NEW YORK (Bloomberg) — Hartford Financial Services Group Inc., the seventh-largest US insurer, raised its 2006 profit forecast because of higher-than-expected fourth-quarter results in both its property-casualty and life insurance units.Core earnings, which exclude some investment gains and losses, are expected to be $8.85 to $9 a share, rather than $8.75 to $8.95, executives of the Hartford, Connecticut-based company said yesterday on a conference call. Analysts were predicting $8.91, according to the average estimate compiled by Bloomberg.

Hartford, which gets about half its profit from life insurance and retirement savings products, said variable annuity sales in the US have been “slightly” higher than expected so far in the fourth quarter.

For property and casualty insurers, 2006 “will likely be the year of peak performance” before price declines take a toll amid increased competition, said David Zwiener, president of that business.

Next year, Hartford expects to earn $9.35 to $9.65 a share. The average estimate compiled by Bloomberg was $9.53.

Shares of Hartford, No. 7 by market value, rose $1.41, or 1.6 percent, to $88.34 at 1:38 p.m. in New York Stock Exchange composite trading.

The stock rose 2.9 percent this year, compared with the 7.3 percent gain in the KBW Insurance Index.

The higher core earnings forecast includes a $30 million fourth-quarter cost stemming from a review of deferred acquisition costs.

The cost will reduce net income in the quarter by $76 million, Hartford said.

Hartford also said it would buy back $500 million of the company’s shares under a previously disclosed program authorising as much as $1 billion in repurchases.