The Hartford(HIG) - 2025 Q2 - Quarterly Report

Part I. Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements and notes for the periods ended June 30, 2025 and 2024 Report of Independent Registered Public Accounting Firm Deloitte & Touche LLP reviewed the interim financial information, finding no material modifications needed for U.S. GAAP conformity - Deloitte & Touche LLP reviewed the interim financial information, confirming no material modifications are needed for U.S. GAAP conformity and fair statement of the December 31, 2024 balance sheet[13][14] Condensed Consolidated Statements of Operations This statement details the Company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations Three Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Earned premiums | $5,961 | $5,578 | 6.87% | | Total revenues | $6,987 | $6,486 | 7.72% | | Total benefits, losses and expenses | $5,741 | $5,574 | 3.00% | | Net income | $995 | $738 | 34.82% | | Net income available to common stockholders | $990 | $733 | 35.06% | | Diluted EPS | $3.44 | $2.44 | 40.98% | Six Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Earned premiums | $11,796 | $11,024 | 7.00% | | Total revenues | $13,797 | $12,905 | 6.91% | | Total benefits, losses and expenses | $11,768 | $11,082 | 6.19% | | Net income | $1,625 | $1,491 | 8.99% | | Net income available to common stockholders | $1,615 | $1,481 | 9.05% | | Diluted EPS | $5.58 | $4.92 | 13.41% | Condensed Consolidated Statements of Comprehensive Income (Loss) This statement presents net income and other comprehensive income components for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income (Loss) Three Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Net income | $995 | $738 | +34.82% | | Change in net unrealized gain (loss) on fixed maturities, AFS | $208 | $(90) | NM | | OCI, net of tax | $196 | $(71) | NM | | Comprehensive income | $1,191 | $667 | +78.56% | Six Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Net income | $1,625 | $1,491 | +8.99% | | Change in net unrealized gain (loss) on fixed maturities, AFS | $510 | $(250) | NM | | OCI, net of tax | $502 | $(219) | NM | | Comprehensive income | $2,127 | $1,272 | +67.22% | Condensed Consolidated Balance Sheets This statement provides a snapshot of the Company's assets, liabilities, and equity as of June 30, 2025 and December 31, 2024 Consolidated Balance Sheets As of June 30, 2025 vs. December 31, 2024: | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (%) | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Total investments | $60,903 | $59,210 | 2.86% | | Total assets | $83,639 | $80,917 | 3.36% | | Unpaid losses and loss adjustment expenses | $45,482 | $44,610 | 1.96% | | Unearned premiums | $10,337 | $9,408 | 9.87% | | Total liabilities | $66,121 | $64,470 | 2.56% | | Total stockholders' equity | $17,518 | $16,447 | 6.51% | Condensed Consolidated Statements of Changes in Stockholders' Equity This statement tracks changes in stockholders' equity components for the six months ended June 30, 2025 and 2024 Consolidated Statements of Changes in Stockholders' Equity Six Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Retained Earnings, beginning of period | $21,531 | $19,007 | +13.28% | | Net income | $1,625 | $1,491 | +8.99% | | Dividends declared on common stock | $(296) | $(279) | +6.09% | | Treasury Stock acquired | $(808) | $(707) | +14.29% | | Accumulated Other Comprehensive Income (Loss), net of tax, end of period | $(2,384) | $(3,068) | +22.30% | | Total Stockholders' Equity, end of period | $17,518 | $15,680 | +11.72% | | Common Shares Outstanding, at end of period (in thousands) | 282,275 | 293,989 | -3.98% | | Cash dividends declared per common share | $1.040 | $0.940 | +10.64% | Condensed Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows Six Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Net cash provided by operating activities | $2,276 | $2,357 | -3.44% | | Net cash used for investing activities | $(1,144) | $(1,323) | +13.53% | | Net cash used for financing activities | $(1,151) | $(1,009) | +14.07% | | Net increase (decrease) in cash and restricted cash | $(15) | $21 | NM | | Cash and restricted cash – end of period | $219 | $210 | +4.29% | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of the accounting policies, estimates, and specific financial statement line items Note 1 - Basis of Presentation and Significant Accounting Policies This note outlines the basis for preparing interim financial statements and the significant management estimates involved - The Hartford Insurance Group, Inc. operates as a holding company, offering property and casualty insurance, employee group benefits, and mutual funds/ETFs across various geographies[30] - Interim financial statements are prepared under U.S. GAAP, necessitating management estimates for insurance reserves, goodwill impairment, investment/derivative valuation, and litigation contingencies[31][34][35] Note 2 - Earnings Per Common Share This note details the computation of basic and diluted earnings per common share for the reported periods Earnings Per Common Share Three Months Ended June 30: | Metric | 2025 (in millions, except per share) | 2024 (in millions, except per share) | Change (YoY) | | :------------------------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Net income available to common stockholders | $990 | $733 | +35.06% | | Weighted average common shares outstanding, basic | 283.7 | 295.5 | -4.00% | | Basic EPS | $3.49 | $2.48 | +40.73% | | Diluted EPS | $3.44 | $2.44 | +40.98% | Six Months Ended June 30: | Metric | 2025 (in millions, except per share) | 2024 (in millions, except per share) | Change (YoY) | | :------------------------------------------------- | :--------------------------------- | :--------------------------------- | :----------- | | Net income available to common stockholders | $1,615 | $1,481 | +9.05% | | Weighted average common shares outstanding, basic | 285.1 | 296.8 | -3.94% | | Basic EPS | $5.66 | $4.99 | +13.43% | | Diluted EPS | $5.58 | $4.92 | +13.41% | Note 3 - Segment Information This note provides detailed financial information for the Company's five reportable segments and Corporate category - The Company operates five reportable segments: Business Insurance, Personal Insurance, P&C Other Operations, Employee Benefits, and Hartford Funds, plus a Corporate category[39] Total Segment Revenues (Three Months Ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :-------------------- | :----------------- | :----------------- | :----------- | | Business Insurance | $3,865 | $3,484 | +10.93% | | Personal Insurance | $1,017 | $924 | +10.06% | | P&C Other Operations | $17 | $16 | +6.25% | | Employee Benefits | $1,765 | $1,768 | -0.17% | | Hartford Funds | $271 | $261 | +3.83% | | Total segment revenues | $6,935 | $6,453 | +7.47% | Total Segment Revenues (Six Months Ended June 30) | Segment | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :-------------------- | :----------------- | :----------------- | :----------- | | Business Insurance | $7,614 | $6,946 | +9.62% | | Personal Insurance | $1,999 | $1,815 | +10.14% | | P&C Other Operations | $35 | $34 | +2.94% | | Employee Benefits | $3,555 | $3,522 | +0.94% | | Hartford Funds | $535 | $520 | +2.88% | | Total segment revenues | $13,738 | $12,837 | +7.02% | Net Income (Loss) by Segment (Three Months Ended June 30, 2025) | Segment | Net Income (Loss) (in millions) | | :-------------------- | :------------------------------ | | Business Insurance | $696 | | Personal Insurance | $91 | | P&C Other Operations | $13 | | Employee Benefits | $150 | | Hartford Funds | $54 | | Corporate | $(9) | | Consolidated | $995 | Net Income (Loss) by Segment (Six Months Ended June 30, 2025) | Segment | Net Income (Loss) (in millions) | | :-------------------- | :------------------------------ | | Business Insurance | $1,173 | | Personal Insurance | $96 | | P&C Other Operations | $26 | | Employee Benefits | $283 | | Hartford Funds | $97 | | Corporate | $(50) | | Consolidated | $1,625 | Note 4 - Fair Value Measurements This note details the Company's fair value measurement framework, hierarchy, valuation techniques, and Level 3 rollforwards - Financial assets and liabilities are classified into a three-level fair value hierarchy: Level 1 (active market prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[53][55] Total Assets Accounted for at Fair Value (June 30, 2025) | Category | Total (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | | :------------------------------------------ | :------------------ | :-------------------- | :-------------------- | :-------------------- | | Fixed maturities, AFS | $44,558 | $115 | $41,398 | $3,045 | | FVO securities | $181 | — | — | $181 | | Equity securities, at fair value | $529 | $390 | $46 | $93 | | Derivative assets | $35 | — | $35 | — | | Short-term investments | $3,649 | $604 | $2,929 | $116 | | Total assets at fair value | $48,952 | $1,109 | $44,408 | $3,435 | - Valuation techniques for investments and derivatives primarily use market observable inputs, with Level 3 valuations relying on significant unobservable inputs and judgment[61][63][64] Fair Value Rollforwards for Level 3 Assets (Six Months Ended June 30, 2025) | Category | Fair value as of January 1, 2025 (in millions) | Total realized/unrealized gains (losses) (in millions) | Purchases (in millions) | Settlements (in millions) | Sales (in millions) | Transfers into Level 3 (in millions) | Transfers out of Level 3 (in millions) | Fair value as of June 30, 2025 (in millions) | | :-------------------------- | :------------------------------------- | :----------------------------------------------------- | :---------------------- | :------------------------ | :------------------ | :--------------------------------- | :---------------------------------- | :------------------------------------- | | Fixed maturities, AFS | $2,610 | $69 | $949 | $(241) | $(86) | $81 | $(337) | $3,045 | | FVO securities | $197 | $(17) | $8 | $(7) | — | — | — | $181 | | Equity securities, at fair value | $87 | $(1) | $10 | $(3) | — | — | — | $93 | | Short-term investments | $98 | — | $67 | $(49) | — | — | — | $116 | | Total Assets | $2,992 | $51 | $1,034 | $(300) | $(86) | $81 | $(337) | $3,435 | Note 5 - Investments This note details the investment portfolio, including realized gains/losses, impairment methodology, and credit risk concentrations Net Realized Gains (Losses) (Before Tax) Three Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Gross gains on sales of fixed maturities | $19 | $6 | +216.67% | | Gross losses on sales of fixed maturities | $(45) | $(75) | +40.00% | | Equity securities | $36 | $14 | +157.14% | | Other, net | $(20) | $(3) | -566.67% | | Net realized losses | $(10) | $(59) | +83.05% | Six Months Ended June 30: | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Gross gains on sales of fixed maturities | $32 | $11 | +190.91% | | Gross losses on sales of fixed maturities | $(70) | $(86) | +18.60% | | Equity securities | $25 | $49 | -48.98% | | Other, net | $(48) | $(6) | -700.00% | | Net realized losses | $(59) | $(31) | -90.32% | - The Company records 'intent-to-sell impairment' for fixed maturities in unrealized loss positions if early sale is likely, or an ACL for credit-related losses without intent-to-sell[94][96] ACL on Mortgage Loans (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | ACL as of beginning of period | $44 | $51 | -13.73% | | Current period provision (release) | — | $(3) | NM | | Current period gross write-offs | $(1) | — | NM | | ACL as of June 30 | $43 | $48 | -10.42% | - As of June 30, 2025, $22.1 billion in fixed maturities, AFS, were in an unrealized loss position due to higher interest rates, with recovery expected as the Company does not intend to sell[113][114][625][626] Note 6 - Derivatives This note describes the Company's use of derivatives for risk management, replication, and income, including hedge accounting and collateral - The Company utilizes OTC, OTC-cleared, and exchange-traded derivatives for risk management, replication transactions, and income generation across various financial risks[143] Derivative Balance Sheet Presentation (June 30, 2025) | Hedge Designation/Derivative Type | Notional Amount (in millions) | Net Derivatives Fair Value (in millions) | Asset Derivatives Fair Value (in millions) | Liability Derivatives Fair Value (in millions) | | :------------------------------------------ | :---------------------------- | :------------------------------------- | :----------------------------------- | :------------------------------------ | | Cash flow hedges | $4,565 | $(11) | $22 | $(33) | | Non-qualifying strategies | $2,851 | $3 | $33 | $(30) | | Total | $7,416 | $(8) | $55 | $(63) | Gains (Losses) Reclassified from AOCI into Income (Six Months Ended June 30) | Affected Line Item | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Net realized losses (Fixed Maturities, AFS) | $(36) | $(77) | +53.33% | | Net investment income (Interest rate swaps) | $(4) | $(15) | +73.33% | | Interest expense (Interest rate swaps) | $6 | $9 | -33.33% | | Net investment income (Foreign currency swaps) | $5 | $6 | -16.67% | | Total amounts reclassified from AOCI | $(35) | $(74) | +52.70% | - As of June 30, 2025, the Company pledged $27 million in cash and $23 million in securities collateral for derivative instruments, with an additional $12 million cash and $104 million securities for initial margin on OTC-cleared and exchange-traded derivatives[175][176] Note 7 - Premiums Receivable and Agents' Balances This note details premiums receivable, agents' balances, and the Allowance for Credit Losses (ACL) methodology for credit risk management Premiums Receivable and Agents' Balances (As of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (%) | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Premiums receivable, excluding loss sensitive business | $6,347 | $5,624 | +12.86% | | Receivables for loss sensitive business | $486 | $491 | -1.02% | | Total Premiums Receivable and Agents' Balances, Gross | $6,833 | $6,115 | +11.74% | | ACL | $(135) | $(117) | -15.38% | | Total Premiums Receivable and Agents' Balances, Net of ACL | $6,698 | $5,998 | +11.67% | - The ACL for premiums receivable is based on aging and historical credit loss experience, adjusted for economic conditions, and for loss-sensitive business, considers policyholder credit ratings and collateral[179][181] Rollforward of ACL on Premiums Receivable and Agents' Balances (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Beginning ACL | $117 | $109 | +7.34% | | Current period provision | $49 | $31 | +58.06% | | Current period write-offs | $(35) | $(27) | -29.63% | | Current period recoveries | $4 | $3 | +33.33% | | Ending ACL | $135 | $116 | +16.38% | Note 8 - Reinsurance This note explains the Company's use of reinsurance to manage risk, detailing recoverables, credit quality, and uncollectible allowances - The Company cedes insurance risk to reinsurers for capital and risk management, retaining primary policyholder liability, with recoverables presented net of an allowance for uncollectible reinsurance[186][187] Gross Reinsurance Recoverables by Credit Quality (As of June 30, 2025) | A.M. Best Financial Strength Rating | P&C (in millions) | Employee Benefits (in millions) | Corporate (in millions) | Total (in millions) | | :---------------------------------- | :---------------- | :------------------------------ | :-------------------- | :------------------ | | A++ | $2,200 | — | — | $2,200 | | A+ | $2,257 | $283 | $217 | $2,757 | | A | $755 | $1 | — | $756 | | A- | $615 | $3 | — | $618 | | B++ | $2 | — | $2 | $4 | | Below B++ | $22 | — | — | $22 | | Total Rated by A.M. Best | $5,851 | $287 | $219 | $6,357 | | Mandatory (Assigned) and Voluntary Risk Pools | $204 | — | — | $204 | | Captives | $425 | — | — | $425 | | Other not rated companies | $183 | $6 | — | $189 | | Gross Reinsurance Recoverables | $6,663 | $293 | $219 | $7,175 | | Allowance for uncollectible reinsurance | $(72) | $(1) | $(2) | $(75) | | Net Reinsurance Recoverables | $6,591 | $292 | $217 | $7,100 | - The allowance for uncollectible reinsurance includes an ACL based on reinsurer credit ratings and an allowance for disputed balances, with credit risk managed through selection, collateral, and monitoring[195][189] Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses This note details the rollforward of P&C and Group Life, Disability, and Accident liabilities for unpaid losses and LAE Rollforward of P&C Liabilities for Unpaid Losses and LAE (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Beginning liabilities, gross | $36,404 | $34,044 | +6.93% | | Beginning liabilities, net | $29,651 | $27,348 | +8.42% | | Total provision for unpaid losses and LAE | $5,361 | $4,917 | +9.03% | | Payments | $(4,380) | $(3,836) | -14.19% | | Ending liabilities, net | $30,727 | $28,481 | +7.89% | | Ending liabilities, gross | $37,358 | $35,137 | +6.32% | Prior Accident Year Development (Six Months Ended June 30) | Line of Business | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------ | :----------------- | :----------------- | :----------- | | Workers' compensation | $(126) | $(119) | -5.88% | | Commercial property | $(23) | $(5) | -360.00% | | Professional liability | $(11) | $(7) | -57.14% | | Bond | $(22) | $(22) | 0.00% | | Personal automobile liability | $(22) | $(13) | -69.23% | | Homeowners | $(31) | $(10) | -210.00% | | Catastrophes | $(39) | $(38) | -2.63% | | Total prior accident year development | $(309) | $(171) | -80.70% | - Favorable prior accident year development for the six months ended June 30, 2025, resulted from decreased reserves across workers' compensation, commercial property, professional liability, bond, personal automobile liability, homeowners, and catastrophes[203][204][205][206] - The Company paid $787 million in April 2023 for BSA-related sexual molestation and abuse claims from the 1970s and early 1980s, with appeals dismissed as moot for material settlement issues[217] Rollforward of Group Life, Disability and Accident Liabilities for Unpaid Losses and LAE (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Beginning liabilities, gross | $8,206 | $8,274 | -0.82% | | Beginning liabilities, net | $7,924 | $8,020 | -1.20% | | Total provision for unpaid losses and LAE | $2,420 | $2,426 | -0.25% | | Payments | $(2,506) | $(2,526) | +0.79% | | Ending liabilities, net | $7,838 | $7,920 | -1.04% | | Ending liabilities, gross | $8,124 | $8,186 | -0.76% | - Group disability prior period reserve estimates decreased by $307 million due to strong claim recoveries and lower paid family medical leave incidence, while Group life and accident estimates decreased by $69 million from favorable mortality and low incidence in group life premium waiver[223][224] Note 10 - Reserve for Future Policy Benefits This note provides a rollforward of the reserve for future policy benefits, including payout annuities and life conversions Net Reserve for Future Policy Benefits (As of June 30) | Product | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :-------------------- | :----------------- | :----------------- | :----------- | | Payout Annuities | $124 | $129 | -3.88% | | Life Conversions | $61 | $60 | +1.67% | | Paid-up Life | $163 | $172 | -5.23% | | Deferred Profit Liability | $19 | $20 | -5.00% | | Other | $76 | $83 | -8.33% | | Total | $443 | $464 | -4.53% | Weighted-Average Interest Rates (As of June 30, 2025) | Product | Interest accretion rate | Current discount rate | | :-------------------- | :---------------------- | :-------------------- | | Payout Annuities | 5.6% | 5.4% | | Life Conversions | 4.3% | 5.6% | | Paid-up Life | 2.9% | 5.0% | Note 11 - Other Policyholder Funds and Benefits Payable This note details the rollforward of universal life long-duration contracts, economically ceded to Prudential in 2013 Universal Life Long Duration Contracts Rollforward (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Balance, beginning of the period | $206 | $223 | -7.50% | | Premiums Received | $6 | $6 | 0.00% | | Policy Charges | $(9) | $(13) | +30.77% | | Surrenders and Withdrawals | $(3) | $(4) | +25.00% | | Benefit Payments | $(3) | $(6) | +50.00% | | Interest Credited | $4 | $4 | 0.00% | | Balance, end of the period | $201 | $210 | -4.29% | | Weighted-average crediting rate | 4.3% | 4.2% | +0.10% | | Net Amount at Risk | $791 | $870 | -9.19% | | Cash Surrender Value | $199 | $209 | -4.78% | - As of June 30, 2025, universal life contracts totaling $199 million had crediting rates at their guaranteed minimums, ranging from 4% to 5%[237] Note 12 - Income Taxes This note reconciles income tax expense to the statutory rate and provides a rollforward of unrecognized tax benefits Income Tax Expense (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Tax provision at U.S. federal statutory rate | $426 | $383 | +11.23% | | Nontaxable net investment income | $(14) | $(22) | +36.36% | | Other | $(8) | $(29) | +72.41% | | Provision for income taxes | $404 | $332 | +21.69% | Rollforward of Unrecognized Tax Benefits (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Balance, beginning of period | $24 | $26 | -7.69% | | Gross increases - tax positions in current period | $1 | $1 | 0.00% | | Balance, end of period | $25 | $27 | -7.41% | - The Company believes $14 million of unrecognized tax benefits may be recognized by year-end 2025 due to the lapse of the applicable statute of limitations[241] - H.R.1, the 'One Big Beautiful Bill Act,' signed into law on July 4, 2025, is not expected to materially impact the Company's results of operations[242] Note 13 - Commitments and Contingencies This note outlines the Company's commitments and contingencies, including litigation, A&E claims, and derivative agreements - The Company faces various claims litigation and legal actions, with management expecting immaterial liability for ordinary-course claims, though certain outcomes could materially affect results or cash flows[245][246] - The Company continues to receive A&E claims, mostly pre-1986, with significant uncertainty in reserve estimation due to evolving liability theories, litigation risks, and inconsistent legal doctrines[250][251][253][254][255] - As of June 30, 2025, the Company reported $141 million in net A&E reserves and an $850 million deferred gain for NICO-ceded losses; the $1.5 billion A&E ADC reinsurance coverage limit is fully incurred, with no remaining coverage[259][260] - Derivative agreements contain financial strength rating provisions; a downgrade could trigger termination or collateral requirements, though a one-level downgrade as of June 30, 2025, would not require additional collateral[261][263] Note 14 - Equity This note updates the Company's equity repurchase program, detailing shares repurchased and remaining authorization - During the six months ended June 30, 2025, the Company repurchased 6.8 million common shares for $800 million under its Board-authorized share repurchase program[262] - As of June 30, 2025, $2.35 billion remains available for equity repurchases under the current $3.3 billion program, effective until December 31, 2026[262] - Repurchase timing is influenced by market price, capital position, financial strength/credit ratings, blackout periods, and other considerations[264] Note 15 - Changes In and Reclassifications From Accumulated Other Comprehensive Income (Loss) This note details the rollforwards of AOCI, net of tax, and reclassifications into net income for the reported periods Changes in AOCI, Net of Tax (Six Months Ended June 30, 2025) | Component | Beginning balance (in millions) | OCI before reclassifications (in millions) | Amounts reclassified from AOCI (in millions) | Income tax benefit (expense) (in millions) | Ending balance (in millions) | | :------------------------------------------ | :------------------------------ | :----------------------------------------- | :----------------------------------------- | :--------------------------------------- | :--------------------------- | | Net Unrealized Gain (Loss) on Fixed Maturities, AFS | $(1,539) | $610 | $36 | $(136) | $(1,029) | | Unrealized Losses on Fixed Maturities, AFS with ACL | $(6) | $1 | — | — | $(5) | | Net Gain (Loss) on Cash Flow Hedging Instruments | $40 | $(36) | $(7) | $9 | $6 | | Foreign Currency Translation Adjustments | $29 | $20 | — | $(4) | $45 | | Liability for Future Policy Benefits Adjustments | $33 | $(5) | — | $1 | $29 | | Pension and Other Postretirement Plan Adjustments | $(1,443) | — | $16 | $(3) | $(1,430) | | AOCI, net of tax | $(2,886) | $590 | $45 | $(133) | $(2,384) | Reclassifications from AOCI into Net Income (Six Months Ended June 30, 2025) | Affected Line Item | Amount (in millions) | | :------------------------------------------ | :------------------- | | Net realized losses (Fixed Maturities, AFS) | $(36) | | Net investment income (Interest rate swaps) | $(4) | | Interest expense (Interest rate swaps) | $6 | | Net investment income (Foreign currency swaps) | $5 | | Insurance operating costs and other expenses (Pension/Postretirement) | $(16) | | Total amounts reclassified from AOCI | $(35) | Note 16 - Employee Benefit Plans This note provides the net periodic cost (benefit) for pension and other postretirement plans and funding status Net Periodic Cost (Benefit) (Six Months Ended June 30) | Metric | Pension Benefits 2025 (in millions) | Pension Benefits 2024 (in millions) | Other Postretirement Benefits 2025 (in millions) | Other Postretirement Benefits 2024 (in millions) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Service cost | $1 | $1 | — | — | | Interest cost | $87 | $88 | $3 | $3 | | Expected return on plan assets | $(121) | $(115) | — | — | | Amortization of prior service credit | — | — | $(3) | $(3) | | Amortization of actuarial loss | $17 | $17 | $2 | $2 | | Net periodic cost (benefit) | $(16) | $(9) | $2 | $2 | - The Company has no required minimum funding contribution for its U.S. qualified defined benefit pension plan in 2025 and will monitor its funded status for future contributions[274] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition, operating results, and risk management strategies Key Performance Measures and Ratios This section defines key performance indicators and non-GAAP measures, including reconciliations to GAAP results - Key performance indicators include AUM, Book Value per Diluted Share excluding AOCI, Combined Ratio, Core Earnings, various loss and expense ratios, premium metrics, and underwriting gain/loss, providing a comprehensive view of financial health[282][283][284][285][292][293][294][296][297][298][301][302][303][304][306][307][308][309][310][312][313][314][315][316][318][320] Reconciliation of Net Income to Core Earnings (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :------------------------------------------------- | :----------------- | :----------------- | :----------- | | Net income | $1,625 | $1,491 | +8.99% | | Net income available to common stockholders | $1,615 | $1,481 | +9.05% | | Net realized losses excluded from core earnings, before tax | $57 | $28 | +103.57% | | Integration and other non-recurring M&A costs, before tax | $4 | $4 | 0.00% | | Change in deferred gain on retroactive reinsurance, before tax | $(56) | $(61) | +8.20% | | Income tax expense (benefit) | — | $6 | NM | | Core earnings | $1,620 | $1,459 | +10.90% | Reconciliation of Net Income to Underwriting Gain (Loss) for Business Insurance (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--------------------------------- | :----------------- | :----------------- | :----------- | | Net income | $1,173 | $1,113 | +5.39% | | Net investment income | $(886) | $(793) | -11.73% | | Net realized losses | $44 | $38 | +15.79% | | Income tax expense | $298 | $259 | +15.06% | | Underwriting gain | $631 | $620 | +1.77% | The Hartford's Operations This section outlines the Company's business operations, revenue sources, profitability drivers, and investment objectives - The Hartford's revenues primarily stem from earned premiums, mutual fund/ETF management fees, net investment income, third-party service fees, and net realized gains and losses[324] - P&C insurance profitability is driven by underwriting, risk selection, claims management, reinsurance, and expense ratio, with pricing adequacy influenced by regulatory approvals, risk evaluation, and market dynamics[325] - Employee Benefits profitability depends on accurate risk evaluation, pricing, and reliable mortality/morbidity estimates, with critical investment returns managed through asset-liability duration matching[326][327] - Hartford Funds' financial results correlate strongly with AUM, driven by net flows and market returns, with the primary investment objective to maximize economic value within acceptable risk parameters[328][329] Financial Highlights This section summarizes key financial performance highlights for the second quarter, including net income, EPS, and combined ratio - Net Income Available to Common Stockholders increased by $257 million (35%), driven by higher P&C earned premiums, favorable prior accident year development, lower Personal Insurance underlying loss ratio, lower catastrophe losses, and higher net investment income, partially offset by a higher Business Insurance underlying loss ratio[331][332] - Net Income Available to Common Stockholders per Diluted Share increased by $1 (41%), primarily due to higher net income and reduced outstanding shares from repurchases, partially offset by dilutive effects[331] - Book Value per Diluted Share increased by $4.93 (9%), attributed to net income exceeding dividends and an increase in AOCI from decreased net unrealized losses on AFS securities[331] - Investment Yield, After Tax, increased by 20 basis points, mainly due to higher yields on fixed maturity securities from reinvesting at higher interest rates, partially offset by a lower yield on variable-rate securities[334][336] - Property & Casualty Combined Ratio improved by 5.0 points, driven by favorable prior accident year reserve development, lower Personal Insurance underlying loss ratio, and lower catastrophe losses, partially offset by a higher Business Insurance underlying loss ratio[336][340] Consolidated Results of Operations This section provides a consolidated overview of the Company's financial performance, detailing changes in revenues, expenses, and net income Consolidated Results of Operations (Three Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Earned premiums | $5,961 | $5,578 | 7% | | Total revenues | $6,987 | $6,486 | 8% | | Benefits, losses and loss adjustment expenses | $3,712 | $3,661 | 1% | | Total benefits, losses and expenses | $5,741 | $5,574 | 3% | | Net income available to common stockholders | $990 | $733 | 35% | - Net income available to common stockholders increased by $257 million for the three months ended June 30, 2025, driven by a $243 million P&C underwriting gain increase, $62 million higher net investment income, and $49 million lower net realized losses[344][345] Consolidated Results of Operations (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Earned premiums | $11,796 | $11,024 | 7% | | Total revenues | $13,797 | $12,905 | 7% | | Benefits, losses and loss adjustment expenses | $7,712 | $7,272 | 6% | | Total benefits, losses and expenses | $11,768 | $11,082 | 6% | | Net income available to common stockholders | $1,615 | $1,481 | 9% | - Net income available to common stockholders increased by $134 million for the six months ended June 30, 2025, driven by $125 million higher net investment income and a $94 million higher P&C underwriting gain, partially offset by $28 million greater net realized losses[365][372] - Earned premiums increased 7% for both periods, primarily from a 10% P&C increase due to new business growth and earned pricing, while Employee Benefits earned premium was flat for three months and up 1% for six months[348][353][373] - Benefits, losses and LAE increased $51 million for three months, mainly from a $50 million P&C increase, and $440 million for six months, primarily from a $444 million P&C increase, driven by higher CAY loss and LAE and catastrophe losses[356][357][359][376][382] Investment Results This section analyzes the Company's investment performance, including asset composition, net investment income, and realized gains/losses Composition of Invested Assets (As of June 30, 2025 vs. December 31, 2024) | Asset Type | June 30, 2025 (in millions) | Percent of Total | December 31, 2024 (in millions) | Percent of Total | | :------------------------------------------------- | :-------------------------- | :--------------- | :-------------------------- | :--------------- | | Fixed maturities, AFS, at fair value | $44,558 | 73.2% | $42,567 | 71.9% | | Mortgage loans (net of ACL) | $6,463 | 10.6% | $6,396 | 10.8% | | Limited partnerships and other alternative investments | $5,325 | 8.7% | $5,042 | 8.5% | | Short-term investments | $3,649 | 6.0% | $4,068 | 6.9% | | Total investments | $60,903 | 100.0% | $59,210 | 100.0% | - Total investments increased primarily due to higher fixed maturities, AFS, at fair value, driven by net additions of corporate bonds and ABS, and higher valuations from lower interest rates, partially offset by decreased short-term investments[389][390] Net Investment Income (Before Tax, Six Months Ended June 30) | Asset Type | 2025 Amount (in millions) | 2025 Yield | 2024 Amount (in millions) | 2024 Yield | | :------------------------------------------------- | :------------------------ | :--------- | :------------------------ | :--------- | | Fixed maturities | $1,158 | 4.7% | $1,063 | 4.5% | | Mortgage loans | $142 | 4.4% | $128 | 4.1% | | Limited partnerships and other alternative investments | $52 | 2.1% | $32 | 1.3% | | Total net investment income | $1,320 | 4.3% | $1,195 | 4.1% | | Total net investment income excluding limited partnerships and other alternative investments | $1,268 | 4.5% | $1,163 | 4.3% | - Total net investment income increased due to higher invested assets and reinvesting at higher interest rates, with the six-month period also reflecting greater income from limited partnerships and other alternative investments[395] - Net realized losses for the six months ended June 30, 2025, increased due to lower equity securities appreciation, transactional foreign currency revaluation losses, and FVO securities depreciation, partially offset by fewer net losses on fixed maturities sales[374][377] Critical Accounting Estimates This section updates critical accounting estimates, focusing on P&C and group long-term disability reserves and their development - Critical accounting estimates involve significant judgment and variability, covering P&C and group LTD reserves, goodwill impairment, investment/derivative valuation, and corporate litigation/regulatory contingencies[410] - P&C loss and LAE reserve estimates represent the Company's best estimate of ultimate settlement amounts, with adjustments based on emerging trends and volatility, without statistical loss distributions or confidence levels[414] Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE (Six Months Ended June 30, 2025) | Metric | Business Insurance (in millions) | Personal Insurance (in millions) | P&C Other Operations (in millions) | Total Property & Casualty (in millions) | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------------ | | Beginning liabilities, gross | $31,380 | $2,240 | $2,784 | $36,404 | | Provision for unpaid losses and LAE | $4,008 | $1,353 | — | $5,361 | | Payments | $(3,036) | $(1,233) | $(111) | $(4,380) | | Ending liabilities, gross | $32,329 | $2,383 | $2,646 | $37,358 | Current Accident Year Catastrophe Losses, Net of Reinsurance (Six Months Ended June 30, 2025) | Catastrophe Type | Business Insurance (in millions) | Personal Insurance (in millions) | Total (in millions) | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------ | | Wind and hail | $145 | $162 | $307 | | Wildfires | $145 | $114 | $259 | | Winter storms | $15 | $9 | $24 | | Global assumed reinsurance business | $89 | — | $89 | | Total catastrophe losses | $394 | $285 | $679 | Unfavorable (Favorable) Prior Accident Year Development for P&C (Six Months Ended June 30, 2025) | Line of Business | Business Insurance (in millions) | Personal Insurance (in millions) | P&C Other Operations (in millions) | Total Property & Casualty (in millions) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------------ | | Workers' compensation | $(126) | — | — | $(126) | | Commercial property | $(23) | — | — | $(23) | | Professional liability | $(11) | — | — | $(11) | | Bond | $(22) | — | — | $(22) | | Automobile liability | — | $(22) | — | $(22) | | Homeowners | — | $(31) | — | $(31) | | Catastrophes | $(28) | $(11) | — | $(39) | | Other reserve re-estimates, net | $14 | $(16) | — | $(2) | | Change in deferred gain on retroactive reinsurance | $(56) | — | — | $(56) | | Total prior accident year development | $(229) | $(80) | — | $(309) | Reportable Segment And Corporate Operating Summaries This section provides detailed operating summaries for each reportable segment and the Corporate category, analyzing their financial performance Business Insurance - Results of Operations Business Insurance reported increased net income and underwriting gain, driven by premium growth and favorable prior accident year development Business Insurance Underwriting Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Written premiums | $7,502 | $6,902 | 9% | | Earned premiums | $6,748 | $6,169 | 9% | | Total losses and loss adjustment expenses | $4,008 | $3,602 | 11% | | Underwriting gain | $631 | $620 | 2% | | Net income | $1,173 | $1,113 | 5% | Business Insurance Underwriting Ratios (Six Months Ended June 30) | Ratio | 2025 | 2024 | Change (pts) | | :--------------------------------- | :----- | :----- | :----------- | | Loss and loss adjustment expense ratio | 59.4 | 58.4 | 1.0 | | Expense ratio | 30.9 | 31.3 | (0.4) | | Combined ratio | 90.6 | 90.0 | 0.6 | | Underlying combined ratio | 88.2 | 87.9 | 0.3 | | Underlying loss and loss adjustment expense ratio | 57.0 | 56.3 | 0.7 | | Current accident year catastrophes | 5.8 | 4.3 | 1.5 | | Prior accident year development | (3.4) | (2.2) | (1.2) | - Written premiums increased 9% for the six-month period, driven by growth across small business, middle & large business, and global specialty, reflecting renewal written price increases and new business growth[452][454] - The underlying loss and LAE ratio increased due to a higher general liability loss ratio (reflecting increased severity trends) and workers' compensation margin compression[457] - Prior accident year development was net favorable for both periods, primarily from reserve decreases in workers' compensation, catastrophes, commercial property, and bond, including benefits from Navigators ADC deferred gain amortization[462] Personal Insurance - Results of Operations Personal Insurance improved net income and shifted to an underwriting gain, driven by increased earned premiums and favorable prior accident year development Personal Insurance Underwriting Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Written premiums | $1,893 | $1,757 | 8% | | Earned premiums | $1,830 | $1,662 | 10% | | Total losses and loss adjustment expenses | $1,353 | $1,308 | 3% | | Underwriting gain (loss) | — | $(76) | NM | | Net income (loss) | $96 | $23 | 317.39% | Personal Insurance Underwriting Ratios (Six Months Ended June 30) | Ratio | 2025 | 2024 | Change (pts) | | :--------------------------------- | :----- | :----- | :----------- | | Loss and loss adjustment expense ratio | 73.9 | 78.7 | (4.8) | | Expense Ratio | 26.1 | 25.9 | 0.2 | | Combined Ratio | 100.0 | 104.6 | (4.6) | | Underlying combined ratio | 88.8 | 96.4 | (7.6) | | Underlying loss and loss adjustment expense ratio | 62.7 | 70.5 | (7.8) | | Current accident year catastrophes | 15.6 | 10.6 | 5.0 | | Prior accident year development | (4.4) | (2.5) | (1.9) | - Written premiums increased 8% for the six-month period, driven by written pricing increases and new business growth in homeowners, with renewal written pricing moderating for both automobile and homeowners[486][487] - The underlying loss and LAE ratio decreased in both automobile and homeowners due to earned pricing increases, partially offset by higher loss costs from increased physical damage and liability claim severities[492] - Current accident year catastrophe losses increased for the six-month period, including a $114 million loss from the January 2025 California Wildfire Event, while prior accident year development was favorable due to lower estimated severity[495][496] Property & Casualty Other Operations - Results of Operations P&C Other Operations reported increased net income for both periods, primarily due to decreased net realized losses and a lower underwriting loss P&C Other Operations Operating Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Underwriting loss | $(4) | $(11) | 64% | | Net investment income | $37 | $37 | 0% | | Net realized losses | $(2) | $(3) | 33% | | Net income | $26 | $19 | 37% | - Net income increased for the six months ended June 30, 2025, primarily due to a lower underwriting loss, which decreased due to unfavorable prior accident year reserve development in the 2024 period[501][502] Employee Benefits - Results of Operations Employee Benefits saw decreased net income for three months but a slight increase for six months, influenced by loss and expense ratios Employee Benefits Operating Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Premiums and other considerations | $3,331 | $3,304 | 1% | | Total revenues | $3,555 | $3,522 | 1% | | Total benefits, losses and expenses | $3,199 | $3,173 | 1% | | Net income | $283 | $279 | 1% | Employee Benefits Ratios, Excluding Buyouts (Six Months Ended June 30) | Ratio | 2025 | 2024 | Change (pts) | | :--------------------------------- | :----- | :----- | :----------- | | Group disability loss ratio | 68.8% | 68.6% | 0.2 | | Group life loss ratio | 77.1% | 78.7% | (1.6) | | Total loss ratio | 70.5% | 71.1% | (0.6) | | Expense ratio | 25.5% | 24.9% | 0.6 | - Fully insured ongoing premiums were flat for three months but increased for six months due to increased exposure and persistency above 90%; sales increased for three months but decreased for six months due to lower paid family and medical leave product sales[518][519] - The total loss ratio was flat for three months but improved by 0.6 points for six months due to a lower group life loss ratio, while the expense ratio increased for both periods due to higher technology and staffing costs[523][525][526] Hartford Funds - Results of Operations Hartford Funds reported increased net income for both periods, driven by higher fee income from increased AUM and net realized gains Hartford Funds Operating Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Fee income and other revenue | $516 | $503 | 3% | | Total revenues | $535 | $520 | 3% | | Operating costs and other expenses | $412 | $406 | 1% | | Net income | $97 | $89 | 9% | | Daily average Hartford Funds AUM | $140,004 | $132,856 | 5% | | ROA, core earnings | 12.9 | 12.6 | 2% | Mutual Fund and ETF AUM (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Mutual Fund and ETF AUM - beginning of period | $128,054 | $119,316 | 7% | | Net flows - Mutual Fund and ETF | $(2,947) | $(3,596) | 18% | | Change in market value and other | $9,183 | $7,966 | 15% | | Mutual Fund and ETF AUM - end of period | $134,290 | $123,686 | 9% | | Hartford Funds AUM - end of period | $145,516 | $135,518 | 7% | - Hartford Funds AUM increased primarily due to higher equity market levels, partially offset by net outflows over the preceding twelve-month periods[536] Corporate - Results of Operations The Corporate category reported a decreased net loss for three months but an increased net loss for six months, influenced by net realized gains and tax benefits Corporate Operating Summary (Six Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Total revenues | $59 | $68 | (13)% | | Total benefits, losses and expenses | $130 | $130 | 0% | | Net loss | $(50) | $(32) | (56)% | | Net loss available to common stockholders | $(60) | $(42) | (43)% | - Net loss available to common stockholders decreased for three months due to increased net realized gains, but increased for six months due to lower net realized gains and a reduced tax benefit from stock-based compensation awards[540][541] Enterprise Risk Management This section details the Company's ERM framework, categorizing and managing insurance, operational, and financial risks - The Company's ERM function identifies, assesses, monitors, and reports risks, categorizing main risks as insurance, operational, and financial, with defined appetites, tolerances, and limits[543][544] - Insurance risk encompasses non-catastrophe and catastrophe risks, managed through underwriting protocols, exposure controls, risk-based pricing, modeling, risk transfer, and capital management strategies[545][546][548][551][552] Primary Catastrophe Treaty Reinsurance Coverages (As of June 30, 2025) | Treaty Type | Portion of losses reinsured | Portion of losses retained by The Hartford | | :------------------------------------------------- | :-------------------------- | :--------------------------------- | | Per Occurrence Property Catastrophe Treaty ($200M to $350M, non-earthquake/hurricane) | 40% of $150M in excess of $200M | 60% co-participation | | Per Occurrence Property Catastrophe Treaty ($350M to $500M, all perils) | 75% of $150M in excess of $350M | 25% co-participation | | Per Occurrence Property Catastrophe Treaty ($500M to $1.20B, all perils) | 90% of $700M in excess of $500M | 10% co-participation | | Aggregate Property Catastrophe Treaty ($750M to $950M of aggregate losses) | 100% | None | | Workers' Compensation Catastrophe Treaty ($100M to $450M from one event) | 80% of $350M in excess of $100M | 20% co-participation | - Financial risks include liquidity, credit, interest rate, equity, and foreign currency exchange risks, managed through risk aggregation limits, portfolio re-balancing, derivatives, diversification, surveillance, and counterparty approval[570][571][572][576][579][580] Fixed Maturities, AFS by Credit Quality (As of June 30, 2025) | Credit Quality | Amortized Cost (in millions) | Fair Value (in millions) | Percent of Total Fair Value | | :--------------------------------- | :--------------------------- | :----------------------- | :-------------------------- | | United States Government/Government agencies | $5,520 | $5,130 | 11.5% | | AAA | $7,455 | $7,333 | 16.4% | | AA | $7,683 | $7,439 | 16.7% | | A | $12,554 | $12,239 | 27.5% | | BBB | $10,319 | $10,070 | 22.6% | | BB & below | $2,349 | $2,347 | 5.3% | | Total fixed maturities, AFS | $45,880 | $44,558 | 100.0% | - As of June 30, 2025, total gross unrealized losses on fixed maturities, AFS, were $1.8 billion, a $453 million decrease since December 31, 2024, primarily due to lower interest rates, with recovery expected[625][626] Capital Resources and Liquidity This section discusses the Company's financial strength, capital resources, liquidity, and related management strategies and ratings - As of June 30, 2025, HIG Holding Company held approximately $1.3 billion in fixed maturities, short-term investments, and cash, with an undrawn $750 million revolving credit facility and $1.85 billion available under an intercompany liquidity agreement[647] - During the six months ended June 30, 2025, HIG Holding Company received $1.2 billion in net dividends from subsidiaries, including $729 million from P&C, $442 million from Employee Benefits, and $75 million from Hartford Funds[654] - The Company repurchased $800 million (6.8 million shares) of common stock during the six months ended June 30, 2025, with $2.35 billion remaining under the current $3.3 billion authorization[643] Capital Structure (As of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (%) | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Long-term debt | $4,369 | $4,366 | 0% | | Common stockholders' equity excluding AOCI, net of tax | $19,568 | $18,999 | 3% | | AOCI, net of tax | $(2,384) | $(2,886) | 17% | | Total stockholders' equity | $17,518 | $16,447 | 7% | | Total capitalization | $21,887 | $20,813 | 5% | | Debt to stockholders' equity | 25% | 27% | (2)% | | Debt to capitalization | 20% | 21% | (1)% | - Cash provided by operating activities decreased in 2025 due to increased P&C loss and LAE paid, higher operating expenses, increased taxes, and decreased partnership cash income, partially offset by increased P&C and Employee Benefits premiums[683] - A.M. Best upgraded the Company's senior debt rating to 'a' from 'a-' on July 3, 2025, citing balance sheet strength, operating performance, favorable business profile, and ERM, while affirming insurance financial strength ratings[690] Impact of New Accounting Standards This section refers to Note 1 of the 2024 Form 10-K for a discussion of new accounting standards - For a discussion of accounting standards, refer to Note 1 - Basis of Presentation and Significant Accounting Policies in The Hartford's 2024 Form 10-K Annual Report[697] Part II. Other Information This part includes information on legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings This section refers to Note 13 - Commitments and Contingencies for a discussion of legal proceedings - For a discussion regarding The Hartford's legal proceedings, refer to Note 13 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements[702] Item 1A. Risk Factors This section advises investors to consider risk factors from the 2024 Form 10-K, which could materially affect the Company - Investors should carefully consider the risk factors disclosed in Item 1A of Part I of the Company's 2024 Form 10-K, as they could materially affect business, financial condition, operating results, or liquidity[703] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details common stock repurchases during the quarter and remaining authorization under the share repurchase program Repurchases of Common Stock by the Issuer (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | | :--------------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------------------------ | | April 1, 2025 - April 30, 2025 | 1,305,216 | $118.70 | 1,299,056 | $2,595 | | May 1, 2025 - May 31, 2025 | 955,783 | $129.73 | 945,215 | $2,474 | | June 1, 2025 - June 30, 2025 | 997,072 | $127.76 | 995,490 | $2,348 | | Total | 3,258,071 | $124.71 | 3,239,761 | | - From July 1 to July 25, 2025, the Company repurchased an additional *