The Hartford’s headline third-quarter numbers look strong. Net income available to common stockholders rose 23% to $1.3 billion, and the company raised its quarterly dividend by 12%. Neither figure reflects how the quarter actually went for its underwriting operations.
Stripping out a $497 million one-time gain from commuting an asbestos and environmental adverse development cover, a non-recurring reinsurance transaction, core earnings fell 6% to $956 million. Core earnings strip out items like realized gains and one-time reinsurance transactions to reflect ongoing operational performance, and on that measure the quarter declined.
The clearest sign of stress sits inside business insurance’s middle and large segment, which covers mid-market and national accounts across workers’ compensation, property, general liability, commercial auto, and umbrella lines. Its underlying combined ratio, which strips out catastrophes and prior-year reserve movements to show current-period performance, rose to 99.5 in Q3 2026 from 91.4 a year earlier. That is a business operating just below breakeven on underwriting, and the trajectory has been consistent: 91.4 in Q3 2025, 91.3 in Q1 2026, 95.3 in Q2 2026, and now 99.5 in Q3 2026.
The Hartford attributed the jump to a higher loss ratio in workers’ compensation and higher non-catastrophe property losses. Workers’ comp is the more significant driver. The Hartford is the largest workers’ compensation carrier in the US by market share, and the line has historically been the segment’s profit anchor. When its loss ratio moves up inside the mid-market book, it moves the segment’s combined ratio materially.
The pressure was flagged before Q3 arrived. On the Q2 2026 earnings call, Morris Tooker, then president of The Hartford and named as incoming CEO in September 2026, said the company was “watching the middle and large space really closely” and had “felt increasing pressure in the second quarter and potentially a divergent view from some of our competitors, especially on GL and workers’ compensation."
The Hartford’s Q3 data arrive as the workers’ comp market’s long run of exceptional profitability shows signs of narrowing. National Council on Compensation Insurance's (NCCI) 2026 State of the Line report found that the calendar-year combined ratio for private carriers widened from 86% in 2024 to 91% in 2025, while the accident-year combined ratio hit 102%, above breakeven for the first time since the pandemic years, reflecting current-period cost experience before prior-year reserve releases are applied.
Softening commercial property is adding to the pressure. Falling property premiums are pushing carriers toward workers’ comp in search of growth, with the Council of Insurance Agents and Brokers’ (CIAB) market survey showing comp premiums declined 3.2% in Q2 2026, the 18th consecutive quarter of decreases, even as loss costs continue rising. The Hartford’s numbers are a carrier-level expression of that dynamic playing out in the mid-market segment.
The small business segment, by contrast, posted a Q3 underlying combined ratio of 85.2, improved from 89.8 a year earlier, a strong result that reflects the advantage of The Hartford’s automated, high-volume small commercial model. The divergence between the two sub-segments within business insurance is notable.
Business insurance written premiums grew 6% to $3.8 billion in Q3, with small business and global specialty each up 7%.
A secondary signal sits in the employee benefits segment, where the group disability loss ratio rose 5.7 percentage points, driven by higher short and long-term disability claim incidence and less favorable recovery experience. The core earnings margin narrowed to 6.4% from 8.3% a year earlier.
On the leadership front, chairman and CEO Christopher Swift announced he will step down on March 1, 2027, after nearly 13 years leading the company, first as CFO, then as CEO. Tooker will take over as CEO at that point, with Swift transitioning to executive chair before departing in the second half of 2027.
