PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) Presents the unaudited condensed consolidated financial statements for Q1 2024, including the auditor's review report, core financial statements, and detailed explanatory notes [Report of Independent Registered Public Accounting Firm](index=7&type=section&id=REPORT%20OF%20INDEPENDENT%20REGISTERED%20PUBLIC%20ACCOUNTING%20FIRM) Deloitte & Touche LLP reviewed the interim financial information for Q1 2024 and found no material modifications needed for U.S. GAAP conformity, affirming the fair presentation of the December 31, 2023 balance sheet - The independent auditors, Deloitte & Touche LLP, conducted a review and found **no material modifications necessary** for the interim financial statements to be in conformity with U.S. GAAP[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Reports Q1 2024 total revenues of $6.42 billion, a 9% increase, with net income rising significantly to $753 million and diluted EPS at $2.47 Q1 2024 vs Q1 2023 Statement of Operations Highlights | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $6,419 | $5,910 | +8.6% | | Earned Premiums | $5,446 | $5,063 | +7.6% | | Net Investment Income | $593 | $515 | +15.1% | | **Income Before Income Taxes** | $911 | $653 | +39.5% | | **Net Income** | $753 | $535 | +40.7% | | **Net Income Available to Common Stockholders** | $748 | $530 | +41.1% | | **Diluted EPS** | $2.47 | $1.66 | +48.8% | [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Comprehensive income for Q1 2024 was $605 million, a significant decrease from $1.12 billion in Q1 2023, primarily due to a net unrealized loss on fixed maturities Q1 2024 vs Q1 2023 Comprehensive Income | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net Income | $753 | $535 | | Other Comprehensive Income (Loss) | $(148) | $587 | | **Comprehensive Income** | **$605** | **$1,122** | [Condensed Consolidated Balance Sheets](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2024, total assets increased slightly to $77.71 billion, with total liabilities and stockholders' equity also rising, driven by net income Balance Sheet Highlights (as of March 31, 2024 vs. Dec 31, 2023) | Metric | March 31, 2024 (in millions) | Dec 31, 2023 (in millions) | | :--- | :--- | :--- | | Total Investments | $56,107 | $55,922 | | **Total Assets** | **$77,710** | **$76,780** | | Unpaid Losses and Loss Adjustment Expenses | $42,771 | $42,318 | | **Total Liabilities** | **$62,242** | **$61,453** | | **Total Stockholders' Equity** | **$15,468** | **$15,327** | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) Stockholders' equity increased to $15.47 billion, driven by net income, partially offset by treasury stock acquisitions, common stock dividends, and other comprehensive loss - Key drivers of the change in stockholders' equity in Q1 2024 were net income of **$753 million**, common stock dividends of **$141 million**, and treasury stock acquisitions of **$353 million**[28](index=28&type=chunk) - The company declared a cash dividend of **$0.470 per common share** in Q1 2024, up from **$0.425** in Q1 2023[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities increased to $1.10 billion in Q1 2024, while net cash used for investing and financing activities remained stable Q1 2024 vs Q1 2023 Cash Flow Summary | Activity | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,097 | $871 | | Net Cash used for Investing Activities | $(435) | $(446) | | Net Cash used for Financing Activities | $(529) | $(545) | | **Net Increase (Decrease) in Cash** | **$133** | **$(126)** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Provides detailed explanations for financial statement figures, covering presentation basis, earnings per share, segment information, fair value measurements, and various financial components [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=56&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's analysis of the company's Q1 2024 financial condition and results, covering segment performance, investments, and risk management [Key Performance Measures and Ratios](index=56&type=section&id=Key%20Performance%20Measures%20and%20Ratios) Defines key non-GAAP and other financial measures, reconciling them to U.S. GAAP and explaining their relevance to business trends - Core earnings is a key non-GAAP metric that excludes items like certain realized gains/losses, restructuring costs, and M&A costs to provide a clearer view of ongoing business performance[278](index=278&type=chunk)[279](index=279&type=chunk) Reconciliation of Net Income to Core Earnings (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net Income Available to Common Stockholders | $748 | $530 | | **Core Earnings** | **$709** | **$536** | - The Underlying Combined Ratio is a non-GAAP measure that adjusts the standard combined ratio by excluding the effects of catastrophes and prior year development to better show the core underwriting profitability trend[305](index=305&type=chunk) [Financial Highlights](index=64&type=section&id=Financial%20Highlights) Highlights strong Q1 2024 performance with increased net income, diluted EPS, and improved P&C combined ratio and Group Benefits margins - Net income available to common stockholders increased by **$218 million (41%)** in Q1 2024, driven by higher net investment income, favorable prior year development, and improved Group Benefits loss ratios[322](index=322&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - The Property & Casualty Combined Ratio improved by **2.9 points**, benefiting from favorable prior accident year development, lower catastrophe losses, and a lower expense ratio[323](index=323&type=chunk) [Consolidated Results of Operations](index=65&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated net income available to common stockholders rose 41% in Q1 2024, driven by P&C underwriting gains, net investment income, and realized gains Consolidated Results of Operations (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Earned Premiums | $5,446 | $5,063 | +8% | | Total Revenues | $6,419 | $5,910 | +9% | | Income, before tax | $911 | $653 | +40% | | Net Income Available to Common Stockholders | $748 | $530 | +41% | - The increase in net income was primarily due to higher P&C underwriting gain, increased net investment income, and a shift from net realized losses to gains[330](index=330&type=chunk) [Investment Results](index=68&type=section&id=Investment%20Results) Total investments reached $56.1 billion, with net investment income up 15% due to higher yields and a shift to net realized gains Net Investment Income by Source (Q1 2024 vs Q1 2023) | Source | Q1 2024 (in millions) | Q1 2023 (in millions) | Yield (2024) | Yield (2023) | | :--- | :--- | :--- | :--- | :--- | | Fixed maturities | $526 | $445 | 4.5% | 4.0% | | Limited partnerships & alts | $16 | $26 | 1.3% | 2.5% | | **Total Net Investment Income** | **$593** | **$515** | **4.1%** | **3.7%** | - The average reinvestment rate for fixed maturities and mortgage loans in Q1 2024 was **6.1%**, significantly higher than the **5.0%** average yield of sales and maturities during the same period[350](index=350&type=chunk) - Net realized gains were **$28 million** in Q1 2024, compared to a net loss of **$7 million** in Q1 2023, primarily due to fewer losses on sales of fixed maturities and appreciation in FVO securities[335](index=335&type=chunk)[353](index=353&type=chunk) [Critical Accounting Estimates](index=70&type=section&id=Critical%20Accounting%20Estimates) Highlights critical accounting estimates requiring significant judgment, including P&C and group benefits reserves, noting favorable prior year development - The company identifies key critical accounting estimates as: P&C reserves, group benefit LTD reserves, goodwill impairment, investment valuation (including credit losses), and litigation contingencies[361](index=361&type=chunk)[364](index=364&type=chunk) P&C Prior Accident Year Development (Favorable)/Unfavorable - Q1 2024 | Line of Business | Development (in millions) | | :--- | :--- | | Workers' compensation | $(67) | | General liability | $17 | | Assumed reinsurance | $9 | | Change in deferred gain on retroactive reinsurance | $(24) | | **Total PYD** | **$(56)** | [Commercial Lines](index=74&type=section&id=Commercial%20Lines) Commercial Lines net income increased 36% to $573 million in Q1 2024, driven by higher underwriting gain, improved combined ratio, and strong premium growth Commercial Lines Underwriting Ratios (Q1 2024 vs Q1 2023) | Ratio | Q1 2024 | Q1 2023 | Change (pts) | | :--- | :--- | :--- | :--- | | Loss and LAE Ratio | 58.3% | 60.7% | (2.4) | | Expense Ratio | 31.5% | 31.7% | (0.2) | | **Combined Ratio** | **90.1%** | **92.7%** | **(2.6)** | | **Underlying Combined Ratio** | **88.4%** | **88.5%** | **(0.1)** | - Written premiums increased **8%** to **$3.36 billion**, driven by growth in Small Commercial, Middle & Large Commercial, and Global Specialty segments[381](index=381&type=chunk)[398](index=398&type=chunk) - Renewal written price increases were strong across most lines, with notable increases in package business, automobile, and excess and surplus lines, while D&O pricing remained negative but improved[399](index=399&type=chunk)[400](index=400&type=chunk) [Personal Lines](index=79&type=section&id=Personal%20Lines) Personal Lines reported net income of $34 million in Q1 2024, a turnaround from a prior-year loss, driven by improved combined ratio and strong premium growth Personal Lines Underwriting Ratios (Q1 2024 vs Q1 2023) | Ratio | Q1 2024 | Q1 2023 | Change (pts) | | :--- | :--- | :--- | :--- | | Loss and LAE Ratio | 76.3% | 79.6% | (3.3) | | Expense Ratio | 25.3% | 26.5% | (1.2) | | **Combined Ratio** | **101.6%** | **106.1%** | **(4.5)** | | **Underlying Combined Ratio** | **96.1%** | **97.0%** | **(0.9)** | - Automobile renewal written price increases were **25.7%** and homeowners were **15.2%**, reflecting responses to higher loss cost trends[415](index=415&type=chunk) - The underlying combined ratio for Automobile improved to **104.4%** from **105.1%**, while the Homeowners underlying ratio improved to **77.0%** from **78.9%**[419](index=419&type=chunk) [P&C Other Operations](index=83&type=section&id=Property%20%26%20Casualty%20Other%20Operations) P&C Other Operations, primarily run-off A&E liabilities, reported net income of $8 million in Q1 2024, despite an increased underwriting loss - The underwriting loss increased to **$9 million** from **$6 million** in the prior year, mainly due to a **$7 million** provision for prior year development related to uncollectible reinsurance[436](index=436&type=chunk)[439](index=439&type=chunk) - Comprehensive annual reviews for asbestos and environmental reserves are scheduled for the fourth quarter of 2024[440](index=440&type=chunk) [Group Benefits](index=84&type=section&id=Group%20Benefits) Group Benefits net income rose 17% to $108 million in Q1 2024, driven by an improved total loss ratio and 2% premium growth Group Benefits Ratios, Excluding Buyouts (Q1 2024 vs Q1 2023) | Ratio | Q1 2024 | Q1 2023 | Change (pts) | | :--- | :--- | :--- | :--- | | Group Disability Loss Ratio | 70.1% | 70.4% | (0.3) | | Group Life Loss Ratio | 82.6% | 86.7% | (4.1) | | **Total Loss Ratio** | **73.5%** | **75.2%** | **(1.7)** | | Expense Ratio | 25.4% | 24.7% | 0.7 | - Net income increased to **$108 million**, up **17%** from **$92 million** in Q1 2023, driven by a lower loss ratio and higher premiums[442](index=442&type=chunk)[452](index=452&type=chunk) - Fully insured ongoing sales decreased by **6%** to **$444 million**, driven by lower group life sales[445](index=445&type=chunk) [Hartford Funds](index=86&type=section&id=Hartford%20Funds) Hartford Funds reported a 10% increase in net income to $45 million in Q1 2024, driven by higher fee income from increased average AUM Hartford Funds AUM and Flows (Q1 2024 vs Q1 2023) | Metric (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Beginning Mutual Fund & ETF AUM | $119,316 | $112,472 | | Net Flows | $(2,511) | $(1,179) | | Change in Market Value | $6,754 | $4,215 | | **Ending Mutual Fund & ETF AUM** | **$123,559** | **$115,508** | - Net income increased **10%** to **$45 million**, and the core earnings ROA improved to **12.5 bps** from **11.6 bps** in the prior year[457](index=457&type=chunk)[462](index=462&type=chunk) [Corporate](index=88&type=section&id=Corporate) The Corporate segment's net loss narrowed to $20 million in Q1 2024, driven by higher net investment income, realized gains, and a larger tax benefit - The net loss available to common stockholders narrowed to **$20 million** from **$29 million** year-over-year[466](index=466&type=chunk) - The improvement was driven by a **$6 million** increase in net investment income, a **$3 million** increase in net realized gains, and a higher income tax benefit[466](index=466&type=chunk)[468](index=468&type=chunk) [Enterprise Risk Management](index=88&type=section&id=Enterprise%20Risk%20Management) The company manages insurance, operational, and financial risks through underwriting, exposure controls, and a high-quality investment portfolio - The company's primary catastrophe reinsurance for 2024 includes a per-occurrence property treaty covering **90%** of losses from **$500 million** up to **$1.2 billion**, and an aggregate property treaty covering **100%** of losses between **$750 million** and **$950 million**[482](index=482&type=chunk) - The company has two Adverse Development Cover (ADC) reinsurance agreements with NICO for A&E and Navigators reserve development[250](index=250&type=chunk)[491](index=491&type=chunk) - As of March 31, 2024, **85%** of the Fixed Maturities, AFS portfolio was rated A or better[506](index=506&type=chunk)[529](index=529&type=chunk) [Capital Resources and Liquidity](index=102&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains a strong capital and liquidity position with $1.0 billion in liquid assets, active share repurchases, and a stable debt-to-capitalization ratio - The holding company had approximately **$1.0 billion** in liquid assets as of March 31, 2024, and access to a **$750 million** undrawn revolving credit facility[564](index=564&type=chunk)[571](index=571&type=chunk) - In Q1 2024, the company repurchased **3.8 million** common shares for **$350 million**[568](index=568&type=chunk) Capitalization Summary (as of March 31, 2024) | Metric | Amount (in millions) | | :--- | :--- | | Total Debt | $4,363 | | Total Stockholders' Equity | $15,468 | | **Total Capitalization** | **$19,831** | | Debt to Capitalization Ratio | 22% | [Quantitative and Qualitative Disclosures About Market Risk](index=108&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section's market risk disclosures are incorporated by reference from the Enterprise Risk Management section within the MD&A - The information required for this item is located in the Enterprise Risk Management section of the MD&A[6](index=6&type=chunk) [Controls and Procedures](index=111&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) The company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during Q1 - Management concluded that the company's disclosure controls and procedures are effective as of the end of the quarter[627](index=627&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the quarter[628](index=628&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=112&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) Information on the company's legal proceedings is detailed in Note 13 of the Condensed Consolidated Financial Statements - Information on legal proceedings is detailed in Note 13 - Commitments and Contingencies[630](index=630&type=chunk) [Risk Factors](index=112&type=section&id=Item%201A.%20RISK%20FACTORS) This section incorporates by reference the risk factors disclosed in the company's 2023 Annual Report on Form 10-K - For a detailed discussion of risk factors, readers are referred to the company's 2023 Form 10-K[631](index=631&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=112&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased 4.7 million shares for $432 million in Q1 2024, with $1.0 billion remaining under the current share repurchase authorization Q1 2024 Share Repurchases | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased Under Program | Remaining Authorization (millions) | | :--- | :--- | :--- | :--- | :--- | | Jan 2024 | 1,508,128 | $84.58 | 1,501,029 | $1,222 | | Feb 2024 | 1,916,318 | $94.17 | 1,119,428 | $1,119 | | Mar 2024 | 1,244,304 | $99.64 | 1,226,596 | $998 | | **Total Q1** | **4,668,750** | **$92.53** | **3,847,053** | **$998** | - The Board of Directors approved a **$3.0 billion** share repurchase authorization effective from August 1, 2022, to December 31, 2024[634](index=634&type=chunk) [Other Information](index=112&type=section&id=Item%205.%20OTHER%20INFORMATION) Discloses the adoption of Rule 10b5-1 trading arrangements by two executives and the termination of previous plans for other executives - On February 8, 2024, EVP Jonathan R. Bennett and EVP & CFO Beth A. Costello each adopted a Rule 10b5-1 trading arrangement for potential sales of company stock starting in May 2024[636](index=636&type=chunk)[637](index=637&type=chunk) [Exhibits](index=114&type=section&id=Item%206.%20EXHIBITS) Provides an index of exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL data - The report includes standard exhibits such as the Certificate of Incorporation, By-Laws, and Sarbanes-Oxley Act certifications from the CEO and CFO[641](index=641&type=chunk)

INVESTOR FINANCIAL SUPPLEMENT March 31, 2024 Measures used in these financial statements and exhibits that are not based on generally accepted accounting principles ("non-GAAP") are denoted with an asterisk (*) the first time they appear in this document. These measures are defined within the Discussion of Non- GAAP and Other Financial Measures section and are reconciled to the most directly comparable generally accepted accounting principles ("GAAP") measure herein. THE HARTFORD FINANCIAL SERVICES GROUP, I ...

The Hartford Financial Services Group, Inc. (HIG) is scheduled to release first-quarter 2024 results on Apr 25, 2024, after the closing bell.What Do the Estimates Say?The Zacks Consensus Estimate for Hartford Financial’s first-quarter earnings per share is pegged at $2.43, which indicates an improvement of 44.6% from the prior-year quarter’s reported figure. The consensus mark for revenues is $4.4 billion, suggesting 11.8% growth from the year-ago quarter’s reported number.Hartford Financial’s bottom line b ...

The Hartford Financial Services Group, Inc. (HIG) recently announced its partnership with Active Minds to enhance its Group Benefits offerings with a mental health guide. Hartford Financial aims to promote mental health awareness and improve employee productivity.Per Hartford Financial’s Future of Benefits Study, 45% of Gen Z employees feel anxious or depressed at least several times a week. 52% of workers said that the taboo surrounding mental health prevents them from seeking care, per the report. These t ...

Sezeryadigar Elevator Pitch I rate The Hartford Financial Services Group, Inc. (NYSE:HIG) stock as a Buy. My earlier write-up published on November 21, 2023 touched on HIG's shareholder capital return and the performance of certain businesses. The current article focuses on Hartford Financial's latest personnel changes. I have a favorable opinion of HIG's recent appointment of a new head of sales at its Middle & Large Commercial sub-segment's Northeastern operations, and the expanded role of its Chief I ...

Part I [Item 1. Business](index=6&type=section&id=Item%201.%20BUSINESS) HFSG is a holding company offering P&C insurance, group benefits, and mutual funds/ETFs, with a strategy focused on underwriting, digital capabilities, and sustainability The Hartford Financial Services Group, Inc. Key Financials (as of Dec 31, 2023) | Metric | Amount (as of Dec 31, 2023) | | :----- | :-------------------------- | | Total Assets | $76.8 billion | | Total Stockholders' Equity | $15.3 billion | - The Hartford's strategic priorities include **advancing underwriting capabilities**, emphasizing **digital capabilities and data science (including AI)**, **maximizing distribution channels**, **optimizing organizational efficiency**, **balancing capital for growth and shareholder returns**, and **advancing sustainability leadership**[24](index=24&type=chunk)[25](index=25&type=chunk)[30](index=30&type=chunk) 2023 Revenues by Segment | Segment | 2023 Revenues ($ millions) | | :----------------------------- | :------------------------- | | Commercial Lines | 11,641 (Earned Premiums) | | Personal Lines | 3,087 (Earned Premiums) | | Group Benefits | 6,515 (Premiums & Other Considerations) | | Hartford Funds | 973 (Fee Income & Other Revenue) | | P&C Other Operations & Corporate | 176 (Revenue) | | **Total Revenues** | **24,527** | [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces significant risks across economic, industry, financial, operational, and regulatory domains, impacting its business and financial condition - The Company's investment portfolio and insurance businesses are **highly sensitive to changes in economic, political, and global market conditions**, including credit spreads, equity prices, interest rates, inflation, and foreign currency exchange rates, which can impact demand for products, investment returns, and loss costs[152](index=152&type=chunk)[155](index=155&type=chunk) - **Unfavorable loss development**, particularly for **long-tailed exposures like asbestos and environmental (A&E) claims**, and vulnerability to **natural and man-made catastrophes** (e.g., hurricanes, cyber-attacks, terrorism) pose **significant risks to financial results**[169](index=169&type=chunk)[170](index=170&type=chunk)[175](index=175&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - **Downgrades in financial strength or credit ratings** can **negatively impact competitiveness and cost of capital**. The Company's capital requirements are subject to external factors, and **nonperformance by counterparties** (reinsurers, investment issuers) can lead to losses. Dividend payments are also subject to **regulatory limitations**[196](index=196&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - **Operational risks** include **system failures, cyber breaches, reliance on third-party vendors**, and challenges in executing capital management plans. The Company also faces **extensive and complex regulatory and legislative developments** that can increase costs and affect strategy[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[225](index=225&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Item 1C. Cybersecurity](index=43&type=section&id=Item%201C.%20CYBERSECURITY) The Hartford employs a NIST-aligned 'defense-in-depth' cybersecurity strategy to protect information assets - The Company implements a **'defense-in-depth' cybersecurity strategy**, aligned with the **NIST Cybersecurity Framework**, covering identification, protection, detection, response, and recovery[253](index=253&type=chunk) - **Protection measures** include reputational filtering, anti-virus scans, intrusion prevention, multi-factor authentication, and account isolation. **Detection methods** involve dark web searches, email sandboxing, endpoint detection, and intrusion detection[254](index=254&type=chunk) - Cybersecurity governance involves **regular reports to the Board, Audit Committee** (primary oversight), and **Finance, Investment and Risk Management Committee (FIRMCo)** by senior Enterprise Risk Management, Information Protection, and Internal Audit functions[258](index=258&type=chunk)[259](index=259&type=chunk) - Management believes **no cybersecurity threats have materially affected** or are reasonably likely to materially affect the Company's business strategy, results of operations, or financial condition[258](index=258&type=chunk) [Item 2. Properties](index=45&type=section&id=Item%202.%20PROPERTIES) The Hartford owned 1.8 million sq ft and leased 935k sq ft in the U.S., deeming its properties suitable and adequate - Owned building space: approximately **1.8 million square feet** in Hartford, Connecticut area[264](index=264&type=chunk) - Leased office space as of December 31, 2023: approximately **935 thousand square feet** in the United States, **22 thousand square feet** in London, and **6 thousand square feet** in other international locations[266](index=266&type=chunk) - The Company believes its properties and facilities are **suitable and adequate for current operations**[266](index=266&type=chunk) [Item 3. Legal Proceedings](index=45&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The Hartford is involved in routine claims litigation and other legal actions, including class actions and punitive damages - The Company is involved in claims litigation arising in the ordinary course of business, including as a liability insurer and in coverage disputes[265](index=265&type=chunk)[1352](index=1352&type=chunk) - Other legal actions include putative class actions alleging underpayment of claims or improper sales/underwriting practices, and individual actions seeking punitive damages for alleged bad faith[1353](index=1353&type=chunk) - Management expects the ultimate liability from ordinary-course claims litigation to be **immaterial to the consolidated financial condition, results of operations, or cash flows**[1352](index=1352&type=chunk)[1353](index=1353&type=chunk) Part II [Item 5. Market for The Hartford's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20MARKET%20FOR%20THE%20HARTFORD'S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The Hartford's common stock (HIG) is traded on the NYSE, with 297.35 million shares outstanding and $1.35 billion remaining for repurchases as of December 31, 2023 - The Hartford's common stock is traded on the New York Stock Exchange under the trading symbol "**HIG**"[268](index=268&type=chunk) - As of February 22, 2024, there were **297,350,060 shares** of Common Stock outstanding[7](index=7&type=chunk) Common Stock Repurchases for Q4 2023 | Period | Total Number of Shares Purchased [1] | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | :--------------------------------- | :--------------------------------- | :--------------------------- | :----------------------------------------------------------------- | | October 1, 2023 - October 31, 2023 | 2,043,934 | $71.72 | 2,039,013 | | November 1, 2023 - November 30, 2023 | 1,294,172 | $76.29 | 1,290,733 | | December 1, 2023 - December 31, 2023 | 1,370,044 | $80.19 | 1,356,163 | | **Total** | **4,708,150** | **$75.44** | **4,685,909** | - As of December 31, 2023, **$1.35 billion remained available for equity repurchases** under the $3.0 billion share repurchase program authorized by the Board of Directors, effective through December 31, 2024[272](index=272&type=chunk)[769](index=769&type=chunk) Cumulative Five-Year Total Return to Stockholders (Base Period 2018 = $100) | Company/Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | | The Hartford Financial Services Group, Inc. | $100 | $139.72 | $116.07 | $167.45 | $188.07 | $204.11 | | S&P 500 Index | $100 | $131.49 | $155.68 | $200.37 | $164.08 | $207.21 | | S&P Insurance Composite Index | $100 | $129.38 | $128.81 | $170.19 | $187.42 | $204.78 | [Item 7. Management

Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford's future results of operations. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those discussed i ...

Financial Data and Key Metrics Changes - The company reported core earnings for Q4 2023 of $935 million or $3.06 per diluted share, with a 12-month core earnings ROE of 15.8% [58][66] - The Group Benefits segment achieved record core earnings of $567 million for the full year, reflecting a core earnings margin of 8.1% [90] - The overall investment portfolio produced strong results, with net investment income of $653 million for the quarter and a total annualized portfolio yield of 4.3% before tax [91] Business Line Data and Key Metrics Changes - Group Benefits fully insured premium growth was 6% for Q4 and 7% for the year, with a core earnings margin of 9.8% for the quarter [50][90] - Small Commercial reported record-breaking annual written premium of $5 billion, with a decade-long trend of annual sub-90 underlying combined ratios [51] - Commercial Lines had a strong quarter with written premium growth of 10% for the year and an underlying combined ratio of 87.8% [75][76] Market Data and Key Metrics Changes - The company experienced a 6% increase in renewal written pricing in Commercial Lines, up from 5.5% in the previous quarter [54] - Personal Lines achieved auto renewal written price increases of nearly 22% and homeowners renewal written pricing of 14.7% [55][86] - The Group Life loss ratio improved to 83 for the quarter, reflecting an improving mortality trend [65] Company Strategy and Development Direction - The company aims to sustain profitable growth in Small Commercial through data science advancements and pricing expertise [52] - The focus on the preferred market within Personal Lines is seen as a competitive advantage, with plans to expand the Prevail product to additional states [81] - The company is committed to disciplined underwriting and expects to maintain underlying margins consistent with 2023 [94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic environment, noting low unemployment and a supportive macroeconomic setup [170] - The company anticipates continued strong performance in 2024, with expectations for core earnings margins in Group Benefits to remain between 6% and 7% [96] - Management highlighted the importance of maintaining pricing discipline to offset loss cost trends, particularly in long-tail liability casualty lines [164] Other Important Information - The company repurchased 4.7 million shares for $350 million during the quarter, with plans to maintain this level of repurchases in the first quarter of 2024 [92][145] - An increase in environmental reserves was noted, primarily due to higher estimated site remediation costs, including PFAS exposures [62][40] - The company expects total dividends from operating companies to be approximately $2.2 billion in 2024, up from 2023 [92][140] Q&A Session Summary Question: What is the outlook for the Commercial Lines expense ratio? - Management indicated a continuous improvement mindset and plans to seek additional efficiencies while maintaining investments for outstanding results [126][127] Question: Can you clarify the 21.9% rate increase in auto? - The majority of the increase was attributed to pure rate, with minimal exposure growth, and an expected improvement in the loss ratio of five to six points [128] Question: Are there concerns about peak margins in the current results? - Management expressed that while they are pleased with the current performance, it is viewed as the beginning of their mission, not the end [151]

Financial Data and Key Metrics Changes - The company reported core earnings of $708 million, or $2.29 per diluted share, with a core earnings return on equity (ROE) of 13.8% [137][133] - The underlying combined ratio for Commercial Lines improved to 87.8, reflecting strong performance [137][133] - Net investment income for the quarter was $597 million, benefiting from higher interest rates, with a total annualized portfolio yield of 4.1% before tax [17][133] Business Line Data and Key Metrics Changes - Commercial Lines experienced an 8% growth in top-line revenue, with written premiums exceeding $1 billion in Middle & Large Commercial, and an exceptional underlying combined ratio of 88.1 [15][133] - Group Benefits saw premium growth of 8% and a quarterly earnings margin of 9.8%, with core earnings reaching a record $170 million [6][133] - Small Commercial written premiums were $1.2 billion, with a 16% growth in new business and an underlying combined ratio below 90 for the 13th consecutive quarter [140][137] Market Data and Key Metrics Changes - The U.S. economy remains resilient, with robust payroll and strong retail sales supporting the company's business environment [11] - The company noted strong pricing trends across various lines, with Commercial property pricing exceeding 10% and Auto and General Liability nearing that level [5][133] - The company anticipates a 25% increase in commercial property premium for the full year, approaching $2.5 billion [134][133] Company Strategy and Development Direction - The company is focused on disciplined pricing and underwriting, aiming to sustain profitable growth while managing catastrophe exposure [20][134] - The management emphasized the importance of data science capabilities and underwriting tools to enhance margins and competitive positioning [12][134] - The company plans to return Personal Lines to targeted profitability by 2025, with ongoing rate increases expected [30][77] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategies, talent, and technology to continue delivering consistent results [18] - The company is monitoring economic conditions closely, with expectations of continued strong performance in Group Benefits due to low unemployment levels [61][82] - Management acknowledged competitive pressures in the market but remains optimistic about maintaining pricing discipline and growth [110][96] Other Important Information - The company reported total net favorable prior accident year development of $43 million, with reserve reductions in workers' compensation and package businesses [145][133] - The investment portfolio produced strong results, with expectations of a $200 million before-tax increase in investment income excluding limited partnerships [146][133] Q&A Session Summary Question: What are the trends in Commercial Lines premium growth? - Management noted a disciplined approach to pricing and underwriting, which may have led to a slowdown in premium growth in the Middle Market [19][20] Question: How is the company addressing medical cost inflation in workers' compensation? - Management indicated that medical severity is trending lower than expected, with claims management strategies in place to mitigate risks [38][39] Question: What is the outlook for Personal Lines profitability? - Management expects a return to profitability in Personal Lines by 2025, with ongoing rate increases and improved execution [30][77] Question: How does the company view the competitive environment in commercial insurance? - Management believes the competitive environment remains stable, with a focus on maintaining pricing discipline despite rising reinsurance costs [110][95] Question: Can you elaborate on the Group Benefits business and its economic sensitivity? - Management highlighted that the Group Benefits business is sensitive to employment levels, with strong performance linked to low unemployment rates [80][82]

The Hartford Financial Services Group, Inc. | October 26, 2023 The Hartford's Third Quarter 2023 Financial Results Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford's future results of operations. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should ...