The Hartford's Q2 2026 net income rose 31% to $1.29B ($4.68/share), mostly on a $251M tax benefit from the Hartford Funds sale; core earnings rose 1% as Business Insurance's combined ratio worsened to 91.4 while Personal Insurance improved to 90.1.
Revenue
$7.3B
+8.1% YoY
Net income
$1.3B
+30.6% YoY
Diluted EPS
$4.68
+36.0% YoY
Headline: profit up 31%, but mostly from a one-off tax gain; core earnings barely moved
The Hartford's net income available to common stockholders rose to $1,293 million in Q2 2026 (quarter ended June 30), up 31% from $990 million, and diluted EPS rose 36% to $4.68. That headline overstates the underlying improvement. Most of the jump came from $318 million of income from discontinued operations (up from $57 million), which includes a $251 million income tax benefit booked when the company agreed on June 3, 2026 to sell its mutual-fund arm, Hartford Funds, to Wellington. That gain happens once and says nothing about how the insurance business performed.
Core earnings is the company's own measure that strips out investment gains and losses, discontinued operations and a few other items. It rose just 1%, to $945 million from $932 million. Core EPS rose faster, 6% to $3.42, because buybacks reduced the share count. Behind that flat result, two things roughly cancelled out:
Better: net investment income jumped 22% to $800 million, and the Personal Insurance (home and auto) segment improved sharply.
Worse: Business Insurance got much less help from past-year reserve releases, a large-account unit had a bad quarter, and disability claims rose in Employee Benefits.
Total revenue grew 8.1% to $7,263 million, led by earned premiums of $6,279 million (+5%).
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenues
$7,263M
$6,716M
+8.1%
Earned premiums
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A few terms used throughout: the combined ratio is claims plus operating expenses as a share of the premiums the insurer earned. Below 100 means the insurance itself made money before any investment income. For example, 91.4 means about 91 cents of cost for every dollar of premium. The underlying combined ratio is the same measure without the current year's catastrophe losses and without prior-year reserve development. That development is the gain or charge that comes from changing estimates of what older claims will cost. A "favorable" change means old claims are costing less than the company reserved for, so money is released back into profit. ROE (return on equity) is annual profit as a percentage of shareholders' equity.
Business Insurance: premiums grew 5%, but profit from underwriting fell 29%
Business Insurance is the largest segment, covering insurance for small businesses, mid-sized and large companies, and specialty lines. Written premiums grew 5% to $4,022 million and earned premiums grew 7% to $3,663 million. Small Business grew fastest at 7%, helped by what the release calls "double-digit new business growth."
The segment's underwriting gain, meaning premiums minus claims and expenses before investment income, fell to $316 million from $444 million. The combined ratio worsened 4.4 points to 91.4. Most of that came from reserves: favorable prior-year development shrank to $52 million from $146 million, which cost 2.9 points. Within that $52 million:
The company raised reserves by $46 million for general liability and $26 million for commercial auto liability. The 10-Q says the Q2 general liability increase was "primarily to reflect a higher frequency of large losses in excess casualty and umbrella lines across multiple accident years." The commercial auto increase reflected "higher severity than previously estimated" for accident years 2023 and 2024.
Releases from workers' compensation ($51 million), bond ($32 million) and catastrophes ($37 million) more than offset those increases.
Last year's $146 million included a $24 million accounting benefit from a reinsurance deal (the Navigators ADC) that has since run out. That makes the year-on-year comparison look somewhat worse than the change in reserve quality alone.
The underlying combined ratio also rose, by 1.3 points to 89.3, and the three sub-units moved in opposite directions:
Business Insurance unit
Combined ratio Q2 2026
Q2 2025
Underlying Q2 2026
Underlying Q2 2025
Small Business
85.9
89.7
86.5
89.0
Middle & Large Business
101.9
86.6
95.3
89.1
Global Specialty
89.5
85.9
85.8
84.8
Middle & Large Business is the weak spot. Its combined ratio above 100 means it lost money on underwriting this quarter. The release attributes this to reserve development that turned from favorable to unfavorable, 2.0 points of higher catastrophe losses, and an underlying deterioration from "higher non-CAT property losses and a change in business mix." Small Business went the other way, with the underlying ratio improving 2.5 points on lower non-catastrophe property losses.
Price increases are slowing. Renewal written price increases, meaning how much more existing customers pay when they renew, were 4.1% in small business (down from 6.0% a year ago) and 3.5% in middle market (down from 6.1%). Global Specialty was 5.5%, up from 5.1%. At the same time, the 10-Q describes rising loss costs in general liability and commercial auto. Slower price increases combined with rising claim severity in liability lines is the combination that pushes underwriting margins down over time.
Personal Insurance: better margins, fewer customers
Personal Insurance, which is home and auto insurance for individuals, moved in the opposite direction from Business Insurance. Its combined ratio improved 4.0 points to 90.1, and core earnings rose 36% to $128 million. The underlying loss ratio improved 2.8 points to 60.0, which the release credits to "earned pricing increases outpacing loss cost trends." In other words, rate increases from the past year are still feeding into premiums faster than claim costs are growing. Favorable reserve development also increased, to $59 million from $41 million, split between auto and homeowners.
That margin recovery came at the expense of size:
Written premiums fell 7% to $915 million, and auto written premiums fell 10% to $567 million. Homeowners was flat at $348 million.
Auto policies in force fell to 990,000 from 1,121,000 a year earlier, and new auto business premiums dropped to $51 million from $81 million.
Renewal price increases slowed sharply. Auto went to 5.5% from 13.9%, and homeowners to 10.4% from 12.6%. The 10-Q says this was "primarily in response to moderating loss cost trends," and auto retention edged up to 81% from 79% as a result.
The expense ratio rose 1.2 points to 26.3 because fixed costs are spread over fewer premiums and because more business is coming through independent agents, who earn higher commissions.
Homeowners' underlying combined ratio of 73.3 remains very profitable. Auto's underlying ratio of 93.3 improved 1.9 points but leaves a much thinner margin.
Employee Benefits: disability claims pushed margin down
Employee Benefits sells group life and disability insurance through employers. Fully insured ongoing premiums grew 5% to $1,676 million, and sales rose 31%. However, core earnings fell 15% to $139 million, and the core earnings margin dropped to 7.4% from 9.2%. The cause was the group disability loss ratio (claims as a share of premiums), which rose 6.3 points to 74.8. The company cites "increased claim incidence across short and long-term disability products and less favorable long-term disability claim recoveries," while adding that results were still "in line with long-term expectations."
Investment income: a one-quarter boost
Net investment income rose to $800 million from $658 million, but most of the increase came from volatile sources. Income from limited partnerships and alternative investments (real estate joint ventures, infrastructure funds) jumped to $114 million from $13 million, "primarily driven by sales of underlying investments within real estate joint ventures." Excluding those partnerships, investment income grew 6%, to $686 million from $645 million, because the company had more money invested. The 6% figure is the better guide to what recurs each quarter. The $101 million swing in partnership income accounts for most of the growth in core earnings, which were otherwise flat.
Takeaway: Q2's 31% jump in profit comes mostly from a one-time $251 million tax benefit on the Hartford Funds sale, and core earnings grew only 1% even with a one-off surge in investment income. The insurance trends point in different directions. Personal auto is making more money per policy but losing customers, commercial price increases are slowing, and reserve increases in general liability and commercial auto, along with a 101.9 combined ratio in Middle & Large Business, are the numbers to watch next quarter.
Capital, the Hartford Funds sale, and what comes next
Buybacks: The company returned $615 million to shareholders in Q2, made up of $450 million of share repurchases and $165 million of dividends. $648 million was left under the current $3.3 billion program as of June 30. The Board approved a new $4.2 billion program running from August 1, 2026 through the end of 2028. The 10-Q says the company "expects to use the vast majority of the new authorization in 2027 and 2028."
Hartford Funds sale: Wellington will pay $300 million in cash at closing, plus quarterly payments for about seven years equal to 95% of certain after-tax cash flows. The expected closing is in Q1 2027. Before closing, The Hartford expects to receive $85 million of dividends from Hartford Funds for the rest of 2026 plus a pre-closing dividend of about $170 million. At closing, it expects to record an after-tax loss of about $150 million in discontinued operations. Much of this quarter's $251 million tax gain will therefore be offset when the deal closes. The contingent quarterly payments will be recorded as income only when they are received.
Arbitration over a reinsurance recovery: National Indemnity (a Berkshire Hathaway subsidiary) stopped paying under the reinsurance contract that covers The Hartford's old asbestos and environmental claims (the A&E ADC), and the dispute is now in arbitration. The 10-Q says the outcome and timing "is not yet known" and could affect cash flows or operating results.
Book value per diluted share was $70.28, up 6.0% since December 31, 2025. Excluding unrealized investment gains and losses (AOCI), it was $78.91, up 7.2%.
Outlook: The Hartford's Q2 filings (10-Q and earnings release) give no numerical earnings or combined-ratio guidance. For the second half of 2026, our read is:
Business Insurance margins are likely to keep drifting up because price increases have slowed to 3.5%–4.1% in the core small and middle-market lines while liability claim costs are rising.
Personal Insurance margin gains should slow now that auto price increases have fallen to 5.5%. The question is whether better retention can stop premiums from shrinking.
Investment income without the partnership surge looks closer to the ~$686 million run-rate than the $800 million headline.
The 18.7% trailing core ROE is still high for a commercial-focused insurer. It will be hard to push it higher from here without the help of reserve releases and a strong partnership quarter.
Source: The Hartford Insurance Group, Inc. Form 10-Q for the quarter ended June 30, 2026, filed July 23, 2026, and the Q2 2026 earnings release (Form 8-K Exhibit 99.1) filed the same day. Core earnings, core EPS, core ROE and underlying combined ratios are non-GAAP measures reconciled in those filings.