Hartford Financial Services Group (HIG) is keeping a low profile, despite its near $16 billion market capitalization, and manages to largely fly below the radar. Core earnings in Hartford's dominant commercial P&C business unit have increased from $511 million in 2012 to $827 million in 2013 -- an increase of 62% y-o-y. At the same time, the combined ratio -- an insurance metric to determine underlying insurance pricing discipline -- decreased from 96.6 in 2012 to 93.0 in 2013, according to Hartford's 2013 results presentation. Hartford Financial Services Group also projects a commercial P&C combined ratio of 90.0-92.0 in 2014, which would be another material y-o-y improvement.
Total core earnings increased from $1,386 million ($2.85 per share) in 2012 to $1,742 million ($3.55 per share) in 2013 -- a whopping y-o-y increase of 26% (25%), driven largely by margin improvements in Hartford's commercial P&C unit.
One of the more underrated companies out there right now is supplemental health and life insurance provider Aflac (AFL). The company hasn't been getting all that much press lately because 77% of the company's profits originate in Japan, and the company's financial performance has suffered in response to the yen's weakening against the dollar. Less than a year ago, it only took 77 yen to equal a dollar. Now, it takes 102 yen to equal a dollar.
Despite this difficulty, Aflac has still managed to grow earnings from $5.86 to $6.15 (as of year-end 2013) for a gain of 4.94%. In a way, Aflac's profits have a "coiled spring" effect-when the yen's strength improves against the dollar, Aflac shareholders could suddenly find themselves experience year-over-year growth in the 15-20% range if we start to see something resembling a reversion to the mean.
More interestingly, Aflac's management team is responding intelligently