Hartford (NYSE:HIG) announced earnings yesterday of $505 million, or $1.03 per share, compared to earnings of $433 million, $0.90 per share in the third quarter of 2012, an increase of 17%. In the second quarter Hartford issued an earnings-per-share outlook of $0.70 to $0.75 for the third quarter.

The results
Its total net income of $293 million ($0.60 per share) was well above the $13 million ($0.01 per share) reported in the third quarter of 2012, in which it had a net loss of $388 million as a result of the sale of its Individual Life business, but also reported a gain of $62 million from hedging activities, compared to a loss of $105 million in the current quarter.

Hartford said its gains were driven by core earnings growth in its largest segments, Commercial Property & Casualty (up $15 million to $176 million, or 9%) and its Talcott Resolution (up $12 million to $204 million, or 6%).

Hartford's performance in its Property & Casualty Commercial business rose thanks to an increase in earned premiums, which rose to $2.6 billion from $2.5 billion, or 2%. Gains were seen in both its commercial (up $15 million, or 1%) and consumer divisions ($28 million, or 3%). That compares very favorably to competitor Travelers Companies (NYSE:TRV), which saw its insurance premiums up 2% in its business insurance segment but down 5% in its personal insurance.

The company's total Property & Casualty business did see a dip in net income of 6%, as it fell to $264 million compared to $282 million, however this was in large part due to $66 million of catastrophe losses in the third quarter of this year, compared to only $10 million last year.

Hartford's underwriting gains did fall in its consumer business as a result of higher catastrophe payouts, but its commercial underwriting gains improved to $30 million from $12 million. In addition its combined ratio (what it pays out compared to what it takes in), before prior year loss and loss adjustment expense reserve development (PYD) fell to a more favorable 93.3, versus 97.5 in the third quarter of the last year.

The Talcott Resolution is the runoff of Hartford's U.S. and international annuity, institutional and private-placement life insurance, retirement plans and individual life insurance businesses. The retirement plans and individual life insurance businesses were sold to MassMutual and Prudential, respectively, in January of this year.

Of the results, Hartford's Chairman, President and CEO Liam E. McGee said, "Hartford's third quarter and year-to-date results demonstrate our significant progress transforming the company. Margins are improving in our go-forward businesses, contributing to a 17% year-over-year increase in core earnings, and the company continues to reduce its overall risk profile."

Hartford also continued to aggressively repurchase stock in the quarter, as it had a total of $241 million in buybacks of common shares and warrants. In total, the company has had approximately $408 million in share repurchases through the first nine months of the year, and still has approximately $840 million remaining under its $1.25 billion repurchase authorization.

The takeaway
In March of 2012, Harford noted that it would begin focusing exclusively on its property & casualty, group benefits, and mutual funds businesses, with noting that its "sharper focus will lead to an organization that, over time, will be positioned for higher returns on equity, reduced sensitivity to capital markets, a lower cost of capital and increased financial flexibility."

Considering Hartford handily beat both its own and analyst expectations while raising its full year 2013 outlook to $1.7 billion -- which is well above its outlook of $1.45 to $1.55 billion issued in April of this year -- it proved this quarter that it is continuing to deliver on that plan and execute in its core operations.

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