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What's in Store for Hartford Financial's (HIG) Q3 Earnings?

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The Hartford Financial Services Group, Inc. (HIG - Free Report) will release third-quarter 2021 financial results on Oct 28, after the closing bell.

Let’s see how the company is placed before its upcoming earnings announcement.

Q3 Earnings & Revenue Expectations

The Zacks Consensus Estimate for Hartford Financial’s third-quarter earnings of 81 cents per share implies a 44.5% decrease from the prior-year quarter’s reported number. The consensus estimate for sales of $3.5 billion suggests a 3.9% increase from the year-ago period’s reported figure.

Factors at Play for Q3 Results

Hartford Financial’s revenues are likely to have gained from higher contribution by its Commercial Lines, Hartford Funds and Corporate segments. Strong sales are expected to have contributed to the top line. Net investment income of the company might have increased owing to solid limited partnership returns.

The Zacks Consensus Estimate for written premiums from the Commercial Lines segment stands at $2.3 billion, indicating a downside of 7% from the year-ago quarter’s tally.

The consensus mark for total revenues for Hartford Funds and Group Benefits indicates an upside of 19.5% and 2% from the year-ago quarter’s reported figures, respectively.

However, the Personal Lines segment is likely to have recorded lower earned premiums, which in turn, might have dented its revenue base.

The segment might have suffered from soft underlying underwriting gain and less favorable PYD. The consensus mark for core earnings from the Personal Lines segment stands at ($2.61) against the year ago quarter’s figure of 77 cents.

The company is also expected to have witnessed a significant decline in new business in the middle and the large commercial market, which might have affected its overall performance. It is likely to have witnessed lower auto shopping rates in the to-be-reported quarter.

Margins are likely to have been depressed by steep expenses despite its cost-curbing measures.

What the Quantitative Model States

Our proven model conclusively predicts an earnings beat for Hartford Financial this season. The combination of a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, which is the case below. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Earnings ESP: Hartford Financial has an Earnings ESP of +5.61%. This is because the Most Accurate Estimate is pegged at 85 cents, higher than the Zacks Consensus Estimate of 81 cents.  You can see  the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank: Hartford Financial currently carries a Zacks Rank #3.

Highlights of Q2 Earnings and Surprise History

Hartford Financial reported second-quarter 2021 adjusted operating earnings of $2.33 per share, which outpaced the Zacks Consensus Estimate by 75.2%. The bottom line surged 91% year over year.

Results gained momentum on the back of an improved net investment income, lower COVID-related losses, reduced current accident year (CAY) CAT losses, rise in Commercial Lines earned premium and a better underlying ex-COVID-19 property and casualty (P&C) loss ratio.

The company flaunts an appreciative earnings history as its bottom line delivered a surprise in three of the trailing four quarters (missing the mark in one), the average beat being 37.5%.

Stocks to Consider

Some stocks worth considering from the insurance industry with the perfect mix of elements to surpass estimates in the upcoming releases are as follows:

Manulife Financial Corp (MFC - Free Report) currently has a Zacks Rank of 3 and an Earnings ESP of +1.53%.

MetLife, Inc. (MET - Free Report) is currently Zacks #3 Ranked and has an Earnings ESP of +1.21%.

Voya Financial, Inc. (VOYA - Free Report) has an Earnings ESP of +2.23% and is presently a #3 Ranked player.