The Hartford, a prominent insurance company, is facing significant challenges in its auto insurance division. Despite implementing a series of rate hikes throughout the year, the company’s CEO, Christopher Swift, recently stated that The Hartford’s auto book will not turn a profit until 2025. This revelation was made during a session at the KBW Insurance Conference.

The Current State of The Hartford’s Auto Book

Swift highlighted the positive contributions to The Hartford’s bottom line from its commercial insurance and group benefits divisions. However, he acknowledged that the personal lines division, particularly the personal auto line of business, is in need of improvement. The company is focused on pushing rate increases into the personal auto line to address loss severity trends and improve profitability.

The Hartford has a longstanding marketing relationship with AARP, but Swift emphasized that the company’s priority is to restore profitability to the auto book, regardless of the impact on policies in force or the top line. While AARP has a point of view, The Hartford ultimately makes the decisions regarding underwriting and pricing. Swift expects to implement approximately 20 points of rate increase in the auto book by the fourth quarter, with an additional 15-20 points of rate increase estimated for 2024 to achieve targeted margins and return on equity (ROE) goals by 2025.

The Path to Profitability

Swift acknowledged that achieving targeted profitability will be a long process, estimating that it will not be realized until 2025. The Hartford is diligently working on filing programs and leveraging its capabilities to adjust rates as needed in various states. Approximately 47% of The Hartford’s premium volume operates in states that require prior approval, while the remaining 53% are in states that use file and use or use and file systems. This means that half of the company’s book has a longer timeline for rate adjustments, particularly in West coast states, Massachusetts, and New Jersey.

To reach its profitability goals, The Hartford is relying on a reversion of loss severity trends and a slight improvement in loss ratios. Swift mentioned that the recent decrease in the Manheim index of used car prices may support the assumption of reverting loss severity trends. However, he also acknowledged that the company’s rate hike forecasts do not assume stable severity trends.

The Role of the AARP Relationship

The Hartford’s partnership with AARP, a relationship that spans over 35 years, plays a significant role in the company’s underwriting and rating actions. AARP endorses The Hartford as the exclusive carrier for home and auto products on a national basis. In exchange for the endorsement, The Hartford pays royalty fees based on premium volumes, similar to a commission structure. However, it’s important to note that AARP has no influence over pricing, rate filings, or claim settlements.

The nature of the relationship between The Hartford and AARP is one of co-marketing and positioning the AARP brand alongside The Hartford’s brand in the mature market segment. The insurer keeps AARP informed about underwriting, growth strategies, and investing strategies, but the ultimate decisions and actions are the responsibility of The Hartford.

The Hartford’s Focus on Commercial Property

In addition to addressing the challenges in its auto book, The Hartford is actively growing its presence in the commercial property insurance market. Historically, the company had been underrepresented in this segment, with only 8% of premiums coming from commercial property. However, The Hartford has been working to diversify its product sets and expand its property capabilities to generate exceptional risk-adjusted returns.

The company has been investing in underwriting tools, risk management, and multi-peril models to enhance its property underwriting capabilities. Swift expressed confidence in The Hartford’s ability to make property a significant growth focus and generate strong returns, not solely relying on catastrophe exposure but also emphasizing fire perils on a national basis.


The Hartford’s journey towards achieving profitability in its auto insurance division is a challenging one. Despite implementing substantial rate hikes, the company anticipates that it will not see a profit until 2025. The focus is on pushing rate increases into the personal auto line of business, particularly in states with longer approval processes. The Hartford’s longstanding relationship with AARP remains intact, but the ultimate decision-making power lies with the company itself.

In addition to addressing the challenges in its auto book, The Hartford is actively growing its commercial property division to diversify its product offerings and generate strong returns. With a focus on underwriting tools, risk management, and multi-peril models, the company aims to enhance its property capabilities and expand its market share.

While The Hartford faces near-term obstacles, the company remains committed to improving profitability and delivering value to its customers and shareholders. By implementing strategic rate adjustments and focusing on growth opportunities, The Hartford aims to overcome these challenges and achieve its long-term goals.