The Hartford Financial Services (HIG): Liability Reserve Additions and Underlying Bl Margin Miss Casts Shadow on 2Q26 EPS Beat

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The Hartford Financial Services (HIG): Liability Reserve Additions and Underlying Bl Margin Miss Casts Shadow on 2Q26 EPS Beat

Equity Research

23 July 2026 | 8:19PM EDT

The Hartford Financial Services (HIG): Liability Reserve Additions and

Underlying BI Margin Miss Casts Shadow on 2Q26 EPS Beat

HIG reported operating EPS of $3.42, beating VA Consensus of $3.10 and our Robert Cox

+1(212)902-9813 | rob.cox@gs.com

$3.23 estimate. The beat was primarily driven by a $70mn beat on NII, with Goldman Sachs & Co. LLC

further support from relatively equal-sized beats on Total P&C CATs (4.9% vs. Jack Kendall

5.6% Street) and PYD (2.4pp favorable vs. 1.7pp Street). These beats were +1(212)902-0331Goldman Sachs & Co.| jack.kendall@gs.comLLC

partially offset by an 80bps miss on the BI underlying loss ratio, which deteriorated Victoria Gong

by 130bps YoY to 58.3% (vs. 57.5%/57.6% Street/GSe), due to business mix impacts +1(212)902-7254victoria.gong@gs.com|

and non-cat property losses. In addition to an underlying margin miss in BI, the Goldman Sachs & Co. LLC

company missed GS/Street expectations on BI PYD (1.4pp favorable vs. 1.5pp

Street/2.4pp GSe), with the miss vs. GSe due to addition to reserves for Auto Liability

($26mn for AY2023/AY2024) and General Liability ($46mn for multiple accident

years). Despite a marginal impact on BV (0.3% after-tax), investors are likely to

have a negative reaction to HIG’s first non-legacy focused liability reserve

increase since 4Q24 (excl. a $12mn auto addition 4Q25). Outside of these

negative BI margin impacts, HIG demonstrated the strength of its SME-focused

business in the quarter, delivering largely stable growth of ~5.5% in BI (vs. +5.9%

1Q26), and stable BI pricing of 4.3% (vs. 4.3% 1Q26), with growth and pricing