The Hartford(US:HIG)2024-02-23 21:32Part I Item 1. Business 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 | $15.3 billion | - The Hartford's strategic priorities include advancing underwriting capabilities, emphasizing digital capabilities and data science (including AI), maximizing distribution channels, optimizing organizational efficiency, balancing capital for growth and shareholder returns, and advancing sustainability leadership242530 2023 Revenues by Segment | Segment | 2023 Revenues ($ 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 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 costs152155 - 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 results169170175179180181 - 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 limitations196198199200205206209210 - 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 strategy218219220221222225234235 Item 1C. Cybersecurity 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 recovery253 - 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 detection254 - 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 functions258259 - 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 condition258 Item 2. Properties 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 area264 - 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 locations266 - The Company believes its properties and facilities are suitable and adequate for current operations266 Item 3. Legal Proceedings 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 disputes2651352 - 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 faith1353 - Management expects the ultimate liability from ordinary-course claims litigation to be immaterial to the consolidated financial condition, results of operations, or cash flows13521353 Part II Item 5. Market for The Hartford's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 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 - As of February 22, 2024, there were 297,350,060 shares of Common Stock outstanding7 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, 2024272769 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