Nation's insurers post 3Q profit declines, losses

CHARLOTTE, N.C. - A trio of major insurance companies posted dour third-quarter results Wednesday, extending a trend among national insurers seeing their profits evaporated by investment and catastrophe losses.

Prudential Financial Inc. and Hartford Financial Services Group Inc. each swung to quarterly losses, while MetLife Inc. saw its profit slide while still meeting Wall Street expectations.

The three companies, which reported results after the market closed, warned earlier this month that they were not going to meet previously announced guidance for the most recent quarter because they had to write down investments and were hurt by hefty hurricane-related losses.

Hartford, Conn.-based Hartford Financial late Wednesday said it lost $2.6 billion, or $8.74 per share, in the period, compared to a profit of $851 million, or $2.68 per share, in the third quarter 2007.

Operating losses, which excludes investment gains and losses, totaled $422 million, or $1.40 cents a share — missing analysts' average loss estimate of $1.54 per share, according to Thomson Reuters.

"This was an extremely difficult quarter for the company," said Ramani Ayer, Hartford's chairman and chief executive, in a statement. "Volatile credit and equity markets and the largest catastrophe in the past three years significantly affected our results."

Unfavorable market conditions also drove Prudential Financial to report a third-quarter loss, reversing a year-ago profit.

The Newark, N.J.-based insurance and investment company said its financial services businesses lost $108 million, or 23 cents per share, after a profit of $860 million, or $1.88 per share, a year ago.

After-tax adjusted operating profit fell 68 percent to $308 million, or 74 cents per share. Analysts expected an average profit estimate of 94 cents per share.

Quarterly revenue fell 9 percent to $6.15 billion. Analysts had expected $6.72 billion.

In light of current financial market volatility, Prudential Financial withdrew its earnings guidance for 2008 of $7.50 to $7.80 per share. Analysts have forecast profit of $6.45 per share.

And while MetLife's quarterly profits were also down, the New York-based life insurer appeared to be performing better than its peers.

MetLife's profit fell 39 percent in the third quarter as it paid out $1.2 billion more in benefits and claims and recorded higher operating costs.

The company's profit after paying preferred dividends fell to $600 million, or 83 cents per share, from $985 million, or $1.29, a year ago. The results were in line with Wall Street's expectations.

Total revenue rose 14.5 percent to $13.38 billion, as premiums, fees and other revenue rose 16 percent to $8.6 billion.

Operating income at the company fell to $639 million, or 88 cents per share, in line with preliminary estimates issued by the company earlier this month. The results were also in line with estimates of analysts surveyed by Thomson Reuters.

The news comes as other national insurers are seeing similar profit declines as investment and catastrophe losses hit balance sheets.

Last week, property, casualty and auto insurer Allstate Corp. posted an unexpected $923 million loss in the third quarter, hit by hefty hurricane-related losses and the ongoing global financial crisis.

Shares of Hartford closed up 64 cents, or 3.3 percent at $19.86 on Wednesday, Prudential Financial lost $1.25, or 3.4 percent to close at $35.25 and MetLife slipped 23 cents, or 0.7 percent, to $29.55.

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