Press Release: The Hartford Announces Fourth -2-
Full year 2020 core earnings of $2.1 billion, or $5.78 per diluted share, increased 1% from full year 2019. The increase was primarily due to:
Partially offset by:
Dec. 31, 2020 book value per diluted share of $50.39 increased 15% from $43.85 at Dec. 31, 2019, principally due to an increase in net unrealized gains on investments within AOCI and net income in excess of common stockholder dividends.
Book value per diluted share (excluding AOCI) of $47.16 as of Dec. 31, 2020, increased 8% from $43.71 at Dec. 31, 2019, primarily due to net income in excess of common stockholder dividends.
The net income available to common stockholders' ROE (net income ROE) was 10.0% at Dec. 31, 2020, decreasing from 14.4% for the twelve months ended Dec. 31, 2019 due to a decrease in twelve month trailing net income available to common stockholders and an increase in average stockholders' equity. The core earnings ROE at Dec. 31, 2020 was 12.7%, down from the 13.6% recognized in the same period of 2019 due to an increase in average stockholders' equity, excluding AOCI.
2021 KEY BUSINESS METRICS OUTLOOK
The Hartford also announced its outlook for several 2021 key business metrics. The company does not provide an outlook for consolidated net income or core earnings. The key business metrics shown below are management estimates based on business, competitive, capital market, catastrophe and other assumptions.
 2021 combined ratio metrics include an estimated consolidated P&C current accident year catastrophe loss ratio of 4.1 points, comprised of 3.1 points in Commercial Lines and 7.2 points in Personal Lines; actual 2021 catastrophes are likely to be different and will fluctuate quarterly due to seasonal variations
 Commercial Lines combined ratio outlook includes an estimated 0.4 points for accretion of discount on workers' compensation reserves as PYD. Personal Lines does not include any estimated PYD
 Group Benefits 2021 net income margin outlook includes integration costs of $9 million, before tax, compared with $18 million, before tax, in 2020
 Group Benefits 2021 net income margin and core earnings margin outlooks include pandemic losses of $160 million, before tax, associated with excess mortality and $17 million, before tax, of short-term disability claims
Actual 2021 results are subject to unusual or unpredictable items such as weather or catastrophe losses, impacts from the COVID-19 pandemic, change in loss frequency and severity, regulatory changes or assessments, prior year development, capital markets or investment results and other factors that are not within management's control. The company has frequently experienced unusual or unpredictable changes in revenues, expenses or other items that were not anticipated in prior outlooks.
Fourth quarter 2020 net income of $478 million increased from $302 million in fourth quarter 2019 principally due to an increase in underwriting gain and higher net investment income. The higher underwriting gain was driven by lower CAY losses before considering COVID-19 losses and lower underwriting expenses, partially offset by COVID-19 incurred losses and less favorable PYD as a $125 million, before tax, increase in reserves for sexual molestation and abuse claims was partially offset by a $77 million, before tax, reduction in prior accident year catastrophe reserves.
COVID-19 incurred losses of $28 million, before tax, in the quarter included $14 million in workers' compensation, net of favorable frequency on other workers' compensation claims, and $14 million in financial and other lines.
Fourth quarter 2020 written premiums of $2.2 billion were flat with fourth quarter 2019, reflecting higher new business premium in Small Commercial and higher rate increases in Middle & Large Commercial and Global Specialty, offset by lower retention, and lower audit and endorsement premium in workers' compensation due to a declining exposure base.
Combined ratio was 91.8 in fourth quarter 2020, 6.4 points lower than 98.2 in fourth quarter 2019, primarily due to a lower underlying combined ratio and lower CAY CAT losses, partially offset by less favorable PYD. Underlying combined ratio was 90.7, down 5.2 points from fourth quarter 2019, due to lower underwriting expenses and lower loss ratios, primarily in non-CAT property, U.S. wholesale, international and Global Re, partially offset by COVID-19 incurred losses of $28 million, before tax.
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