Increasing annuity sales and an improving stock market helped Hartford increase its share price to almost $25, up close to 5%. This information comes from Christi Roberts’ article in Annuity News Journal, “Hartford Shows Strong Earnings.” Hartford’s third quarter income was $666 million, a huge improvement over the net loss of $200 million that they saw last year at this time. While financial analysts predicted that Hartford would make 98 cents per share, they actually made $1.34 per share. Hartford’s core earnings, those ignoring investment losses or gains, were $1.43 per share.
The deferred acquisition costs tied to variable annuities earned $166 million in income, accounting for 34 cents per share. As the global equity market saw an increase, so did Hartford’s deferred acquisition costs relative to variable annuities. The fees charged for variable annuities pay for the cost of selling those annuity products and are called deferred acquisition costs. Any increase in the stock market, especially that above what analysts predicted, results in an increase of income for the company selling the annuities. The improvements within the stock market helped Hartford with both their deferred acquisition costs and their share price increase.