Covid-19 and the Corporate Bond Trading by The Hartford Insurance Group

Using investment transaction data from statutory statements filed by The Hartford Insurance Group, I examine changes in their corporate bond investments and response to the volatile financial conditions brought by Covid-19. The Hartford is a Property and Casualty (P&C) insurance company which provides coverage for homeowners and businesses throughout the world. Their business is focused on underwriting, collecting premiums and paying claims on losses. The Hartford invests premiums to generate more income and diversify risk. Choosing the right investment is a critical aspect of the business, as compromised bonds pushed The Hartford close to insolvency during the 2008 Financial Crisis. Available literature provides two main schools of thought; The first is a “flight-to-safety” through buying higher-rated bonds with lower yields, whereas the second is purchasing lower-rated bonds in search of yield. I found that Covid-19 did not drastically alter the investment strategy of The Hartford, although they did increase purchases of lower-rated bonds.