The Hartford today announced that it estimates fourth quarter 2017 financial results will be reduced by approximately $850 million due to the impact of the new U.S. tax law and $117 million, after tax, for catastrophe losses.

The approximately $850 million charge from the new U.S. tax law is primary due to the reduction in the U.S. corporate tax rate from 35 percent to 21 percent effective Jan. 1, 2018 and its impact on the company’s net deferred tax asset position. The estimate is based on current accounting guidance and the company’s net deferred tax assets as of Sept. 30, 2017, and the final amount will depend on fourth quarter 2017 financial results. The charge will not affect core earnings, a non-GAAP financial measure. Although the new U.S. tax law reduces the company’s net deferred tax asset position, the company expects a net favorable future economic impact from both the lower corporate income tax rate and the repeal and refunding of the corporate alternative minimum tax credits.

In addition, the company estimates that fourth quarter financial results will include approximately $180 million of net catastrophe losses, before tax, or $117 million, after tax. This estimate includes the benefit of favorable loss reserve development on prior quarter 2017 catastrophes and anticipated reinsurance recoveries for fourth quarter 2017 catastrophe losses ceded to the company’s 2017 property catastrophe aggregate reinsurance treaty. Catastrophe losses in fourth quarter 2017 were primarily in the Personal Lines segment and from wildfires in California, with total estimated gross losses of $307 million, before tax, and before expected reinsurance recoveries.