarter 2012 financial results after the market closes on August 1.

Currently, the company’s shares carry a short-term Zacks #3 Rank (Hold). Considering the fundamentals, we maintain a long-term Neutral recommendation on Hartford.