Hartford shares jump after profit tops Street view

NEW YORK, Nov 4 (Reuters) - Shares of Hartford Financial Services Group Inc, which has received $3.4 billion in federal aid, jumped 7.3 percent on Wednesday, a day after the insurer reported better-than-expected quarterly results. The life and property insurer reported a narrower net loss in the third quarter, a vast improvement from a record loss a year earlier. The company also raised its outlook for full-year earnings. Hartford, like many others in the life insurance sector, was badly battered in late 2008 and earlier this year by losses on stock market-linked annuities and investments. But industry results have improved as credit markets have stabilized, leading to narrower capital losses. Hartford Shares rose to $27.70 in premarket trade after closing at $25.82 Tuesday on the New York Stock Exchange. Hartford's third-quarter net loss of $220 million compared with a loss of $2.6 billion a year earlier. The latest results included net realized capital losses of $885 million from impaired investments and a hedging program, compared with capital losses of $2.2 billion a year earlier. New Chief Executive Liam McGee said on an earnings conference call Wednesday that he has sat through a round of "in-depth business reviews" with clients since he joined Hartford a month ago, and said the company has tweaked its investment portfolio to cut risk, potentially heading off a repeat of the losses that roiled its results in past quarters. In addition to taking federal funds and raising capital from other sources to stabilize finances, Hartford in the past year has slashed its dividend, drastically cut jobs, curtailed business in Europe, and withdrawn from Japan, a market that had once been key. Analysts on the conference call expressed concern about potential losses from obligations Hartford retains in Japan. CFO Liz Zlatkus said the company had bought insurance protection to partially cover liabilities in Japan, and also had a hedging program in place. "We do have some risk left in Japan," said Zlatkus, but added, "The capital we have there is more than sufficient." McGee told investors the company had stabilized but there were still challenges, including the effects of a lagging U.S. economy. He sees a "slow and choppy" recovery in the economy extending into 2010. Hartford raised its forecast for "core" earnings for full-year 2009 to a range of 85 cents to $1.05 per share, from its previous outlook of nil to 20 cents a share. Hartford shares have staged a strong recovery since hitting an all-time low of $3.33 in March, when investor concerns about life insurers running short of capital reached fever pitch. (Reporting by Lilla Zuill; editing by John Wallace) Keywords: HARTFORD/ ([e-mail];[phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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