Core earnings for The Hartford Financial Services Group improved 7 percent in the first quarter of 2013 compared with the same period last year, driven by tougher underwriting, price hikes in property-casualty, and stronger results in both group-benefits results and mutual funds.

And it helped that this was a lighter year than 2012 for tornadoes, hail storms and other disasters.

The property-casualty insurer, however, reported a net loss for the quarter as it took two charges: $541 million related to expanded hedging on the company's variable-annuity in Japan, and $138 million from paying off $800 million in outstanding debt.

"Our go-forward businesses delivered core earnings growth of 19% across Property and Casualty, Group Benefits and Mutual Funds. …Group Benefits core earnings of $30 million were significantly improved from last year and gross sales for Mutual Funds were up 34% over first quarter 2012," The Hartford's CEO Liam E. McGee said in a prepared statement. "We are pleased with the progress we are making with these businesses, as well as their outlook for profitable growth."

The Hartford reported a $241 million net loss for the first quarter, or 58 cents per diluted share, compared with a net income of $96 million, or 18 cents per diluted share, during the same period in 2012.

Core earnings for the quarter were $456 million, or 92 cents per diluted share, compared with $426 million, or 87 cents per diluted share, during the same period last year. Analysts polled by Thomson Reuters were expecting 82 cents per share on average.

The Hartford's property-casualty business improved its core earnings by 12 percent for the quarter, up to $318 million from $284 million during the same period in 2012. Revenue was down slightly for the quarter to $2.52 billion from $2.55 billion in 2012. The Hartford, and the property-casualty industry in general, have increased prices and become more shrewd in underwriting.

An insurer that raises prices and toughens underwriting — meaning the company becomes more selective about customers that are high risk — will invariably lose some customers, reducing revenue, though profits generally improve.

The company's losses from catastrophes, such as tornadoes and hail, were $32 million for the quarter, before tax, compared with $71 million during the same period last year.

The Hartford explained at an investor day in early April that it has secured sufficient hedge investments to counter the losses of its variable annuity business. The runoff annuity business — called Talcott Resolution — is now capital self-sufficient, meaning it won't lose money that had to be covered in the past by The Hartford's more profitable property-casualty business segments.

"During the quarter, we executed a major portion of our capital management plan and effectively eliminated the currency and equity market risk of the Japan variable annuity block with an expanded hedging program," Chief Financial Officer Christopher J. Swift said in a prepared statement. "Talcott Resolution is now capital self-sufficient, the company's capital flexibility is significantly enhanced, and our capital generation outlook is improved."

The Hartford's variable annuity business has been in runoff since March 2012, when the company stopped selling new policies in the U.S. The Hartford stopped selling annuities internationally in 2009.

The company has worked in recent years to reduce the size and risk of its annuity business — which is primarily in Japan and the U.S. At the end of the first quarter, the total value of variable annuity accounts was $94.2 billion, with 1.3 million contracts, of which 68 percent are in the U.S., 31 percent are in Japan and 1 percent are in the United Kingdom.

The annuities were sold with either a 10-year or 15-year accumulation period, to build wealth, followed by a payout period. The total number of contracts is expected to decline by 50 percent by the end of 2017, helped in part by people surrendering policies, which is to say, cashing out sooner than the payout period.

The Hartford is a much leaner operation than it was a year ago. with about 2,600 fewer workers in Connecticut and about 4,400 fewer employees companywide.

The company had about 7,700 employees in Connecticut as of late February, the most recent figures available, compared with about 10,300 in March 2012. It wasn't immediately clear late Monday how many of the 2,600 work for units that were sold to other insurers and how many are no longer working for the company for some other reason, such as attrition. Companywide, The Hartford had about 20,000 workers in February compared with about 24,400 in March 2012.